xREX

What is xREX?

xREX is a token developed by the Etherex team to address the sustainability challenge associated with earlier metaDEX models. xREX combines the best of vote-escrow models with the flexibility of traditional escrow incentive systems.

No more lengthy lock-ups to participate fairly in an ecosystem.

What can I do with xREX?

xREX stakers can vote to direct emissions to their favorite LP pairs. By staking, they earn 100% of protocol fees, vote incentives, and penalties from exits.

Token

xREX is a non-transferable representation of 1 unit of REX held in escrow within the xREX smart contract. Only holders of xREX have voting rights on Etherex. While xREX itself is non-transferable, it offers users the ability to exit their position when needed.

How is xREX obtained?

Users can acquire xREX through vote incentives, token emissions, or by converting REX.

REX > xREX conversion

REX can be freely converted into xREX at any time. The process is instant, and the ratio is 1:1.

How to exit xREX?

xREX > REX redemption

Users can exit their xREX position in two ways:

1. Direct redemption: Convert xREX back to REX instantly with a 50% penalty (1:0.5 ratio)
2. Liquidity exit: Use REX33, the liquid staked version of xREX, to trade your position on the open market

Exit Rebase

Etherex incorporates a unique zero-sum take on the traditional metaDEX anti-dilution (rebase) model which is designed to both protect xREX holders from dilution and to incentivize them to maintain their positions and participate in the continued success of Etherex.

100% of xREX tokens that are forfeited to instant exiting xREX is streamed to xREX stakers and can be claimed in proportion to their positions after epoch flip, serving as dilution protection (rebase) and an additional incentive.

This rebase mechanism not only discourages premature exits but also ensures that the remaining participants are rewarded for loyalty and active participation.

Why?

As discussed in the Origins of metaDEX, metaDEX introduced important improvements to user alignment but still had fundamental limitations. xREX builds on these improvements while addressing the core issues, moving the power balance back towards users. Instead:

• Stakers who remain in xREX longer earn more fees, vote incentives, user and emission exits.
  • Users can exit their position at any time, ensuring rewards flow to those who value it the most.

Exit penalties create a "survival of the fittest" where less committed capital exits and active stakers earn increased rewards, attracting more users. Any size can exit, unlike liquid wrappers (limited liquidity) or veNFTs that are large to sell (pseudo-liquid).

Voting Incentives

xREX holders are rewarded for actively participating and voting—earning 100% of protocol fees and vote incentives. When you vote for liquidity with gauges, you receive a proportionate share of all fees generated by that liquidity, plus any additional vote incentives offered by protocols to attract emissions.

Voting Breakdown

The main purpose of the xREX token is to vote to direct emissions to liquidity. This is achieved through weekly voting for gauged liquidity. Emissions are distributed proportionally to the total percentage of votes in the Epoch.

Emission Calculation

The expected emissions can be calculated using a simple division formula:

For example, 100,000 REX is distributed in a single epoch. If 10% of all votes are allocated to the REX / USDC pair, that pair will receive 10,000 REX tokens distributed linearly to liquidity providers of the relevant LP pair throughout the epoch.

Vote Weight Calculation

The voting power of xREX is determined by:

1. Amount of xREX held
2. Active participation in voting

Active Staking

Active staking is a key improvement in xREX's design over traditional metaDEX systems. While other protocols automatically distribute rebases to all holders, xREX requires users to be staked to earn vote incentives and rebases.

Requirements

To be eligible for ALL weekly rewards, xREX holders must:

• Have xREX staked
• Cast votes during that epoch

This design choice ensures incentives flow to active participants who are staked and vote every epoch, rather than having passive holders accumulate rewards without contributing.

Liquid Staking

Etherex was designed to eliminate friction from the metaDEX model, and managing voting positions is one of the biggest sources of this friction. The liquid staked version of xREX simplifies this process by automating voting and reward claims without disrupting xREX's core mechanics.

$REX33

$REX33 is the liquid staked version of xREX and can minted with xREX. The $REX33:xREX ratio starts at 1.00:1.00 and increases in $REX33's favor as rewards accrue from fees, vote incentives and rebases.

After every weekly epoch flip rewards from fees and vote incentives are automatically sold to increase the $REX33:xREX ratio, this increase includes rebases from user and emission exits. Below is an example showing how $REX33:xREX ratio will increase over time.

Does not bypass exit fee

While $REX33 offers instant liquidity, it doesn't circumvent xREX's exit penalties. As the liquid staking version of xREX, $REX33's market price naturally reflects the instant exit fee structure. The token cannot trade below the xREX redemption value because arbitrageurs would immediately buy and redeem $REX33 for xREX to capture the difference. While $REX33 cannot trade below the xREX instant exit penalty, it may trade at a premium to this based on market dynamics.