🚀Dual Buybacks
ALX Dual Buyback and ETHx Reserve Rewards!
The ALX obtained through the dual buyback method serves two crucial purposes. Firstly, the Buyback & Burn mechanism consistently reduces the ALX supply during periods of low participation. Secondly, the Buyback & Earn mechanism rewards ALX stakers who lock their stakes, earning loyalty points based on lock periods ranging from 30 to 365 days.
These loyalty point holders demonstrate their commitment to the protocol's stability and growth. Additionally, the ETHx accumulated in the ETHx Reserve during periods of high participation is used to reward active ETH bondholders according to their earning power, while also creating scarcity for the ALX token during times of low participation.
💰 ALX Buyback & Earn
When initiated, the ALX Buyback & Earn will be used to purchase and distribute ALX to loyalty point holders. The buyback balance will only grow once daily ETH bond creations surpass 2 ETH.
The ALX Buyback & Earn can only be triggered once per fortnight when the 13th daily cycle has accrued more than 2 ETH. Once triggered, it can only be retriggered at the end of the following fortnightly cycle.
The user with the highest trigger power in the cycle can initiate this buyback, earning a reward in ETH. This reward comes from 10% of the ETH bond purchases allocated to the Buyback & Earn Incentive. For example, if the incentive collected during a fortnightly cycle reaches 2 ETH, the user triggering the buyback would receive the full 2 ETH as their reward.
🔥 ALX Buyback & Burn
The ALX Buyback and Burn can only be triggered once per fortnight when the 13th daily cycle has reached less than 2 ETH.
For every ETHx sold for either ETH or eETH, the protocol will allocate 25% of the ETHx to the buyback and burn of ALX tokens. For example, if you sell 1 ETHx for ETH, the protocol will send you 0.5 ETH, use 0.25 ETHx to create a bond with a maximum payout of 0.5 ETHx, and allocate the remaining 0.25 ETHx to buy and burn ALX tokens.
Similarly, for every vXNF sold for ETHx, the protocol allocates 25% of the ETHx to buyback and burn ALX tokens. For instance, if you sell vXNF equivalent to 1 ETHx, 0.5 ETHx will be sent to the ETHx Reserve, 0.25 ETHx will be used to buy and burn ALX tokens, and the remaining 0.25 ETHx will be used to issue an ETH bond worth 0.5 ETHx, with a maximum payout of 1 ETHx.
Additionally, when a user's ETHx rewards are sniped or self-claimed, up to 25% of the claim distribution on top of the rewards will be directed to the Buyback & Burn.
When the buyback amount reaches 10 ETHx, the user with the highest trigger power in the fortnightly cycle can initiate the Buyback & Burn, receiving a reward of 1 ETH. Once triggered, the Buyback & Burn mechanism can only be retriggered and checked in the next cycle.
🏦 ETHx Reserve (Low Weekly Participation)
The ETHx Reserve can only be triggered when the weekly cycle receives less than 7 ETH from ETH inflows into the protocol. The reserve balance grows through various contributions, including 25% of the proceeds from vXNF sales, positive rebases of eETH, LP trading fees, sniping of ETHx rewards, and self-claiming of ETHx rewards, all of which increase the reserve.
An ETH bondholder can trigger this distribution to earn an ETH reward from 10% of the collected ETHx Reserve. Once claimed, this will impact the ETHx maximum payout for the bondholder who triggered the distribution. After being triggered, the remaining 90% of the collected ETHx is distributed to ETH bondholders based on their earning power. This distribution can only be re-triggered at the end of the following weekly cycle.
⚡️ Buyback & Reserve FAQs
When does the ALX Buyback & Earn start growing?
The ALX Buyback & Earn starts growing when the daily cycle of ETH bond purchases exceeds 2 ETH. This process begins once the liquidity pools are deployed.
What if the daily cycle receives 2 ETH or more?
If the current daily cycle receives 2 ETH or more, the ALX Buyback & Earn allocation will start growing, and ETH bondholders will begin earning 70% on each new ETH bond purchased.
What if the daily cycle receives less than 2 ETH?
