One of the more popular centralized cryptocurrency exchanges, BingX, has announced the official listing of xCREDI on its spot trading platform.
As part of its listing campaign, the teams at Credefi Finance and BingX have also announced a massive trading competition where users can win up to 80,000 in xCREDI.
But what’s all the fuss about?
A smarter way to lend. $XCREDI is now trading on BingX Spot—where #TradFi evolves into #DeFi. @credefi_finance
Join the XCREDI Listing Carnival, Share 80,000 $XCREDI Reward Pool.
Event Details: https://t.co/Wku3LqwYP0
Listing Details: https://t.co/3wZ76imKqi pic.twitter.com/GvZupesUqS— BingX (@BingXOfficial) January 15, 2025
Understanding xCREDI: The Cornerstone of Credefi’s Ecosystem
Within the broader Credefi ecosystem, the xCREDI token plays a critical role. It’s purpose is to function as a deflationary, governance, and liquidity token. As such, it operates alongside the protocol’s primary token – CREDI. However, it offers some unique utilities and long-term value to participants that are only attributable to it. In the following lines, let’s try to break down the relationship between CREDI and xCREDI and where its long-term potential may be found.
The Key Differences Between CREDI and xCREDI
In a nutshell, CREDI is the main utility token within the entire Credefi ecosystem. It is the one powering basic functionalities such as lending, staking, and collateralization.
On the other hand, xCREDI is a token with a variable supply that’s obtained by burning CREDI. It offers advanced utilities, which include participation in governance and revenue sharing, while also introducing a deflationary mechanic to the ecosystem.
Both tokens are designed in a way that complements each other. That’s because CREDI serves as the foundation, while XCREDI is a more exclusive asset that’s tied to the platform’s long-term growth.
Obtaining xCREDI
There are a couple of ways to obtain xCREDI:
- Conversion from CREDI:
- Users can convert CREDI to xCREDI through the Credefi Security Module.
- CREDI deposited into the module is burned, and xCREDI is minted at a rate determined by a bonding curve. This means the more xCREDI is minted, the higher the cost for subsequent conversions, introducing scarcity. Example: Deposit 1,000 CREDI at a 1:1 rate to receive 100 xCREDI per month for 10 months.
- Direct Purchase:
- xCREDI can also be bought on Decentralized Exchanges (DEXs) or Centralized Exchanges (CEXs), offering an alternative for users who prefer not to burn CREDI.
xCREDI’s Long-Term Potential
As we mentioned in the beginning, xCREDI is designed to be a value-accruing asset that’s also deflationary. This is what’s supposed to make it an attractive long-term investment.
To digest:
xCREDI gives its holders a voice in shaping the future of Credefi by participating in its governance model. They can vote on platform upgrades, strategic decisions, and new features.
Apart from that, there’s a revenue-sharing program that also involves a buyback. In essence, a portion of all fees and interest earned on the Credefi platform is allocated to a buyback and liquidity provision program. This also has a deflationary impact because the purchased tokens from the xCREDI/USDT liquidity pool are burned, reducing the xCREDI supply over time in a bid to increase its value. And ultimately, as the platform and revenues increase, so will the demand for xCREDI.
Going forward, xCREDI holders can provide liquidity to the xCREDI/USDT (or DAI) pair on DEXs like UniSwap:
- Earn trading fees.
- Stake LP tokens in the Credefi Security Module for additional CREDI rewards.
Last but not least, the conversion from CREDI to xCREDI follows a bonding curve model. Early adopters benefit from lower conversion rates, while latecomers pay higher rates, creating a natural incentive for early participation.
How to Swap Between CREDI and xCREDI?
The process is relatively simple:
- Deposit CREDI: Users deposit CREDI into the Security Module.
- Burn & Mint: Deposited CREDI is burned, and xCREDI is minted in return.
- Gradual Conversion: Conversion occurs over time (e.g., 100 xCREDI per month for 10 months from a 1,000 CREDI deposit).
- Usability of Remaining CREDI: Until fully converted, the unminted portion of CREDI remains usable by the security module for system stability.
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