Airdrop is about to start: Is Arbitrum eco-game Layer3 Xai worth a shot?

On December 16, 2023, Arbitrum ecological game Layer3 Xai released a mysterious message on social platforms: “ai_dr_p soon”, which aroused widespread attention from the cryptocurrency community. This short and subtle message seems to hint at the possible imminent airdrop of Layer3 Xai, a move that has undoubtedly breathed new life into the entire gaming ecosystem. As Xai is about to launch an airdrop, let’s take a look back at the project’s past and present.

Xai’s tweet about the upcoming airdrop

Xai recently released tokenomics, and the distribution mechanism has attracted attention

Looking back at Xai’s history, it released its tokenomics on October 26 of this year. The total supply of Xai and esXai (staking) reached a staggering 2.5 billion. More notably, more than half of the supply, or 50.1%, is allocated to the community, Sentry node operators, and the Data Availability Council (DAC), demonstrating the importance Xai places on its community members and contributors. At the same time, 22.4% of the tokens are distributed to investors, 20% to team members, and the remaining 7.5% to the development and maintenance of the ecosystem.

On a technical level, XAI shows its uniqueness. It is a permissionless Orbit chain that uses the Arbitrum Nitro technology stack and aims to bring gaming-centric Layer 3 solutions to the gaming industry. This technology not only improves transaction efficiency, but also enhances the scalability of the network, creating more possibilities for game developers and players.

Dapps in the Arbitrum on-chain ecosystem

In addition, Xai’s network allows anyone to participate by operating a node. This not only provides an opportunity for regular users to earn rewards from the network, but also allows them to participate in the governance of the network. This feature exemplifies Xai’s commitment to decentralization and providing opportunities for community members to participate and contribute substantively.

It is worth mentioning that Xai was developed by Offchain Labs using Arbitrum technology. This collaboration demonstrates Xai’s potential in terms of technological innovation and ecosystem building, while also proving its position and influence in the cryptocurrency industry.

As the community’s anticipation of Xai’s airdrop increases, we can foresee new opportunities for this ecosystem. In the following sections, we’ll dive into Xai.

Technical solutions close to L3: A brief analysis of the new trends of the Foundation and Sentry nodes behind XAI

Dig deeper into XAI and we’ll see that the financial backing and technical architecture behind it is the key to its success. Just like many blockchain projects, XAI has a foundation behind it. Among them, Xai is backed by the Ex Populus Foundation, which raised $12 million two years ago, plus some undisclosed funding. This funding scale, especially when compared to Offchain Labs’ funding of more than $120 million, shows that the XAI project has a strong economic foundation.

Well, for the Sentry node of XAI Games, there are some new developments. As an L3 blockchain, XAI Games is designed to allow different operators to run nodes on multiple platforms, whether in the cloud, laptops, or desktops, guaranteeing the integrity and security of the network. This flexibility provides a wide range of users with new opportunities to participate in blockchain operations.

Of particular interest is the way Sentry nodes are sold. XAI Games plans to sell 50,000 node key NFTs through a Dutch auction. This way of selling allows the price to change over time, starting at 0.13E and now reaching 0.4E on Tier 9. Pegging the Sentry node price to ETH coin may be an attractive strategy for investors, but it also brings market price volatility considerations.

In summary, the financial backing behind the Xai Foundation and the innovative sales strategy of its Sentry node together form the two pillars of the XAI project. This not only provides a solid financial foundation for the future development of XAI, but also provides new technical and economic opportunities for participants. In what follows, we’ll explore Xai’s tokenomics and its potential impact on the ecosystem as a whole.

Understanding XAI and esXAI: Understand the core economic mechanism design and development dynamics of the project

XAI is not only the token of record of the Xai blockchain, but also the cornerstone of its ecosystem. Similar to traditional L1 and L2 tokens, XAI’s utility is broad and significant, it is fully transferable, acting as a gas token in the Xai L3 ecosystem. This means that all network operations and transactions need to use XAI as fuel.

