Overview

LandX Finance is a blockchain protocol that aims to introduce Real World Assets (RWAs) into the world of decentralized finance (DeFi) through Perpetual Commodity Vaults. By bringing agricultural RWAs on-chain, the protocol can provide investors with yield opportunities and exposure to uncorrelated asset classes. 

As a decentralized protocol, LandX connects farmland owners with crypto-native investors through blockchain-based Perpetual Commodity Vaults. This design makes it possible to generate real yield from real production, entirely on-chain.

Farmers can raise capital from the DeFi ecosystem in exchange for regular crop share payments secured by the underlying farmland. These crop share payment obligations are tokenized as ERC-20 tokens and represented on-chain as xTokens.

xTokens produces real yield payments in cTokens, a commodity token that represents one kilogram of wheat, soy, rice, or corn. For example, one cWheat is equal to the current market price of 1 kilogram of wheat.

xTokens	cTokens
These are Perpetual Commodity Vaults that pay out 1 cToken per year in yield, providing investors with a consistent income stream.	On-chain commodities represent 1KG of the underlying product, offering tangible ownership of real-world assets.

• xTokens are tradable on the open market.
• cTokens are redeemable in the LandX dApp for $USDC. They are not tradable on the open market. 

	xTokens	cTokens
Price	xTokens derive their value from the pricing of the vault they are associated with.	cTokens derive their value from the market value of the underlying commodity they represent.
Underlying Value	The value of xTokens is determined by the demand for the particular vault they are associated with.	cTokens offer a highly attractive option for investors as their value is directly tied to real-world commodities.
Fluctuations in Value	The demand for a particular vault is influenced by factors such as the performance of the underlying assets, supply and demand in the market, and investor sentiment.	Since cTokens are directly tied to real-world commodities, they can fluctuate in value identically to the agricultural commodities traded on the Chicago Mercantile Exchange (CME).

Investors can also participate directly in land ownership via the $LNDX governance token, which earns a percentage of protocol fees and offers the highest exposure to the success of the platform.

The LandX Process

LandX introduces a new method of utilizing farmland through the utilization of tokens and NFTs. 

Legal Crop Share Contracts

LandX relies on 49-year rolling legal liens. These liens are independent legal agreements that give LandX the right to take ownership of the collateral (farmland) if the loan is not repaid.

On the one hand, NFTs are used to represent legal and economic contracts backed by farmland, ensuring a reliable and secure coordination system for both parties.

On the other hand, farmers commit a percentage of their yearly harvest through a legal contract, known as a lien, after undergoing an extensive qualification process. In return, they receive xTokens equivalent to the agreed-upon crop share. These tokens are then sold to interested investors, providing farmers with upfront capital.

To hedge against potential uncertainties, LandX requires farmers to keep 12 months of crop-share payments and a 12-month security deposit on the platform.  Additionally, the protocol ensures that independent legal agreements give LandX the right to take ownership of the collateral (farmland) if the loan is not repaid.

The farmland’s output is then distributed to xToken holders as cTokens. xTokens yield  1 kg of the underlying commodity per year in perpetuity. Through the use of cTokens, which can be sold for USDC at the current market price of the commodity, investors receive daily payments based on the farmer’s contract. Additionally, they have the freedom to convert their cTokens to USDC at any time. If a farmer wishes to exit their crop-share obligation, they must buy back the xTokens they originally received to be released from their loan contracts.

Perpetual Commodity Vaults

The LandX protocol facilitates agreements between borrowers (farmers) and investors using blockchain-based tokenized Perpetual Commodity Vaults. This makes it possible for investors to receive yield that is guaranteed by legal contracts secured by the underlying farmland.

Perpetual Commodity Vaults trade at a market-determined principal price and provide daily yields of the underlying commodity in perpetuity to token holders.

1 xWHEAT is staked to earn 1 cWHEAT per year indefinitely.	1 cWHEAT equals 1 kilogram of wheat.
1 xRICE is staked to earn 1 cRICE per year indefinitely.	1 cRICE equals 1 kilogram of rice.
1 xSOY is staked to earn 1 cSOY per year indefinitely.	1 cSOY equals 1 kilogram of soybeans.
1 xCORN is staked to earn 1 cCORN per year indefinitely.	1 cCORN equals 1 kilogram of corn.

These products are traded through an internal marketplace that employs a Chainlink Oracle data service to update product prices. This means they can be redeemed 24/7 with zero slippage when exchanged for stablecoins like $USDC.

xTokens

xTokens are tokenized Perpetual Commodity Vaults, representing 1 kg/year of an underlying commodity. They are liquid and can be traded on-chain at any time.

For instance, someone holding xWHEAT would be entitled to receive 0.0027 kg of wheat per day, equating to 1 kg/year. This yield that comes from the underlying commodity is paid out on a daily basis in units of the underlying commodity. xToken stakers receive their cToken yield daily and can redeem cTokens in the LandX dApp to receive their current value in $USDC.

1 staked xWHEAT token will earn 1 cWHEAT per year which can be redeemed in $USDC for the market value of 1 kg of wheat. 

xTokens offer investors a unique opportunity to hedge against inflation, while also providing a liquid and income-producing asset backed by the output of farmland. This combination of features makes xTokens a highly attractive investment option in today’s volatile market.

xTokens As an Inflation Hedge

One of the key benefits of xTokens is their ability to hedge against inflation. This is achieved by providing exposure to the crop output of farmland, a historically reliable inflation hedge.

As the demand for food and agricultural commodities continues to rise, farmland prices are expected to increase, thereby providing investors with a safeguard against rising inflation. This makes xTokens a valuable addition to any investment portfolio, especially in times of economic uncertainty.

xTokens As an Income-Producing Asset

In addition to hedging against inflation, xTokens also offer investors a liquid and income-producing asset. Unlike traditional farmland investments, which are illiquid and tied up for long periods of time, xTokens can be traded on decentralized exchanges all year round. 

This enables investors to easily buy and sell their holdings, providing them with the flexibility to capture market opportunities and manage risk. Furthermore, investors can collect daily yields on their positions as long as they stake their xTokens to earn yield. This crop yield is added daily and distributed as cTokens, which can be redeemed at any time in $USDC.

xTokens Liquidity Provision

xTokens are traded primarily on Uniswap. Like with other tokens, LPs deposit a pair of assets into a liquidity pool, enabling them to earn trading fees on that specific pair. For instance, an LP can provide xSOY and USDC to the xSOY/USDC market on Uniswap. When traders purchase xSOY tokens with USDC or another routed token (e.g., USDT > USDC > xSOY), it increases the USDC balance in the xSOY/USDC pool while reducing the available xSOY tokens. This imbalance affects the price based on the constant product formula: x*y=k, where x and y represent the pool balance of each token, and k is the total constant price of the pool, which creates a price curve.

In return for this service, LPs earn trading fees depending on the fee structure of the underlying AMM pool, which is usually set at 0.3% per trade. These fees contribute to the LPs’ income for their role in maintaining liquidity in the market.

cTokens

The implementation of a staking system for xTokens presents a unique opportunity for both farmers and investors alike. This is materialized in the form of cTokens, which are derivative tokens designed to track the price of an underlying agricultural asset. 

With 1 staked xToken earning 1 cToken per year, farmers can ensure a steady and fair return on their investment of land and labor. Not only does this incentivize farmers to continue producing high-quality wheat, but it also provides them with a stable and predictable source of income. 

