Summary
This proposal seeks to initiate a token swap operation in which the current $XMT governance token will be replaced by a new token (ticker to be decided). This change follows MetalSwap’s recent rebranding to Denaria and aims to align the tokenomics and governance structure with the broader scope of Denaria’s decentralized derivatives suite.
Background and Context
The MetalSwap DAO has already voted in favor of two TempChecks that resulted in significant milestones: the rebranding of MetalSwap to Denaria and the deployment of a Perpetual DEX.
MetalSwap rebrand → Snapshot
Perpetual DEX deploy → Snapshot
An important discussion has taken place on the governance forum regarding the role of $XMT within Denaria. Insights and feedback from this discussion have contributed significantly to the composition of this specific proposal.
Forum discussion → Forum
Proposal Details
The $XMT token was originally designed as MetalSwap’s governance token, supporting hedging contracts as its primary product. All previous MIPs and Tempcheck votes were conducted using $XMT. However, with MetalSwap transitioning into Denaria and expanding its offerings to include a perpetual DEX (currently in its demo phase), the existing token structure no longer meets the project’s needs.
Key Points
- Broader governance scope: The new token will govern both the hedging contracts (formerly MetalSwap) and the perpetual DEX, ensuring alignment across Denaria’s product suite.
- Enhanced tokenomics: The new tokenomics will account for incentives and growth strategies for both products, addressing the limitations of $XMT, which was tailored solely for hedging contracts.
- Protocol fees sharing model: The new token will introduce a staking mechanism aligned with evolving DeFi practices and DAO feedback. Through staking, protocol users will be able to lock their tokens, granting them the opportunity to receive a proportional share of the protocol fees generated by the protocol’s autonomous contracts, based on their individual contribution.
- Ticker improvements: The current token ticker, $XMT, is directly derived from the MetalSwap brand. However, with Denaria now established as our new brand identity, we need a token ticker that better aligns with and reflects our derivatives suite.
Token Swap Mechanism and Ratio
If approved by the DAO, the token swap operation will allow $XMT holders to claim the new governance tokens via a dedicated interface.
- Fair allocation: Holders will retain their proportional ownership. For example, if an address holds 1% of the $XMT supply, it can claim 1% of the new token supply.
- Swap ratio: Each $XMT will be replaced by five new tokens, resulting in a total new token supply of 10,000,000,000 tokens—five times the current $XMT supply. The rationale behind the 1:5 ratio is that in the DeFi space, a 10B token supply is becoming a common standard among dApps. Additionally, it simplifies the calculation of economic metrics, such as the diluted market cap, making it clearer for users. It’s important to note that the future percentages of circulating supply will be the same as the current $XMT circulating supply.
- Snapshot: Before the token swap operation, a snapshot will be conducted to determine the allocation of the new governance token.
Timeline and Milestones
Here the path that, if approved, will bring us to the token swap:
- Vote period: this proposal will be voted from the 18/12/24 and the vote will last for 3 days.
- Development of the token swap interface: A user-friendly front end will be created to facilitate the token swap process.
- Snapshot: The snapshot will be finalized just before the token swap.
- Token deployment: The new governance token will be deployed on the blockchain.
- Launch of the token swap operation: The swap interface will be activated, enabling $XMT holders to claim the new governance tokens.
Conclusion
This is a pivotal moment for Denaria, as completing the token swap operation will lay the foundation for the future project’s success.
If this proposal is approved, a migration process to transition the DAO from $XMT to the new token will be necessary and will be discussed in the forum.
All the $XMT holders are encouraged to vote and share their opinion on this critical proposal, which, if approved, will mark a turning point in the history of the project.