What are xAssets?
Let’s break it down.
The true benefit of the Xsauce ecosystem starts with xAssets.
xAssets are synthetic assets which provide price exposure to cultural assets in the real world, specifically sneakers, streetwear, watches and other collectibles.
For those of you familiar with other synthetic asset protocols, there are some characteristics of xAssets which reflect the unique attributes of cultural assets that differ from traditional stocks, bonds, or commodities.
We’ll cover each of these attributes and the benefit they provide in the ecosystem.
Aggregated Price Feeds —
Oracles can be a great tool, but they also have weaknesses if not deployed strategically. The Xsauce protocol uses Chainlink oracles to feed in pricing from StockX, Goat, FlightClub and Stadium Goods (more to come). The price of each xAsset is aggregated with weighting applied to the normal shoe size distribution. The xDAO proposal framework invites feedback and improvements to the oracle-based pricing model which will only get better with time.
Fractionalized Shares —
Fractionalized shares offer immense flexibility regarding price exposure. Instead of having to buy the entire asset, xAssets are expressed by a total implied value (TIV) with each share accounting for 1% of its TIV. This makes nearly every xAsset affordable.
Cross Asset Trades —
Moving across asset classes can now be instant and permissionless via the Xchange. This was really important to us because we’ve personally experienced the opportunity cost of having to sell a sneaker to then buy a collectible. There was lost time, missed buyers and new drops happening all while we waited on the sidelines. The Xchange allows members to quickly adjust their risk tolerance or make trades based on the news of releases, volatility or a desire to move gains from one asset class to another.
Lastly, xAssets have specific nomenclature to separate them from their physical counterparts. For example, a Jordan 1 Retro High “Bordeaux” as an xAsset is called xJ1h — Bordeaux. The “x” denoting the synthetic asset, the brand, model and design signified by “J1h” and the colorway shown after the hyphen.
For V1, members can purchase tokenized shares in half or full increments. For the example above, a half share of the xJ1h — Bordeaux would be ~$14 USD. You would then need to lock up additional $SAUX as collateral (more to come on how collateral works with regard to xAssets).
Here’s a teaser of what’s to come:
Note: xAssets can be purchased by staking $SAUX to get $sSAUX
Cultural assets are poised for continued growth. The current static marketplaces, burdened by shipping, inventory issues and other liabilities are not built for the dynamic future. Investment portfolios will be fluid, comprised of fractions of sneakers, watches, trading cards and collectibles. These assets be able to move with you and most importantly move with culture.
The Xsauce protocol aims to enable anyone to utilize xAssets across the full DeFi ecosystem. Our ambition is to support our members to buy, sell, trade or gift their shares to other members.