MEX 2.0 Upgrade - Community’s Most Frequent Questions Answered

Lucian Todea
·
Nov 24, 2022
·
8 min read
Energy, Batteries and the New MEX Tokenomics Model

MEX 2.0, the long-awaited redesign of the Maiar DEX economic model, has generated a tremendous amount of interest throughout the ecosystem, stirring a high number of insightful conversations and massive community engagement.

Introducing several novel concepts and reimagining the architecture already in place, MEX 2.0 inevitably awakened some hard-thought questions in the minds of the inquisitive masses.

This blogpost is our attempt to bring forward the most relevant inquiries encompassing every communication channel, and shed light on the topics that remain thus far unclear.

Important note: As questions may yet arise and some aspects are still subject to change we will do our best to keep this article updated with the latest information available.

Before going through your questions, let’s quickly review the next steps of the transition:

  • LKMEX v1 becomes non-transferable — 24 November
  • Governance vote for the transition to V2 — 28 November - 5 Dec
  • Maiar Exchange Scheduled Maintenance (expect more details soon) — 6 December - pending favorable governance vote
  • xExchange goes live w/ LKMEX v2 — 8 December
  • Whitelisted SCs are enabled to support LKMEX v1 & v2 — 9 December

FAQ

1.When was the LKMEX snapshot taken?

The snapshot was taken on the 16th of November, at 17:30 UTC.

It will be used to counter users splitting their LKMEX in multiple accounts for the launchpad tickets and to calculate the governance voting power.

2. Does LKMEX become non-transferable?

Yes, starting with the 24th of November, after the epoch change (~15:20 UTC), LKMEX becomes non-transferable and users will no longer have the possibility to transfer it between wallets or sell it on 3rd party applications.

3. Is the migration process from LKMEX v1 to v2 mandatory?

No one is forced to switch from LKMEX v1 to v2. The two versions of the token will co-exist in the DEX.

4. Will the migration be done automatically? Do we need to exit LP/ Farm/ Metabonding to migrate?

The migration from LKMEX v1 to LKMEX v2 is NOT done automatically. You will need to unstake from farms, remove liquidity, migrate to LKMEX v2 and, after that, redo the process of adding liquidity and entering the farm.

The same goes for Metabonding (without any additional step required after migrating as staking into Metabonding is not needed anymore to be eligible for rewards - meaning that LKMEX liquidity providers and farmers will receive them as well)

Important note: Penalties for early withdrawals from farms and the unbonding period for unstaking from Metabonding will be waived during the initial phase of the migration process.

5. How will the bonus rewards for converting v1 to v2 work?

In order to be eligible for the extra benefits (Metabonding bonus rewards & NFT launchpad ticket), a user needs to convert ALL their LKMEX v1 to v2 (there is no minimum per account) in the first 30 days after v2 goes live.

You don’t need to lock your LKMEX v2 for 4 years, you just need to convert it, which will increase the avg. locking time by 4 times (i.e 2 months will become 8 months).

In the first 3 months, those who converted LKMEX v1 to v2 in the first 30 days after launch will receive between 2x up to 10x more Metabonding rewards.

How it will work:

  • 50% of the Metabonding rewards will go to all LKMEX holders, proportional to the holders’ energy
  • 50% of the Metabonding rewards will go to LKMEX holders who have converted all their LKMEX v1 to LKMEX v2, proportional to the holders’ energy.

In other words, the 50% that was given to EGLD holders in DEX v1 will now be given to LKMEX holders that converted v1 to v2. After 3 months, 100% will go to all LKMEX holders.

The NFT will guarantee the holder that if they participate in a launchpad, they will get at least 1 winning lottery ticket.

Users need to participate in the launchpad for the NFT to be used. This means KYC needs to be passed (not all countries are accepted so please double check), and they need to buy all the tickets for the tier they are eligible for. If no ticket is a winning ticket the NFT will be used to ensure at least one ticket is a winning one.

There might be a case where not all NFTs can be used in the next launchpad (too many users, etc) so this means the NFT can be used on other future launchpads.

Important note: the NFT is not transferable

6. What happens with LKMEX v1 holders?

The unlock schedule for LKMEX v1 holders continues as normal and they are eligible for all rewards based on their energy points given by the LKMEX average unlock time.

The only difference between an LKMEX v1 and LKMEX v2 is that energy can’t be removed nor added for LKMEX v1.

Important note: There is no specific time limit within which users can migrate to v2, it can be done at any time

7. Can people swap only a small/specific part of their LKMEX v1 to LKMEX v2?

Yes, they can. However, they won’t be eligible for the bonus rewards granted to people who have converted all their LKMEX v1 to LKMEX v2.

8. How can you differentiate LKMEX v1 and v2?

They will have different token id (ticker) and logo.

9. Why the need to lock LKMEX V1 in V2 for 4 times the time? Why can't we choose?

Allowing users to choose their lock time when converting would be equivalent to allowing people to choose their unlock fee, which is not acceptable.

10. Let’s say I have LKMEX v1 with 1 year and 6 months unlock time and I migrate to v2. According to the whitepaper, after migration, the unlock time will be quadrupled. Will I then have LKMEX v2, which unlocks in 6 years?

It is not currently possible to have an LKMEX v1 with an average unlock time of 1 year and 6 months.

However, it is possible to have an LKMEX v1 with an average unlock time greater than 1 year. In this case, the unlock time will be quadrupled and capped at 4 years.