The total supply of XAI is clearly distributed among the different groups. Of this, 20% is allocated to the core team and early contributors, which will be unlocked starting 6 months after the token offering (TGE) and gradually fully unlocked over the next 36 months. In addition, 22.41% of the supply is purchased by early investors, which is unlocked 6 months after TGE and vested over 24 months. In terms of ecosystem allocation, 2% of the supply is designated for market makers and unlocked immediately at TGE, and 5.5% of the supply is used for ecosystem development, which will be unlocked 6 months after TGE and completed within 36 months.

The Xai testnet has surpassed 60 million transactions

XAI can also be exchanged for esXAI, which is a special type of token. esXAI is different from XAI in that it is non-tradable and is primarily used for staking in the Xai ecosystem, resulting in multiple stakes for stakers. This includes rewarding Sentry node operators and providing them with a range of perks and benefits. esXAI’s staking mechanism allows node operators to freely adjust their staked esXai between three different accounts:

Yield Account: Node operators who stake esXai in this account can earn more esXai rewards.

Culture Account: By staking esXai, node operators can participate in exclusive events and NFTs related to games launched on the Xai blockchain.

Governance Account: Node operators can obtain the governance rights of the DAO through staking, including the right to propose DAO/foundation funds.

The exchange rules between Xai and esXai are bidirectional, allowing users to choose according to their needs. The process of exchanging Xai to esXai is free, there is no penalty to pay, and the ratio is always 1:1. Redeeming esXai back to Xai, on the other hand, involves an unlocking period, which can be decided by the user. The redemption ratio varies with the length of the lock-up period, with the longer the lock-up period providing the higher the redemption ratio.

The impact of this exchange mechanism on the Xai ecosystem is significant. First of all, it creates a certain level of deflationary pressure for Xai, as all gas paid in the Xai ecosystem is burned. Second, the esXai emissions of the Sentry node depend on the current circulating supply of Xai and esXai. This dynamic emission rate design is designed to automatically adjust to changes in the total supply, guaranteeing flexibility and adaptability of supply.

In addition, the exchange mechanism of Xai and esXai essentially reduces the selling pressure in the market. This design is especially important in combination with Xai’s strong gaming ecosystem, including relationships with large partners such as Tencent. It not only supports the continued development of the Xai ecosystem, but also provides a window of time for community members to see the explosive development of the ecosystem and choose to hold it after the mainnet launches.

Sentry node network rewards in the Xai ecosystem are an aspect to keep an eye on. While it is difficult to accurately predict the rewards for each Sentry node, based on market conditions and assumptions, it is possible to estimate the different reward scenarios that may result from running a Sentry node. These estimates are based on assumptions that the total supply of XAI and esXAI will not exceed 2.5 billion, supply deflation due to 100% gas burning, and that the Xai Foundation will not sell more than 50,000 Sentry keys.

The economic model of XAI and esXAI forms the core of the Xai ecosystem, and their interaction not only affects the operational efficiency of the network, but also has a profound impact on the stability and sustainability of the ecosystem as a whole.

The future of Xai’s development is unpredictable, but its innovative attempts are worthy of recognition

As the Xai ecosystem grows and matures, the design of the XAI and esXAI tokens shows its ambition in building a diverse and sustainable blockchain environment.

XAI, as the basic token of the ecosystem, provides the fuel needed for the network to run, and the introduction of esXAI brings more staking opportunities and rewards to participants. This dual-token system not only ensures the efficient operation of the network, but also encourages community participation and investment.

With this, we can foresee that the XAI ecosystem will continue to attract more participants and investors. Its deflationary mechanism and staking incentive design are expected to provide Xai with a stable and vibrant ecosystem in the future. This will not only facilitate growth within the Xai ecosystem, but may also bring new innovation and growth drivers to the blockchain industry as a whole.