Mettalex economics overview

Sep 4, 2020

Why Mettalex?

Mettalex is a decentralized crypto and commodities derivatives trading platform, and one of the first major applications to be built using the Fetch.ai technology. Mettalex is aiming to solve market failures inherent to today’s commodities market: front running, poor liquidity, price manipulation and loss of value in the form of margin calls.

Mettalex solves this through the creation of what is referred to as position tokens. Position tokens are primarily used to track the difference in price of an asset. They do not require the entirety of collateral of an asset to be tied up in a smart contract, thereby allowing contracts of much larger sizes to be traded with lower collateral requirements. This is also different from the conventional leverage requirements in traditional markets as the possibility of a liquidation is not dependent on basis of the movement of prices until it hits a pre-set price band.

The anticipated first markets on the Mettalex platform will be:

  1. Steel Supply chain based commodity spreads
  2. Gold and Silver spreads with BTC and USD
  3. Lithium and Oil Spreads with BTC and ETH
  4. Stock Market indices spreads with BTC and ETH
  5. Data Storage, Compute and Utilization spreads with USD/BTC/ETH

Next step

The first step in the public launch of the platform will be the issuance of a MTLX governance token to platform stakeholders, through a FET token staking program, that will commence on Tuesday 8th September.

The MTLX token, an overview

The purpose of the MTLX token is to enable stakeholders in the Mettalex decentralised platform to govern the policies and fees in operation.

In the ordinary course of business on the Mettalex platform, MTLX tokens will be distributed to providers of liquidity to the liquidity pools

In turn, MTLX then enable the platform stakeholders to vote on policy, including:

  • to vote on system parameters such as choice of autonomous market makers to back with liquidity from the liquidity pool
  • vote on the creation of new markets
  • the usage of exchange fees
  • the percentage of the spread going to the pool
  • the buyback and borrowing rates from the liquidity pool

Mint and buyback model

Minting: During operation of the system, minted MTLX tokens will be distributed in proportion to the amount of liquidity supplied to the system at each block.

Algorithmic buy back: As a stability mechanism, during network usage a fraction of the exchange fees and autonomous market maker spreads are used to buy back a portion of the MTLX tokens.

MTLX token allocation

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The total number of MTLX tokens that will be created is 40 million.

Liquidity provider rewards

87.5% of all potential Mettalex tokens (35 million) are assigned as rewards for Mettalex liquidity providers during platform operations. Tokens will be distributed over a four year period (8,409,600 blocks of 15 seconds each) at approximately ≈4.1 MTLX drip rate per block.

Network incentives

12.5% of tokens are assigned as network incentives for ecosystem participants. The breakdown is as follows:

  • Initial distribution to FET stakers: 1M (2.5% of total) over 21 days
  • 1M (2.5% of total) reserve for further FET staking in intervals of 500k, 350k, then 150k tokens.
  • Incentive pool for stakeholders and partners: 2M MTLX Tokens (5% of total) released over 1 year
  • Team: 1M (2.5%) released over 3 years

Circulating supply

For the two years, based on the above information, token distribution is limited to the following:

  • After 3 months: ≈3.08%
  • 6 months: ≈7%
  • 1 year: ≈13%
  • 2 years: ≈25.15%
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MTLX token distribution: economic summary

Starting on Tuesday 8th September, 1 million MTLX tokens will be distributed to FET holders.

The MTLX will be distributed in proportion to the total number of FET that are staked. So if a FET holder stakes 1% of the total FET staked, they will receive 1% of the MTLX rewards, or 10,000 MTLX tokens.

There is no minimum number of tokens that can be staked, but the more FET an individual stakes the higher the number of MTLX rewards that will be received.

Staking contract

The staking contract will be hosted at the Mettalex.com website at staking.mettalex.com

Summary statistics

MTLX genesis staking program summary

  • Tokens accepted for staking: FET
  • Tokens staking window: Tuesday 8th September to 6pm UTC Thursday 10th September
  • Minimum FET for staking: 1FET
  • Staking contract location: staking.mettalex.com

MTLX genesis staking rewards overview

  • Initial distribution to FET stakers: 1M (2.5% of total) over 21 days, 1M reserve for further FET staking in intervals of 500k, 350k, then 150k tokens.
  • Total blocks in first reward phase: 120,960
  • MTLX token drip rate per block: ≈8.2
  • Distribution rate: Linear
  • Restricted jurisdictions: US and OFAC

Token supply

  • Maximum supply (Hard Cap) for circulation: 40M MTLX Tokens
  • Initial distribution to FET stakers: 1M (2.5% of total) over 21 days
  • 1M (2.5% of total) reserve for further FET staking in intervals of 500k, 350k, then 150k tokens.
  • Pool to be issued to liquidity providers: 35M MTLX Tokens (87.5% of total) over 4 years (8,409,600 blocks) (≈4.1 drip rate per block)
  • Incentive pool for stakeholders and partners: 2M MTLX Tokens (5% of total) released over 1 year
  • Team: 1M (2.5%) released over 3 years