Token Utilities

SWA token is integral to facilitating various operations and incentives within the xSwap protocol, ranging from staking and liquidity provision to voting on important governance decisions. Its aims are to create an engaged community while also ensuring the platform's adaptability and growth through decentralized governance.

Governance and DAO Token

SWA token grants its holders voting power, making it a pivotal element in the governance of the xSwap platform. Token holders can participate in decision-making processes, influencing the platform's development, operational updates, and strategic directions.

How It Works

• DAO Participation: SWA token holders have the right to vote on proposals within the xSwap DAO. These include updates to the protocol, fee structure, liquidity incentives, and other governance matters.

• Voting Power: The number of SWA tokens held directly correlates with a participant's voting power, enabling a democratic and equitable governance process.

Locking SWA for veSWA

Users have the option to lock their SWA tokens in exchange for veSWA tokens. One veSWA is equivalent to one SWA only if the tokens are locked for the maximum possible duration. For shorter lock periods, veSWA represents less voting power, increasing as the lock duration extends, making long-term commitments more valuable for governance decisions.

How It Works

Locking Mechanism: Users can lock their SWA tokens for a specified period in exchange for veSWA tokens. These veSWA tokens grant users the ability to participate in governance by voting on key proposals.

Increased Voting Power: The voting power of veSWA increases linearly over the lock period. This means the longer the tokens are locked, the more influence the holder gains in the DAO’s decision-making process.

Governance and Incentives: With veSWA, users can vote on which liquidity pools will receive additional incentives. In addition, veSWA holders earn SWA tokens as rewards. These rewards come from the fees generated by swaps on the platform. A portion of these fees is distributed to veSWA holders in SWA tokens, offering further incentives for locking tokens and participating in governance.

Liquidity Provider Incentives

Liquidity providers (LPs) who stake tokens in SWA-paired pools on xSwap are rewarded with XFI, boosting the platform's liquidity and increasing trading volume. This reward mechanism ensures that LPs are compensated in proportion to their liquidity contributions, providing them with passive income through XFI rewards and transaction fees generated by trading activities within their pools.

Rewards for liquidity provision are dynamically adjusted based on factors such as the total liquidity in the pool and the duration of the stake, encouraging both liquidity addition and long-term participation. This strategic approach not only benefits liquidity providers with consistent rewards but also strengthens the xSwap ecosystem by ensuring deep liquidity and stable market conditions for traders.