XIP #23: Growth Token Utilisation Strategy

This XBorg Improvement Proposal suggests utilising a small portion of the growth token allocation to increase XBorg's market presence over the next three months. These XBG tokens will be used for strategic partnerships and marketing initiatives while maintaining transparency and fiscal responsibility.

Context

XBorg currently holds 215M XBG tokens (~$25M) allocated towards growth initiatives, which is 21.5% of the total supply. These tokens are subject to a 6-month lock-up period, August 2024 - February 2025, followed by a 6-year linear vesting schedule until August 2030. This allocation aims to grow the XBorg ecosystem through strategic partnerships, KOL engagements, and targeted growth campaigns over the next decade. From February 2025 to May 2025, 10m XBG tokens will be vested; we propose to tap into 1,500,000 - 4,500,000 (15 - 45%) of these for growth over the next three months.

We believe the next few months will favour utility tokens with strong fundamentals and want to capitalise on healthy market conditions when they arrive. To do so without increasing our treasury burn rate, we suggest selling a small portion of the growth token allocation over a three-month trial period. With our daily trading volume averaging $500,000 year-to-date, implementing a controlled token DCA (Dollar Cost Average) strategy to the value of $50,000 - $150,000 per month (~500,000 - 1,500,000 XBG) would have minimal negative market price impact whilst giving us the funds to significantly boost the growth of the XBG token and the XBorg ecosystem.

Market Impact Analysis

• Daily Trading Volume: $500,000
• Proposed Monthly Utilisation: $50,000 - $150,000
• Daily Impact: $1,666.67 - $5,000 (0.33% - 1% of daily volume)
• Monthly Trading Volume: ~$15M
• Impact on Monthly Volume: 0.33% - 1%

This analysis demonstrates that the proposed utilisation would have a negligible market impact while providing significant resources for growth initiatives.

Financial Context

XBorg currently has over three years of runway with our current burn rate. Whilst we already make revenues from our esports team partnerships and DEX fees, we’d prefer not to increase our burn rate and put our product development at risk. We believe that we can achieve a high rate of return on a $50,000 - $150,000 monthly marketing spend to grow XBG and its holder base positively.

December Case Study

In December 2024, we allocated 200k USDC from XBorg’s treasury to fund the global community growth campaign targeting communities and KOL in strategic regions like China, India, Brazil, Turkey and more.

During this period:

• We had approximately $1–3M in volume daily
• We increased our token holders from 18,000 to 25,000
• We made about $5,000 on average per day on DEX fees, around $150,000 in total, almost paying for the campaign entirely
• The XBG price increased from $0.20 - $0.40

We believe the market environment for utility altcoins in March and April will be even better, and based on our previous experience, we can be even more efficient with our marketing spending.

Success Metrics

We will consider this initiative successful if:

• Achieve measurable growth in community engagement metrics
• Increase in daily active users and token holders
• Enhanced market presence and brand awareness
• Positive token growth due to marketing expenditures
• Maintain price stability during implementation

For increased transparency, we’d provide detailed monthly reports showcasing token utilisation and return on investment metrics and a comprehensive evaluation after the three-month trial period.

Risk Mitigation

• Fixed monthly cap and range ensures minimal market impact whilst providing flexibility (0.33% - 1% of daily volume)
• Transparent reporting prevents misuse of funds
• A 3-month trial period allows for strategy adjustment
• Continued focus on product development alongside growth initiatives

Implementation Timeline

If approved, the initiative will start in March 2025 and continue until the end of May 2025. Three monthly reports will be provided, and an overall initiative evaluation will be conducted. Holders will be able to vote on whether to continue, adjust, or close the initiative.

If rejected, the XBorg team will adjust the proposal based on community feedback and weigh up other options to grow the ecosystem.