Similarly, investors can now participate in the agricultural industry, which was previously inaccessible to them, by staking their xWHEAT tokens. This allows them to not only support farmers and the production of essential food crops but also earn a tangible return on their investment in the form of cTokens.

cTokens are exchangeable for the market value of the underlying commodity. They can be traded through an internal marketplace, which adds an additional layer of liquidity and accessibility to the system. 

This way, landowners now have the option to convert their yield into $USDC and trade it for cTokens at market value. This ensures that they are receiving a fair price for their produce and have the flexibility to sell it at any time.

Exchange Rate and Pricing

To ensure accurate pricing, cToken exchange rates are updated via Chainlink oracles using traditional finance exchange data. These oracles source futures pricing data from traditional finance exchanges, enhancing the reliability of cToken valuations. 

Prices are updated by Chainlink oracles and LandX relies on 49-year rolling legal crop share contracts known as liens. These contracts are secured by farmland and managed by validators, ensuring reliability and security.

ERC20 And L2 Expansion

All cTokens adhere to the ERC20 standard and are deployed on the Ethereum mainnet. However, LandX has forward-looking plans to bridge these assets to popular Layer 2 rollup solutions. This strategic move demonstrates LandX’s commitment to scalability and user accessibility.

LandX Credit Gateway

The LandX Credit Gateway launched on the Arbitrum network connects lenders and agricultural borrowers on-chain. This provides lenders with competitive yields while borrowers can finance their operations.

Lending Mechanics:

LandX Credit Gateway offers two primary lending pools, each catering to different risk tolerances and liquidity preferences:

• Senior Pool:
• This pool is ideal for risk-averse lenders who prioritize liquidity over yield. This pool may have lower yields but offers priority exit rights. Senior lenders are repaid first when the borrower settles the loan, reducing their risk.
• Junior Pool:
• Offers significantly higher yields but with a trade-off: Junior lenders are only repaid after Senior Pool lenders. This pool is designed for those willing to take on additional risk for the prospect of higher returns.
• Both pools are structured to provide liquidity to agricultural borrowers and are backed by a variety of strong collateral options to minimize risk.

For Lenders

• High Yields: Earn yield on $USDC, with options ranging from lower-risk Senior Pools to higher-yield Junior Pools.
• Variety of Pools: Lenders can select from pools with different risk profiles, allowing for a tailored risk-reward strategy.
• Flexible Exit: Senior lenders have exit priority, providing a degree of liquidity and security.

For Borrowers

• Fixed Loan Terms: Clear, predefined loan terms ensure borrowers have predictable repayment schedules.
• Flexible Collateral Options: Loans are secured by a range of collateral, including promissory notes, liens over assets, warrants, and certificates of deposit.
• Fast Turnaround: The system offers a quick turnaround time for loan approval and funding, providing much-needed capital to agricultural participants.

Collateral and Risk Management

The LandX Credit Gateway aims to mitigate the risk for lenders by backing loans with strong collateral. Some of the collateral types include:

• Promissory Notes
• Liens over assets
• Warrants
• Certificates of Deposit

This multi-layered approach to collateral helps to secure loans and reduces the likelihood of default, providing added security to lenders.

Aave Credit Delegation Integration

A noteworthy feature of the platform is its integration with Aave’s Credit Delegation. This allows users to delegate their borrowing power to the LandX Credit Gateway. In return, they can earn higher APYs compared to standard lending options within the DeFi ecosystem.

How It Works:

1. Users delegate their borrowing power on Aave to LandX.
2. LandX uses delegated credit to provide loans to borrowers on the platform.
3. Lenders earn higher yields through this process, benefiting from the integration between Aave and LandX.

Real-Time Interest Payments and Withdrawals

• Interest Payments: Lenders receive interest payments in real-time, a feature that enhances the transparency and responsiveness of the lending process. This means lenders do not need to wait until the loan’s maturity to start seeing returns on their capital.
• Withdrawals: Withdrawals are typically allowed 35 days after the funds have been lent and the borrower repays the loan. This mechanism ensures that lenders can exit their positions, particularly for Senior Pool lenders who have exit priority.

LandX Insurance Safety Module

The LandX Insurance Safety Module (ISM) introduces a smart contract-based security system designed to safeguard $LNDX and xToken holders by providing asset-backed guarantees for safety and stability. Similar to the AAVE Safety Module, the ISM is composed of staked assets and smart contracts that protect the LandX Protocol and its users from losses due to various events, particularly those affecting agricultural yields. This system mitigates the inherent risks in DeFi activities and agricultural-backed assets, ensuring principal protection and incentivizing stakers with revenue from multiple sources.

xTokens and xBaskets are principal-protected Real World Assets (RWAs), secured by the Insurance Safety Module’s capital pools. In the event of adverse agricultural conditions such as crop failures, the ISM guarantees that xToken holders are repaid their principal and interest, protecting them from potential shortfall events. Active $LNDX, xToken, and xBasket holders who participate in DeFi (e.g., by lending assets on Timeswap or providing liquidity on Uniswap) are protected from losses caused by hacks, exploits, or unforeseen DeFi risks.

The LandX Insurance Safety Module is closely modeled after the AAVE Safety Module:

• Both systems consist of smart contracts and staked assets that act as a backstop in the event of protocol-level losses.
• However, while AAVE focuses on protecting against protocol insolvency, the LandX ISM is specifically tailored to the agricultural sector and DeFi, offering protection against weather-related crop failures and DeFi exploits.

Stakers of $LNDX tokens within the ISM can participate in the staking pool to:

• Earn Real Yield: Stakers receive a proportional share of the ISM’s revenue, which is generated from multiple sources:
  1. $USDC risk premiums from providing insurance cover.
  2. $LNDX ISM rewards distributed periodically.
  3. Protocol-Owned Liquidity (POL) fees from DEX LP pools like LNDX/USDC and xToken/USDC.
• High APYs: During reward distribution periods, the APYs for staked $LNDX can spike, providing opportunities for stakers to capture elevated yields.

How the ISM Protects xToken and xBasket Holders

The ISM offers a unique level of security for holders of xTokens and xBaskets:

• xTokens are backed by farmland (real estate) and promise future crop payments.
• In the event of crop failure (due to climate change, extreme weather, etc.), the ISM will compensate the LandX Protocol for the lost crop value, ensuring that xToken holders receive their principal and interest payments despite the agricultural loss.
• This makes xTokens overcollateralized RWAs with insured principal and interest repayments, insulating holders from potential risks tied to agricultural production.

Mode of Operation

1. Stake $LNDX:
   • Users deposit $LNDX into the ISM staking pool to participate in revenue sharing and insurance protection.
2. Monitor and Claim Rewards:
   • Stakers can collect earned rewards at any time, which include:
     • Risk premiums in $USDC.
     • Rewards in other tokens, such as $LNDX.
3. Unstake & Withdraw $LNDX:
   • Users must submit a withdrawal request to activate the 14-day unbonding period before completing the transaction to withdraw their staked $LNDX.

LNDX Staking Pool: Stakers earn from ISM revenues, generated by insurance premiums and protocol-owned liquidity (POL).

Insurance Cover NFTs: Users can mint insurance cover NFTs to protect their positions in Uniswap, LandX smart contracts, and protocols officially partnered with LandX. These covers are “pay-per-second,” meaning users pay only for the exact time they hold the cover.

The payout approver for the ISM is currently configured as a 2 of 3 SAFE multisig, comprising the following participants:

• LandX DAO

• Atomica.org team

• Institutional (re)insurance capital provider

Future upgrades include adding decentralized governance mechanisms like Kleros or UMA to the multisig, increasing economic security.

Internal Marketplace

LandX includes an internal marketplace that facilitates cToken/USDC liquidity. Users can trade commodities without slippage at an oracle-set rate.

