REX vs Chintai – A Comparison of Two EOS Resources Lending Models
Earning a passive income from holding EOS has been a long awaited feature desired by the community. With the advent of Chintai and the coming Resources Exchange (REX) people are now able to lend their EOS to the market and collect EOS token rewards in return.
Chintai leasing platform allows users to rent out EOS resources like CPU and Network bandwidth but the mechanism by which it’s done is completely different compared to the REX. There are other differences that distinguish both platforms which are also worth highlighting.
REX has been developed by Daniel Larimer and his team at Block.one and has been released as an open source code, which means that anyone can take the code and create an interface for it. Both eosrex.io and Chintai have implemented the REX code into their platform. Eosrex.io is just a user interface to the REX smart contract so they don’t have to handle any funds themselves.
Revenue is one of the main factors attracting lenders to these platforms. Chintai offers revenue based on the interest rate calculated from the P2P trading while REX users don’t submit orders. They stake tokens and receive a revenue which depends on the quantity of fees that are added to the eosio.rex account. They come from account name bids, ram fees and payments to lease the tokens. The addition to the common pool of fees coming from future markets like eosio.token is on the table. EOS holders lend their tokens to REX and receive in exchange REX tokens at the current book value determined by the Bancor algorithm and at a ratio of 1:1. At launch, no fees from the above markets will be included in REX and no pool is distributed to the users. Only revenue on the interest rate calculated from P2P trading will apply. After the referendum or approval by BPs the fees markets will be included and redistributed to REX lenders.
EOS holders renting out to both REX and Chinati don’t run the risk of returning less EOS than what they put on the market. With REX however, the users don’t have an exact estimate of the rewards matured at the end of the leasing period while with Chintai it’s possible to know this beforehand.
Chintai offers token leasing for periods of 7, 14, 21 and 28 days while REX has a 30 day loan period. Users are able to sell their non-tradable REX tokens after minimum of 4 days.
Chintai and REX don’t charge any fee although each user needs to pay for the RAM as per normal transaction. No fees apply except for Bancor algorithm that prices lending rates which vary based on system usage. RAM fees are redirected to the common pool where they are redistributed to all REX users. For this to happen the referendum needs to get passed first.
EOS staking with REX vs Chintai smart contract
The first difference lies in the method of leasing. When token holders decide to rent out their EOS through the Chintai platform they send the tokens to Chintai dApp smart contract, while when they rent out through REX they stake the tokens as they normally would and the resources are rented through the REX system contract, which is located on the base layer of the EOS mainnet. This difference has its main implications in security as well as voting.
Lending resources on Chintai requires users to unstake their EOS and send them to the dApp’s smart contract for a specified interest rate and specified timeframe. This means that users must trust the dApp’s smart contract security and can no longer vote because the tokens aren’t available in their account.
Chintai has also added REX lending to their platform but the mechanism remains the same: users still need to send their EOS to the chintailease contract. Although the contract’s multisig has been set, a huge pool of tokens is being created, which is an attractive bounty for hackers to target.
Renting out through REX is different because the users stake EOS in their account and lend EOS resources directly from there so at all times they are in control of their tokens and are also able to vote with them.
One of the things of interest to users is the availability of airdrops. People are used to receiving them and dapps like to adopt airdrops or airgrabs for marketing purposes and for token distribution. Holding EOS in their account means that users get airdrops or airgrabs and this is why leaving EOS staked in the account while lending through REX means they will get all airdrops/airgrabs.
This doesn’t actually happen with Chintai as the tokens are unstaked and not in the users account anymore. Chintai 2.0’s P2P upgrade that will occur in two months or so will allow users to retain voting rights and still receive airdrops exactly the same as REX.
The first right of an EOS token holder is the right to vote, because this is the only way they can influence the fate of the EOS mainnet. With staked EOS they can vote on BPs who should be producing blocks as well as proposals. The BPs are the ones who perform code changes and this is why voting on good BPs is essential. Being in the top 21 doesn’t necessarily mean a BP is a good one, it means that more tokens have been voted to them which, on the other hand is not equal to the number of people who voted for that particular BP. Performing research on who to vote for or who to delegate votes to is imperative.
REX requires users to vote for at least 21 BPs or to choose a proxy which best suits their philosophy and who will perform the voting on behalf of the user.
Sending tokens to Chintai means that the users don’t have this right and their tokens are being used by the Chintai proxy to vote for the BPs of their choice. The Chintai proxy model is controversial and they are going to change it in the next platform upgrade. The users will need a special Chinati account from where they will be able to vote.
What is REX
EOS Resource Exchange (REX) has a functionality enabling token holders to rent portions of their CPU and Network resources while receiving a passive income from it. Developers needing more computational power to operate applications on the platform, fast performance traders, gamers etc. can loan these resources for a reduced price than the one of acquiring tokens. The loan price will be calculated by an automated market maker. The REX pool is community owned and is open source.
What is Chintai
Chintai is a token leasing platform that is undergoing substantial changes which will bring more token leasing markets. Other than EOS it will also be possible to lease Telos, WBI, NFTs and, in the future, other EOSIO custom tokens. Chintai will adopt a new token named CHEX which will become the platform’s token capable of hedging down price volatility.
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