11. Will LKMEX be fractional, or will we get an average lock over all of our LKMEX?

Yes, the time lock is per LKMEX.

You can have 1M LKMEX with a 2-year lock and 2M LKMEX with a 3-year lock, for example.

12. How is the energy for each account calculated?

Each LKMEX has a certain amount of energy.

All the energy of all the LKMEX owned by an account is summed to determine the energy of this account and, thus, the benefits it is eligible for.

As an example, we will take two simple cases to better understand how the mechanism works:

a. If, say, someone now has 40 LKMEX to be unlocked in the next 4 months in the form of: 10 LKMEX in M1, 10 LKMEX in M2, 10 LKMEX in M3 and the last 10 LKMEX in M4, then the system will calculate the average energy of this wallet like this: (1 * 10 + 2 * 10 + 3 * 10 + 4 * 10) / 40, where 1, 2, 3, 4 are the months you have to wait until the amount multiplied by them becomes available, and 40 represents the total amount of LKMEX in that wallet. From here, it follows that by applying this formula, we will reach the following result (10 + 20 + 30 + 40) / 40 = 100 / 40 = 2.5 (months). That is exactly what was expected, the average energy of this wallet is exactly halfway between 1 month - 4 months, i.e. 2 and a half months

b. In the same way, if we assume that an account has a quantity of 40 LKMEX that will be unlocked in 4 months, but in the form: 5 LKMEX in M1, 5 LKMEX in M2, 10 LKMEX in M3 and the last 20 LKMEX in M4, then the average energy, applying the same formula, will be: (1 * 5 + 2 * 5 + 3 * 10 + 4 * 20) / 40 = (5 + 10 + 30 + 80) / 40 = 125 / 40 = 3,125 months. From here, it can be seen that although the unlocking term and the amount are identical to those in the first example, the average energy of this wallet is higher, and this is due to the larger amounts that are unlocked at the end of the period. So this wallet will have an average energy of 3,125 vs. 2.5 months, practically 0.5125 months longer (approx. 15-16 days of extra energy)

13. What rewards do I receive for owning LKMEX v2 with energy?

Just by owning LKMEX v2 (with energy), you will be eligible for the following rewards:

a. Metabonding

b. 0.05% of each swap that takes 0.30% fee from the user (0.05% distribution towards fees pool, 0.05% burn, 0.20% distribution towards liquidity provider)

c. 50% of each penalty applied to those leaving the system (1/2 distribution towards fees pool, 1/2 burn)

d. 5% of the MEX v2 issuance, which will start on 8 December, and which will be 350K MEX per block / 6 seconds (65% lower than the first year, where the issuance was 1M per block / 6 seconds). The remaining 95% will go to farms like EGLD/MEX, EGLD/USDC, etc.

14. Will we have the option to add just one more month or one more quarter of energy to an LKMEX v2?

You will be able to add energy to an LKMEX such that the resulting LKMEX has 1 year, 2 years or 4 years of energy. So if your LKMEX has 6 months of energy remaining, you will be able to add 6 months, 1 year and 6 months, or 3 years and 6 months of energy.

15. Can LKMEX v2 be converted to MEX at any time?

LKMEX v2 gets a flexibility not found in LKMEX v1, namely the idea that it can be converted to MEX regardless of whether the locking time has passed or not. Obviously, against a penalty applied, a penalty that will benefit both the system and its users.

The fact that it becomes non-transferable to exchanges / third-party applications / etc., which have not been whitelisted through governance, makes it temporarily non-tradable outside of the DEX, and thus all fees and benefits will be captured by the system and by those who are in it  for the long run.

16. Is there any waiting time when converting LKMEX into MEX?

Any conversion from LKMEX to MEX will also have a 10-day unbonding period, similar to what exists now in staking on EGLD or Metastaking on DEX.

This means that a user who wants to either convert their rewards or wants to exit the system by converting LKMEX to MEX, will have to wait 10 days until the converted MEX from LKMEX will be available in their wallet.

17. The whitepaper says 1 day from lock time equals 1 energy point but also displays 1 year as 360 days. Why so if a year is 365 days?

1 month is considered 30 days, so 12 x 30 = 360 days for better arithmetics.

18. After initiating an LKMEX conversion into MEX, can users change their minds?

During the 10-day unbonding period, users will have the possibility to cancel this action if they change their minds.

19. Are there any farm rewards for users who don't have any energy?

Any farm has two types of rewards: Base Rewards that go to everyone no matter if they have the energy or not in the account (but only depending on the LP value) and Boosted Rewards that go only to those who have energy, depending on the energy of each account.

20. Will EGLD holders still get Metabonding rewards?

Rewards from Metabonding will no longer go to EGLD stakers, but only to LKMEX holders.

21. Will MEX (unlocked) still be received as a reward?

In DEX V2 there is no longer an option to choose the type of rewards desired: LOCKED (LKMEX) or UNLOCKED (MEX), and users will receive LKMEX v2 with a maximum energy of 4 years.

Those who wish to convert their rewards into MEX can do so by paying the up to 80% fee.

22. Will LKMEX holders have to do KYC for their launchpad ticket?

Yes, the KYC process needs to be passed, and users need to purchase all the tickets they are eligible for.

23. Where will we be able to claim the rewards?

Each week, users will be able to claim their LKMEX and Metabonding rewards in a specific section of the xExchange website. Rewards won’t be distributed automatically.


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Written by
Lucian Todea
Co-Founder and COO, Elrond Network.