🔄 XUSD is Vibratile

Description: Understanding Vibratile Tokens and the XUSD Mechanism


Vibratile: capable of or characterized by oscillatory motion.

A Vibratile token is a digital asset that oscillates around a target price, fluctuating above and below a fixed point. Unlike stablecoins, which aim to maintain a steady value, Vibratile tokens leverage volatility to maintain price stability. For instance, XUSD oscillates around 1 USD but should not be confused with a stablecoin.


🌉 Conceptual Analogy

Imagine a loose, dangling rope bridge that you need to tighten in order to cross. To raise the bridge, you shorten the rope, and when it gets too high, you add more rope to bring it back down. Similarly, XUSD contracts its supply by burning tokens (shortening the rope) to raise the price. When the price is too high, it inflates the supply (adds rope) to bring it back to the target.

This simple analogy helps illustrate the mechanics of XUSD: balancing contraction and inflation to maintain its peg.


🪙 How Vibratile Tokens Differ from Stablecoins

Unlike stablecoins, which maintain value through collateral, Vibratile tokens like XUSD rely on token mechanics and community support.

  • Stablecoins: Typically backed by reserve assets, such as USDC, which holds a 1:1 ratio with USD.
  • Vibratile tokens: Maintain their peg using algorithms and mechanics that adjust the token supply through contraction and inflation.

⚙️ Mechanisms of XUSD

🔥 Contraction

Contraction occurs when the token supply decreases, preventing inflation. XUSD reduces its supply through a burning mechanism, removing tokens from circulation.

  • Dynamic Taxes: 70% of all transaction taxes are burned, while the remaining 30% is used for bonds. This ensures a continuous contractionary burn, which increases with transaction volume.
  • User Contributions: Users can contribute to token burns and receive credits for helping reduce the supply.

💹 Inflation

In contrast to contraction, inflation occurs when the token supply increases. When demand for XUSD exceeds the supply, inflation becomes necessary to lower the price back to the target level.

  • Positive Use of Inflation: Inflation is used as a tool for economic growth and price stability, rather than having negative connotations.
  • Inflationary Rewards: Key stakeholders receive inflationary rewards to adjust the price of XUSD.

The rate of inflation is based on the Time-Weighted Average Price (TWAP) and epoch periods. Adjustments are made when necessary to keep inflation aligned with economic growth.


🤝 Importance of Community Trust

The stability and success of a Vibratile token like XUSD are deeply tied to the trust and perceived value within its community. Community support plays a key role in maintaining the peg and ensuring long-term growth.


🚀 Next Steps

In the upcoming brainstorming section, we will explore ways users can actively contribute to the contraction of XUSD while increasing their personal earnings.


🛠️ Key Takeaways:

  1. XUSD uses oscillatory mechanisms to maintain its target price, unlike stablecoins.
  2. The contraction mechanism burns tokens to reduce supply, while inflation adjusts supply when demand exceeds the peg.
  3. Community trust is essential to maintaining the stability and growth of XUSD.