This marketplace funds a vault that investors can use to exchange their cTokens for $USDC. As a result, this mechanism enhances liquidity and provides users with efficient ways to transact.

xBASKET

LandX launches with four markets representing essential agricultural commodities: Wheat, Soy, Corn, and Rice.

Investors can get exposure to this basket of commodities through an xBASKET ERC20 token that represents equally weighted xTokens.

Smart Contracts Architecture

When it comes to off-chain components, LandX relies on a network of validators who play a crucial role in identifying suitable farmland opportunities within their respective regions. Their responsibilities include securing crop share agreements and verifying farmland productivity. To assess land productivity, LandX employs a combination of methods, including geospatial imagery.

One key tool used is the Normalized Difference Vegetation Index (NDVI), which measures vegetation levels. LandX compares the 5-year vegetation history data with regional averages and actual crop yields reported by farmers. This comprehensive evaluation helps ensure the quality and potential of the farmland.

LandX establishes a critical parameter known as the Maximum Allowable Crop Share (MACS) for each farmer. MACS represents the percentage of farmland yield that farmers can tokenize. The specific MACS value is determined through voting within the LandX DAO (Decentralized Autonomous Organization). Currently, MACS is set between 10-15%, varying based on the crop type.

Target Asset Price Appreciation (TAPA)

The value of xTokens is derived from two main factors: the real yield they produce and their price appreciation over time.

• Real Yield: xTokens provide a real yield based on the value of the underlying agricultural commodity. Farmers who stake xTokens receive a portion of the crop share in the form of cTokens. This real yield is an essential component of the value proposition for xTokens, offering investors a source of income linked to agricultural production.
• Price appreciation: Over time, xTokens can appreciate in price. The price appreciation may result from factors such as increased demand for tokenized agricultural assets, the scarcity of farmland resources, and the overall performance of the LandX ecosystem.

The supply of xTokens is carefully controlled to maintain a balance between demand and availability. New farmers who join the platform are responsible for minting xTokens equivalent to the amount of crop share they are contractually obligated to pay. This process helps manage the supply of new xTokens. It’s essential to strike a balance between onboarding new farmland and ensuring that the demand for xTokens remains appropriate.

LandX also determines and evaluates the Target Asset Appreciation Rate regularly, typically every 3 months. Currently, this target appreciation rate is set at 10% per annum, aligning with actual inflation rates. This rate serves as a guideline for the expected price appreciation of xTokens, providing clarity to investors and participants in the LandX ecosystem.

Why The Project Was Created

Currently, DeFi-native and institutional investors don’t have ways to get exposure to farmland commodities. As a result, LandX was created to enable crypto-native investors to diversify their digital asset portfolios and get access to sustainable yield sources that are only available off-chain. LandX achieves this by linking digital assets to real-world farmland and agricultural production, and offering real-yield opportunities to users on-chain. 

On the one hand, farmers frequently face challenges accessing funds. Several factors contribute to this issue, such as the difficulties involved in obtaining financing for agricultural purposes, cumbersome administrative processes, the dependence on the location… As a result, the available choices are often unfavorable. 

On the other hand, investors in DeFi currently have no means of gaining exposure to the production of real-world agricultural land. As a consequence, the majority of investment portfolios in crypto remain highly correlated to the overall crypto markets (which also have a strong correlation with stock markets). Furthermore, most market participants are often searching for sustainable sources of yield on-chain.

Farmers require funds to acquire additional farmland, new equipment, and improve their facilities. These efforts directly contribute to local food security, but cannot be accomplished without liquidity. LandX solves farmers’ funding difficulties by providing them with upfront funds in exchange for a percentage of their land’s future crops. 

In simple terms, farmers utilize LandX to convert a proportion of their future harvests into tokens in order to receive immediate monetary assistance. At the same time, crypto investors can get direct exposure to the output of the underlying farmland. LandX’s commodity vaults offer these investors a daily yield paid out in units of the underlying commodity. 

Problems Solved By LandX

For Farmers	For Investors
Difficulty accessing capital for agricultural purposes.	Lack of exposure to real-world farmland output.
Administrative complexities in obtaining financing.	Limited options for crypto-native investors (can only access yield opportunities available on-chain).
Location-dependent capital access.	Demand for sustainable yield.
Limited and unfavorable financing options.	High correlation with cryptocurrency markets.
LandX solves these problems by allowing farmers to tokenize a portion of their future crops, providing them with upfront capital.	LandX addresses these issues by offering investors: Portfolio diversification opportunities through uncorrelated assets.  Daily yield paid in commodity units that are convertible to $USDC. Fractionalized on-chain exposure to farmland crop-shares

Why Agricultural Commodities

In the current economic climate, marked by crises and soaring inflation rates, agricultural commodities present an appealing combination of a safe haven and a unique investment opportunity for investors.

Land has consistently proven to be a sustainable asset that outpaces inflation by at least 2% annually. Moreover, the availability of arable land—land capable of producing quality crops—is diminishing due to erosion and industrialization.

According to the World Bank, arable land has fallen below 20 hectares per person. Europe, for instance, is currently facing shortages of agricultural commodities and fertilizer from countries like Russia, Ukraine, and the Netherlands. Combined with global warming and a growing world population, key commodities like wheat, soy, rice, and corn are expected to witness increased demand and, consequently, value.

Unlike finite resources like gold, arable land is a productive asset. It not only preserves its value against inflation but also generates income for the owner through the sale of agricultural produce.

Agricultural commodities such as rice, corn, soy, and wheat have been traded for millennia. Think of historical marketplaces like the Dojima Rice Exchange, where rice brokers issued rice bills to successful bidders, ultimately leading to the creation of a rice futures market in 1730. Rice futures provided a means for farmers and investors to hedge against economic and political uncertainties, and this system remains in place today for various agricultural commodities.

Despite the evident value of agriculture as a hedge in turbulent times, it remains relatively undervalued in the contemporary financial landscape. While speculation in growth stocks and digital assets like Bitcoin is popular, LandX recognizes significant potential in agricultural commodities, especially when combined with the immediate, trustless, and decentralized attributes of blockchain technology.

Roadmap

LandX has published a roadmap, indicating 3 core objectives that are guiding their progress:

• Bringing tokenized farmland commodities exposure to all crypto-native investors.
• Providing a secure, stable, and intuitive platform to access all services and products.
• Positively impacting every farm we work with to encourage regenerative practices.

LandX’s growth strategy includes expanding the range of crop-share opportunities. This expansion will allow the protocol to accommodate a broader spectrum of agricultural assets, providing both farmers and investors with increased diversification options. 

The next step for LandX is to integrate with DeFi applications for short-term borrowing, lending, and more.

• LandX tokens can be utilized as collateral for borrowing or lending within decentralized finance applications. This creates opportunities for users to access liquidity or earn interest on their holdings.
• The protocol can be integrated with auto-compounding mechanisms, allowing users to automatically reinvest their earned yields. This strategy can potentially magnify returns over time.
• By integrating with various DeFi platforms, LandX tokens can gain expanded utility, opening doors to innovative financial instruments and services.

Once the fundraising and the Token Generation Event is completed and the mainnet is launched, LandX will be looking at the following objectives:

• Integrating with more networks.
• Launching the xBasket index.
• Enhancing security and transparency measures.
• Expanding their product offerings to include xUSD and xNFTs.
• Forming LandX DAO

LandX Platform Launch

The LandX app will be available for investors on December 15, 2023. At launch, $2M of xTokens/USDC liquidity will be available.

