ICX Auction Yield
ICX Daily Auction
The ICX Daily Auction is a central feature of the ICX Protocol, distributing a significant portion of ICX rewards to participants who actively compete by spending ICX. The auction is designed to reward active engagement, create a deflationary effect through token burns, and contribute to perpetual liquidity growth.
Purpose of the Daily Auction
Dynamic Engagement:
Encourages participants to actively utilize ICX within the protocol by spending it in daily auctions.
Introduces a competitive element, incentivizing strategic participation.
Token Scarcity:
Burns a portion of ICX spent during the auction, permanently reducing the circulating supply.
Reinforces the deflationary mechanics of the protocol.
Liquidity Growth:
Redistributes a portion of the ICX spent during auctions to liquidity pools, enhancing stability and increasing the ETH price floor.
Reward Distribution:
Provides substantial ICX rewards to participants based on their Auction Power, which can be boosted using DXN multipliers.
Auction Mechanics
Auction Power:
A participant’s Auction Power determines their share of the daily auction rewards.
Auction Power is calculated as follows:
Daily Auction Pool:
A fixed allocation of ICX is distributed daily through the auction pool.
The size of the pool decreases annually in line with the disinflation schedule.
Yield Distribution Formula:
ICX rewards are distributed based on the proportion of a participant’s Auction Power to the total Auction Power in the cycle:
Vesting Schedule:
5% Liquid: Available immediately upon claiming.
95% Vested: Unlocks linearly over 360 days, ensuring long-term ecosystem engagement.
Burn and Liquidity Contributions
Burn Mechanics:
55% of ICX spent during auctions is permanently burned, reducing the total supply and driving token scarcity.
Liquidity Contributions:
22.5% of ICX is swapped for ETH and added to the ICX/ETH UniV2 liquidity pool.
22.5% is directly added as ICX liquidity to the same pool.
These contributions strengthen the price floor and ensure liquidity growth.
DXN Multiplier and Auction Synergy
Boosting Auction Power:
Participants can lock DXN tokens to multiply their Auction Power, increasing their share of the daily rewards.
DXN multipliers range from 2x to 10x, depending on the amount of DXN locked.
Earning ETH Rewards:
Locked DXN tokens generate ETH rewards, providing an additional yield stream for participants.
Strategic Advantage:
Higher Auction Power increases the likelihood of earning significant ICX rewards.
Participants who strategically utilize Reflection Yields and DXN multipliers can dominate daily auctions.
Example: Daily Auction Reward Distribution
Participant
ICX Spent
DXN Locked
Multiplier
Auction Power
Total Auction Power
Daily Yield (%)
Auction Yield (ICX)
Participant 1
10,000
250
2x
20,000
1,000,000
2%
200,000
Participant 2
25,000
500
4x
100,000
1,000,000
10%
1,000,000
Participant 3
50,000
1,250
10x
500,000
1,000,000
50%
5,000,000
Participant 4
15,000
None
1x
15,000
1,000,000
1.5%
150,000
Participant 5
100,000
1,000
8x
800,000
1,000,000
80%
8,000,000
Total
200,000
3,000
1,435,000
100%
10,000,000
Benefits of the Daily Auction
Active Engagement:
Encourages daily participation, fostering an engaged community.
Strategic Depth:
Allows participants to optimize their Auction Power through DXN multipliers and Reflection Yields.
Deflationary Design:
Burns tokens and redistributes liquidity, ensuring sustainable ecosystem growth.
Liquidity Stability:
Contributions to the ICX/ETH liquidity pool reinforce the ETH price floor.
The ICX Daily Auction is a critical mechanism that combines dynamic engagement, token scarcity, and liquidity growth.
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