Epoxy Protocol is a DApp (Decentralized Application) on the Ethereum blockchain. It is managed by the people who have the governance token EPX. EPX holders can arrange voting to bring changes to the protocol.
EpoxyWallet is the easiest way to access the Epoxy ecosystem. It’s a user-friendly light client where users can easily access all the functions of EpoxyDAO. EpoxyWallet is integrated with two blockchains, Ethereum and Epoxychain.
Epoxy Stablechain (Epoxychain)
Epoxychain is a separate blockchain that handles eUSD issuance, burning and transactions. The sole purpose of creating Epoxychain is to have a dedicated blockchain only for stablecoin transactions. It ensures efficiency, high speed, nearly 0 transaction fee and very high TPS (transaction per second) limit. Along with this, it is completely decentralized, borderless and trustless peer-to-peer (P2P) payment network. Epoxychain has the ability to beat Paypal, VISA and any other payment processors. It has been designed for 7.8 billion people around the world.
eUSD is a cryptocurrency with a standalone blockchain (Epoxychain) and not a token. It is the main stablecoin of EpoxyDAO platform and is backed by ERC20 PEX at 1:1 ratio. eUSD can be seen as Electronic USD which represents a digital version of US Dollar. eUSD doesn’t have a fixed supply and its supply depends on the amount of PEX locked in the TokenLocker contract. eUSD is issued when someone locks PEX in the TokenLocker and initiates a PoL transaction; and it is burned when someone initiates a PoB transaction and unlocks PEX. eUSD completely depends on the performance and value of PEX. If PEX is considered as a parent currency then eUSD is a child currency. eUSD is the best choice for everyday transactions and institutional transactions. It can be used to transact fraction of a cent to billion dollars for nearly 0 fee.
PEX is considered as the intermediate currency between Epoxy Protocol and Epoxychain. It is an ERC20 token on the Ethereum blockchain. PEX is backed by the existing stablecoins and meant to be pegged to 1 USD but its performance may depend on the performance of collateralized stablecoins. Anyone can generate PEX through eTreasury by locking their stablecoins. Once generated, PEX can be used as regular stablecoin or to issue eUSD. PEX is decentralized, unbiased and resistant to devaluation. The sole purpose of PEX is backing eUSD by merging all the ERC20 stablecoins. PEX can’t be issued by governance, team or any factor other than locking stablecoins.
EPX is the governance token of Epoxy Protocol. It plays the key role in the Epoxy ecosystem by controlling the Epoxy Protocol and balancing the value of stablecoins. EPX has a total supply of 100,000,000. EPX is used to make votes in Epoxy Governance. If an institution or a bank wants to introduce their stablecoin or collateralization token to EpoxyDAO, they will have to either convince the community to approve it or buy most of the EPX tokens to win the vote. EPX is a standard ERC20 token.
EPX Contract Address: 0x5729b237d016ec3c24e5c926d9884d8a77bc3781
We have created a temporary token EPI for EpoxyDAO ICO as a precautionary measure after scam event on Uniswap on 5th Oct 2020. A group of scammers created fake contract for EpoxyDAO and conducted sale on Uniswap using our project name and scammed users by selling fake EPX tokens worth of 600+ ETH.
EPI was created for those who are really interested to make investments on EpoxyDAO directly without waiting for IEO rounds on exchanges. EPI token will be only used for EpoxyDAO ICO.
This will also help us to keep records of funds raised on ICO and IEO sales separately.
Later, EPI will be available to swap with EPX once EPX is listed in exchanges for trade.
EPI Contract Address: 0xc49ff2a17579e750133e2f723d1336fd354f48dd
Ethereum-Epoxychain (E2E) Bridge
A blockchain bridge provides a connection that allows for the transfer of tokens or data between two different blockchains. Since eUSD is backed by PEX which is an ERC20 token on the Ethereum blockchain, we need to exchange data between Ethereum blockchain and Epoxychain to ensure that eUSD minting and burning process is decentralized and trustless. We have designed a bridge called Ethereum-Epoxychain Bridge or simply E2E Bridge for this purpose.
eUSD is issued when a user sends PEX to the TokenLocker contract and broadcasts a special type of transaction which we call Proof of Lock (PoL) transaction.
Suppose Alice wants to issue X amount of eUSD and initiates a PoL transaction from EpoxyWallet:
1. EpoxyWallet first sets an allowance to transfer PEX to TokenLocker.
2. It then calls TokenLocker to lock those PEX and this emits the event of “Alice locked X amount of PEX to issue X amount of eUSD”.
3. EpoxyWallet then waits until it receives the Ethereum header that contains this event, plus 30 blocks more for confirmation.
