Is this wise?

in #defi6 months ago (edited)

Happy new year everyone!

Recently this token kinda surprised me with its simple and seemingly effective setup as a staking / banking project. It's built on the Ethereum network, and that's actually the only problem I have with it for reasons you'll find in some of my older posts. Regardless, I ended up taking a position in it because of the following factors:-

  • Close to 100% of the ~58,000 ethers contributed during the 50-day presale auction was deployed as part of a massive ownerless liquidity pool on Uniswap. Nobody can ever remove the pool. This gives Wise a kind of price floor, being asset-backed in a decentralized fashion. It just launched yesterday at the average auction price with about $10 million in ethers swapping-in for Wise in the first minute. The liquidity of the Wise-Eth pair now sits at ~$91,000,000 at the time of writing: https://info.uniswap.org/pair/0x21b8065d10f73EE2e260e5B47D3344d3Ced7596E

  • Nobody was given free tokens or special privileges, including the founders. Everyone who wanted Wise must put their own money in it.

  • The Wise team took the path of "governance is a bug", so it's actually an already completed project. There will be no voting of any kind and no changes can ever be made. Of course, the project can be expanded by working on the layer-2 stuff like insurance, lending, and such. Given its simplistic nature, I think this is the right move. But this is also the reason why Ethereum is not the best choice imo, because you can never know all the consequences of code beforehand. Being unable to change when an unexpected bug happens can be catastrophic. But again, it's a fairly simple set of contracts with limited variables, so it's a risk I'm willing to take.

  • There's a built-in one-level referral system that rewards referrers whenever someone stakes more than 365 days. This in my mind translates to "super efficient salesforce on the blockchain". You can self-refer, sure, but you can only do it with a large capital. Even if you have that large capital, you're just paying yourself with your own money anyway. There's no way to abuse it so far, and it remains to be a "perpetual" opportunity for content creators or whoever who can sell.

  • Besides adoption, a big chunk, if not the entire 4% annual global supply inflation for staking interests and referral rewards can potentially be offset by the trading fees generated by the massive ownerless pool on Uniswap. It's not nearly as good as a "risk-free interest without inflation" setup like Tau-Chain's Agoras, but imo it's better than most inflationary projects in this space.

  • There is no "bigger is better" staking advantage, only "longer is better".

Overall, I think it's a pretty cool simple project with well thought out token economics. However it's predicated on the machinations of Ethereum and the value of ether along with the ridiculous transaction fees, so tread lightly despite that it's probably one of the better ways to make more ether sustainably after Ethereum 2.0's Proof-of-Stake incentives. I hope the team has a solid migration plan in case SHTF.

If you're interested, you can use my referral link for an extra 10% in staking shares: https://wisetoken.net/?w=0x9aD19E1ef23CfE77E2e593f9Ca331f583B22ee0e

Note: If you're to make a one-year stake, use 366 days instead of 365 days.

Disclaimer: not financial advice.

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Thanks Kevin I will check later to see how it looks the same, but if there are no privileges for anyone it will surely be a successful project that is for sure, for now if it has just finished and has had all those variants, well it must have something good, thanks for the fantastic summary on this new project.
Happy New Year for you too.

Interesting!!!!
Happy New Year Kevin!!!!