To fully understand REX and its advantages, we must first go back to basics. REX is short for “resource exchange.” It’s a risk-free marketplace for renting CPU and NET resources within the blockchain. It generates a stream of passive income for EOS token-holders, facilitates efficient resource allocation, and lower prices for dApp developers.
Those in need of network resources can borrow CPU and network bandwidth for 30-day periods, paying rent on it instead of purchasing EOS tokens. And token-holders earn that income by leasing out their surplus resources. The users keep their votes and retain full control of their EOS — it’s an important risk-mitigating feature of REX.
By way of the smart contracts that drive REX, EOS users can pledge their tokens into a pool of lendable EOS. As these are deposited, the system creates REX tokens, which are non-transferable and non-tradable. When a user withdraws EOS tokens from the pool, the smart contract burns REX tokens. Since REX tokens are minted and burned at the same rate to support the current EOS-to-REX ratio, depositing or withdrawing EOS from the pool doesn’t affect the overall ratio. If a user places his EOS into the lendable pool and mints REX, that’s simply called “buying REX.” Similarly, withdrawing EOS from the pool is called “selling REX.”
It’s important to know that REX enforces a voting requirement before leasing out tokens. To be able to hold REX, the token holder will have to vote for a proxy or a minimum of 21 block producers.
REX offers several distinct advantages to EOS token users and EOS dApps alike. For the token holders, those advantages include a stream of passive income that’s generated by lending, instant liquidity (since the tokens can be withdrawn instantly after the initial 4-day maturity period), and the retaining of full control over the tokens. For dApps, REX provides easy access to network and CPU resources with no upper or lower limits on the leased amount, flexible one-month lease contracts that can be renewed for the same price, and a single resource market.
Passive income for token holders is a major aspect of REX, so let’s talk about how those profits are made. REX price is mostly driven by demand for resources, as well as the EOS-to-REX ratio and the system fees funneled to REX.
So how much can you make? Let’s find out.
There are roughly 65,000,000 lendable EOS tokens in the pool as of January 14, 2020. Today 60,000,000 EOS were lent out. That generated about 21,000 EOS of income from the REX pool. That sum gets equally divided between the holders. If you hold 1,650,000 your share of the total pool is 2.5%.
Daily income is determined by multiplying the total interest by your pool share. So 21,000 EOS times 2.5% = 525 EOS per day. The current one-year interest rate is 0.9491%. That’s the main idea — a user gets more EOS back when they sell REX than they paid to buy the REX in the first place.
This leads to the first and most obvious way to work with REX tokens, which is to buy and sell them directly. As a token holder, you can lend liquid and staked EOS alike. A number of services make it possible, and they feature simple interfaces and include all necessary tools.
Consider EOS Authority, which offers a simple REX tool and extensive statistics on the REX exchange. Eosrex.io has a dedicated site for REX and a range of supporting materials. And EOS Cafe Block features useful current stats, like interest rates and resource prices, among other necessary features.
You can also work with Equilibrium Framework, which lets users open a door to truly passive income using their collateral. The primary advantage here is that collateral doesn’t become dead weight — it gets used to support the overall EOS ecosystem. When EOSDT users pledge EOS collateral, the system automatically stakes that EOS to REX. So that’s passive income as well as discounted collateral for EOSDT. As of this writing, Equilibrium is the largest lender to REX.
Since it’s impossible to get less EOS from the REX than was deposited, the best strategy for earning high profits is to get into REX as soon as possible.
Don’t forget about other rewards and opportunities that are out there.
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