Marquise$Museum
Jr. Member
Activity: 90
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March 09, 2021, 06:47:46 PM
Last edit: March 09, 2021, 08:42:42 PM by Marquise$Museum |
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The video of Swop APY itself explains that only a fraction, less than 1% is from real revenue such as fees, pooled into total APY.
The remainder of this xxx% yield is from staking and farming rewards.
Real APY backing is less than 1% and you can see exactly how much in the video based on collected fees, it's below $25 000 for the total Swop pool.
I would advice to dramatically decrease APY to less than 10% maybe same as waves 6% because this APY is not backed by anything.
I don't think Waves is using funds from deposits to pay investors, I don't see it as Ponzi.
It is simply hyperinflating supply which is what Masternodes did in 2018 and 1 year after every masternode was -99%.
So what happends here is extreme dilution if you invest your money into USDN, Swop etc.
In the stock world, this is usually from excessive company emissions to raise new money, they take a 10 million shares and pump another 5 million into market by selling it to investors to raise development funds. This drastically dilutes the market and makes every share less valuable which causes downwards pressure on price.
But stock market never had anything near xxx% annual dilution, which is also why Masternodes imploded in such short time and so dramatically -99%.
So the take away is that you are buying toxic assets here, anything over 5-10% APY is toxic because it is unbacked and will dilute your investment to zero by hyperinflating supply.
I don't understand the logic with this creation how did waves expect to catch up to such extreme APY and back it with something real such as fees or other revenue sources?
This was impossible for the past thousands of years of finance, it did not suddenly become a reality this year.
It is actually a Pyramid, not ponzi.
Value investors should absolutely take a look at NFTs and follow investment in NFTs which are consistently selling such as Beeple. This is a very hard investment category and art collecting in a new frontier is even harder than normal art collecting. But atleast there is some material backing to the ROI. Early NFTs from 2017 will probably go up alot in value similar to Surrealism, pop art, Beat, Cubism movements.
Waves is very lucky, because there is one 2017 NFT token on waves. All others are from Ethereum and they are valued in the hundreds of millions at this point.
I guess waves created this high APY to get new users which is a good cause but this methodology will backfire because the foundation is from DeFi hyperinflation, if we suppose it is not straight up ponzi.
DeFi can be launched as lending contracts instead of hyperinflating contracts.
It is very easy to create lending on waves with 20-30% APY.
Simply lock USDN on user 1 wallet and collateralize his waves at 70-80% LTV.
This borrowed USDN can be transferred or there can be a rule that it can only be used inside waves exchange.
As long as monthly fee is paid, the contract cannot be liquidated.
This is much better way to grow userbase, waves price will go over $100 if you launch this.
TurtleNetwork already have this Dapp on Polarity but it is experimental 1 week loan at 50-70% LTV.
Very promising.
Waves loans should be without time limit if user chooses this option, only repayment of interest per monthly, with zero principal.
The key is to lock interest in USDN, not waves. OR, lock repayment in waves based on when the loan was issued, so if waves price goes up, the user only pays USDN equivalent to original amount. This means, if user takes $10 000 loan when waves $10, he will repay 1,3 waves every month with 0.3 as interest, or simply 0.3 instead of 1.3 if this is loan without time limit which the Swedish housing market had before 2016, interest only mortgage because home values only went up. So, when waves increase to $100, the interest repayment goes from 0.3 waves per month to 0.03, and this way it is dynamic price correlation because repayment is based on orignal USDN value of loan.
Another option will be to repay loan instantly using waves collateral if waves price goes up.
This is true DeFi, banking for the unbanked.
I would advice, $20 000 credit per wallet, with $350 interest per month, this is 20% APY. But it is real APY, not fake like Swop.
In order to take this loan, user must own $30 000 in waves. But more importantly, do not liquidate lending contracts if waves price goes down, simply bundle price loss into monthly repayment, maybe by increasing it a little bit like $50-$100 to cover short term volatility.
But you can also issue blanco loans without waves collateral. This USDN blanco loan should only be used inside waves exchange and only to buy waves or waves tokens or other waves related products and cannot be withdrawn from wallet. Blanco loan interest can be 30% APY instead of 20%.
Blanco USDN should be issued separately as USDN-B because its junk bonds with high default rate. Tokens traded against USDN-B will inherit debtor status but the monthly interest is still paid by original loan taker. When USDN-B is collateralized by monthly repayments, a share of supply can be converted into USDN and traded freely.
The reward for selling tokens for USDN-B is that this pairing will be pumped because of blanco lenders. So the dollar reward for token sellers is much higher, but risk of default is also higher.
If someone buys Tokens using USDN-B, those tokens go into blanco pool and cannot be touched until the loan is collateralized by monthly repayments. it can then be withdrawn according to level of USDN-B collateralization per account.
For example:
user 1 takes $20k USDN-B blanco with $500 USDN repayment interest
He buys token 2 for $1 using this USDN-B whereas in USDN market token 2 is trading at 20 cents
After exchange seller of token 2/USDN-B is locked in wallet and waiting for user 1 to repay, he can then withdraw or convert equivalent to what is paid in USDN every month, $500.
User 1 who bought token 2, cannot immediately resell token 2 in USDN market for 20 cents, he must wait until USDN-B loan is repaid with $500, and can then withdraw $500 worth of Token 2.
It is win/win/win for waves/investor/project creator
waves gets users, investor gets financing to invest in tokens they believe in, token creator gets more paid. The risk is carried by investor.
There are many small retail investors with $100-$1000, what will happen if they can access $20 000? Default? possible, market pump? definately.
But default in this case is harmless, because if borrower does not pay after month 1 deadline, tokens from the pool go back to seller and USDN-B is burned. The wallet which defaults, should be placed on cooldown before permitted new loan.
This system maybe is not perfect, but it is more realistic than swop for yield farmers.
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