Developers Forum for XinFin XDC Network: Valid Protocol

2025 Grant Proposal | Valid V2 | LSD

Valid Protocol — Wed, 05 Mar 2025 18:18:27 +0000

I. Introduction

We are pleased to submit our request for the 2025 round of Community Grants to support the development of the Valid V2 LSD protocol. We are seeking 1 million XDC to fund the final testing, audits, deployment, and integrations for our Liquid Staked Derivative (LSD) token, which will be offered through the second version of the Valid Protocol.

Reference Link:
https://www.xdc.dev/duts/community-support-bounty-rules-and-application-form-3c7c

II. Applicant Details

About Us

X Digital Capital Solutions (XDCS) is a small product development team known for the self-funded development and launch of the XDC staking application, the Valid Protocol. Our team has successfully developed the protocol from concept to product, with a focus on retail users while remaining exclusive to the XDC Network.

Our team consists of five high-performing members, each bringing diverse strengths and expertise. Our backgrounds span business and technology consulting, project management, finance, sales, blockchain research, writing & communications, and public service as first responders.

Contact

X Digital Capital Solutions, LLC https://www.xdcs.io/
Contact Email contact@xdcs.io

III. Grant Application Details

Grant Category
Protocol Development: 30%
Code Audits: 40%
Integrations: 30%

Project Description

Valid Protocol V2 enhances XDC staking opportunities by eliminating the technical barriers to MasterNode operations, enabling participation from stakers of all sizes. Users can choose from multiple staking options, each with different lock durations, stake amounts, and expected annual percentage yields (APY).

The protocol offers three staking options; Users will be classified based on their selected staking option, i.e., Anchor Staking = Anchor Staker, Native Staking = Native Staker, Liquid Staking = Liquid Staker.

Anchor Staking

Anchor Staking is designed for larger stakers with a long-term horizon who are willing to lock their tokens for a steady yield. Anchor Stakers will receive the highest APY, which is greater than 8%, as a reward for their commitment to the protocol and network. This offering is ideal for self-managed XDC MasterNode owners, as it allows them to earn a higher APY than they would through self-management.

Liquid Staking: stXDC

Liquid Staking is tailored for users who want to maximize capital efficiency without sacrificing staking rewards. When users stake their tokens, they receive a Liquid Staking Derivative (LSD)—stXDC—which represents their staked XDC and continues to earn rewards. Liquid Stakers can swap freely between native XDC and stXDC, with the flexibility rewarded by a lower APY. This APY will be governed by the Valid Protocol’s Inventory Manager, a series of smart contracts that rebalance liquidity and incentives.

Native Staking

This option is designed for users who have similar needs to Anchor Stakers but may not meet the minimum liquidity requirements or have a shorter investment horizon. Tokens will be locked by the protocol for predetermined intervals, with the community providing input on these durations. The expected APY for Native Stakers will fall between those of Liquid Stakers and Anchor Stakers.

Project Links

Valid Protocol v1 | https://app.validprotocol.io/

Project Goals & Aspirations

Our primary goal is to establish stXDC as the leading Liquid Staked Derivative on the XDC Network. We aim to transition self-managed Standby XDC MasterNode operators by demonstrating how the Valid Protocol allows them to rehypothecate their staked assets, significantly improving capital efficiency without sacrificing yield potential.

If 25 to 50 percent of self-managed Standby MasterNode owners participate, it would unlock substantial liquidity for the network, driving product innovation and attracting new participants. We continuously engage with the XDC Network community to prioritize features and utility upgrades, with upcoming product rollouts that include Fiat On/Off Ramps, institutional staking participation, and governance features.

Milestones

Most Recent
The latest milestone stems from the Valid v1 protocol. We have been monitoring the application through the entire investment lifecycle, including components such as escrow, distribution, deposit, lock, mint, redeem, countdown, MasterNode creation/shutdown protocols, and emergency features.

Despite high demand, we chose to slow scaling efforts to ensure the system functioned as planned. Now that we have confirmed the success of v1, we are ready to integrate it into v2.

Current
We have developed the v2 components that were not included in the v1 architecture, including Anchor and Liquid Staking. Quality Assurance Testing (QAT) is in progress, with only minor UI modifications required.

