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TERMS AND CONDITIONS OF STAKING

Last Revised:  13 December 2024

THIS DOCUMENT CONTAINS IMPORTANT INFORMATION REGARDING RISKS, YOUR RIGHTS AND OBLIGATIONS, AS WELL AS CONDITIONS, LIMITATIONS, AND EXCLUSIONS THAT MAY IMPACT YOUR RIGHTS, INCLUDING AS TO HOW DISPUTES ARE RESOLVED. PLEASE READ IT CAREFULLY.

1. INTRODUCTION

1.1       These Staking Terms (“Staking Terms”) set out the terms and conditions by which you may stake esXAI Tokens (“esXAI”) and/or Sentry Keys (“Keys”) on the Xai Network. They form an integral part of the Terms of Use that govern your use of our Website (https://xai.games/) and Services.

1.2       By staking esXAI or Keys, you agree to be bound by these Staking Terms, as well as the Terms of Use. If you do not agree, you must not participate in Staking.

1.3       To the extent you hold a Key, you acknowledge and agree that you have read, understood, and agree to the Node Software and Sentry Key Agreement. In case of conflict regarding Staking, these Staking Terms prevail.

1.4       The Foundation may update or modify these Staking Terms at any time pursuant to the Terms of Use. Your continued participation in Staking after such changes constitutes your acceptance of the revised Staking Terms.

1.5       Capitalized terms not defined herein have the meanings set forth in the Terms of Use or the Sentry Node Software and Key Agreement.

2. ELIGIBILITY AND PARTICIPATION

2.1       To be eligible to stake esXAI or Keys, you must:

(a) Satisfy all eligibility requirements in the Terms of Use;
(b) Own and control any esXAI or Keys you stake;
(c) Maintain a compatible Digital Wallet and necessary technical tools;
(d) Comply with all applicable laws and regulations; and
(e) Have sufficient knowledge of blockchain technology, digital assets, and the risks associated with Staking.

3. CONNECTING A DIGITAL WALLET

3.1       Staking requires a compatible Ethereum-based Digital Wallet that you fully control. The Foundation does not custody or control your Wallet or private keys.

3.2       Staking is a direct interaction between you and the Smart Contracts on the Xai Network.  You are solely responsible for securing your Wallet and private keys. The Foundation is not liable for any loss resulting from unauthorized access or transaction errors in your Wallet.

4. STAKING POOLS

4.1       Staking may occur via “Staking Pools,” which are governed by one or more smart contracts. Pool Owners who have accepted the Sentry Node Software and Key Agreement may create and operate these Pools. Pools combine Keys and esXAI to influence participation probabilities and reward distributions.

4.2       While the Xai Network aspires to community-driven governance and long-term decentralization, the Foundation currently exercises influence over certain core smart contracts of the Network. This may include the ability to deploy upgrades, introduce new parameters, or modify existing Staking Pool configurations. The Foundation undertakes these actions with the intent of advancing the Xai Network and its community’s interests, while retaining absolute discretion to make changes deemed necessary or appropriate, sometimes without prior notice.

4.3         The Foundation’s ability to modify or upgrade contracts does not create a fiduciary duty or imply any liability for outcomes. The Foundation does not guarantee that any particular Pool will perform as intended, or that parameters will remain unchanged. Participants should understand that parameters may evolve over time as the Network matures, community feedback is integrated, and external conditions change.

4.4       You are responsible for selecting any Staking Pool you join. The Foundation may display information or user interfaces on our Website, including on https://app.xai.games/staking to help you identify and evaluate Staking Pools, such information is on an “as is” basis.  The Foundation provides no guarantees as to the reliability, fairness, or long-term stability of Staking Pools.

5. NETWORK REWARDS AND PARTICIPATION

5.1       The Xai Network emits Network Rewards (in esXAI) at set intervals (“Challenges”). Keys have a baseline probability of Participation – 0.1%, which may increase if certain esXAI thresholds are met within a Pool. These probabilities and thresholds are encoded in smart contracts that can be updated or replaced as the Network evolves.

5.2       The allocation of Network Rewards among Keys, esXAI stakers, and Pool Owners (the “Breakdown”) is determined by the applicable smart contracts. While some initial parameters are hard-coded at deployment, the Foundation may, through authorized processes, alter or upgrade the underlying code to address security issues, improve functionality, or reflect community consensus.