4. Then EpoxyWallet computes the proof of this event and submits it to the Epoxychain.
5. Epoxychain then verifies that this proof is correct and mints X amount of eUSD for Alice.
eUSD is burned when a user sends eUSD to the burning address and broadcasts another special type of transaction which we call Proof of Burn (PoB) transaction.
If Alice wants to get back his X amount of PEX and initiates a PoB transaction from EpoxyWallet:
1. EpoxyWallet first sets an allowance to transfer eUSD to the burning address.
2. It then sends eUSD to the burning address and this emits the event of “Alice burned X amount of eUSD to get X amount of PEX”.
3. EpoxyWallet then waits until it receives the Epoxychain header that contains this event, plus 10 blocks more for confirmation.
4. Then EpoxyWallet computes the proof of this event and submits it to the TokenLocker.
5. TokenLocker then verifies that this proof is correct and sends X amount of PEX to Alice.
eTreasury is a DApp that handles the PEX issuance and EPX staking. It accepts the supported stablecoins as collateral, locks them for specific periods and generates PEX at exactly 1:1 ratio regardless of market price. To retrieve the collateral which was locked, users need to simply return PEX to the eTreasury once the locking period ends. When collateral is unlocked, those PEX will be burned automatically. Whether a coin is disabled or out of tolerance limit, only depositing and issuance of new PEX is unavailable, but anyone can get back his stablecoin by returning PEX.
75,000,000 EPX is set to be distributed through minting. Once 75,000,000 EPX limit is reached, no more EPX can be minted. EPX can be minted in two ways:
1. Issuing PEX: Allocation is 50,000,000 EPX
2. Staking EPX: Allocation is 25,000,000 EPX
Rewards for Issuing PEX
To issue PEX, users need to simply deposit and lock supported stablecoins in the eTreasury. There are two options for it, flexible lock and time lock.
Timelock reward structure for X amount of stablecoin Z:
1. Flexible lock: Collaterals can be locked and unlocked anytime and there is no reward.
2. Time lock: If the collaterals are locked for minimum 3 years, users instantly get EPX reward. Collaterals can be unlocked only after 3 years from the locking time.
Time lock reward mechanism has been set to attract people to issue more and more PEX. This reward is a one-time reward.
The base reward for time lock is 0.005 EPX per 1 unit of a supported stablecoin. The base reward halves after every 5,000,000 EPX is rewarded.
Now let’s calculate 50,000,000 EPX can be rewarded to how many units of stablecoins:
||X × 0.005
||Unit of Stablecoins
When the 9th stage will be over, marketcap of PEX + eUSD will be approximately 1.023 trillion USD.
DarkLoop algorithm has been designed to enable issuing infinite amounts of PEX with only X amount of a stablecoin.
Suppose you have X amount of stablecoin Z. Initially you can issue X amount of PEX with X amount of stablecoin Z. Then you can exchange/swap X amount of PEX from any exchange or market and get X amount of stablecoin Z again. Then you can repeat the process.
➦ Step - 1: Issue X amount of PEX by locking X amount of stablecoin Z.
➦ Step - 2: Exchange or swap PEX from any exchange or market and get X amount of stablecoin Z again.
➦ Step - 3: Go back to step 1.
Everytime you issue PEX, you get EPX as a reward. To run this loop, you will need to pay a transaction fee or GAS fee whenever you issue PEX but it can be covered from your EPX rewards. Additionally you can sell those EPX rewards and get more stablecoin Z for locking.
This loop works best when you have a large amount of stablecoins. Suppose you have 500,000 units of USDT. If you run this loop 50 times, you will issue 25,000,000 PEX and get 50 times more rewards.
Points to be noted, those PEX aren’t being issued from thin air. When you sell 500,000 PEX to get 500,000 USDT and deposit 500,000 USDT again to issue another 500,000 EPX, you’re actually locking someone else’s 500,000 USDT and taking his reward. If you run the loop 50 times, 25,000,000 USDT will be locked as well.
DarkLoop actually locks stablecoins and issues PEX forcefully. Anyone can run this loop for infinite times and lock 100% of a certain stablecoin while not owning 100% supply of that stablecoin.
EPX can be staked in the eTreasury to get additional EPX as reward. To start staking, users need to simply lock their EPX for a specific time period. The reward amount depends on the total amount deposited and the timelock period.