Validators and farmers can onboard onto the platform at https://landx.fi/landowner/landing 

Sector Outlook

Many DeFi applications often promote unsustainable yields through inflationary tokens and aggressive marketing tactics to attract liquidity providers. These practices can lead to short-term gains but often lack long-term viability.

LandX takes a different approach by focusing on sustainable yield and regenerative finance. The platform utilizes capital as a tool to invest in real-world yield opportunities while addressing systemic issues to regenerate natural environments. This approach aims to provide a lasting and meaningful impact on both DeFi and the environment.

This way, LandX serves as a bridge between real-world assets, particularly farmland production and blockchain technology. It facilitates agreements on a global scale, enabling farmers to connect with sophisticated investors in the DeFi space. This connection not only supports farmers in expanding their businesses but also contributes to long-term food security efforts.

To make this possible, LandX has established a robust legal and financial framework that pioneers a new way of connecting farmers and investors. This approach ensures transparency, security, and efficiency in facilitating these agreements.

Bridging the Gap Between Farmland and Crypto

Farmland yield, which sustains billions of families globally, stands as a reliable, sustainable, and enduring asset in the face of economic fluctuations. Farmland’s value per acre in the United States has steadily risen over the years, as illustrated in the graph below. This enduring growth, even during periods of economic uncertainty, highlights the trustworthiness and resilience of farmland as an investment.

In DeFi, investors have a plethora of options, from highly speculative assets like non-fungible tokens (NFTs) to more established blockchain projects like Ethereum. However, there has been a conspicuous absence of opportunities to invest in the world’s oldest and most dependable asset: farmland. 

For context, 5% of global derivatives volume in traditional finance is made up of agricultural financing.

To bridge this gap, LandX has developed a protocol that links farmland yield to the blockchain through their proprietary Perpetual Commodity Vaults. This way, LandX allows investors to hedge against inflation and gain direct exposure to farmland commodities, including wheat, corn, soybeans, and rice.

The Significance of RWAs

Real-world assets (RWAs) encompass physical and non-physical assets commonly used in traditional finance, backed by cash flows, that can be tokenized and put on-chain. Examples include contracts, loans, mortgages, bonds, real estate, carbon credits, yachts, cars, farmland, and more.

Bridging RWAs with DeFi addresses key challenges:

• Familiarity and Accessibility: Integrating assets familiar to traditional finance users can attract a broader audience to DeFi.
• Eliminating Intermediaries: DeFi’s smart contracts eliminate the need for intermediaries, reducing costs compared to the traditional system.
• Increasing Liquidity: Tokenizing real-world assets enhances their liquidity, making them accessible to more people and driving organic demand.
• Empowering Emerging Economies: On-chain assets provide easier access to foreign currencies and assets, particularly beneficial for businesses and individuals in emerging economies.

LandX is at the forefront of this movement, addressing inefficiencies in one of the world’s most crucial traditional industries: agricultural commodities. Despite the industry’s massive size, estimated at around $12 trillion globally in 2021, farmers often struggle to access capital. High interest rates from banks and a lack of interest from private investors due to the inherent risks and uncertainty leave farmers with limited options.

LandX offers a solution by allowing farmers to enter into revenue-sharing agreements, determining how much of their crop production revenue goes to LandX. These agreements are tokenized as NFTs and recorded on the blockchain. In return, farmers receive xTokens, yield-bearing tokens that provide a stable yield from crop revenue in the form of cTokens (crypto-backed stablecoins).

Sustainable Soil Practices And DeFi

The world is facing a critical issue: a diminishing supply of topsoil. Topsoil, the fertile layer of earth essential for agriculture, takes over 1,000 years to form just 2 cm. However, the demand for agriculture is growing nearly ten times faster than the rate at which topsoil is created. Factors contributing to this imbalance include a rising global population and increasing incomes in developing nations. The United Nations has now classified soil as a non-renewable, finite resource.

The intensification of traditional farming methods has exacerbated soil deterioration and posed threats to future crop production. Some farming practices not only harm the land but also the environment. For example, the regular burning of farmlands in Southeast Asia contributes to dangerous levels of PM 2.5 air pollution.

Topsoil is the most crucial layer of soil, containing the essential nutrients required for crop growth. It is estimated that by 2050, we could lose 90% of our topsoil.

As a result, topsoil deterioration leads to several critical issues:

• Food Supply: Approximately 99% of our food comes from soil, making arable land one of humanity’s most vital resources.
• Nutrient Loss: Topsoil, which provides about 95% of our food, is rapidly decreasing due to nutrient pollution, dead zones, and erosion.
• Finite Resource: The United Nations has officially classified soil as a finite resource, emphasizing its scarcity.
• Unsustainable Farming: The use of synthetic fertilizers and pesticides in conventional agriculture has accelerated topsoil deterioration. Without immediate changes, topsoil may run out in about 60 years, posing challenges in feeding people, filtering water, and absorbing carbon. Soil degradation could result in approximately $23 trillion in losses in food, services, and income by 2050.
• Environmental Impact: Unsustainable farming practices, such as burning crop residues, contribute to greenhouse gases, global warming, loss of biodiversity, and health hazards like lung disease. Soil plays a crucial role in combating climate change, containing three times more carbon than the Earth’s atmosphere.
• Additional Factors: Soil degradation can also occur due to overgrazing, deforestation, and improper land use, all exacerbated by climate change.

Additionally, Earth’s temperature has risen by an average of 2° F over the past 130 years. In other words, the rate of warming since 1981 is more than twice as fast as previous years.

According to NASA, Earth is warming at a rate not seen in the past 10,000 years.

As arable land becomes scarcer, agricultural commodity prices are expected to rise in the long term. Staple agricultural commodities like wheat and soy are particularly susceptible to this trend, especially with high inflation, supply shocks from events like the Ukraine-Russia war, and EU farm closures.

For instance, investors such as Jeff Bezos, Ted Turner, Thomas Peterffy, and Bill Gates have shown interest in arable farmlands in recent years, along with sustainable farming methods and machinery. These investors anticipate increased agricultural productivity and revenue in the near future. 

The rising prices of essential grains like rice present a complex challenge. While these price increases may benefit investors with diversified portfolios, it is crucial to address the underlying issues causing these spikes in prices. The slow pace of production needs to be addressed urgently to avoid a global hunger crisis.

Higher rice prices pose an immediate threat to impoverished populations worldwide who rely on rice as a staple food. When basic food resources like rice become prohibitively expensive, entire cultures and communities are at risk of extinction. People face the agonizing choice of abandoning their cultural heritage to integrate into modernized society or perishing because they cannot afford to purchase food.

In this context, LandX offers a comprehensive solution that can benefit all stakeholders involved in rice production, trade, and consumption. By addressing the challenges of sustainable agriculture, LandX can help stabilize food prices, ensure access to essential resources, and contribute to the preservation of cultures and communities facing the dire consequences of rising food costs.

As a matter of fact, arable farmland offers stability as an asset class, with continued demand for wheat, soy, corn, and rice. It also appreciates in value, driven by global supply shocks caused by climate issues, conflicts, inflation, and protectionist policies.

In this context, LandX believes that decentralized finance (DeFi) can play a pivotal role in the fight to sustain topsoil and the greater environment. LandX aims to create a modern agricultural ecosystem that benefits all stakeholders, including the environment, farmers, and investors.

The LandX ecosystem encourages users to participate in the marketplace and address land degradation issues. Each piece of land will be assigned a true value in the form of a non-fungible token (NFT), calculated based on its long-term productive capacity. Long-term rent obligations will incentivize landowners to maintain the land’s fertility. If land deteriorates and yields decrease, the landowners’ ability to pay the crop share will be significantly affected.

