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Credefi’s CREDI and xCREDI Tokens
Why Do We Need a Two-Token Model?
Under the spotlight are the two main characters in today’s episode of the Discover Credefi Series — CREDI and xCREDI.
CREDI is the utility token of the protocol, incentivizing and promoting user’s activity — lending and borrowing on the platform. CREDI is available to purchase in our IDO and then on CEXs and DEXs after our listing.
xCREDI is our governance token that will allow holders to shape the future development of Credefi and benefit from our increasing revenues which will partly go to buy back and burn xCREDI. The only way to create xCREDI is minting it in our Security Module (Module X) that will kick off in full force about 6 months after the platform launch. To do so, CREDI holders will have to stake in Module X where their tokens will be burned and xCREDI will be minted in return. xCREDI will have a deflationary setup, as we will regularly buy it back from the market and burn it, thus sharing part of Credefi’s revenues with xCREDI holders.
After the launch of Module X and the first minting of xCREDI, it will of course be available to trade on DEXs.
The two-token model allows us to build an ecosystem that separates but yet aligns the means for (i) incentivizing platform activity; and (ii) the governance of the protocol. Why keep these two separate? We operate in a speculative market where traders use tokens as bargaining chips for quick profits. Our goal is to have the governance of Credefi in the hands of capable and trustworthy actors who are willing to invest long-term and commit to supporting Credefi’s development.
What’s the Utility of CREDI and xCREDI?
How does Credefi’s Token Ecosystem Function?
How to Obtain xCREDI?
At the inception of Credefi, the only way to obtain xCREDI is by minting it in Module X through staking and burning of CREDI. The CREDI/xCREDI conversion rate is defined by a bonding curve, where the more CREDI is converted to xCREDI, the more expensive subsequent conversions become.
The following bonding curve exemplifies how expensive it would be to mint xCREDI in the long-run:
The benefits of getting early access to xCREDI are obvious and have a great growth potential for the forward-looking diamond-hands part of our community. To reward our early CREDI holders and loyal supporters, we will open a 1-month period after our CEX listing during which they will be able to stake CREDI to reserve the best exchange ratio CREDI/xCREDI (1:1) and be the first ones to receive xCREDI after we launch Module X in about 6 months after platform kick-off.
Credefi’s Staking Program
It’s time to stake CREDI!
We introduce our exclusive program to CREDI holders for early-stage staking of CREDI to receive xCREDI. By staking their CREDI tokensso, holders will have direct access to the following benefits:
- CREDI staked in the first month after TGE will have a privileged CREDI/xCREDI conversion rate of 1:1.
- The time during which CREDI was staked before the Module X launch will count towards cliff/vesting periods as described in the tokenomics paper.
The CREDI Staking Program will be live at the time of TGE. Soon we’ll be releasing more details about it, so stay tuned. Be ready to pack your bags and be prepared for this once in a lifetime opportunity!
Coming up next…Credefi’s validator nodes and how CREDI and xCREDI play a role in them.
Credefi is a first mover hybrid of a FinTech and DeFi solution connecting crypto lenders of stablecoins and SME borrowers from the real economy. Credefi’s platform enables decentralized and secured lending to portfolios of business projects or individual companies, protecting lenders while providing them fixed APY.
The protocol resolves the key challenges that DeFi and TradFi are facing today: DeFi’s inconsistent yields that evaporate in bear markets, speculative borrowers that are fickle and cannot satisfy DeFi lending supply, as well as the difficulty for SMEs to get TradFi funding at normal interest rates.