Advanced staking possibilities with OptionBlitz
Summary
OptionBlitz offers several staking programs in the form of vaults. We will explore each of them and discuss the benefits plus some staking strategies available.
tl;dr The tokenomics model of OptionBlitz has built in impermanent loss protection offering unlimited upside exposure to the BLX token price and generous rewards for early investors with high yields and returns. By deeply integrating the BLX token pricing to the performance of the platform, investors don’t need to rely on speculation in order generate returns but revenue generation from trading activity.
BLX token utilities
- Enhanced staking yields for liquidity providers, staking BLX with USDC can boost rewards by up to +50%
- 25% discounted commission on selected trading products for traders
- Unlock exclusive trading pairs for BLX holders
- Unlock larger stake sizes for BLX holders
- Unlock longer maturities for BLX holders
- DAO governance rights
- Access to private BLX owners communities offering early access to new features
Staking programs
There are three staking programs or vaults available:
- BLX
- USDC
- USDC+BLX
Each staking program allows the users to configure a minimum lock duration from 1 day to 365 days. The longer the minimum lock time, the higher the revenue share offered.
OptionBlitz shares net revenue with staking participants as follows. The following is the revenue share offered if the maximum lock time of 365 days is selected:
BLX: 20%
USD: 50%
USDC+BLX: 75%
If the minimum lock time of 1 day is selected, the following revenue share is offered:
BLX: 10%
USDC: 25%
USDC+BLX: 37.5%
As you can see, combining USDC with BLX offers the highest reward. OptionBlitz also offers the possibility to burn BLX when you stake USDC, this reduces the amount of BLX required to get the same return as staking, which contributes to the deflationary mechanics of the token model by reducing the token supply.
Lets setup a model to see the relationship between all the components in the system.
Staking simulation
Assumption: BLX token price: 0.1 USDC
If we assume the investors capital is 10,000 USDC and he is the only participant in the pool, he can choose whether to spend 10,000 USDC on BLX tokens, stake 10,000 USDC in the USDC program or buy some BLX tokens and stake the rest in the USDC+BLX program.
If he buys BLX tokens, it depends on his pool share to determine his return so monitoring the revenue generation of the platform and comparing it with the size of the pool would be required to understand yield which is beyond the scope of this simulation.
Focussing on USDC staking and USDC+BLX, if he stakes 10,000 USDC in the USDC program for 365 days, he can earn 50% revenue share. If he stakes 9,140 USDC and buys 8400 BLX tokens for 840 USDC, then stakes those, he can earn 75% share. Even if the token price drops to zero, his overall return only drops to 65%. This is the key to the impermanent loss protection and if the token price appreciates, his return increases.
This also means we can earn the same profit share from staking 10,000 USDC in the USDC vault as staking 8400 USDC in the USDC+BLX vault (7700 USDC + 7000 BLX). And if we wanted to hedge our exposure to impermanent loss, we would stake 9550 USDC in the USDC+BLX vault (8750 USDC + 8000 BLX) so that even if the BLX price dropped to 0, our returns would still not be lower than staking the USDC on its own.
Overall we can see how to hedge our exposure to the BLX price or increase it in expectation of speculative gain.
Two important factors relating to the BLX token are that the total supply is fixed and you have to buy it, it cant be mined in any way. This significantly reduces sell pressure. The available utilities incentivise stakeholders to buy it or burn it, further reducing sell pressure.
Stake or Burn BLX?
The burning mechanism is not only used to reduce the supply of the token to support a positive price trend but also adds greater flexibility to various staking strategies.
In the event that the token price has dropped below the price you paid, instead of selling the token at a loss, you can burn them to increase your staking yield which has the effect of offsetting this loss against the gains made from the staking rewards.
This reduces token selling pressure and takes tokens out of circulation at the same time allowing token holders to avoid negative equity.
This tokenomics design is a deliberate shift away from the typical speculation based token economies which rely on hype to be successful. The BLX token relies on the profitability and revenue generation of OptionBlitz to be successful. Most other crypto projects rely on their token to be successful which is a high risk strategy prone to failure.
BLX token sale
OptionBlitz raised 300,000 USDC in its stage 1 of 2 presale in March 2023, it is raising funds for stage 2 of 2 via public sale in February 2024. For more details visit our website!
If you are interested in discussing this more, reach out to us at our Telegram https://t.me/planetblx or Twitter https://twitter.com/optionblitz_co