Such incentives sustain the ecosystem, fostering land preservation and the production of essential commodities like corn, wheat, soy, and rice, all of which are tokenized as xTokens.

Hence, LandX recognizes that financial support is essential for finding solutions. By actively directing liquidity into the farmland ecosystem, LandX aims to provide the financial foundation for addressing these challenges:

• Create a modern financial ecosystem that rewards and incentivizes climate-friendly farming initiatives.
• Maintain transparency by recording all financial transactions and land registrations on the blockchain.
• Improve soil quality, leading to increased agricultural production.
• Enhance existing agricultural systems by incorporating blockchain’s transparency and democracy into the ecosystem, connecting it with DeFi.

Potential Adoption

The agricultural commodities sector is currently witnessing substantial growth driven by two critical factors:

• Limited Farmland Availability: With finite land resources available for farming, the potential for expansion is constrained. This limitation has created a macroeconomic environment where agricultural commodities appreciate faster than inflation.
• Increasing Global Food Demand: Rising global population and changing consumption patterns have led to higher demand for food products. This heightened demand has contributed to the acceleration of food prices since 2020.

LandX’s product offerings are strategically designed to address these market dynamics since LandX provides a means for participants to achieve food security by participating in the appreciation of agricultural commodities. This aligns with the growing need to safeguard against food shortages and rising prices in an uncertain global environment.

In the realm of traditional finance, agricultural products account for only 5% of derivative trading volumes. 

LandX’s unique value proposition lies in its first-mover advantage in the world of DeFi. By introducing agricultural commodities to the DeFi space, LandX pioneers a new frontier, tapping into a sector that has been relatively untapped in the decentralized finance world. 

Besides, LandX’s impact extends beyond its innovative financial products:

• Empowering Farmers: The protocol provides landowners with the critical upfront capital needed to expand their agricultural businesses, invest in modern equipment, and enhance production capabilities. LandX’s approach is more flexible, efficient, and equitable compared to traditional financing options, offering a lifeline to farmers.
• Investor Benefits: For investors, LandX offers exposure to an uncorrelated digital asset. This asset serves as an inflation hedge, protecting investor portfolios against the eroding effects of inflation. Moreover, it brings real yield to the DeFi markets, offering an alternative to the often unsustainable yields seen in the space.

Solid Portfolio	Barbell Strategy	Conservative Portfolio

Treasury Diversification For DAOs

Since the inception of DeFi, DAO treasuries have amassed substantial capital. LandX is actively seeking partnerships with DAOs that are looking to diversify their portfolios. These organizations typically have strong balance sheets but are often overexposed to crypto assets. LandX offers them a unique opportunity to hedge their exposure and access real yield from the agricultural sector.

As an example, an investment of $1,000,000 USD in LandX’s xBASKET index fund provides exposure to all four xTokens, offering an expected yield of approximately 7% APR. Each xBASKET token returns the USDC value of 0.25 KGs of each commodity annually.

There’s also potential for appreciation in commodity yield as underlying commodity prices increase. High inflation expectations suggest that commodities should rise in price relative to the USD over the long term, providing a hedged downside for investors

To illustrate, if a basket of wheat, soy, corn, and rice appreciates by 15% over the next year, an investor selling their $1M position could profit approximately $230,500 (23.05%). Conversely, if the basket drops in price by 15% over the next year, they would only incur a $95,000 loss (-9.5%). Over longer time periods, inflation further reduces the risk of short-term downside.

Commodity Collateral

Additionally, cTokens unlock multiple opportunities for DeFi treasuries and decentralized protocols. Nowadays most protocols are typically centered around two main categories of assets: the native cryptocurrency (usually ETH) and various USD-pegged stablecoins. cToken commodities present a paradigm shift by offering a distinct type of digital asset for collateral.

It is also worth noting that in order to acquire cTokens, users must stake their xTokens first.

One of the key benefits of cTokens is their ability to offer reduced volatility while avoiding the long-term devaluation often associated with fiat-based stablecoins. This feature makes them an attractive choice for users and DeFi treasuries seeking stability in a dynamic DeFi landscape.

The low volatility and appreciating price trajectory makes xTokens an ideal building block in the DeFi landscape. More specifically, their backing by real-world production of staple crops such as soy, rice, corn, and wheat, makes them naturally resistant to wild price swings in either direction. 

Additionally, xBasket (an index token composed of equal parts of each xToken) represents an auto-compounding vault whose price is formed by appreciating xTokens and the yield they produce targeting an APR of 18.8%.

Customizability and Integration

One of the benefits of blockchain is the ease of usage for investors. For example, utilizing the protocol’s xBASKET index fund allows investors to immediately gain exposure to various xTokens representing different commodities. Such customization and degree flexibility are either not possible or require much time and effort to process in the traditional markets.

Additionally, these xTokens can then be integrated into other DeFi protocols in the future, providing investors and landowners with other avenues of investment strategies. 

Transparency and Ethical Loans

Blockchain transactions by its very nature provide clear transparency. Furthermore, providing an avenue away from the restraints of traditional finances has also been a core ethos of the blockchain industry. 

By decentralizing the fundraising process, landowners are also able to seek opportunities that break off from such traditional financing markets. These markets can be predatory with high interest rates and little freedom offered, as landowners and farmers may not have other options available locally in their region. By offering loan terms through the blockchain, farmers are able to access loans globally. 

Chains

LandX is available on the following chains:

• Ethereum
• Arbitrum

Using the Protocol

The value proposition is to raise capital for real-world farmers in exchange for a legal share of their crop in perpetuity. This contract is secured by a farm audit, security deposit, and lien on their land. 

LandX Finance works by onboarding farmers, minting xTokens representing crop share obligations, and offering these xTokens to investors. These tokens can be staked to earn yields from real agricultural production.

Users

Farmers, validators, and investors are key users of the LandX protocol. 

• Farmers provide agricultural assets. They commit a portion of their crop share to LandX, securing it with a lien on their farmland.
• Validators act as intermediaries between the farmers and the protocol. They propose farmer onboarding and manage the associated economic and legal contracts
• Investors buy xTokens and, in exchange, they receive Perpetual Commodity Vaults representing the actual farmland assets.

LandX For Landowners

The value proposition is that for landowners LandX provides more flexible timely financing at better valuations with more options. There is no minimum financing requirement, and the amount available depends on the pledged farmland and its historical yield. Farmers can also repurchase xTokens and clear their repayment obligations at any time.

LandX provides an avenue of fundraising for landowners, in exchange for a future share of their crops. This is done via a contract, which is secured by a lien over the farmer’s land.

The process involves farmers tokenizing their crop share through a legal contract, receiving xTokens equivalent to their committed crop share. Next, the platform keeps 12 months of crop-share payments as a security deposit. They can then sell their xTokens to investors, who receive daily commodity yields paid in cTokens (as long as they stake their xTokens), redeemable for stablecoins like $USDC. LandX provides support and an OTC desk for non-technical landowners.

The funding that the landowner is able to obtain is based on the market value and production levels of the farmland used as collateral. 

This agreement is structured so that the payments by the farmers are denominated in a fixed amount of crop share over a perpetual rolling 49-year period. This minimizes the financial impact on the landowner each year, ensuring the payments are fixed at a level that cannot exceed the MACS (Maximum Allowable Crop Share). This financing structure removes currency or commodity price risks.