If the daily cycle receives less than 2 ETH, ETH bondholders will earn 30%, while both ALX stakers and ETH stakers will each earn 5%. The remaining balance, along with allocations for the ALX Buyback & Earn incentive, will be redirected towards marketing and future development until the cycle reaches 2 ETH or more.
Purchasing ETH bonds below the 2 ETH threshold comes with significant incentives. You earn points from Ether.fi and EigenLayer based on the entire protocol-owned eETH, which can be quite substantial. Additionally, if you achieve the highest trigger power during the fortnightly cycle, you have the chance to trigger either the ALX Buyback & Burn or ALX Buyback & Earn.
What's the difference between ALX Buyback & Earn and ETHx Reserve?
The ALX Buyback & Earn can be triggered once per fortnight and grows only if ETH bond purchases exceed 2 ETH in each daily cycle. It is funded by each ETH bond purchase, and the collected ETHx is used to purchase and distribute ALX to loyalty point holders proportionate to their points. This means that the more points they hold, the larger their share of ALX. Users who trigger this will earn an ETH incentive from the collected ETHx allocated to the ALX Buyback & Earn incentive. The growth of the Buyback & Earn depends on the daily cycle's ETH bond purchases exceeding 2 ETH.
On the other hand, the ETHx Reserve can only be triggered when the weekly cycle receives less than 7 ETH from ETH bond purchases. This distribution grows with vXNF sales, positive eETH rebases, ALX-vXNF and vXNF-ETHx trading fees, sniping of ETHx rewards, and self-claimed ETHx rewards. To trigger this distribution, an ETH bondholder must have a bond with a maximum ETHx payout equal to or greater than the incentive amount.
Once triggered, it will affect the ETHx maximum payout for the bondholder who initiated the distribution, and the incentive will be given out as ETH to that bondholder. The collected ETHx is then distributed as rewards to ETH bondholders according to their earning power. This distribution can only be re-triggered at the end of the following weekly cycle.
What are the sources of ALX tokens for the Buyback & Earn?
ETH Bond Purchases When ETH bonds are purchased, 5% of the resulting ETHx is used to acquire vXNF, which is then traded for ALX in the ALX-vXNF pool. The obtained ALX is distributed among loyalty point holders in proportion to their loyalty points.
What are the sources of ETHx tokens for the ETHx Reserve?
Selling of vXNF When vXNF is sold for ETHx, the protocol follows a three-step process. First, 50% of the received ETHx is used to purchase a 1-year bond with a maximum ETHx payout of 100%, which is then given to the seller. Second, 25% of the ETHx is used to purchase and burn ALX tokens. Finally, the remaining 25%, along with any surplus, is allocated to the ETHx Reserve. When the ETHx Reserve is triggered, these funds are distributed to ETH bondholders based on their earning power—the greater their earning power, the larger their share of the rewards.
Positive Rebases When a positive rebase occurs on eETH, the protocol mints the positive difference in ETHx and allocates it to the ETHx Reserve. When triggered, these ETHx rewards are distributed to ETH bondholders according to their earning power. Therefore, the more earning power an ETH bondholder has, the larger their share of these ETHx rewards will be.
Liquidity Pool Trading Fees In the ALX-vXNF pairing, fees collected in ALX are converted into ETHx and allocated to the ETHx Reserve. When triggered, these rewards are distributed to ETH bondholders based on their earning power, meaning the more earning power an ETH bondholder has, the larger their share of these rewards will be. Conversely, fees collected in vXNF are used to purchase ETHx, which is also allocated to the ETHx Reserve and distributed to ETH bondholders according to their earning power when triggered. For the vXNF-ETHx pairing, fees collected in vXNF are converted into ETHx and allocated to the ETHx Reserve. When triggered, these rewards are distributed to ETH bondholders according to their earning power. Similarly, fees collected in ETHx are directly allocated to the ETHx Reserve and distributed to ETH bondholders based on their earning power when triggered. Therefore, the more earning power an ETH bondholder has, the larger their share of these rewards will be.
