🧬Tokenomics
SmarDex is based on fixed supply incentives increasing the purchasing power and value of each "remaining" token.
SDEX
SDEX is the primary token used by the SmarDex protocol to reward its users. By participating in staking or farming, users generate passive income while contributing to the network's strength. The protocol also offers additional rewards through various programs, especially community rewards, to encourage engagement and support the ecosystem's growth. SmarDex was officially launched on March 9, 2023, marking the beginning of this new passive income opportunity for crypto enthusiasts.
Initial SDEX distribution
The supply of SDEX is 10,000,000,000 tokens. There will never be additional tokens as it is technically impossible to mint SDEX. Since the deployment on other chains, we have even made it disinflationary, as a portion of the collected fees are now burned. For further details on our fee structure, see the 'Fees Explained' section further down this page.
Here is the initial distribution details:
50% (Liquidity Pool): SmarDex set up a SDEX/USDT , originally filled with 5 billion units of SDEX and supplemented with an additional 500,000 USDT, resulting in a total value of 1 million USD. This introduced a 2.5% weekly withdrawal rate and extended yield farming rewards for liquidity providers. The last withdrawal occurred on December 12th 2023.
37,5% Long-Term Yield Distribution: 37,5% Long-Term Yield Distribution for Farming, Staking, and Ecosystem Expansion: The distribution of long-term yields, adjusted according to the circulation of SDEX tokens in the market, is structured to benefit not only LPs and stakers but also to finance users who actively participate in and contribute to the expanding ecosystem through community rewards and other engagement mechanisms. This enhanced yield distribution approach is designed to unfold over an estimated period of 10 years, supporting the longevity, sustainability, and dynamic growth of the protocol across all its activities, including but not limited to farming, staking and community rewards.
12,5% Boost Yielding Period: To incentivize participation, a Boost Yielding period was instated during SmarDex's launch, lasting for 4 weeks. This move aimed to encourage liquidity providers by offering a substantial reward of 1,250,000,000 SDEX tokens. The distribution began on March 14th 2023 and finished 4 weeks after, on April 12th 2023.
Distribution of SDEX now
The only way to 'mine' SDEX tokens is through the long-term distribution of rewards, which encompasses farming, staking, and other methods designed to expand the ecosystem, such as community rewards. These diverse avenues of earning SDEX are aimed at financing users who actively adopt and contribute to the growing ecosystem. These rewards will be distributed over the 10 years following the launch.
| Year | Year | Percentage Allocation | Total Reward [SDEX] | % of Total Supply |
|---|---|---|---|---|
year 1 | 2023 | 50.000% | 1,875,000,000.0 | 18.750% |
year 2 | 2024 | 25.000% | 937,500,000.0 | 9.375% |
year 3 | 2025 | 12.500% | 468,750,000.0 | 4.688% |
year 4 | 2026 | 6.250% | 234,375,000.0 | 2.344% |
year 5 | 2027 | 3.125% | 117,187,500.0 | 1.172% |
year 6 | 2028 | 1.563% | 58,593,750.0 | 0.586% |
year 7 | 2029 | 0.781% | 29,296,875.0 | 0.293% |
year 8 | 2030 | 0.391% | 14,648,437.5 | 0.146% |
year 9 | 2031 | 0.195% | 7,324,218.8 | 0.073% |
year 10 | 2032 | 0.195% | 7,324,218.8 | 0.073% |
Multipliers
The distribution of SDEX tokens between the farming campaigns, staking, and the expansion of the ecosystem through mechanisms like community rewards is crucial for maintaining balance and meeting market demand. To do this, we use 'multipliers', which determine the share of SDEX allocated to each campaign. Imagine that we have a fixed number of SDEX to distribute, similar to a cake to be shared. The multipliers represent the number of slices allocated to each campaign. For example, if one campaign has a multiplier of 2 and another has 1, this means that the first campaign will receive twice the amount of SDEX compared to the second. This method allows for a flexible and responsive distribution, adapted to the changing dynamics of the crypto market.
Currently, among the distributed SDEX, a portion is allocated to farming campaigns, another to staking campaigns, and just under half is designated for community rewards.
Please note that on our site SmarDex.io, the multipliers are already incorporated into the Annual Percentage Rate (APR) displayed for each campaign.
Fees explained
On every swap, SmarDex collects a fee. Starting from Q3 2023, there will be no standard fees set. Each will have variable fees, which are governed by an algorithm. This algorithm is scheduled to be publicly disclosed through the DAO, aiming to optimize returns for Liquidity Providers (LPs). The full list of pair on all chains and the fees associated can be found in the Fees section.
These fees are instantly utilized for a buy back of SDEX tokens, followed by redistribution. This entire cycle is automated through smart contracts, ensuring efficiency and reliability.
On the Ethereum chain, the fees are immediately channeled into the buy back of SDEX tokens. These tokens are then allocated to Liquidity Providers and to participants in staking. On other chains (Polygon, Arbitrum, BSC, Base), the fees are similarly applied to instantly buy back SDEX tokens. From these, a portion is allocated to LPs, while the remaining part is directed towards burning SDEX tokens. This burning process is also conducted automatically through a smart contract.
Burn Mechanism
As explained above, since the deployment of our protocol on new chains, we have established a burn mechanism to counterbalance the inflationary nature of SDEX. During each transaction on these chains (Polygon, Arbitrum, BSC, Base), a portion of the fees is immediately converted into SDEX and then destroyed. In practice, this means these SDEX tokens are sent to a null address, effectively removing them from circulation. This process not only serves to reduce the total supply of SDEX but also introduces a disinflationary characteristic to the token, thereby influencing its overall economic dynamics. You can find more info in the burn section. It's important to emphasize that all this process is automated through a smart contract and is not conducted manually by us. This ensures efficiency and transparency in the SDEX token burning mechanism.
Last updated
