In this edition, we’ll be briefing you on LandX, and their upcoming TGE.
With their public sale ongoing, it may be a good time to learn about the unique benefits LandX brings to the table, namely bringing commodity RWAs onchain for investors…
Over and out ⬇
Crypto Market Update:
- Top Gainer (24H) in the top 50 mcap: Stacks $STX increased in price by 29%.
- Top Loser (24H) in the top 50 mcap: Injective $INJ is down -6.4%.
- The total crypto market cap has seen a increase by 2.4% to stand at $1.5T.
- BTC dominance in the market is currently at 54.3%.
- Median gas price on Ethereum over the past 24 hours has been 43 gwei.
News
- El Salvador's Bitcoin Investment Turns Profitable: President Nayib Bukele announces El Salvador's bitcoin portfolio is now profitable, marking a significant milestone in its crypto journey.
- SoFi Exits Crypto Amid Regulatory Pressure: SoFi to shut down its crypto services, urging users to transfer their accounts to Blockchain.com or face automatic liquidation.
Project Updates
- Repeated Security Breaches at Velodrome and Aerodrome: Decentralized exchanges Velodrome and Aerodrome faced second-time domain compromises, quickly restored, amidst ongoing security challenges.
- Arbitrum DAO's $23.54M Funding for Missed Projects: Arbitrum DAO approves over $23 million in additional funding to support 26 projects initially overlooked in their grant program.
- Platypus Finance Hackers Acquitted in France: French court clears individuals accused of an $8.5 million Platypus Finance hack, citing no fraud in exploiting a smart contract flaw.
- Mantle's Ethereum Liquid Staking Protocol: Mantle launches a non-custodial liquid staking protocol on Ethereum, offering mETH tokens to stakers.
- Fantom Foundation Launches Sonic Labs Incubator: Fantom Foundation introduces Sonic Labs, a developer incubator for dApps on Sonic mainnet, offering up to 1 million FTM funding and mentorship.
- Crypto.com Gains UK EMI License: Crypto.com secures Electronic Money Institution authorization from the UK's Financial Conduct Authority, expanding its financial services in the country.
- Osmosis and UX Chain Propose Merger: Cosmos's largest DEX, Osmosis, and lending protocol UX Chain plan a merger to create a comprehensive DeFi hub.
- Blur Dominates NFT Market: Blur's NFT marketplace captures nearly 80% of the trading volume, significantly outpacing OpenSea.
Monad, a highly scalable EVM-L1, has been gaining traction. Our Founder & CEO, Nick Drakon, sat down with Monad’s Founder, Keone Hon, to discuss the Layer1’s approach to solving for high performance problem sets and the infrastructure choices they have made.
How LandX Works
LandX works by providing farmers with finance.
In exchange for this upfront capital, the LandX platform receives future crop yield from the farmers.
Specifically, farmers pay a percent of their annual harvest for upfront capital, ~10%.
For farmers, this is convenient as they are paying a share of their harvested crops.
This protects them from currency risk; if the price of their crop decreases, they still pay the same amount each year.
This would not be the case if they secured traditional financing, in which they would have to pay back a bank in their local currency.
Market participants would purchase a kg, or a set amount of corn or another commodity such as soy, wheat, or rice from the farmers, and keep receiving the crop yield every year, perpetually.
Should corn be valued at ~$0.20 /kg, then market participants would be willing to pay $2.00 to receive this annual corn yield, assuming a 10% APR.
The price of corn tends to go up against inflation over time. Rising populations, energy prices, global warming, and war are other factors that affect agricultural commodity markets.
For this reason, the yield that market participants would be receiving is uniquely hedged against inflation, providing a unique use case in contrast to products denominating yield in USD stablecoins.
Typically, those who want to invest in food commodities would purchase these futures to gain exposure.
However, these futures don't share the yield component that LandX provides.
XTokens & Future Plans
Users can deposit into xToken vaults, which are used to provide an annual yield of 1 kg/ token held.
1 xCorn = receive 1 kg of corn per year
1 xWheat = receive 1 kg of wheat per year
1 xSoy = receive 1 kg of soy per year
1 xRice = receive 1 kg of rice per year
1 xBasket = receive 4 kg yield per year, 1 kg for each commodity listed above
xBasket is unique in the sense that it can be used in other DeFi protocols. LandX is in talks with Aave and other lending platforms. In the future, the token could potentially be used as collateral to borrow stablecoins.
The first land on LandX is in Columbia, with incoming land coming from various destinations in Latine America including Argentina, Columbia, Chili, Dominica, Ecuador, Dominica, Guatemala, Honduras, Nicaragua, Panama, Paraguay, and Uraguay.
In addition, the team is in talks with European farmers, specifically in Bulgaria, Estonia and Lithuania.
~80% of LandX capital will be directed towards Latin America, as there is a lot of opportunity in this region. The remaining 20% will be diversified.
The project will be launching on December 15th, after building a community and hosting two testnets.
$LNDX Raises, Public Sale
~$5.5M was raised from seed investors, comprised of farmers. The private round was closed on December 3rd after raising ~$1M, with the public sale commencing immediately afterward on December 4th.
Seed Investors have a 4-month cliff & 4-year vesting schedule
Omega farmers are the staple of the community and will have access to the sale first, followed by Alpha farmers and then the general public on a first-come first-serve basis.
$LNDX will be available for the same price across all 3 stages of the sale
$LNDX will be listed on December 14th, a day before the project goes live on December 15th.
At TGE, the token will have a $2.7M marketcap.
