UXD — Update, Vision & Roadmap

  • We’ve added six team members in the past month.
  • UXD’s smart contract code is complete and being audited by two security audit firms.
  • UXD’s vision is to be a decentralized stablecoin that is used in all aspects of the crypto economy.
  • UXD’s anticipated roadmap is as follows: ~3 Weeks, launch mainnet; Q1 2022, launch liquidity mining program and other incentives; Q1-Q2 2022, enable functionality of UXP token and begin transition to DAO management; Q3-Q4 2022, cross-chain development; Q3-Q4 2022, mint other stablecoins for fiat such as JPY, EURO, GBP.

Team Update

Development Update

UXD’s Vision

Guiding Principles

  • UXD is fully-collateralized at mint ($1 of assets backs 1 UXD), and will remain fully-collateralized as long as funding rates are not negative for an extended period of time. Historically, funding rates have been positive, which is a net value to UXD (see previous explainer post). UXD’s insurance fund, which currently holds $57 million, will be used to pay negative funding rates. At the insurance fund’s current size, UXD could withstand -11.4% funding rates on $500 million of UXD for an entire year. We are of the opinion that sustained negative funding rates of this size and duration are unlikely, and have not occurred historically. As the insurance fund grows (through asset management strategies), UXD will be able to sustain even higher negative funding rates on ever larger amounts of UXD.
  • UXD is designing a liquidity mining program to incentivize immediate liquidity for trading + borrowing/lending, and is designing a governance token to create long-term stakeholders. UXD is exploring partnerships with top platforms on Solana and will focus on incentivizing real economic activity using UXD. UXD will be thoughtful about how to grow liquidity in a sustainable way.
  • First, UXD will undergo as many security audits as it takes for our team and the community to feel comfortable. We will also have generous bug bounty programs once we open source our code. UXD will align the incentives of UXP holders and UXD holders via risk management. UXP holders will take an active role in areas such as asset management of the insurance fund. Finally, UXD will eventually deploy to as many derivative dexs as possible to spread out smart contract risk.
  • Developing confidence in UXD — UXD should help user’s feel comfortable with and knowledgable of UXD’s solutions to the above three goals. Transparent and frequent communication, educational materials, and incorporation of feedback from the community are key.
  • Simplicity — At the end of the day, UXD is a tool for Solana users. UXD is not an end in itself, but a way for Solana users to do other things they’d like to do on Solana, including DeFi, digital goods trading, etc. Therefore, UXD should be as simple as possible (but no simpler), and provide a clean mint/redeem process and governance structure. This includes concepts like governance minimization, which we interpret as “UXD stakeholders should spend time only on things that require human input to be effectively managed, no time should be wasted on tasks that can be decided automatically”. For example, thinking about clever asset management strategies for the insurance fund is a good use of time, whereas bickering about the color scheme of the website would not be.
  • Thoughtful design on EVERY aspect of UXD — In our studies of previous projects in DeFi, including stablecoins, we’ve been surprised to find that many projects neglect essential aspects of their protocols (including governance token structure, liquidity mining rewards structure, and other long-term value drivers) and instead rely on lazy heuristics. For example, we’ve seen plenty of governance tokens that are forks of the governance tokens of other platforms, without any regard for the needs of their particular protocol. We’ve also seen plenty of half-thought liquidity mining programs, including multi-year constant emission programs (e.g. reward 100,000 gov tokens per day for 5 years, decided on day 1). At UXD we believe that every aspect should be treated with the same thoughtful care and tailored to provide value to UXD stakeholders. We also believe that our community members are highly intelligent and should be given the opportunity to provide feedback on aspects of the protocol before implementation, when possible.

Roadmap

  • ~3 Weeks, Mainnet Launch- As noted above, the smart contract code is complete and we’ve contracted security audit firms to test for vulnerabilities. Assuming all goes well, we will be ready to launch soon. In anticipation of mainnet launch, we will be working to spread awareness of UXD and announcing partnerships so stay tuned! We will release exact details about the mainnet launch over the coming couple of weeks.
  • Q1 2022, Liquidity Mining Program Launch- What’s a launch party without some goodies? We will be releasing the details of our UXP rewards liquidity mining program for feedback from our community, followed by a gradual roll-out of rewards to our partnership platforms. We are thinking through the best ways to reward long-term stakeholders and are using the successes and failures of those who came before us to inform our design.
  • Q1-Q2 2022, Enable Functionality of UXP token and Begin Transition to DAO Management — As a decentralized stablecoin, our goal is to be as decentralized as possible in the long-run. We’re already developing our DAO interface, and are excited to see active community participation. More details will be released about UXP’s structure (including staking, voting systems, and rewards programs) over the coming weeks.
  • Q3-Q4 2022, Develop Cross-Chain — As other DeFi ecosystems develop, there will be opportunities for UXD to develop and deploy on other chains, providing broad network effects to UXD holders in the broader crypto economy, while also providing upside value to Solana-native UXP holders. UXD is already beginning discussions on when/how to deploy onto other chains.
  • Q3-Q4 2022, Mint non-USD Fiat Stablecoins — Rather than pledge the future of UXD to the FOMC, UXD will expand by minting other stablecoins pegged to JPY, EURO, GBP, etc. The delta-neutral strategy that backs UXD works for any currency, so long as there are perpetual futures in that currency (e.g. SOL-USD, SOL-JPY perps).

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UXD Protocol

UXD Protocol

Algorithmic stablecoin backed 100% by a delta neutral position using derivatives.