*Recently, many people who follow the growth of the SORA network have been asking in the official Telegram groups what is happening to the price of one of the newest tokens on the SORA blockchain - XST(SORA Synthetic).
That’s why I decided to share more information about the token itself to give a better idea of ​​what the token is and its functionality. There is currently [an article on Medium](https://medium.com/sora-xor/xst-a-platform-for-synthetic-assets-on-sora-b45ca526d8d5) about this, but it’s important to note that its mostly with proposals that are not implemented yet.*
![zaglana xst.jpg](https://i.imgur.com/qoJJPv7.jpg)

The first time that I heard about XST was when I attended the 2nd Annual SORA Economic Forum. During this event, Makoto Takemiya, Ph.D., the CEO and co-founder of SORAMITSU presented the idea of ​​creating a **Platform for Synthetic Assets on SORA** and the launch of the new token, $XST. In the beginning, it was stated that this token couldn't be bought, it could only can be earned (by farming or by building stuff on the network  and receiving grant for it). It was also stated that an initial amount of 1337 $XST will be farmable in October on [Demeter Farm](https://farming.deotoken.io/) on two of the pools (**XOR-DAI** and **XOR-ETH**).


The other important decision was that from now on, all invoices(for developers, other costs, etc.) will be paid in XST or in XST-backed synthetic assets.

One of the changes that have also  been introduced is that the SORA token - $XOR will no longer be mintable (except through the TBC), which means that the  TBC will effectively control 100% of $XOR supply. Thus, XST has replaced it for the purpose of **PROJECT FUNDING**.

When there is a set supply of something, price *has to go up with demand*. In economic theory, if supply can’t expand and contract via mechanisms, *we get parabolic price movements*. When liquidity dries up, there are parabolic movements down when there is no exit liquidity. XST is one mechanism that allows for supply to be diminished and increased based on demand, but a TBC allows traders and arbitrage to help keep the price more stable.

**For example:** The price of XOR goes to $600. At that price, the TBC will start to provide incentives to bond your long held PSWAP or VAL. In exchange for minting new XOR and receiving some vested PSAWAP, as the reserves grow in the TBC. **The price of XOR should become responsive to the total reserve in the TBC.**
TBC inflow and outflow will allow arbitrage and for other traders to get some predictive sense of price movements, as everything is transparent.
Also, XST will be a reserve currency of the TBC like DAI,VAL,PSWAP and Ethereum.
*Here is how buys into the TBC are distributed*:

![Distribution of buys into TBC.jpg](https://i.imgur.com/I6tJVxz.jpg)

Decisions on the SORA blockchain are made by community voting on the proposals made, so it is very important to actively monitor what these proposals are. You can follow the  [SORA Governance Bot on Telegram](https://t.me/sora_governance_updates)  to get live updates on these proposals.

Right now there are 23631.41 tokens in supply (you can check it in real time via [this website](https://mof.sora.org/qty/xst)), which means that the Market Cap of the XST token at the moment is 23631.41 x $17.76 (price at the moment of writing the post) = 419 693.84 USD.

Before we take a deeper dive into XST, it is very important to understand exactly what **“Synthetic Assets”** are.
The simple explanation is that they are *assets which are PEGGED TO AN INDEX using ONLY on-chain collateral*.
**For example**: XSTUSD is a synthetic asset, because *it is pegged to the value of USD, but backed by redeemability to XOR*.

One of the ways to expand the SORA economy are the XST or XST-based synthetic assets that can be created by governance to fund projects. This way, the supply of XOR tokens is not inflated.
Speaking about governance, it is really important to mention that XST is **only mintable by governance** (via on-chain referendums), or by **BURNING XST assets (like XSTUSD) IN ORDER TO MINT XST**!

When XST is minted via governance (for funding productive activities), an additional amount of XST is minted and gived to XOR-XST LP on Demeter Farm. In this way, we can say that this pair is the “*Maradona*” оf the LP pools on SORA blockchain. The other pools for minting XST are currently:
- XOR-ETH
- XOR-XST
- XOR-DAI
- XOR-USDT
- XOR-XSTUSD

*The fee to entry for any of them is 1%. You can also check this post this post about all the pools at Demeter now.

##### In conclusion, I can say that XST is basically a claim on 10% of all the fees paid on Polkaswap and 5% of all fees paid on the SORA Network. This could be very, but very valuable if/when we get more users.
Just a final example:
#### 10% of VAL remint / 50% of fees go into VAL = 5% of fees go to XST!


Stay tuned for more SORA and Polkaswap related content. 

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