The SX Merge in Review
Reviewing the impact of the SX Merge 3 months later
Three months ago, SX released its biggest feature yet, the SX Merge. The Merge fused SX Network and SX Bet into one vertically-integrated betting platform and brought SX one step closer to becoming the world’s first fully-decentralized betting platform.
This article serves as a high-level overview of what the SX Merge is, why it matters, and the impact it has had over the first 90 days.
How does SX earn protocol fees?
The fees from SX Bet and the SX Blockchain collectively make up the protocol fees of SX Network.
SX Bet
SX Bet, the #1 betting dapp in the world, generates USDC, ETH and WSX fees from thousands of users betting on sports, politics and crypto.
SX Blockchain
SX Blockchain, an EVM-compatible blockchain built using Polygon Edge, which generates SX gas fees from users and apps transacting on the SX Network Blockchain.
Validators: Who, What, and Why
Validators secure the SX blockchain and report outcomes and resolve betting markets for SX Bet.
Who?
Validators stake 200,000 SX tokens and run a full node for SX Network. The 200,000 SX tokens serve as collateral to ensure their interests are aligned with the network and can’t be accessed for 30 days upon being staked.
What do they do?
From an extremely high level, validators perform the following functions:
- Propose & Validate blocks: Propose a block to be checked by other validators, then validate that each block is correct.
- Report the Outcome of Betting Markets: Run a data client to submit and cross check the outcome of sports, politics and crypto markets.
Why do they receive 100% of the protocol fees?
For the above work, validators receive 100% of the protocol fees earned by SX Network. SX Network currently has 10 validators. As validators stake more SX while performing their responsibilities, the higher their share of the fees generated.
How do SX Token holders get involved?
SX Token holders can become a validator and do the work themselves. However, you will need a solid technical background in order to run a validator.
This is why most SX holders choose the second option: they delegate their SX tokens to any of the other validators. Delegating is kind of like “renting” out your SX tokens to validators so that they can validate for you. In return, they take a small cut (typically between 1–20%) of the rewards generated by your tokens, with you receiving the rest of the rewards (typically between 80–99%).
Validators who are most established, reliable and have higher uptime typically charge a higher fee. The core foundation nodes charge the highest fee (20%); this was done on purpose to encourage outside validators to undercut them and incentivize people to run their own.
Once you are delegated, your share of the protocol fees will pool on the SX staking page where you can claim the fees at any point. You also have the option to “Compound Yield” which takes your staking rewards and automatically buys SX tokens from the SharkSwap DEX on SX Chain, and restakes them.
A validator cannot steal your SX, but if they have bad up-time you will earn less fees. In the case a validator stops operating their node or becomes non-performant, you will not receive any fees. To change nodes you need to undelegate. This process takes 30 days during which you will not be earning staking fees. Particularly poor performing nodes may also be subject to being voted off the validator set by the other validators; however that has yet to happen.
Merge-nomics
Over the first three months since the Merge went live, nearly 40% of the SX Tokens in circulation have been staked. SX tokens cannot be transferred or sold for 30 days once they’ve been staked.
SX Network has also generated and paid out $300,000 to Validators since the Merge, including +$120,000 in the last 30 days alone.
Looking forward
The Merge was a massive step forward in the vision of SX Network. It made the network, including SX Bet, more decentralized, resilient and trustworthy.
In 2024, SX plans to grow the validator set, add slashing, improve the reporting infrastructure, support new app launches on SX Chain and turn SX Bet into the world’s first cross-chain prediction market. These changes will make SX Network more decentralized, introduce SX Bet to new users and increase fees for validators. We’ll be releasing a detailed 2024 technical roadmap in the coming weeks, stay tuned!
About SX
SX Bet is the #1 blockchain sports betting platform by betting volume across all chains. All bets are peer-to-peer and settled on-chain. SX lets you get the best odds when you bet on sports with crypto, all from the security of your own wallet. SX has processed +$350,000,000 in betting volume. SX Bet is not available in the United States or other prohibited jurisdictions.
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