The following are the steps in this process:

• Step 1: Landowners provide essential data, including five years of production yield, cadastral records, geo coordinates, and ownership information to a validator.
• Step 2: Validators verify the data, model the crop share, and present the expected financing terms in USD.
• Step 3: Property titles are pledged against the crop share obligation through a legal contract known as a lien, registered with local authorities.
• Step 4: An NFT is minted with the contract terms.
• Step 5: Farmers deposit the NFT into the smart contract to receive xTokens, which they can sell on the market or create OTC deals.
• Step 6: Farmers have the flexibility to buy back xTokens at market prices on decentralized exchanges or OTC, effectively ending the crop-share obligation.

Funds raised by the landowners can be used to hedge against future yields or to invest in their land and farming infrastructure.

For non-technical landowners, LandX offers support and an OTC desk to ensure accessibility to capital. The platform is committed to making the funding process straightforward and transparent for all participants.

By connecting farmers to more sophisticated and efficient capital markets, LandX enhances the valuation of their assets compared to traditional financing methods. This creates a win-win scenario where landowners benefit from improved funding options, and investors gain exposure to real farmland assets.

LandX For Validators

Validators will be responsible for validating that lands are legitimate and valuable and assisting with legal and financial contracts. 

Validators are required to understand and be proficient with blockchain technology and all the mechanisms and processes used to provide financing and receive crop share payments. 

This way, instead of requiring farmers to trust the cryptocurrency project “LandX”, they trust someone local to them who is well-prepared to answer any questions. This is especially important for landowners who may not be proficient with technology. 

Validators are also required to stake a portion of their $LNDX tokens as a form of investors’ protection against defaults. In return, validators receive commissions for onboarding landowners, along with protocol fees via their staked tokens. 

Users who are interested in becoming validators can open a ticket in the LandX discord.to find out more.

LandX For LPs

LPs will be primarily providing liquidity in order to benefit from trading fees. 

Assets available for LPs will be based around xTokens, and paired with USDC. The LandX team will create an initial pool of 5 tokens for the following pairs:

• xBASKET/USDC
• xWHEAT/USDC
• xSOY/USDC
• xCORN/USDC
• xRICE/USDC

Credit Gateway for Lenders

• Users visit the LandX Credit Gateway.
• A user selects a pool that aligns with their risk tolerance, such as the Junior Pool for those seeking higher returns.

• Users navigate to the Pool Details page and choose the “Lend” option.
• They set their lending amount and confirm the transaction.

• Users can then check the Portfolio tab to track their investment and observe their interest accruing in real-time.

Investing Strategies

Asset Class	xTokens	Stocks	Bonds	Bitcoin	Gold
High Yield	Yes	Yes	No	No	No
Low Volatility	Yes	No	Yes	No	Yes
Inflation Hedge	Yes	Yes	No	Yes	Yes
Diversification	Yes	No	No	No	Yes

Investors can benefit from LandX by diversifying their portfolios with exposure to agricultural commodities. In this context, most investing strategies may involve buying xTokens and staking them for yield.

Investment Case Example

An investor is interested in purchasing $1 million worth of xSOY tokens from LandX’s Soybean vault. Each xSOY token is priced at $10, and the investor acquires 100,000 xSOY tokens, representing 100,000 kilograms of soybeans per year.

Potential Returns

Commodity Yield (CY): The investor earns an approximate 7% Annual Percentage Rate (APR) as the CY. This means they receive 7% of the value of their invested soybeans annually.

Appreciation of Commodity Yield: As the price of soybeans in the market increases, the value of the investor’s commodity yield also appreciates.

Appreciation of xSOY Vault: If the market price of soybeans rises, the value of the xSOY vault, which represents the soybeans, increases.

This investment scenario provides an asymmetric opportunity that on-chain investors typically do not have access to:

Leveraged Upside With Hedged Downside

Upside Scenario	Downside Scenario
If the price of soybeans appreciates by 15% over the next year, the investor’s $1 million position in xSOY would profit approximately $230,500 (a 23.05% gain).	If the price of soybeans drops by 15% over the next year, the investor would experience a $95,000 loss (-9.5%).

This example showcases an investment opportunity that offers a leveraged upside potential, allowing investors to benefit from both the commodity yield and the appreciation of the commodity’s value.

Additionally, the daily yield received helps offset losses in the value of the xSOY vault if soybean prices decrease. This asymmetric opportunity provides diversification and risk management in an asset class that blockchain-based investors typically lack access to.

Economics

LandX’s economics are driven by the Target Asset Price Appreciation (TAPA) and RWA crop share yield. 

• TAPA is managed through controlled farmland supply.
• Crop share yield depends on the market price of xTokens and the price of the underlying commodities.

Business Model

LandX operates on a business model that bridges the gap between farmland owners and crypto investors while providing exposure to agricultural commodities. 

The platform’s revenue model is designed to ensure sustainability and align with the mission of offering food security and real yield in a DeFi context. 

As LandX expands its offerings and integrates with various DeFi applications, it seeks to diversify its revenue streams further. This includes opportunities for short-term borrowing/lending, auto-compounding of yield, and more.

Revenue Streams

LandX generates revenue through various channels, which are integral to its ecosystem’s functionality and growth:

• Transaction Fees: LandX charges transaction fees for activities such as trading commodities and xTokens on its internal marketplace. These fees contribute to the platform’s revenue.
• Validator Commissions: Validators play a crucial role in onboarding farmers, managing legal contracts, and ensuring the security of landowner commitments. LandX pays validators a commission for their services, typically a percentage of the financing amount brought in by farmers.
• Revenue sharing: The $LNDX governance token is a key element of LandX’s ecosystem. Token holders earn protocol fees, further incentivizing participation in governance decisions and the growth of the LandX platform.

LandX’s native token, $LNDX, is central to its economic model and revenue generation:

• Protocol Fees: $LNDX token holders earn a percentage of the protocol’s revenue, which includes transaction fees and other platform-related charges. This provides a direct financial incentive for holding and staking $LNDX tokens.
• Governance Influence: $LNDX holders also have voting rights in the platform’s governance. They participate in decisions related to protocol upgrades, rule changes, and other critical matters, influencing the direction of the ecosystem.

Fee Breakdown

LandX imposes a 3% fee on farmland financing and 0.25% on regular crop share payments. The distribution of these fees is as follows:

• 60% to $LNDX stakers.
• 35% to LandX Labs operations.
• 5% to the LandX Choice fund, supporting regenerative agriculture initiatives, education for land operators, SDG goal certifications, ESG programs, agricultural monitoring technology, and sustainable farming tools and equipment. 

The fee percentage and distribution percentages are not set in stone. They can be adjusted according to market conditions through a DAO proposal and vote, ensuring adaptability and alignment with the community’s interests.

Operating Expenses

Tokenomics

$LNDX is LandX’s native token and staking it allows users to receive a representative token called veLDNX, which receives a percentage of protocol revenue and allows token holders to participate in governance. 

In addition to the voting power in the DAO, being a $LNDX holder also comes with the potential to become a validator for LandX. Validators have the crucial responsibility of onboarding new farmers to the protocol and ensuring the smooth operation of the platform. 

Token Distribution

The $LDNX token has a maximum supply of 80M, with an initial circulating supply of 5.4M. 

The token distribution for fundraising, amounting to 38M (47.5%)  is as follows:

• Seed
  • $0.189 per token.
  • 29M tokens (36.25% of total supply).
  • 4 years cliff and 4 years vesting.
  • Large farmland owners.
• Private
  • $0.23 per token.
  • 6M tokens (7.5% of total supply).
  • 3 months cliff and 9 months vesting.
  • Omegas (whitelisted discord members) and VCs, DAOs, etc
• Public
  • $0.50 per token.
  • 3M tokens (3.75% of total supply).
  • Unlocked immediately at TGE.
  • Anyone.

