The field of decentralized finance (DeFi) has undoubtedly been at the forefront of the cryptocurrency industry in 2020.
Data from DeFi Pulse shows that the total value locked in various DeFi protocols is almost at $15 billion, up from around $550 million in March. That’s an increase of 2600%, which is indicative of how explosive the growth was. This was largely caused by the promise of a decentralized and open financial system, not yet and possibly not ever tampered with by large governments and centralized organizations.
Of course, despite all the promises to disrupt traditional financial systems, DeFi is a particularly nascent field, and it faces a host of challenges that, if not tackled, could prevent open finance from ever truly taking off.
XSigma Corporation is a company owned by ZK International Group, which is listed on NASDAQ under the ZKIN ticker. It was founded in 2018 as a research and development lab to tackle some of the most pressing challenges of blockchain-based technology.
Following two years of research, XSigma is spearheading a new DeFi ecosystem that’s intended to bring legitimacy, accountability, as well as transparency to the field. The innovations that the protocol brings are numerous, but perhaps the most noteworthy is the token burn that should, in theory, increase the value of the SIG token. They can be summarized as follows:
- The project is backed by a public company.
- The tokens are burned using the exchange fees, which reduces the supply and, in turn, should increase the demand.
- The tokens also allow users to vote in the DAO.
Compared to other protocols such as Curve, if XSigma attracts more users, it would lock more exchange fees leading to increased burning of SIG tokens and more revenue for liquidity providers.
XSigma DEX is the first building block of the plan. It’s a decentralized stablecoin exchange designed to compete with currently existing automated market makers (AMM). The decentralized exchange is expected to be released in the coming months and aims to provide users with a decentralized alternative to stablecoin exchanges.
The Importance of Stablecoins and XSigma’s Role
Regarded as a serious departure from existing stablecoin exchanges, XSigma DeFi aims to become a player to be reckoned with.
Most of the platforms are built from the developer side, where XSigma puts the user experience at the forefront. This results in an intuitive and simple interface powered by a sophisticated engine that supports the pooling of ERC-20 tokens while reducing the risk of impermanent loss. Further innovations include a revamped reward structure where SIG tokens are actually burned using the fees.
This system, combined with a hard cap on the token supply, incentivizes users to accumulate tokens, which, in turn, should lead to appreciation. Moreover, the native governance tokens provide users with the right to decide how the protocol is run.
Over time, XSigma intends to empower the DeFi ecosystem with new borrowing and lending services, as well as a custodial, regulated exchange and a derivatives platform enabling futures trading. The roadmap also sees the launch of the XSigma stablecoin.
It’s worth noting that this is the only company in the DeFi space that’s backed by a publicly-traded entity. It has managed to recruit some of the most skillful engineers to lead the development of the project.
All in all, the company is focused on providing high-quality service in an industry that’s nascent, which is critical.