The Role of XMT on Denaria

✨ General
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Hi everyone,

MetalSwap is going through a period of profound change. As already decided by the previous two votes on Snapshot, a new financial derivative will soon be added to the dApp, specifically the Perpetual DEX, and MetalSwap will undergo a rebranding process, changing its name to Denaria.

These changes require us, as a community and token holders, to reconsider the role of the XMT token within the new suite of derivatives.

Certainly, some elements will need to change, such as the incentive system, to align with the new product. However, I believe this rebranding and evolution process presents an opportunity for a deeper transformation.

In recent months, I have analyzed many “token swap” operations in DeFi, i.e., processes of migrating from an “old” token to a “new” one, all completed following rebranding efforts.

Some examples are: MKR → SKY; FTM → S; BTRFLY → DINERO; MATIC → POL; MUTE → KOI.

As mentioned earlier, I believe this is a unique opportunity to rethink the structure and purpose of our governance token. The token swap offers an exciting chance to revitalize the token and adapt it to the needs of Denaria’s new suite of derivatives. This approach will allow us to essentially start fresh and position the token in a new light.

I invite you to share your opinions so we can begin a conversation about it.

Diego.crv

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Hi Diego,

Very interesting topic, I also think it’s a good opportunity for a token swap for several reasons:

  • Rethinking the Token allocations based on new needs
  • Designing a solid revenue share system – maybe it’s time to abandon buybacks. I’ll address this in another post.
  • Avoiding confusion between the new Denaria brand and the fact that XMT refers to Metalswap since it’s named that way onchain.

I’m curious to know what other members of the community/DAO think about it.

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Hello Diego and to the whole community,

I fully agree that this rebranding process represents a valuable opportunity to rethink the role of the $XMT token within the new Denaria ecosystem. The rebranding is not just an aesthetic evolution, but a concrete opportunity to renew the identity and functionality of the token, better aligning it with new financial products, such as Perpetual DEX.

A token swap could not only resolve any confusions related to the old name, but also allow tokenomics to be restructured to fit future needs. In my opinion, this would give us the opportunity to build stronger governance and incentivise more active community participation, as well as improve the incentive system for users to interact with the new derivative instruments.

It would be interesting to explore how these changes could make Denaria even more competitive in the DeFi landscape.

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I agree with what you say, this is the best timeframe to rethink the token.

Regarding its allocation, I am curious to see what ideas there are in your minds. In this moment, and IMHO, I see a 1to1 change from XMT plus some rewards if vested - I’m pretty sure you have something more to discuss here.

It’s a good idea to change the revenue share system, we talked about that some time ago. I will read the thread about it with interest.

Naming: DENARIA is too long, let’s get a shorter ticker, better 3 or 4 characters. I see that other tokens have already been deployed on various chains with similar names, but none worth mentioning. I think we can simply choose the one that suits Denaria best, I would use DNR, XDNR or something similar to tie the token to the brandname.

I would add an argument about the reference blockchain: I am aware that all the development of XMT has been focused on the security of the Ethereum core layer, and it was a very good choice in 2021. So, now talking about a token swap, perhaps the time is ripe enough to consider token generation on a well-secured layer-2.
MetalSwap has already concluded interesting partnerships with Optimism and Linea, and can certainly have more appeal for other Layer-2s with the integration of the PerpetualDex tool. This can lead to new partnerships, new users, new liquidities, and new possibilities for brand awareness. Also new VCs, why not.

What do you think about it?

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Hey Diego and everyone,

I wholeheartedly agree that it’s time for change. The evolution of MetalSwap into Denaria and the addition of Perpetual DEX necessitates a reevaluation of the XMT token’s role.

It’s crucial that we retain the core functionalities of XMT as both a governance and utility token. This means ensuring it plays a meaningful role in the incentive structures of Denaria’s new derivatives suite.

When considering a token swap, it’s imperative that we maintain fairness and proportionality. Existing XMT holders should see their voting power and overall stake in the ecosystem preserved through a proportionate swap.

This is an exciting opportunity to revitalize the token and align it with Denaria’s vision. I’m eager to participate in further discussions about how we can best achieve this.

Let’s continue this important conversation.