Future
A. User Acceptance Testing (UAT) on XDC Apothem Testnet
B. Protocol Audit
C. XDC Mainnet Launch
D. stXDC & Partnership integrations

IV. Budget

Request: 1,000,000 XDC

We request funding to support the final testing, audits, and integration of our Liquid Staked Derivative (LSD) token within Version 2 of the Valid Protocol. The breakdown is as follows:

Security & Compliance
Smart Contract Audit (Independent Firm) – 10,000 USD
External Security Audit (Independent Firm) – 10,000 USD
Institutional Compliance & Legal Review- 20,000

Development & Deployment
Final Protocol Testing & Deployment - 10,000 USD
API Development & Integration - 10,000 USD
Server & Infrastructure Scaling – 10,000 USD

Operational Monitoring & Maintenance
Protocol Monitoring, Ongoing Maintenance & Support – 20,000 USD
External Security Audit (Independent Firm) – 10,000 USD

Partnerships & Integrations
Product & Strategic Partnership Integrations – 10,000 USD
Project Management & Coordination – 5,000 USD

Security & Compliance: $40,000
Development & Deployment: $30,000
Monitoring & Maintenance: $30,000
Partnerships & Integrations: $15,000

Total: $115,000

Total Requested Grant Amount: 1,000,000 XDC

Receiving this grant will greatly enhance our ability to successfully launch the Valid Protocol V2, ensuring it is rigorously tested, secure, and well-integrated into the XDC ecosystem, thereby increasing adoption and utility for LSD token holders.

V. Sustainability Plan

Near-Term Sustainability

The Valid Protocol V2 is designed to achieve long-term sustainability through a combination of different protocol fees. The protocol will generate revenue through transaction fees and staking commissions, while keeping operating costs manageable through automation, partnerships and efficient infrastructure scaling.

Protocol Revenue

Fees: A portion of the staking rewards earned by users will be allocated to the protocol. Additionally, a small fee for unstaking and converting LSD tokens to XDC will support long-term operational sustainability.

Staking as a Service: White-labeling services will provide customizable staking solutions for enterprises, financial institutions, and XRC-20 projects in exchange for service fees.

Valid Utility Token: The team will explore the possibility of launching its own token; however, this decision will be contingent on various external factors, including regulatory developments and community demand.

DeFi & Ecosystem Integrations: Yield Aggregation Partnerships – As stXDC integrates with more DeFi protocols, demand for stXDC will grow, bringing in additional liquidity and increasing total value locked (TVL).

Long-Term Sustainability

Valid Protocol’s financial strategy includes treasury and reserve management, increasing TVL, and strategic partnerships. By utilizing DeFi options and staking revenue from the treasury, we aim to generate additional income to support future operations and development. As TVL increases and more MasterNodes are operated, fee revenue will also grow, strengthening the protocol's financial position. Collaborations with other protocols and DeFi platforms will further expand adoption and opportunities within the Valid Protocol ecosystem.

Treasury Management

As the protocol adoption grows and revenue stabilizes, Valid’s Treasury assets will have more flexibility in how they’re deployed. For instance, utilizing treasury assets to support other DeFi protocols will generate further revenue while contributing to the growth of the broader ecosystem.

Total Value Lock (TVL)

A byproduct of TVL growth on Valid Protocol is the expansion of the LSD token, which can be freely utilized in other applications. This growth follows a 1:2 ratio of network total value expansion—for every one XDC staked, an LSD token is minted, enabling further utility and integration across the broader XDC ecosystem.

Strategic Influence

Beyond direct financial strategies, actively advocating for and influencing other teams to develop verticals that strengthen the sustainability of the protocol, including the rehypothecation of LSD assets or tooling to further polish the User Experience.

VI. Legal Information

Entity Name: X Digital Capital Solutions, LLC
Registered in: United States (Delaware & California)
Grant Recipient: X Digital Capital Solutions, LLC

[Informative] Retrieving Your Staked XDC on the Valid Protocol: A Step-by-Step Guide

Valid Protocol — Thu, 01 Feb 2024 17:35:51 +0000

The Valid Protocol is an innovative framework of smart contracts designed for the XDC Network, enabling users to work together and stake XDC tokens towards the operation of a Masternode.

This article is focused on a key feature of Valid Protocol. A 30-day window is allotted for collecting the necessary 10,000,000 XDC required to run a Masternode. This mechanism ensures that participants have a clear timeframe within which to achieve the staking goal.

