DXS Loyalty Token (DXLT)

DXS's launch of a loyalty token (DXLT)

At DXS we are launching DXS Loyalty Token (DXLT).

DXLT will be redeemable against the ‘loyalty pool’ in either BSV or USD. Redeemed amounts can be used to open ‘Bounty Positions’ on DXS.

The goals of DXLT are:

  1. Provide referral compensation for traders who successfully invite new traders onto DXS

  2. Reward traders for their loyalty

  3. Incentivise trading volume into the future

What’s the timeline?

DXLT will launch in two phases:

DXLT phase one:

Reward DXLT to DXS traders who:

  • Introduce new traders to DXS

  • Suffer profit deductions

  • Pay holding fees

  • Discover and report bugs (bug bounty)

All users trading on DXS since DXS's launch in November 2020 will be awarded retrospectively.

DXLT phase two:

  • DXLT made proportionally redeemable against DXS's loyalty pool (next section). Redemptions from the loyalty pool can be used to open Bounty Positions on DXS

  • DXLT able to be withdrawn from your DXS account as tokens

What is the DXS loyalty pool?

From the date of DXLT launch, 100% of DXS loyalty fees will accumulate in the DXS loyalty pool.

Loyalty fees are charged when a user exceeds their free volume tier or profit tier in any given week. Details of these tiers are here.

The loyalty pool will be made available to credit BSV or USD into trader’s Bounty Wallets by redeeming DXLT from DXLT's launch date.

Will I get DXLT?

You will be rewarded a balance of DXLT in your DXS account after DXLT's launch date if you have at any time in the past:

  • Paid holding fees (held a trade for longer than 8 hours)

    • 20 DXLT per $100 of holding fees paid

  • Suffered profit deductions

    • 10 DXLT per $100 of profit deducted

Quick example:

A trader has been trading on DXS since November 2020. By DXLT launch date this trader has paid $112.30 in holding fees. Additionally, this trader has suffered $98.70 in profit deductions.

The trader is rewarded 32.33 DXLT on DXLT launch date:

  • Holding fees

    • 1.123 * 20 = 22.46 DXLT

  • Profit deduction

    • 0.987 * 10 = 9.87 DXLT

  • Total

    • 32.33 DXLT

From DXLT launch date onwards, traders on DXS will be rewarded DXLT daily for the following:

  • Paying holding fees

    • 20 DXLT per $100 of holding fees paid

  • Suffering profit deductions

    • 10 DXLT per $100 of profit deducted

  • Introducing new traders to DXS

    • 6 DXLT per introduced trader

    • Introduced trader must use referral code, complete KYC and pay cumulative $30 in holding fees

What can I do with DXLT?

DXLT can be redeemed against the DXS loyalty pool for BSV or USD. The BSV or USD that is redeemed from the loyalty pool is credited to the trader’s DXS ‘Bounty Wallet’.

Alternatively, DXLT can be withdrawn from your DXS account as tokens into your crypto wallet. This will allow users to exchange DXLT tokens on secondary markets.

What is a DXS Bounty Wallet?

We introduce the concept of a Bounty Wallet within each trader’s DXS account.

Traders are awarded DXLT to their Bounty Wallets. DXLT can be redeemed against DXS's loyalty pool for BSV or USD. BSV or USD that is redeemed from the loyalty pool is credited to a trader’s Bounty Wallet in their DXS account. The BSV or USD in a trader’s Bounty Wallet can be used as margin to open trades on DXS.

An important thing to note about Bounty Wallets:

BSV or USD redeemed from the loyalty pool that is credited into a trader’s Bounty Wallet cannot leave the Bounty Wallet. The only way to extract BSV or USD from your Bounty Wallet is to use it as margin to place profitable trades on DXS. Any profits will be credited to your crypto wallet. The original BSV or USD redeemed into the Bounty Wallet will remain in the Bounty Wallet until it is expended in an unprofitable trade.

What is the DXLT supply and allocation?

There will be a fixed supply of 3,500,000 DXLT:

  • 1,500,000 DXLT for successfully inviting new traders to DXS

    • 6 DXLT per new invited trader

  • 1,000,000 DXLT for profit deductions

    • 10 DXLT per $100 of profit deducted

  • 500,000 DXLT for paying holding fees

    • 20 DXLT per $100 of holding fees paid

  • 500,000 DXLT for paying bug bounties

    • Decided on a case by case basis

How does DXLT redemption work?

A trader redeems their DXLT in DXS's loyalty pool for BSV credited to their Bounty Wallet without possibility of withdrawal. They get the same percent of the loyalty pool as their percent holding of DXLT's circulating supply.

The concept of ‘circulating supply’ is important. Circulating supply of DXLT is 3,500,000 minus the amount of DXLT DXS holds.

Quick example:

A trader on DXS has a balance of 1,000 DXLT in their Bounty Wallet. The trader wants to redeem their 1,000 DXLT for BSV (same applies for USD loyalty pool)

  • 100,000 DXLT have been awarded to traders so far

  • No DXLT have been redeemed at the loyalty pool for BSV

  • DXS is holding the remaining 3,400,000 DXLT

  • Circulating supply is 3,500,000 minus 3,400,000 = 100,000

  • There are 1,000 BSV in the loyalty pool

The trader holds 1,000 DXLT which is 1% of the circulating supply (100,000). The trader redeems their DXLT for 1% of the BSV in the loyalty pool (10 BSV). 10 BSV is made available in their Bounty Wallet to open trading positions on DXS.

  • DXS now holds 3,401,000 DXLT

  • Circulating supply is 3,500,000 minus 3,401,000 = 99,000

  • There are 990 BSV in the loyalty pool

Note, DXLT tokens do not disappear, they simply return to DXS and are further distributed.

Which wallets will support DXLT?

Will I be able to trade DXLT?

DXS will not buy or sell any DXLT on the secondary market and does not encourage speculating on the market price of DXLT. Holders of DXLT may opt to trade directly between each other, on decentralized orderbook or AMM style exchanges.

Is DXLT a security?

Read this post for our analysis of this question.

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