ETHmx

Minting ETHmx Tokens

An ETHmx minter contributes ETH on the weiWard AMM and receives ETHmx tokens in proportion to their ETH contribution.

Staking ETHmx Tokens

ETHmx tokens must be staked on the weiWard platform to be eligible for the 1.5% network fees allocated to the ETHmx pool.

Redeeming Platform Rewards with ETHmx

Each ETHmx staker is responsible for claiming ETH rewards. Rewards will be indefinitely available for claims, but the process of claiming the ETH rewards must be performed by the ETHmx staker.

Burning ETHmx for ETH Rewards

ETH rewards claimed by ETHmx stakers will be issued in exchanged for burned ETHmx at a rate of 1:1 (ETHmx : ETH). As such, ETHmx token balances will decay in accord with total ETH rewards claimed.

An Example:

  • Alice contributes 5 ETH to the weiWard platform to mint 10 ETHmx tokens.
  • Alice stakes 10 ETHmx tokens on the weiWard platform and begins accruing ETH rewards.
  • At some point in the future, Alice has accrued 2 ETH in rewards and decides she wants to claim the 2 ETH rewards.
  • Alice issues a transaction to claim the 2 ETH rewards, which requires Alice to burn 2 ETHmx tokens.
  • Alice claims 2 ETH in rewards from the weiWard platform and Alice's remaining ETHmx balance is now 8 ETHmx.

Motivation for Burning ETHmx in Exchange for ETH rewards

Most staking mechanisms exhibit indefinite staking. However, the weiWard platform collateralization rate will be in a continuous state of flux as trades are made against the weiWard platform. Over time, as profitable trades are made against the weiWard platform, ETH collateral in the weiWard AMM will decrease. Though the weiWard platform generates ETH at a rate commensurate with ETHtx transaction volumes from its LP position, ETH contributes by ETHmx minters must necessarily remain continuous to ensure the viability of the weiWard platform. If ETHmx tokens could be staked indefinitely without decay, several likely outcomes would occur:
  • Staked ETHmx would continuously grow, which would have the effect of discouraging late ETHmx minters, as the repayment timeline for late ETHmx minters will be continuously increasing per ETH (e.g. Minting 50 ETHmx tokens when 450 ETHmx are staked would entitle the ETHmx staker to 10% of the Minter pool ETH rewards, whereas minting 50 ETHmx tokens when there at 950 ETHmx are staked would entitle the ETHmx staker to 5% of the Minter pool rewards.). Eventually, the cost of participation as a Minter on the weiWard platform would become prohibitively expensive and no further ETH contributes would be made.
  • During periods of reduced ETHtx transaction volumes, ETHmx stakers would experience reduced reward accrual rates due to the decline in ETHtx transaction volumes. Burning ETHmx in exchange for reward claims forces the stake pool to continuously reduce in quantity staked, which has the effect of remedying possible states of stagnation associated with reduced ETHtx transaction volumes.
  • Loss of the 'accordion effect'; when ETHtx transaction volumes are relatively high, ETH rewards generated by the weiWard platform will increase in accord with ETHtx transaction volumes. As such, minting ETHmx tokens during periods of increased ETHtx transaction volumes becomes a more favorable proposition for the ETHmx minter. However, when ETHtx transaction volumes inevitably decrease, ETHmx stakers will begin to experience reduced ETH rewards accrual rates exacerbated by a diffusion of ETH rewards among an increased number of ETHmx stakers remaining from preceding periods of high ETHtx volumes. Burning ETHmx tokens in exchange for ETH rewards preserves the accordion effect in that the quantity of ETHmx staked will experience growth and decay in accord with the changing demand for ETHtx speculation. Thus, burning ETHmx tokens in exchange for ETH rewards right-sizes the quantity of staked ETHmx tokens for the weiWard platform as a function of ETHtx transaction volumes.