xTAO — The journey continues.

Friction Finance
6 min readApr 29, 2021

It’s been a while since the last update so we plan to make this one pretty extensive. As always, if you have any questions after reading you’re welcome to hop in our telegram and ask away :)

TAO will be re-launching with a new token (xTAO), new staking contract, a brand new landing page, updates to farms, and much more. All TAO users will be able to migrate their TAO to xTAO at a 1:1 swap rate.

All timelines and dates will be provided at the end of the article.

What is xTAO?

xTAO is designed to be the next-generation of reflective tokens. Re-defining passive earning while having the ability to self-sustain yield farms that never run out of rewards without ever minting a token.

xTAO — Next generation of Reflective Tokens

xTAO carries over all the great things that make up TAO and much more. Unlike some of the current reflective tokens that exist, xTAO includes a sustainable transaction fee rate and has fee-sharing built into dApps.

xTAO Features

  • 3% reflection on every transaction instead of the current 1% on TAO. 2% of reflections go straight to xTAO holders and the other 1% goes directly to the staking wallet to supply the infinite and mintless LP farms
  • Ability for the DAO to adjust the tx fees for both holders and staking wallet in the future. Both of these functions are under the restrictions of a timelock contract and have a hard-cap at 3% each to prevent any type of exploitation
  • Ability to shut off reflections and rewards for specific addresses. These functions are only callable by the owner which will be a timelock contract under a 24 hour delay. The only reason this would ever be used would be to potentially stop the burn address from receiving more TAO or to prevent a CEX from receiving TX distributions.

xMasterChef — Earn yield forever, with no mints.

Unlike some of the recent reflective tokens that have been popping up, xTAO incentivizes liquidity instead of forcing it. xTAO LP holders can stake their LP to earn high APY without a new xTAO ever being minted.

Almost all traditional DeFi yield farm dApps work in the following way:

  • Farmers stake their LP tokens on the farming dApp and earn tokens for doing so
  • These earned tokens are minted by the staking contract to ensure that farmers always get rewarded
  • This creates a infinite supply and constant sell pressure as new tokens are entered into circulation and there is no max total supply.

Here’s how xTAO yield farms work

  • Farmers stake their LP tokens on the farming dAPp and earn tokens for doing so
  • The staking contract receives 1/3 of all xTAO transaction fees and uses these fees to reward LP farmers without ever minting a new token
  • As volume increases on xTAO so does transaction fees which means the staking contract will receive more tokens and thus provide a higher APY for LP farmers
  • Essentially, all xMasterChef yield farm rewards are tokens that are already in circulation, so no new tokens are ever created

On top of this, yield farmers who supply xTAO LP tokens also earn the xTAO “holder APY” as their underlying tokens will receive part of the TX fee distributions.

That sounds great! But what if I don’t want to stake LP tokens?

While farming LP in the yield farms will offer the highest yield, just holding xTAO also provides high APY.

2/3 of all xTAO transaction fees go straight to xTAO holders automatically and instantly after every transaction. Simply hold TAO and earn more.

xdApps — Apps With Built-In xTAO Reflections

The true value of reflection tokens is brought to life by volume, as more users transact with the token, more transaction fees are generated and disbursed to holders. Higher volume = higher APY for holding xTAO.

There’s no better way to incentivize volume then through dApps. All of the xTAO dApps will support the token reflections. Anyone is welcome to build apps that support xTAO reflections and we will be providing a comprehensive guide on how dApp creators can help contribute to the ecosystem.

7% of all xTAO is locked in a contract that can be voted on by the DAO to supply grants for dApp creators. If you’re a dApp creator and want to implement xTAO in your app (lottery, game, DEX, yield farm, etc) let us know and we can add a proposal for a grant.

xDashboard — View your xTAO earnings in real-time

We will be adding on an entire new suite of analytics and information to our current dashboard with the launch of xDashboard. We will also be completely shifting away from the pancakeswap front-end design for our farms. Here are a few new features you can expect to see on xDashboard.

  • xTAO earnings from transaction distributions
  • Global graphs and trading stats for any token on BSC
  • xTAO dApp distributions
  • Recent trades, daily fee rates, and daily burn rates

xTAO Distribution at Launch

xTAO has a max total supply of 25m. Here’s how the token will be distributed at launch.

  • ~28% (7m) xTAO will be sent to a migration contract where TAO holders can swap their TAO for xTAO at a 1:1 rate. Any unclaimed xTAO will be burned after 10 days.
  • 5% (1.25m) xTAO will be sent to the BSC burn address where it will earn transaction fees just like a holder and get larger and larger over time.
  • 60% (15m) xTAO will be sent to the LOCKED staking contract where it will be used to seed the initial farming rewards for LP farmers. This address will also be receiving 1% of all transaction fees to ensure it can self-sustain itself forever without ever minting a new token.
  • 7% (1.75m) xTAO will be locked for 30 days. After the 30 days passes, the xTAO will then be under the restrictions of a timelock contract with a minimum 72 hour delay. These funds will be used for future partner pools or supplying syrup pools and as rewards for dApp creators to build on xTAO. These funds will be voted on by the DAO before they can be spent.

TLDR; Circulating at launch will be 28% or ~7m xTAO. The remaining 72% is either locked or burned.

Implementing Buybacks

  • The new staking contract being launched will support variable deposit fees on all of our LP farms, these fees will go towards buying back and burning TAO
  • Lottery contracts and lootboxes will also allow BNB / BUSD purchases that will be used to buy xTAO


With this change, we will also be launching a brand new landing page that will act as a high-level whitepaper and a router between all of the different TAO dApps while also featuring some of our custom graphics created by a professional graphic designer and community member.

Timelines and Next Steps

TAO farms will stop providing rewards on May 4th. Farmers can unstake their LP any time after this date and there is no rush to remove the liquidity. The current farming site will be available under a legacy subdomain to access.

  • xTAO migration start date: May 6th
  • xTAO migration end date: May 16th
  • xTAO trading: May 6th
  • Landing page and re-branding: May 6th
  • xMasterchef and farming launch: May 8th
  • xAnalytics launch: May 10th
  • NFT Marketplace re-launch with xTAO reflective distributions built in: May 23rd with a public beta 1 week prior.


xTAO was designed to be self-sustainable and decentralized through and through. The architecture of the contract provides a lot of flexibility for the DAO to make slight adjustments without the need to ever create a new token. Dedicating some of the supply towards ecosystem development, having buybacks built in, and a more enticing reward for holding are just some of the many features that will come with xTAO.

We look forward to seeing you in our telegram and are excited for this upcoming new chapter for Friction.Finance.