Mint/Redeem - xSMD

SMD and xSMD: Convertibility and Vesting Mechanism

In the SwapMode ecosystem, SMD and xSMD tokens are crafted to provide users with flexibility and choice. The conversion mechanism between SMD and xSMD is a key feature, enabling users to adapt their holdings according to their strategic goals.

SMD to xSMD Conversion:

Users can convert SMD to xSMD anytime, with a straightforward 1:1 conversion ratio. This instant process allows users to transition their SMD tokens into xSMD, granting them the opportunity to participate in governance and enjoy the unique benefits that come with xSMD.

xSMD to SMD Redemption (Vesting Mechanism):

Converting xSMD back to SMD involves a vesting mechanism, giving users the option to select a vesting duration that suits their investment approach. The conversion ratio varies based on the chosen duration:

• Minimum Vesting Duration (15 days): Offers a 1:0.5 ratio. Each xSMD redeemed results in 0.5 SMD.

• Maximum Vesting Duration (30 days): Provides a full 1:1 ratio. Each xSMD redeemed equates to 1 SMD.

It's crucial to note that choosing a vesting duration shorter than the maximum, thus receiving a ratio below 1:1, leads to the burning of the unclaimed excess SMD. This mechanism promotes fair reward distribution and encourages longer-term investment commitments.

Cancel Redeem Option:

During the vesting period, users retain the option to cancel the redemption process. Canceling ensures the retention of the original xSMD amount, with no SMD generated. This offers users the flexibility to reassess and adapt their investment strategies in response to market shifts or personal preferences.

This mint/redeem framework is integral to SwapMode, providing a fluid and adaptable experience for users. It allows for the conversion between SMD and xSMD while respecting individual vesting preferences and optimizing the utility of tokens within the ecosystem.