The remaining 42M (52.5%) are allocated accordingly:

• Team
  • 10M tokens (12.50% of total supply)
  • 6 months cliff and 24 months vesting.
• Staking Reward Pool
  • 15.6M tokens (19.50% of total supply)
  • 60 months vesting.
• Liquidity
  • 2.4M tokens (3% of total supply)
  • Unlocked immediately at TGE.
• Development and Stability Fund
  • 14M tokens (17.50% of total supply)
  • 48 months vesting.

Token Emission Schedule

Tokens are emitted according to the following schedule:

• 29.6M tokens (37%) for staking reward pool and development and stability funds start vesting immediately, over a 48 and 60 months period respectively. 
• 29M tokens (36.25%) for the seed round start vesting in the 4th year, over a 4 year period.
• 16M tokens (20%) for private and team start vesting at the 3rd and 6th month respectively, over a 9 and 24 months period. 
• 5.4M tokens (6.75%) for public sales and liquidity are unlocked immediately at TGE.

$LNDX Staking

Users can stake $LNDX and they will receive veLNDX in return. This will allow stakers to benefit from token rewards, revenue sharing, and governance power. Revenue-sharing figures can be found in the Fee Breakdown section. 

Users can stake $LNDX for 3 different periods depending on their preferred investment outlook, which directly affects the amount of veLNDX that is received. 

• 3 months period = 0.25 veLNDX per $LNDX
• 12 months period = 0.5 veLNDX per $LNDX
• 48 months period = 1 veLNDX per $LNDX

Hence, while a shorter period allows the users to unlock their staked $LNDX token faster while still being able to benefit from token rewards and fee sharing, the actual capital earnings are actually lessened for the period.  Once the staking period is over, the staker will be able to unlock the initial amount of $LNDX tokens that were locked. 

Token rewards amounting to 15.6M (19.5%) $LNDX tokens are allocated towards the reward pool. These incentives will be disbursed linearly over a period of five years, or about 8.55k tokens daily to stakers.

Governance

LandX operates as a decentralized autonomous organization (DAO) where the community has a significant say in its future through the $LNDX governance token. 

Validators, essential to LandX’s operations, are required to stake $LNDX tokens as part of their commitment to the land agreements they establish, ensuring their dedication to the platform’s success.

Similarly, $LNDX token holders earn a percentage of platform fees generated from the xToken yield, creating utility and demand for $LNDX. 

The fee percentage and distribution percentages are not set in stone. They can be adjusted according to market conditions through a DAO proposal and vote, ensuring adaptability and alignment with the community’s interests.

Risks

Similar to other RWA platforms, LandX implements several safeguards and transparency measures to mitigate counterparty risk and protect the interests of different participants.

• Security Deposit for Uncertain Risks: LandX addresses the uncertainties in agricultural production by requiring landowners to maintain the equivalent of twelve months of the crop share as a security deposit. This deposit acts as a safeguard against potential crop or cash flow uncertainties, providing a buffer for landowners and investors.
• Centralized Platform Risk: As a centralized platform dealing with real-world assets, LandX carries inherent risks associated with such projects. However, it actively works to minimize these risks through robust legal structures and transparency.
• Transparency and On-Chain Recording: LandX is committed to transparency. Every aspect of the platform, including land details, harvest records, lien documents, payment histories, and commodity yield, is recorded on-chain. This ensures an immutable and verifiable record of all activities, enhancing accountability and trust.
• Yield Reserves and Staking Mechanism: To further safeguard investor interests, the yield reserves are locked inside the smart contract. These reserves are paid out to stakers in a traditional DeFi staking manner, with a yield runway exceeding 14-18 months. This extended runway provides stability and security in the event of unforeseen challenges.
• Transparency Around Farmers and Land: LandX provides transparency around farmers and land. Information about the actual land, including its location and historical crop yield, is stored in NFTs and immutable IPFS records. These details are accessible on the platform, ensuring clarity for all participants.
• Validator Accountability: Validators play a crucial role in the LandX ecosystem. They are responsible not only for onboarding but also for the timely collection of crop share. Validators are incentivized to ensure that crop share payments are collected promptly, as their stakes are affected if the farmers they onboarded fail to meet their obligations.
• Protection Against Collusion: Collusion between farmers and validators is discouraged through legally binding agreements. Farmers make commitments to LandX, and any breach would carry legal repercussions. Validators, as trusted third parties, undergo rigorous vetting processes, minimizing the risk of collusion.

Security

LandX has implemented a range of security measures to create a robust and secure ecosystem.

First, LandX operates on Ethereum, leveraging its core properties of decentralization and security, ensuring that all transactions and contracts are transparent and tamper-proof.

Second, LandX’s core functionality is powered by smart contracts that have been audited.  These self-executing contracts automate processes and also reduce the risk of human error, 

Third, every aspect of LandX, from land details and harvest records to lien documents and payment histories, is recorded on-chain. This on-chain transparency provides an immutable and verifiable audit trail of all activities, fostering trust among participants.

Fourth, landowners are required to maintain security deposits equivalent to twelve months of the crop share. These deposits act as a financial buffer, protecting landowners and investors in the event of crop or cash flow uncertainties. 

Fifth, validators are accountable for onboarding farmers and ensuring the timely collection of crop share. They have an incentive to act in the best interests of investors, as their stakes are affected if the farmers they onboarded fail to meet their obligations.

Sixth, legal agreements and contracts are in place to provide clear guidelines and enforceable measures in case of disputes or breaches.

Finally, it is worth noting that the platform undergoes continuous monitoring and auditing to identify and address any potential vulnerabilities or security threats.

Audits

The following audits have been completed:

• Security Assessment – Quantstamp – February 3, 2023
  • High – 5 (5 Fixed)
  • Medium – 4 (3 Fixed, 1 Acknowledged)
  • Low – 6 (5 Fixed, 1 Mitigated)
  • Informational – 8 (7 Fixed, 1 Mitigated)
  • Undetermined – 2 (2 Fixed)

LandX has a bug bounty program in collaboration with Immunefi.

Economic Attack Vectors

While LandX has implemented robust security measures, it is essential to consider some possible economic attack vectors that could affect the platform. 

• Market manipulation: A malicious actor may attempt to manipulate the market price of commodities or xTokens to their advantage. This could involve attacking the underlying oracle provider or large-scale trading activities aimed at artificially inflating or deflating prices, leading to unfair gains or losses for other participants.
• Validator collusion: Collusion between validators and farmers could lead to fraudulent activities. Validators, if compromised or acting in bad faith, might onboard non-compliant farmers or manipulate crop share data, impacting the platform’s trustworthiness.
• Governance attack or staking manipulation: Attackers may attempt to manipulate the staking mechanism by acquiring a significant stake in LNDX tokens. With a large stake, they could influence governance decisions, potentially favoring their interests over those of the broader LandX community.
• Front-running and insider trading: Unfair trading practices, such as front-running or insider trading, can disrupt the platform’s fairness and trust. Monitoring and enforcing trading rules should help mitigate these risks.

Dependencies and Access Controls

• Oracle Dependence: LandX relies on third-party oracles to provide price data for commodities and xTokens. Any compromise or failure of these oracles could lead to inaccurate pricing information, affecting the platform’s stability and user trust.
• Vulnerabilities in Smart Contracts: LandX heavily depends on smart contracts for its core functionality. Any vulnerabilities in these contracts could be exploited by attackers, leading to asset theft or disruption of platform operations.
• Validator Misbehavior: Validators serve as a bridge between farmers and the protocol. If validators act maliciously or fail to perform their duties properly, it could lead to fraudulent activities or compromise the security of landowner commitments.
• Legal and Regulatory Risks: LandX is actively developing legal structures to protect users. However, changes in regulatory environments or legal disputes could pose risks to the platform’s operations and user trust.

