![Cover image for [Proposal]Xave Deployment Grant Proposal](https://www.xdc.dev/images/N3i3WXG4r3qVU3ulIwuU8e3mRYWTPa0aFDCujkQoATg/s:1000:420/mb:500000/ar:1/aHR0cHM6Ly93d3cu/eGRjLmRldi91cGxv/YWRzL2FydGljbGVz/L21nNTZoenZlZ3hk/Mmo5ZjcwdTJlLnBu/Zw)
Motivations
Xave has brought liquid FX markets to DeFi, via its’ novel FXPools built on the Balancer v2 Vault. Stablecoin issuers (Circle, Stasis and StraitsX) have created 3 FXPools on Xave and have seen ~$37M worth of forex trades settled on the platform across EUROC, USDC, EURS and XSGD stablecoins.
Xave now intends to bring liquid FX markets and unlock 24/7 FX trading (even on weekends!) to XDC’s enterprise network.
Ecosystem Benefits
Deploying Xave’s FXPools on XDC would unlock major use cases, such as 24/7 Real World Asset (RWA) trading and tokenization, cross border settlement (such as bonds and remittance), 24/7 stablecoin FX and basically anything that requires real world asset liquidity beyond just USD pegged stablecoins.
The “FX Invariant” vs StableSwap vs Constant Product
Read detailed behaviour here https://docs.xave.co/product/amm.
The novel “FX Invariant” is built and optimised for;
- 24/7 FX trades (even on weekends!)
- auto rebalancing FX LP ranges (unlike Uni v3 that needs manual range management)
- Bringing live off chain price on chain
| Property | FX Invariant | StableSwap | Constant Product | Concentrated Liquidity |
| Type of Trading | Real World Assets (gold, silver, oil, currencies, etc)
Any tokenized asset where pricing is off chain |
For like-priced stablecoin trades | Volatile tokens where pricing is on chain | Volatile tokens where pricing is on chain |
| Capital Efficient for FX |
Yes
“$1M TVL enables ~$300k FX accurate trading” |
No
Needs multiple millions of USD to enable ~$300k FX accurate trading |
No
Needs multiple millions of USD to enable ~$300k FX accurate trading |
Yes |
| LP Management | Passive
Real time FX market pricing via Chainlink integration Auto LP range adjustment via Chainlink |
Passive | Passive |
Active
FX LPs have to manually adjust LP range based on off chain FX markets |
Deployment Cost Rationale
Typically, Xave expands to new chains only where the Balancer v2 Vault is present (takes roughly 1 week). Expanding to XDC would require the Xave team to fork and deploy the Balancer contracts, significantly adding to the work and time needed.
See Component Dependencies here https://drive.google.com/file/d/1LPS1I1GBQf3G_Sj75pDCBPJN-cm0Yo1l/view?usp=sharing
Rates
| Role | FTE / mo | Rate / mo (USD) | Cost / mo (USD) |
| Senior Front End Dev | 1 | 7,000 | 7,000 |
| Senior Full Stack / Solidity Dev | 1 | 8,000 | 8,000 |
| Technical Project Manager | 0.5 | 6,000 | 3,000 |
| Product Manager | 1 | 10,000 | 10,000 |
| Technical Lead/Architect | 1 | 10,000 | 10,000 |
| Total | 4.5 | 38,000 |
Milestones
| Phase | Estimated Time (weeks) | Component(s) | Activity | Estimated Man Months |
| 0 - Kick off | T | Identify stakeholders to participate in “pilot FX transaction” | 0 | |
| 1 - Pre Pilot | T + 2 | Testnet Deployment:
|
Stakeholders to see demo of FXPool (FX swaps, arbitrage incentives, fee structure, etc) | 0.5 |
| 2 - Production Pilot | T + 6 | Deploy Xave’s FXPool, Token Vault, Incentives Module and FX Feed on XDC mainnet |
Chainlink to setup FX Feeds for production
Identify initial liquidity provider for at least 1M USD (like 50:50 EURS:USDC) |
1 |
| 3 - Seed + Incentivise Liquidity for more FXPools |
T + 8-10
(Depending on comms/logistics) |
Non gauge rewards contract for single token rewards
Allocate incentives to FXPools |
Determine list of initial FXPools to seed
Acquire incentives / decide what target incentives APR is competitive on XDC network |
0.5 |
| Total | 2 |
Total Cost
| Cost / mo (USD) | Man Months ( + 10% margin) | Total Deployment Cost (USD) |
| 38,000 | 2.2 | 83,600 |
About Xave
Xave Finance (pronounced “Save Finance”) has built liquid FX markets for DeFi. Xave's core product, the "FXPool", integrates our novel "FX Invariant" with the Balancer V2 Vault.
Website: https://www.xave.co/
Stats: https://dune.com/xavefinance/amm
App Links (Ethereum, Polygon POS, Avalanche):
Swap: https://app.xave.co/#/swap
Pool: https://app.xave.co/#/pool
Original FXPool Announcement with Balancer (under old brand): https://medium.com/balancer-protocol/halodao-aims-to-bring-defi-to-the-masses-with-custom-amm-built-on-balancer-v2-534c2d72312
See upcoming upgrade to FXPools: https://medium.com/@BalancerGrants/xave-finance-integrating-bb-a-usd-to-their-custom-fx-pools-7372eecc790e
Traction Elsewhere
As of August 2023:
- ~$37M FX trades
- ~$3.6M TVL/AUM
Networks:
- Ethereum Mainnet
- Polygon POS
- Avalanche
Past Integrations:
| Integration | Integration Type | Resources |
| http://circle.com/ | EUROC:USDC | https://twitter.com/XaveFinance/status/1686689252334280704 |
| https://stasis.net/ | EURS:USDC | https://twitter.com/smartcryptonew1/status/1690522225152335872?s=61&t=H2gLKX5R-g96RvBUhPZh9g |
| https://straitsx.com/ | XSGD:USDC | https://twitter.com/straitsx/status/1686915432551489536?s=61&t=_TD4VuTw5mac-p4vL2GfuA |
| https://balancer.fi/ | Infrastructure |
Discussion (1)
As an initial step to fulfill the "1 - Pre Pilot" stage, the Xave team has deployed test pools on Apothem while mocking the required Chainlink oracles. Swaps and LP deposits/withdrawals may now be tested.
Notes:
App Links: (switch network to Apothem)
Swap (app.xave.co/#/swap)
Pool (app.xave.co/#/pool)