Should the collective staking effort fail to reach the 10,000,000 XDC threshold within the designated 30-day period, the protocol safeguards the stakers' interests by allowing for the redemption of their staked tokens. This means that any XDC tokens staked are made redeemable to the wallet from which they originated from, eliminating concerns over locked or inaccessible funds.

Step-by-Step Redemption Process

Retrieving your staked XDC is a straightforward process. Below is a step-by-step guide to ensure you can redeem your tokens without hassle:

Go to Valid Protocol: https://app.validprotocol.io/
Start by connecting your wallet. You will be able to view the amount of staked XDC on the home page. If you open your wallet you will see the stXDC (staked XDC) balance. The presence of stXDC indicates that you have tokens currently staked on the Valid Protocol.
Navigate to the Portfolio
Locate and select the "Portfolio" option on the left side of the screen. Here you will see a "Holdings" section, where you will find a "Redeem" button associated with your staked XDC. Click on the "Redeem" button and proceed to approve the transaction. This action signals the retrieval of your staked XDC from the Masternode funding pool.
Initiate the Swap
After redeeming, move down to the "Settlement" section, where you will find the option to swap your stXDC for XDC. Click on "Swap" and approve this transaction as well.
Complete the Swap
Finally, access the "Swap" function, also found on the left side of your wallet's interface. Here, you will swap WXDC (Wrapped XDC) for XDC. Specify the amount you wish to swap, click "Withdraw," and approve the transaction.

Finalizing the Process
Upon completing the swap, you will see your XDC tokens returned to your wallet, with the stXDC now removed. This seamless process ensures that you have full control over your tokens, with the Valid Protocol providing a failsafe mechanism to protect your staked XDC.

The Valid Protocol's design emphasizes user security and convenience, offering peace of mind to those participating in the Masternode initiative. By following the steps outlined above, you can efficiently retrieve your staked XDC, ensuring that your digital assets remain under your control, regardless of the funding outcome for any particular Masternode.

This guide aims to assist XDC Network participants in navigating the staking and redemption process with ease, promoting a more accessible and secure digital finance ecosystem.

The Race for the Final Masternode Slots on the XDC Network: A Golden Opportunity for the Community

Valid Protocol — Sat, 13 Jan 2024 16:37:01 +0000

A Limited Window for a Lasting Impact

The XDC Network, known for its robust and secure blockchain infrastructure, has presented a unique opportunity that is quickly narrowing down: the chance at one of its prestigious Masternodes. With only 16 slots left out of the original 350, this is not just an opportunity to stake; it's a chance for the community to secure its own ecosystem of Masternodes. Traditionally dominated by early investors and institutions, thanks to the high requirement of 10,000,000 XDC, these Masternodes are now within reach of the broader community through the innovative Valid Protocol.
The Democratizing Force of the Valid Protocol
The Valid Protocol is a transformative solution, breaking down the challenging barriers to Masternode operation. By allowing the community to pool resources, it enables collective operation of a Masternode. This approach is not just about lowering entry barriers; it's a strategic move to diversify the network's governance and strengthen its decentralized nature.
A Stake in the Future
The urgency to claim the remaining Masternode slots goes beyond mere participation. If the XDC community successfully onboards 10 Masternodes through the Valid Protocol, they are effectively securing a platform for staking XDC for years to come. This long-term vision offers stability and sustained engagement within the network, allowing community members to reap ongoing benefits and have a continuous voice in the network's evolution.
The Valid Protocol stands out as a beacon of security and simplicity in the often complex crypto landscape. Valid Protocol offers a straightforward, dedicated staking service, enhancing both accessibility and peace of mind for participants.
A Call to Action for the XDC Community
This is a pivotal moment for the XDC Network and its community. With the Valid Protocol, the final 16 Masternode slots are a golden opportunity; they are a chance for the community to establish a lasting footprint in the network. The community's collective action in securing these slots will pave the way for a secure, staking ecosystem, offering benefits for years to come.

In summary, the closing window to obtain a Masternode in the XDC Network, coupled with the Valid Protocol, offers the community a rare chance to secure a long-term robust staking environment. This is more than an opportunity in a blockchain network; it's a commitment to a sustainable and inclusive future in the digital finance world. The time to act is now. Join together, secure these final Masternode slots, and take a definitive step towards a future where the community holds a lasting stake in the XDC Network.