Team

The team is not doxxed publicly. However, they have mentioned that they are doxxed to partners and investors. 

While there is an official LinkedIn page, no main members are listed apart from the following:

• Aleksandar Pavlovic
  • Community Growth Specialist
  • Founder of TipJockey LLC
• d_ K
  • Business Development Manager/Growth Manager
  • Previously Business Development Manager at Multifarm Finance

Project Investors

Funds for the project were raised via multiple venues, with seed investors and private round members being undisclosed. The token distribution for the various rounds can be seen in the Token Distribution section.

Additional Information

Partnerships

• DeFiVerseMoney –  Simplifying crypto asset management with decentralized solutions.
• PWN Dao – A lending and borrowing platform featuring peer-to-peer loans collateralized with digital assets. 
• insrt – Developing creator tooling allowing users to create IOUs on-chain. 
• X2Y2 –  A decentralized NFT marketplace.
• Erable – Your gateway to impact investment on the blockchain.
• ImmuneFi – The leading bug bounty platform for blockchain with the world’s largest bug bounties.
• Halls of Olympia – A risk-to-earn gaming and SocialFi hub.
• Matrixed.Link – Blockchain infrastructure provider.
• Uroboros DeFi – Omnichain Solution built on LayerZero with MEV sharing swaps and trades.
• Holdstation – Smart contract wallet for futures trading.
• Mises Browser – Mises Browser is the world’s first fast, secure, and extension-supported mobile Web3 browser.
• Hashtag – Soul Names – Your Home for Web3 Identity & Reputation 
• Tide – Build vibrant communities with web3 incentives and analytics.
• Spice Finance – Deposit ETH and earn real yield from automated NFT-backed lending strategies.
• Wonderverse – A community building co-pilot.
• DeFiSafety –  An independent quality and ratings organization that evaluates Decentralized Finance products.
• Gamma Protocol – A protocol that provides active, non-custodial, concentrated liquidity management for Uniswap v3 and other decentralized exchanges.
• Resonate Finance – A yield-focused protocol.
• Menthol Protocol – Menthol Protocol is open source allowing anyone to take responsibility and become climate-friendly in a transparent, yet convenient way.
• KlimaDAO – KlimaDAO focuses on improving upon the existing carbon market.
• Atomica – A Risk Transfer Protocol for Decentralized Finance.
• Chainlink – Chainlink is the decentralized computing platform powering the verifiable web.
• Timeswap – Lending and borrowing protocol.
• Arbitrum – Layer 2 network built upon Ethereum.
• LayerZero – An omnichain interoperability protocol.

FAQ

General

What problem does LandX solve for farmers?

Access to financing for farmers is logistically difficult and unavailable in many parts of the world. LandX solves this problem by offering farmers upfront capital for a share of their farm’s output in perpetuity.

For instance, farm financing in developing (and many other) countries comes with heavily unfavorable terms for farmers like exploitative interest rates or unreasonable terms like sell-lease-back programs

What problem does LandX solve for investors?

LandX provides access to crop share from real farmland commodities in the form of a liquid digital asset (xToken). xTokens offer investors uncorrelated, inflation-hedged diversification, and sustainable yield.

Which crops are available on the LandX platform?

LandX currently accepts land with crop-share denominated in units of Wheat, Corn, Soybeans, and Rice, with plans to add more agricultural commodities in the future.

How is the crop share payment calculated?

Farmers are to pay an agreed-upon percentage of their crop share every year, whether in real crop or in currency. When paying in currency, the crop share payment is dependent on the market rate of the commodity on the day payment is due.

What is MACS (Maximum Allowable Crop Share)?

MACS is the maximum amount of crop share that a farmer is obligated to pay to the protocol each year. It is set at a fixed level and cannot be exceeded, ensuring that farmers are not overburdened with payments.

Risk

How does LandX protect against uncertain risks?

LandX withholds the equivalent of twelve months of the crop share as a security deposit for the crop share obligation. 

What happens to investors if the LandX protocol disappears?

LandX carries the risks of a centralized platform, which is a common risk for any project dealing with real-world assets.

However, LandX is developing robust legal structures to minimize potential downsides for users. The platform’s built-in transparency ensures that every transaction, including every square meter of land, every harvest, every lien document, every timely or late payment, and every kilogram of commodity yield, is recorded on-chain. 

The yield reserves are also locked inside the smart contract and paid out to stakers in a traditional DeFi staking way, with the yield runway exceeding 14-18 months. 

Is there any way we will be able to have transparency around who these farmers are / where the land is located & historical crop yield? 

The information on the actual land is on the NFTs and are immutable IPFS records, as well as lien contacts and productivity information of the farmland.  These will be available on the platform. 

How are Validators punished for bad yields or deals?

Validators are responsible for onboarding but also for the timely collection of crop shares and the staking mechanism ensures that the remuneration they receive is aligned with the interest of investors in the timely collection of all due crop share payments. If the farmers they onboarded are not paying the rent the validator’s stake becomes affected.

How about collusion in bad faith between Farmers and Validators?

Farmers make a legally binding agreement with LandX when they onboard their land. There would be legal repercussions if that were to happen basically. 

Additionally, Validators, who are trusted 3rd parties, are vetted heavily. LandX doesn’t take risks with validators.

Tokens

How does the xToken yield differ from other DeFi yields?

The xToken yield is provided from the crop share paid out by real-world farmers. It is not an inflationary rewards token or fee-capturing token dependent on protocol volume. xTokens pay yield in units of the underlying commodity and are backed by legal farmland contracts.

What is the APR on xTokens?

The xToken APR is determined by the daily yield paid to holders of xTokens in USDC based on the value of the underlying commodity. The daily yield is determined by the market value of the commodity and the investor’s pricing of the bond.

Farmers

How are individual farmer identities protected given a lot of sensitive info would need to be put into the NFT?

Many countries have strict privacy laws, e.g. GDPR in the EU which limits the amount of private information that can be disclosed. LandX presents the data of the liens in aggregate format on UI and the NFT on each land contains a hash of the legal documentation file (title deed, crop share agreement, etc).

What are the financing rates being offered to farmers?

The farmer will pay a fixed amount of crop share in kilograms. This amount in kg is equal to the number of xTokens that he “minted” with his crop share obligation. LandX simply collects the crop share each year and passes it to the stakers of xTokens in the form of commodity yield which is paid out in cTokens. So the rate depends on the market price of xTokens at the time when the farmer sells his xTokens to new investors.

How long does the farmer need to pay the crop share?

The funding is structured so that the payments by the farmers are denominated in a fixed amount of crop share over a perpetual rolling 49-year period. This minimizes the financial impact on the landowner each year, ensuring the payments are fixed at a level that cannot exceed the MACS (Maximum Allowable Crop Share).

Would the contract require the same commodity type to be farmed on the same plot of land for 49 years? Or can you switch between commodity types?

Farmers can choose what to plant each year but the obligation is fixed in units of a particular crop.

If they plant corn but need to pay an obligation in wheat they sell corn and pay as much as their wheat obligation costs that year.

Community Links

• Website
• Docs
• Whitepaper
• LandX Academy
• Terms and Conditions
• Twitter
• Discord
• Telegram
• Blog