SIG Token & DAO
What is SIG token and how DAO works
The SIG token is a central unit in xSigma DEX. You receive SIG tokens for staking LP pool shares, and use SIG to vote for decisions regarding DEX development.
SIG has no intrinsic value. xSigma specifically renounced any representation or warranty as to the value of SIG. Instead, xSigma has programmed its DeFi platform to interact with SIG as a utility token, with the uses indicated in the whitepaper here: governance and cashback.
The xSigma governance token is called ‘SIG’ and has no intrinsic value. xSigma specifically renounced any representation or warranty as to the value of SIG. Instead, xSigma has programmed its DeFi platform to interact with SIG as a utility token, with the uses indicated below.
Initially, the only way to get the SIG token is to provide liquidity to xSigma DEX with stablecoins DAI, USDT, or USDC.
When there is enough liquidity, you will be able to buy SIG token from Uniswap.
Having SIG in your wallet provides greater cashback when you use the exchange.
You can burn the SIG tokens. It works as follows: there is a current price, which is changed each block according to a predefined formula. You can exchange your SIG anytime to a fraction of accumulated fees.
The SIG token is minted gradually, at a constant emission rate per block. It starts at a classic Bitcoin speed of 50 per block and then halves each 210,000 blocks. However, DAO will be able to speed up or slow down this rate. On the time of deploy, we chose to slow it down 4 times, meaning its normal rate is 12.5 tokens per block.
For the first four weeks, the SIG mint will be 2x the normal speed, and for the second four weeks, it will be 1.5x the normal speed. After that, it will continue according to the formula.
This way, for the first four weeks, total SIG mint will be 25 tokens per block.
Each mint is distributed among these three categories:
- LPs, including pool 1 and pool 2, receive 60% of the minted SIG
- xSigma R&D Fund receives 30%
- Growth Fund allocated for marketing purposes receives 10% of SIG
SIG token total supply is capped at 24,024,024 tokens. Even though DAO can change the minting speed, they can only speed it up or slow it down. They can't change the predefined mint formula. No more SIG tokens will be produced after the distribution is finished.
DAO stands for a Decentralized Autonomous Organization. It is a form of governance for controlling a decentralized project.
In a DAO, users may create proposals and vote on-chain. Proposals that gain enough support are automatically executed.
There are many forms of DAO existing today. xSigma uses a modified version of Compound's governance framework.
SIG token is the only way to vote in xSigma DAO.