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Hi I have waited a few days before writing My opinion. First of all i tried to understand Denaria… how it work and where it fits in the financial ecosistem … The I tried to use the app. Both experiences have been positive even if the perpetual itself will not open to a much bigger user… Tradidional finance and cex already gives this tool… Or pheraps I missed something. But going back to the app… I think that if we make the finale on chain Version as easy to use as it is now the demo… … IT will be one of the first defi experience with a very great and simple UExperience.simply amazing… But
what i did next? Next step… in the last three days I did a deep dive study using chatgpt to stress the Project with assesments on 360 degrees evalutaion of the project, of the token, of the community of the general history, benefit and weakpoint of a rebranding of a swappin to the new token… . So long story short: Rebrand works if there is a reson to do it linked to a change from the original project and if it is supported by a campaign to disseminate the new projec that can give a new Force to the ecosistem. On the opposite side a rebranding has the risk that it will appear to some investor like a brand new project with no hisory or relayability… there is the risk if is not well highlighed that we loose metalswap resiliance… and survival story of 3 years that demonstrate the Good basment that are the backstone of a solid project… And this is valid especially when we go to the item of change the token… Do we really need the swap? The positive aspects will be more of the negative ? Is systemic that when xmit will became DENsomethingh probably we will find new people. How many… I dont know… But. Is also sure that part of the old xmt owner that are not happy of the price will start to blaime and hate the idea to be obliged to do something for replace or swap the xmt with the new token and this will result in a bad reputation that Denaria/Xmt will start to challenge along the community… That will start to generate a very honest question why the Rebrand.?. There was a structural need to Rebrand app and token or a lot of people will start do doubt that is only a way to look for new investors. And finally My assesment. If we go for a a swap of the token it must find a way to do it in a way that the actually owner don’t have ti be challenged doing the swap… IT must happen as much authomatic as possible… Or… Just stay with xmt… Change the image of the token and thas all. These are My 2 cents

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Hi LuigiM,

I agree with you on some points, but not on others.

First of all, I agree that the token swap operation must be as easy as possible. I don’t think it’s possible to automate the entire process (probably one transaction will be needed by holders), but it should definitely be as simple as possible. Also, what’s very important is that holders MUST NOT be diluted. This means that the voting power must remain the same, even if the tokenomics of the new token are reduced or increased.

I don’t agree when you say that the rebrand could lead to a ‘trust’ issue with the new token. As I mentioned in the original post of this conversation, many more important actors in DeFi have completed token swaps, and I never felt that the communities of those projects saw their new projects as less trustworthy.

When you say, ‘Rebrand works if there is a reason to do it linked to a change from the original project,’ I think the original MetalSwap project has now completely changed. We started as a dApp providing hedging contracts, but now we are a derivatives suite offering two (and maybe more in the future) derivatives products.

Overall, I think that the positive aspect are way more than the negative.

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Good morning, in my opinion, the XMT ticker should not be changed. Firstly, many XMT holders risk getting lost in the shuffle of the switch. A lot of them have set aside their XMT tokens in some corner of their ledgers, feeling demoralized by the project and exhausted by the collapse in value. Currently, there are only about fifty subscribers in the Denaria Telegram group, compared to over 5,000 in the XMT group, which, in my view, indicates a decline in interest from XMT holders.

If Denaria can attract new investors and the platform succeeds, it would be a great satisfaction for XMT holders to one day wake up and find their tokens back at their original purchase price. Utopian? Maybe, but it would also be a sweet revenge for the founder against all the detractors of the project. Think about it…

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I am always quite hesitant to express my opinion when there are these discussions, first of all because I know that my opinion weighs and could “stifle” opinions different from mine.

I would like to express it anyway, considering the relevance of the topic and the fact that I am among the people who have more “skin in this game”.

LET’S REMOVE THE PRICE

I am aware of the fact that every time we talk about tokens, we always think about the price. It is important that there is economic value to maintain the balance of interests (game theory) of all those involved, but let’s try to remove this aspect from the game for a moment. We can take it back immediately after having focused quietly on the governance and the utility aspects.

The basic problem is that XMT acts as a governance token of a protocol called MetalSwap (and its DAO) oriented to hedging swaps for digital assets, but with a target of commodities and both retail and business use.

Denaria is a product completely focused on retails and the volatility of purely digital assets. RWA integration is possible, but sees a more adequate ecosystem on hedging swaps.

The basic problem is: how to manage the governance of Denaria perps with a token whose task is to manage another protocol?

Metalswap, as a hedging swap solution, will be integrated into a derivatives suite that takes the general name of “Denaria”, (this has already voted by the XMT DAO), where the user will find both perpetuals and swaps.

In my opinion, at this point, it makes sense for the governance to be expressed through a passage/evolution of the same, involving the role of the token.

BACK TO THE PRICE…

The utility of the token can only be expressed if it has an economic value (see for example incentives for LPs, MMs and arbitrageurs).

The problem here is that XMT expresses its value only based on the usage of swaps on the “old” MetalSwap.

With the arrival of perps, there will be a need to manage other types of incentives and the token will have to be integrated into more complex mechanisms that benefit and balance the derivatives suite as a whole.

That said, I don’t see how XMT can be used as a token in the new Denaria, but I’ll continue reading and waiting for more details on this.

THE PASSIVITY OF TOKEN HOLDERS

A final note on the “passivity” of token holders.

I understand that the trend in the price of XMT has led to a situation where those who remained are in a state of “standby”, but I must remember that XMT is still a governance token, it has never been a “store of value” token, because its value depends on the performance of the protocol. The performance of the protocol also depends on how it is managed, or governed. The ability to propose and vote on changes in progress is the only thing that gives value to the token, it is the representation of progress and participation in the protocol itself (intended as a dApp or set of smart contracts).

