We're introducing the sSDEX token: a staking token that is redeemable for SDEX tokens when fed through the Sigmadex ecosystem. In this article we explore several different details about the sSDEX token including but not limited to: How it relates to the native SDEX token, the advantages of a multiple token structure as well as our upcoming claim drop events.
What is sSDEX and How is it Used?
The lowercase 's' differentiates sSDEX tokens from regular SDEX tokens because it stands for "Staked" or "Strategy". sSDEX tokens exist in a secondary token ecosystem to determine how much of the SDEX total supply is locked up. This sSDEX mechanism partitions tokens by usage, contributing a valuable metric allowing users to determine accurate token values and protocol health.
How do I convert sSDEX to SDEX and vice versa?
In order to convert your sSDEX to the native SDEX token the sSDEX tokens must pass through a transformation smart contract. When the staking terms of this contract have reached maturity or is in the green, your sSDEX tokens can be redeemed and converted into SDEX tokens at a 1:1 ratio plus any further rewards attributed to the smart contract it was deposited in.
If you are an SDEX holder and you wish to stake your tokens, the conversion to sSDEX will be handled automatically through any of the gateway smart contracts.
Tokens Made Equal
The token value does not change across token types. When an individual stakes 1,000 sSDEX they can later convert them to 1,000 SDEX upon the natural maturity of their contract.
Simply stated: 1 sSDEX = 1 SDEX.
Primary differences between sSDEX and SDEX are:
| Market | Primary State |
|---|---|
| SDEX | Liquid |
| sSDEX | Illiquid |
Advantages of sSDEX to SDEX
Transformation contracts that allow sSDEX tokens to become converted into SDEX can generate significant yields while being staked. On the contrary, tokens can also be penalized depending on the parameters outlined within the strategy contract. Sigmadex proposes multiple strategies for transforming your sSDEX tokens that will all stem from discussions on the forum.
Penalties
Penalties may apply to sSDEX tokens based on individual smart contract parameters. Since balancing the Sigmadex ecosystem is a core feature this functionality exists for keeping the protocol within an equilibrium state, meaning penalty curves and the burning of tokens will still take place concerning the sSDEX token.
Rewards
Rewards may apply to sSDEX tokens based on individual smart contract parameters and whether the contract has reached maturity or is past its break even point.
Cornucopia of Curves
Users will have multiple earning/penalty curves to choose where and how they stake their sSDEX tokens. This opens up the possibilities for further gamification by creating new strategies for maximizing returns. Various curves will be proposed, established and voted on by the community via governance on the Sigmadex forums and off-chain voting process. Allowing the community to dictate various earning/penalty curves against time creates a fair and democratic method of ensuring multiple intriguing DeFi options and limitless strategies for all users.
Sigmadex Claim Drop
Users who have held AVAX tokens prior to December 31, 2021 will be eligible to claim sSDEX tokens relative to the amount of AVAX they held at this snapshot date. Through this claim, individuals will receive sSDEX tokens that can be deposited into various sSDEX Strategy Pools and then redeemable down the line for SDEX tokens upon maturity. sSDEX is designed to earn yield, mint platform NFTs and acquire further benefits.
As illustrated above sSDEX will be a key component to unlock an abundance of strategies to further grow and engage with our community. Coinciding with the Sigmadex forum it will be an integral tool to help maximize engagement and pin point critical opportunities for the community to gamify their Sigmadex experience.
