Hey folks, so I’ve been on a bit of an #RWA-kick lately, and although I’ve talked about LandX before, today I’m going to do a bit of a deep dive of what the LandX team has been doing and why I’m pretty bullish about the things that are coming next.

First as a recap — what are RWAs?

RWAs or Real World Assets are probably one of the hottest narratives in Crypto right now, as many protocols are experimenting on how to bridge physical and tangible assets to the blockchain, everything from Rolex watches to bottles of wine. Some will fail, some will explode, but some will produce real viable business models to help grow capital and make markets much more efficient while at the same time producing #RealYield for investors. LandX is a highly anticipated RWA-project currently in testnet that’s aiming to bridge farming commodities to the blockchain, enabling DeFi to help farmers to continue to grow their crops, and for token holders to hedge against things like inflation through an “open, transparent, decentralized marketplace.”

Is farming still profitable?

I’m not gonna lie, I know pretty much zilch about farming. But I do know numbers. Let’s first do a quick review of some stats:

▹There‘s an estimated 500 million small farmholders in the world — where in some areas (like Asia and Africa) 90% of them produce 80% of their area’s food
▹Many of these farms lack access to formal financial institutions, even though studies have shown that proper financing can help increase yields from 80–140%.
▹Although they (as well as almost everything else) took a hit during the pandemic, agricultural prices have steadily rose since 2015, and has been on overall uptrend over the last 30 years:

https://www.ers.usda.gov/data-products/chart-gallery/gallery/chart-detail/?chartId=58360

▹Wheat prices in particular, have seen significant volatility and have risen over the past couple of years in relation to destabilizing events that have occurred in Ukraine:

Wheat Prices over the last 5 years

▹The European Central Bank also predicts that due to climate change are going to see significant increases in the price of food within the next 10 years:

▹Despite a volatile markets and several-decades-high inflation, the gross farm cash income in the U.S. has remained relatively steady (and positive) over the past 20 years:

https://www.ers.usda.gov/data-products/chart-gallery/gallery/chart-detail/?chartId=76943

So what can we gather from all this data?

I by no means consider myself a day-trader, but from what I can tell, the long-term horizon view on farming seems pretty stable, necessary, and most of all, profitable. This is where LandX comes in…

LandX — Connecting DeFi to FarmingFi (yes I made that up)

Currently in testnet, LandX essentially is a DAO that connects the farming community with DeFi, allowing normal joe’s like you and me to take part of “Crop Share Contracts” earning yield on wheat, soy, corn, and rice:

cTokens, xTokens, and xBasket

The cTokens (cWHEAT, cSOY, cCORN, and cRICE) are commodities tokens which represent 1kg of their respective product, while the xTokens are essentially the perpetual yield bearing tokens that pay out in cTokens (or more of the represented physical underlying asset). According to the whitepaper, users can stake their xTokens in order to earn 1 corresponding cToken per year. The xBasket tokens are exactly what they sound like — a basket of equally weighted tokens represented by all four different types of xTokens.

The xBASKET token also helps overcollateralize LandX’s stable coin $xUSD, where collateral is added and $xUSD is minted once a new farmer joins LandX, and extra collateral is distributed to those who stake $xUSD.

According to the $xUSD white paper, the team anticipates a sustainable interest rate of 14% APR, which isn’t bad for a good harvest!

$LNDX

The last native token to LandX is $LNDX, which essentially is the governance token for the LandX DAO. $LNDX holders earn a percentage of fees from the xToken yields (approximately 60%) AND are staked by “Validators” who basically coordinate the farmers with global capital markets.

The Validators do the arduous groundwork in evaluating farmland, providing assistance with legal/financial farming contracts — all while receiving a 1% commission fee for their efforts.

Farming + Transparency + DeFi = LandX

As everything is public on the blockchain within DeFi, so is LandX. This means that all transactions — every acre, all harvests, all loans, all payments, all yields — are recorded on-chain within smart contracts.

Speaking of loans, each farmer has their lien structured within a rolling 49-year period,” meaning that revenue/yield will come in at a very fixed rate for a very long time. These payments are bound by what’s known as a MACS (Maximum Allowable Crop Share) to help farmers from being weighted down by increasing consecutive payments.

Thus Farmers get an efficient way to gain upfront capital, Validators earn a percentage of protocol fees and commissions for bringing in new farmers, and Holders get their share in yields!

Other Takes/Considerations

Audits — As I mentioned before, LandX is still in testnet, but has already been audited earlier by Quantstamp, or to have a better look at running metrics, I highly remind you check out their Dune Analytics page

Public Goods — 90% of all total revenue goes back to the community, with 10% going towards protocol fees. Of that 10%, 5% goes straight to the LandX Choice Fund, which is a public good that helps provide assistance to farmers of the world via education, technology, and networking to promote better sustainable farming practices.

Wen Launch? — Unfortunately a launch date hasn’t been announced yet, and from their last roadmap update, it appears that there’s still a ways to go, meaning that you’re still early!:

Conclusion

Out of many of the RWA-projects that I’ve seen, LandX provides one of the best real world use-cases for how the blockchain can help save lives while at the same time turning a profit. I would imagine that if what they’re doing proves successful, that LandX’s methods might be replicated towards other commodities and industries going forward. What’s next, sugar? coffee? frozen orange juice?

And as I said before, we’re still early. If you’d like to get early access, I’d recommend joining their Discord and giving their testnet a spin. Also, they have a Zealy Questboard setup with different tasks to help you become a part of the community.

As always, thanks for taking the time to read this and be sure to follow me on twitter (https://twitter.com/CryptosWith) to get all my latest updates. If you want to get access to all my draft links or get an idea about what’s next on my docket before I publish, find me on Friend.tech, where I share all that information in my chatroom. Also, looking for a gift for your Crypto-loving/hating friend? Give them a REKT journal to cheer them up!

Disclaimer: And as a final reminder, this is not financial advice and this is for educational and entertainment purposes only. Please as always, do your own research and find what investments are best for you. Cheers everyone!