So a liability is a legitimate choice, but not one that can be supported in a DAO. This means that any holder cannot afford not to stay updated on what happens to their tokens, because each holder is the ONLY one responsible for what they own. If the DAO goes towards a token swap, each holder has the duty to follow the process of change, unless they decide to remain passive and take the consequences.

Obviously the simplicity and timing of the process must be reasonable, but this will be discussed if the process continues.

Thanks for the feedback, I will continue reading to see if there will be details on how to solve the problematics I’ve expressed.

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As an owner of the XMT Token since the beginning of the project, I cannot help but give my opinion on the matter. I am shocked to learn that there is a discussion about whether or not to give XMT a central role in this evolution. Instead, from the posts I read, it seems to me that this is under discussion. The creation of a new token is even being aired… I don’t think it would be right for those who trusted the Team and supported and followed the project in the various phases by investing in it and waiting patiently. I read from Tiziano’s post that he doesn’t see how XMT can interact with the new expanded product; I don’t understand how an evolution of the project can be proposed starting from the role of xmt… maybe someone can explain to me…! Starting from the assumption that in my opinion it would have been correct to foresee XMT in all the evolutions before proposing them, in my opinion at least now we need to discuss only how XMT can be integrated in order to give importance to the Token… Otherwise, we might as well sell it and collect the few pennies left.

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Hello everyone,
In case there was a vote, I would propose to have only one token tied to denaria to avoid confusion and airdrop it to xmt holders.

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Premising that I am not an expert but merely an investor.

  • “Metalswap, as a hedging swap solution, will be integrated into a derivatives suite that takes the general name of “Denaria”
    I had also understood from zooming discussion with Lorenzo that Denaria would replace Metalswap. However, it seems that Metalswap will coexist with Denaria, meaning we will have two platforms: one for fast retail trading (Denaria) and the other for commodity swaps (if they are ever fully integrated into the digital world). Have I understood this correctly? Will the Metalswap project, as originally conceived, continue?
  • “how to manage the governance of Denaria perps with a token whose task is to manage another protocol?”
    Is this a technical issue, a compatibility problem with the underlying code, or is it related to branding and government policy?
  • “With the arrival of perps, there will be a need to manage other types of incentives and the token will have to be integrated into more complex mechanisms that benefit and balance the derivatives suite as a whole.” …“I don’t see how XMT can be used as a token in the new Denaria”
    For example—though this may be a naive suggestion—couldn’t XMT be used to pay fees on Denaria trades? In this case, the more Denaria is used, the greater the demand for the token.
  • “This means that any holder cannot afford not to stay updated on what happens to their tokens, because each holder is the ONLY one responsible for what they own. If the DAO goes towards a token swap, each holder has the duty to follow the process of change, unless they decide to remain passive and take the consequences.”
    I absolutely agree with this point, which is why I’m here.
  • “I must remember that XMT is still a governance token, it has never been a “store of value” token”…
    I apologize, but I have to disagree with you on this. I prefer not to delve into that topic here.
  • …“because its value depends on the performance of the protocol. The performance of the protocol also depends on how it is managed, or governed. The ability to propose and vote on changes in progress is the only thing that gives value to the token, it is the representation of progress and participation in the protocol itself”
    Exactly! So, what was missing in Metalswap? I’m not trying to be contentious, but I want to understand what didn’t work in Metalswap and whether Denaria has the potential to address those shortcomings.
    Thank you for your contribution and the work you do…
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GM Denaria community

I re-read all the messages related to this discussion and noticed there is some confusion about “what Denaria is,” “the role of this possible new token,” “what a token swap is,” and other related topics. Since I initiated this discussion, I would now like to clarify some of these topics.

First of all, I’m very happy to see that so many token holders are interested in the future of the project. There are a lot of more well-known projects out there in DeFi, but they don’t have anyone reading and discussing on their forums. This is something we should be proud of. :blush:

Let’s get back to the topic.

We are currently discussing the possibility of introducing a new token because the current one, “XMT,” was created for a project that has since evolved. However, what’s important to know is that a token swap means that the original token holders will NOT be left behind!

On the contrary, if the token swap operation will be completed, anyone holding XMT tokens will receive an equivalent amount of the new tokens. Therefore, as a DAO whose goal is to increase the usage of the dApp, we need to decide on the best solution to boost the use of our products (both the hedging swap and perpetual DEX).

I have already shared my opinion on this and believe that a new token is necessary because XMT, having been built around a single product rather than a suite, might slow down our development and expansion.

Once again, we need to find the best solution to generate interest and bring users to Denaria. If we succeed, we will all benefit, as everyone will receive an allocation of new tokens proportional to the XMT they currently hold.

Also, there was confusion regarding the relationship between DENARIA and METALSWAP. Denaria is a derivatives suite, meaning it is a project offering two different products. As voted by the DAO, the MetalSwap brand will be discontinued.

New users will know us solely as Denaria, and this alone could be a strong reason to proceed with the token swap. The token ticker should always align with the name of the associated dApp to maintain clarity and consistency.

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