X2Y2: Restructuring Community Token Economics to Build an Inclusive NFT Marketplace
TechFlow Selected TechFlow Selected
X2Y2: Restructuring Community Token Economics to Build an Inclusive NFT Marketplace
The popularity of NFTs continued to rise in 2021, and OpenSea, as one of the earliest NFT marketplaces, monopolized over 90% of the trading volume.
Navigating Web3 tides with focused insights
We at x2y2 share a common vision: to build a truly decentralized NFT marketplace and give back to the community. This is a mission, a journey, and our commitment.
The popularity of NFTs continued to grow throughout 2021. As one of the earliest NFT marketplaces, OpenSea monopolized over 90% of trading volume. Undeniably, OpenSea has contributed significantly to building the entire NFT ecosystem, but it also presents various issues, such as:
1) Frequent system outages affecting the entire industry
2) Centralized management, arbitrarily withholding user assets
3) Aligning with Silicon Valley and Wall Street investors, sharing massive transaction fees generated by the community
Unlike Web2, the underlying business logic of Web3 economies lies in "returning value to end creators"—every high-value on-chain action taken by users should be rewarded by the project team. Thus, at the end of 2021, challengers like OpenDAO and LooksRare emerged precisely to embody this Web3 spirit by distributing airdrops to OpenSea users, demonstrating to all of us that OpenSea is not invincible.
Did LooksRare Break the "80-20 Rule"?
Take the more popular LooksRare, for example. It attempted to challenge OpenSea's dominance through innovative mechanisms—an excellent start. However, setting aside product specifics, we believe it fundamentally suffers from several serious problems:
1) Whale-centric. LooksRare targeted its airdrop only at OpenSea users who had traded more than 3 ETH, representing just 20% of OpenSea’s total 900,000 users. Undoubtedly, these top-tier users are important. But with global NFT adoption still below 0.02% of the world population, shouldn’t we reward *all* participants and empower every NFT enthusiast?
2) Lack of transparency. Prior to its launch, 3.3% of LOOKS tokens were allocated to so-called strategic investors at undisclosed prices. Essentially, this is no different from OpenSea’s behind-the-scenes deals with Silicon Valley and Wall Street investors.
3) Wash trading. This is the most severe of the three issues. A large amount of wash trading dilutes rewards for regular users, penalizing honest participants. A small number of whales with capital and technical advantages capture the majority of daily LOOKS rewards.
LooksRare brands itself as “by NFT people, for NFT people,” but in reality, it operates as a “by RICH people, for RICH people” marketplace.
The Game Changer: X2Y2
The name X2Y2 comes from the mathematical formula of a perfect circle: x² + y² = r². Our journey to discover the formula for building a perfect decentralized NFT marketplace has begun.
X2Y2 aims to solve all three of the above issues present in LooksRare through the following tokenomics:
1. Inclusive Airdrop
We took a snapshot at Ethereum block height #13916166 (OpenSea’s first block in 2022). All 861,417 OpenSea users who conducted transactions prior to this block are eligible for the X2Y2 airdrop, with no expiration date for claiming. Together, they will receive 12% of the total token supply.
We appreciate the top 1% whales who contributed 44.96% of OpenSea’s trading volume. Yet, we remain committed to X2Y2’s vision: creating a truly decentralized, community-owned NFT marketplace. With this in mind, the airdrop follows a two-tier distribution model:
This allocation ensures that 95.17% of retail users from OpenSea receive 65.34% of the X2Y2 token distribution. Additionally, to ensure airdrops reach genuine potential users of X2Y2, there is a claim requirement: users must list all their OpenSea-listed NFTs on X2Y2 at equal or lower prices.
2. No Private Sale, No Institutional Investors
We will not conduct any private fundraising. Instead, we will hold a public Initial Liquidity Offering (ILO) based on a whitelist system. The ETH raised from sales, along with 1% of the total X2Y2 token supply, will be added to Uniswap to provide initial liquidity. All LP tokens will then be permanently burned. The whitelist rules and X2Y2 sale plan are as follows:
1) 1,000 addresses from Discord community members and users who traded on the X2Y2 test platform will be included in the whitelist, with results announced on Discord
2) Whitelist users can claim the X2Y2 Genesis Edition NFT, which grants priority access to advanced features in future iterations
3) 15,000,000 X2Y2 tokens (1.5% of total supply) will be publicly sold at a rate of 1 X2Y2 = 0.0001 ETH
4) Any unsold X2Y2 tokens after the ILO will be directly burned
5) After the ILO, 10,000,000 X2Y2 tokens (1% of total supply) and 1,500 ETH will be deposited into Uniswap to create initial liquidity
6) All LP tokens will be burned, permanently locking this portion of liquidity
7) Tokens obtained through ILO participation will linearly unlock over 360 days
The total supply of X2Y2 tokens is 1,000,000,000, with the overall token distribution as follows:
3. No Trading Mining
We do not offer trading mining—only staking rewards. Therefore, there is no incentive for wash trading, providing fair opportunities for ordinary users to earn higher long-term returns. X2Y2 stakers will share daily rewards of 5,000,000 X2Y2 tokens (0.5% of total supply) and 100% of the previous day’s fee revenue (with a 2% fee rate). Of these rewards, 5% combined with the initial 1% LP liquidity constitutes the 1.5% liquidity management portion.
Most general-purpose NFT marketplaces share similar core functionalities, and we are no exception. On February 4, 2022, X2Y2 officially launched its market beta—a fully functional NFT marketplace. Its smart contracts, frontend, and backend are 100% independently developed. Beyond basic NFT marketplace capabilities, it offers the following unique features:
1) Instant push notifications for buys and sells
2) Comprehensive rarity ranking and analytics
3) Bulk send and listing
4) Bidding on collections or specific traits
The market beta is just X2Y2’s first step. In 2022, you can also look forward to:
1) Availability alerts with trait-based filtering
2) Direct purchase of multiple items from listings
3) Exchange aggregation
4) 3D/VR immersive NFT marketplace UI/UX for display, social interaction, and trading
Our ultimate vision for X2Y2 is a decentralized autonomous organization (DAO), where DAO members collectively decide the project’s direction. We believe what drives DAO progress isn’t token price, but rather participant consensus around the project’s vision—and we will cultivate that consensus. After completing the first phase of marketplace development, we will begin exploring ways to gradually transfer leadership and financial control from the core team to the DAO.
Born for inclusivity, every NFT enthusiast is our strongest supporter. We will return the highest-quality project resources to our community users.
Community:
Website: x2y2.io
Discord: discord.gg/x2y2
Twitter: https://twitter.com/the_x2y2
Join TechFlow official community to stay tuned
Telegram:https://t.me/TechFlowDaily
X (Twitter):https://x.com/TechFlowPost
X (Twitter) EN:https://x.com/BlockFlow_News