5.3       The Foundation does not guarantee that any Key will participate in a Challenge or that you will receive any Network Rewards. Actual outcomes depend on smart contract logic, node performance, network conditions, and any subsequent contract upgrades or parameter changes.

6. UNSTAKING AND COOL-DOWNS

6.1       Unstaking esXAI or Keys may involve cooldown periods enforced by the Pool’s smart contracts. During these periods, you cannot immediately reclaim your staked Tokens.  Those in effect at any given time will be published in the Xai Gitbook (https://xai-foundation.gitbook.io/xai-network).

6.2       These cooldown periods, along with other operational parameters, may be subject to future contract upgrades. While the Foundation seeks to implement changes transparently and in the community’s interests, no guarantee of stability or immutability is made.

7. SLASHING PENALTIES

7.1       Slashing Penalties may apply if Sentry Nodes or Staking Pools fail to meet performance criteria or engage in malicious activity. These penalties could reduce or destroy accrued Network Rewards or staked Tokens.

7.2       The Foundation does not manually administer Slashing Penalties. They occur automatically based on the smart contract’s logic. However, contract logic related to slashing may be revised through upgrades if necessary for the network’s stability or fairness.

8. REDEMPTION OF NETWORK REWARDS (esXAI)

8.1 Network Rewards are in esXAI, which cannot be traded or transferred. esXAI may only be redeemed for XAI according to ratios and lock periods encoded in the smart contracts.  While these conditions are initially hard-coded, you acknowledge that the Foundation may, with proper authority and process, deploy upgrades or adjustments to the redemption logic. Such modifications would be implemented to address security, usability, regulatory, or community-driven changes. Any changes will be made in good faith but may affect redemption timelines, penalties, and ratios.

8.2 To redeem esXAI for XAI, you must complete KYC, submit a Redemption request, and  pay associated gas costs. Presently, for example, you may redeem:

  • After 15 days at 0.25 XAI per esXAI;

  • After 90 days at 0.625 XAI per esXAI;

  • After 180 days at 1:1 with no penalty.

These parameters and the process are subject to change if contract upgrades are implemented.

8.3 The Foundation may present proposed changes to these parameters to the community and seek feedback. However, it ultimately retains the discretion to make upgrades if it believes such actions serve the Network’s long-term viability or legal and regulatory requirements. By staking, you accept this potential for change.

9. RISKS

9.1     Staking involves significant risks, including potential changes to contract parameters, upgrades initiated by the Foundation, software bugs, regulatory changes, slashing events, and uncertain user adoption or Network longevity.

9.2     By participating in Staking, you acknowledge and accept all such risks and agree that the Foundation bears no liability for losses arising from any changes or outcomes related to the Network.

10. NO INVESTMENT ADVICE; NO WARRANTIES; DISCLAIMERS

10.1       Staking does not constitute investment advice and does not create a fiduciary relationship between you and the Foundation or the Network. The Foundation is not an investment advisor, and no information provided should be interpreted as financial, legal, or tax advice.

10.2       The Foundation makes no representations or warranties regarding uninterrupted or error-free operation of the Xai Network, Staking Pools, or redemption processes. All actions you take are at your own risk.

10.3       To the fullest extent permitted by applicable law, in no event shall the Foundation, any of our affiliates, nor any of the officers, directors and employees of the Foundation or our affiliates,  be liable for any claim, damages or any other form of liability, whether in action or in tort, arising from or in connection with staking on the Xai Network. We further disclaim all liability arising from any reliance you placed on any materials we or our affiliates issue in relation to Staking.

11. MISCELLANEOUS

11.1     Incorporation of Terms of Use.  All Terms, including all disclaimers, limitations of liability, indemnities, and dispute resolution provisions, in the Terms of Use of Xai.Games apply equally to these Staking Terms. In the event of conflict, these Staking Terms govern Staking matters.

11.2     Governing Law. These Staking Terms are governed by the laws of the Cayman Islands, without regarding to its conflict of laws principles.

11.3     Severability.  If any provision of these Staking Terms is held invalid or unenforceable, the remaining provisions remain in full force and effect to the maximum extent permitted by law.

12. CONTACT

If you have questions about these Staking Terms, please contact notices@xai.games.