/biz/ - Business & Finance

>>22955639
To explain how it works and make it very simple to understand where the interest lies, I'll try to explain with an example understandable for brainlets. The percentages and numbers in this post are only for illustration purposes.

Let's say you bite the bullet and buy 1 ETH worth of xETH at $6.
You're happy with your purchase, you leave it be. You check back 23 hours later, you see that some nigger sold and now price the is sitting at $5.40
You just lost 10%. But ten minutes after, you receive 10% bonus tokens of your stack thus nullifying the loss, along with every other holder. That's the positive rebase increasing everhone' stack and share of the marketcap. As long as the price remains above $3.5 or so, this phenomenon occurs.

So imagine if the price remained at $6, you'd be 10% up.
So imagine if the price mooned overnight to $12, you'd be up 110%.

>Wait but if everyone gets free money daily that means everyone will sell, right? How is this sustainable?
That's why there are deflationary mechanics built into xETH, to at least partially reduce the will to sell as I've explained. I say partially, because some people might already be satisfied with how their stack has grown and are selling their daily excess.

Besides, the 10% (once again an example) you receive daily are compounding. So the longer you hold, it'll go like this :
Day 1 : 60 eth
Day 2 : 66 xeth
Day 3 : 72 xeth
Day 4 : 79,2 xeth
Day 5 : 86,4 xeth
Day 6 : 94,8 xeth
Day 7 : 104,2 xeth

Human greed and the token rewarding holding for long periods of time can explain how this has managed to stay alive for 2 weeks. And looking at the weekly chart, you can see how the idea is attractive since the price always goes back up from $4 - meaning there are people who want to be part of this too.