🗝 ALX Buyback Incentive
Those who purchase ETH bonds during a cycle will be given a trigger power alongside their earning power and ETHx maximum payout. The user with the highest trigger power in a cycle will be able to trigger either the ALX Buyback & Burn or the ALX Buyback & Earn. Once triggered, they will receive 10% of the collected ALX Buyback & Burn amount or 10% of the ETH allocated from each ETH bond purchase for the ALX Buyback & Earn Incentive, which grows when the daily cycle receives more than 2 ETH. Trigger power also has a multiplier attached to it, meaning the earlier you enter into a cycle, the better your power. During the first day, the multiplier is 14, and every subsequent day it decreases the multiplier by 1 until it reaches 1 in the last day of the cycle. Once a new fortnightly cycle starts, it will reset back to 14.
Trigger Power Formula: Trigger Power = Earning Power * Multiplier
🔑 ETHx Reserve Incentive
The ETHx Reserve Incentive is designed to reward an ETH bondholder with ETH collected from 10% of the ETHx Reserve amount, distributed to eligible bondholders. This incentive becomes available to be claimed once less than 7 ETH has been collected in a weekly cycle. To qualify, you must be an ETH bondholder with a maximum ETHx payout equal to or greater than the incentive amount.
To earn the incentive, you need to trigger the distribution, which involves distributing the collected ETHx to ETH bondholders according to their earning power. The more earning power you have, the larger your share of these rewards will be. This can be done in the next 7-day cycle if the current cycle receives less than 7 ETH. It's important to note that only the first eligible ETH bondholder to trigger the distribution will receive the incentive, and they must cover the gas fees required to execute the trigger.
To participate, monitor the weekly cycle to see if less than 7 ETH has been collected. Ensure that your maximum ETHx payout meets the eligibility criteria. If you are eligible and the conditions are met, you can trigger the buyback and claim the incentive. If no one triggers the distribution within the eligible window and 7 ETH or more is collected in the current weekly cycle, the distribution will be deactivated in the next weekly cycle.
This incentive provides a valuable opportunity to earn more ETH during periods of low participation. Stay vigilant and act quickly to maximise your rewards.
🔑 ETHx Reserve Process
🔑 ETHx Reserve FAQs
How do I become eligible to trigger the ETHx Reserve?
To be eligible, you must:
Hold an ETH Bond: Your bond must have an ETHx maximum payout equal to or greater than the incentive amount.
Weekly Cycle Condition: Verify that the current weekly cycle has received less than 7 ETH in inflows into the protocol.
When can I trigger the ETHx Reserve?
You can trigger the distribution at the start of the next 7-day cycle, provided the current cycle received less than 7 ETH in inflows into the protocol. You have until the beginning of the following cycle to trigger the distribution.
Does this affect my ETHx maximum payout if I trigger the distribution?
Yes, triggering the distribution will affect your ETHx maximum payout. The incentive reward you receive will reduce your ETHx maximum payout accordingly.
What happens if I don't trigger the distribution within the window?
If you don't trigger the buyback within the window and the current cycle received 7 ETH or more, the buyback will be deactivated until the next eligible cycle.
Do I need to cover any costs to trigger the ETHx Reserve?
Yes, you need to cover the gas costs required to execute the trigger. The first eligible user to trigger the function will receive 10% of the ETHx collected for the ETHx Reserve since it was last triggered.
Can you provide an example of how the incentive works?
Certainly! If the incentive is 2 ETHx, you will need to have a bond worth 1 ETH over 365 days to trigger the buyback. If the incentive amount increases to 4 ETHx, for example, you will need to purchase an additional bond worth 2 ETH (totaling 3 ETH) over 365 days to remain eligible.
What encourages users to scale up their bond purchases?
As the incentive amount grows, users need to invest in additional bonds to meet the new incentive amount. This encourages users to scale up their bond purchases in response to the increasing ETHx Reserve incentive.
How is the incentive amount determined?
The incentive amount is calculated as 10% of the ETHx collected for the ETHx Reserve and is paid out in ETH. This dynamic approach ensures that rewards are directly aligned with the growth of the ETHx Reserve and the protocol's overall performance.
Can I trigger the incentive multiple times?
Yes, as long as you meet the eligibility criteria and the distribution is available, you can trigger the ETHx reserve multiple times across different cycles.
What happens if multiple users are eligible?
The first eligible user to trigger the function during the available window will receive the incentive reward, which reduces their ETHx maximum payout.
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