The base reward is 0.10 EPX per 1 locked EPX for minimum 1 month. The base reward halves after every 5,000,000 EPX is rewarded. There are also additional bonuses for locking EPX for the long term. Bonus % is calculated from the main reward amount.
|Locked for 1 month
||X × 0.10
|Locked for 3 months
||X × 0.10
|Locked for 6 months
||X × 0.10
|Locked for 1 year
||X × 0.10
|Locked for 2 years
||X × 0.10
The reward formula is: ((X × 0.10) + ((X × 0.10) × B) / 100) / H;
where X = Amount, B = Bonus Value, H = Halving Value
Locked EPX can be withdrawn anytime by calling a special function, EmergencyWithdraw(). When someone calls this function, his EPX will be unlocked instantly but he won’t receive any staking reward.
There is a voting contract which lets EPX holders lock their EPX tokens to make votes. One EPX locked in the contract equals one vote. Epoxy Governance allows EPX holders to-
➦ List new stablecoins: New stablecoins can be listed in eTreasury if there is enough vote.
➦ Disable/Enable certain stablecoin: If the community sees a certain stablecoin as unfit for the ecosystem, they can vote to prevent eTreasury from issuing further PEX for that certain stablecoin. They can enable that certain stablecoin again by voting.
➦ Adjust tolerance limit: Tolerance limit is very important to prevent devaluation of EPX/eUSD. If a certain stablecoin falls below the threshold limit, it is automatically disabled by the protocol. The threshold value is set by EPX holders through voting.
Why EpoxyDAO is a Better Option
EpoxyDAO doesn’t need liquidity providers to run the system. PEX/eUSD is automatically generated and burned, so technically the liquidity is unlimited here. People can get PEX as long as they have any other stablecoin and they can get the better version of PEX which is eUSD as long as they have PEX. If all people lock their stablecoins to adopt eUSD, they won’t have to look at dozens of stablecoins, they can just use eUSD everywhere. They won’t have to pay any slippage or swap fee because they will not need to exchange or swap stablecoins, they won’t have to pay ridiculous GAS or transaction fees; millions of dollars can be saved.
Mitigating the Risks
Stablecoins are backed by fiat or other collaterals. The value of stablecoins doesn’t come from speculation. When an institution or company issues a stablecoin and you start using it, you accept the risk and believe in that institution or company. If anything goes wrong with that institution or company, there is a high possibility of losing money because their stablecoin will lose value. But when we merge all the stablecoins, we divide the risk by N factor. If there are N stablecoins in EpoxyDAO, the risk is divided by N. When you don’t use EpoxyDAO, the risk will be 100%. So EpoxyDAO is the best solution that has ever been made to hold the fiat value on blockchain.
Filling the Gap Between Crypto & E-commerce
Stablecoin is being considered as the next big thing in e-commerce. It represents fiat on the blockchain. For everyday use and payments, there is no alternative to fiat or stablecoin because you can’t use a volatile currency like Bitcoin or Ethereum for everyday transactions. Stablecoins don’t have service charges or restrictions like centralized payment processors and can be used everywhere regardless of geopolitical borders.
But there are a lot of problems with existing stablecoins. All of them are tokens based on other blockchains. It causes a lot of issues including performance issues, efficiency issues since they totally depend on their parent blockchains. If a parent blockchain is overloaded or having issues, it affects all the stablecoins which are using that blockchain.
Most of the existing stablecoins are based on the Ethereum blockchain. Everyone knows the fact that Ethereum network is overloaded and token/stablecoin transactions are not efficient anymore. We can't use Ethereum based stablecoins for everyday transactions because of very high transaction fees. On September 01, 2020, Ethereum transaction fee reached its peak, 12.54 USD per transaction.
Imagine someone needs to pay 5 USD to 50 people, so he needs to make 50 transactions. If each transaction costs 12.54 USD, he needs to pay 627 USD just as a fee. It can be said that there are other blockchains such as Tron, EOS which are cheaper at the moment; but there is a high probability of the network getting overloaded just like Ethereum in the future. This risk is true for all smart contract platforms.
There are some stablecoins like USDT which use the Bitcoin blockchain. Bitcoin blockchain is slow like snails and not good for instant transactions. Sometimes a transaction can take 12 to 24 hours or more to get confirmation from the network. Your invoice might expire while trying to pay using the Bitcoin blockchain.
With a dedicated blockchain, eUSD says goodbye to all kinds of limitations and problems like the ones mentioned above. It makes stablecoin or fiat transactions easier, cheaper and efficient than ever. eUSD has enough potential to become the stablecoin giant. We expect to capture at least ~5B USD market cap in ~2 years.
Epoxy Lending Pool
In future, the EpoxyDAO team will be developing a lending pool where lenders can deposit PEX in the Epoxy Lending Pool and earn interest from borrowers. Borrowers can use their EPX and other assets as collateral to get a loan from the pool for a % of interest which will be decided by the governance system.