A ve staking system will be introduced, encouraging holders to lock up their tokens for longer periods of time:
3 Months = base voting & staking rewards
12 Months = 2x voting & staking rewards
48 Months = 4x voting & staking rewards
LandX Legal Protections for Investors
DeFi Raiders brings up that legalities and realistic crop yield are factors that can complicate how the LandX process operates.
Land cannot have any legal encumbrances, including a mortgage on the land or any other sort of liability.
Land must be in a rule-of-law country where legal instruments are actually enforced.
LandX uses mortgages and promissory notes which are signed by the farmer.
This ensures that the protocol doesn't have to go through the court to claim assets, in case of dispute.
Disputes would include unmet obligations on behalf of the farmer, namely failure to provide the crop yield.
In this case, the land would be legally reclaimed by LandX to be used by another farmer.
The first lands to be used on the platform are actually being leased out to one of the seed investors in Columbia, who will operate these lands.
They will be obligated to provide the agreed-upon crop share yield.
As these farmers are investors, they are incentivized in the long-term success of the protocol.
In the long term, the protocol aims to diversify and decentralize decision-making.
For this purpose, fixed criteria would need to be used so that onchain courts such as Kleros can determine if a land is suitable to be used on LandX.
LandX uses Chainlink's Oracle services. Chainlink is releasing a new service designed for RWAs, which will entail a CFA auditor.
This individual will analyze the documents that are created onchain and compare them with the offchain assets to make sure onchain commitments can realistically be met.
In this case, the auditor would make sure the number of xTokens aligns with the IRL land, to ensure obligations are met and RWA proof-of-existance.
They would also make sure that the offchain agreement between LandX and the farmers as it pertains to crop yield aligns with the onchain obligation LandX makes with users who deposit into xToken vaults.
When LandX inks agreements with farmers, 12 months of crop share is actually deducted from the upfront capital and is stored in a smart contract.
Another 12 months of crop share is also deducted, which is then put in a multi-sig wallet.
Farmers being required to pre-pay 24 months of their obligation ensures that should any dispute arise, onchain investors will still receive their yield.
An insurance protocol is used to ensure payouts to xToken investors in the event of a weather event that completely depletes a harvest.
LandX Originators
LandX's process includes originators, who can be thought of as sales agents for LandX.
These people do a lot of the on-the-ground work as it pertains to communicating with the farmers and explaining the LandX process to them.
Originators are granted the power of attorney to act on behalf of the LandX organization.
They are rewarded for closing deals with farmers via a one-time fee, valued at a maximum of 1% of the loan given to the farmer.
This could potentially be a very profitable opportunity depending on the size of the loan.
There could be 300-1000 originators potentially in the future.
Tokenomics
On December 15th, ~1,000 hectares of land will be collateralized against approximately half a million kgs of various commodities and then tokenized.
Roughly 10% of the average harvest for a specific crop is presented at yield, so xTokens will be priced at a rate that corresponds with ~10% yield per year.
If corn is worth $0.20 /kg, xCorn will be priced at $1.80.
A target price for the xToken is set that takes into account an inflation rate of ~10%.
The LandX liquidity pools are deep enough to handle current sell pressure.
The protocol is only onboarding the land (which is then tokenized into xTokens) at a rate consistent with demand for xTokens.
The platform sees xTokens as a stablecoin or flatcoin that appreciates against inflation, and yields ~9-10%.
In total, ~18-19% is the target for xTokens and xBasket, the combined rate that includes the target price taking inflation into account, as well as the crop yield.
If someone purchased a large amount of the token and then dropped it in the liquidity pool, the protocol still has enough liquidity to absorb this sell pressure without affecting the price.
If someone purchased, for example, $10M in xTokens and then put them in the liquidity pool, farmers would be incentivized to buy back these tokens at a discount to fulfill their obligations and then restart new obligations.
With this in mind, it is still very important that the protocol controls selling pressure of xTokens.
$LNDX acts as the governance token and is a speculative token used to gain exposure to the success of the protocol.
This token pays out 60% of fees generated by the platform.
Fees include fees taken on farmer financing, yield paid by farmers, and a small tax on yield collection.
Holders can vote on maximum crop share, fees, etc.
cTokens, or commodity tokens, act as the yield paid out from xToken vaults i.e. staking 1 xCorn means the staker will receive 1 cCorn per year.
This cCorn is the equivalent price of 1 kg of corn.
cTokens are backed by the pre-payment from the farmers, so they can always be sold.
Future Plans
Currently, the core team executes their plans and does the decision-making. As TVL rises, the organization will corporatize and introduce a board, becoming more decentralized. Governance will become more important as the protocol grows.
LandX will be flying drones over their lands, so it will be possible for users to view the fields as harvests happen, which can provide assurance for xToken holders.
The team welcomes others to fork the protocol and expand the types of crops offered, but LandX will focus on their 4 staple commodities and providing financing in these areas.
Important Links
Become a Premium member to unlock all our research & reports including access to our members-only discord server
Join thousands of sharp crypto investors & traders by becoming a Premium Member & gain an edge in the markets. For just $33.25/month you’ll get:
Premium access to the entire Revelo Intel platform
*NEW* Raise Alpha- Weekly reports on interesting project raises
*NEW* Sector Overviews - 90 day Reports with data and insights on key sectors
Launch Alpha - Weekly report highlighting new projects
The Trace - Real-time onchain alerts for smart money movements
Airdrop Guides - Reports on airdrop opportunities
Members Only Discord server
Analyst Insights reports - actionable trade ideas
Project Snapshots - Monthly protocol-specific performance reports
Project Breakdowns & Timelines - Deep dive 50+ page protocol-specific reports
Notes - Summaries of your favorite podcasts & AMAs