Many of you have asked ‘what is the long term utility of $WSB tokens?’.
This post is designed to explain the flow of fees and how it all works to benefit the community.
Let’s start by breaking down the product lines:
1) Exchange Traded Portfolios (ETP’s) — 0.3–0.5% Fees accrued when buying/selling ETP’s.
WSB Core devs are working on a daily basis with the team at Balancer Labs to launch the world’s first wholly-collateralized, self-custodial ETP concept. Auditing has begun and the ETP’s should go live in early August.
Essentially, we have augmented Balancer V2 and with the assistance of their team, created the bespoke features required to:
- Go live with ETP’s which can scale up/down in basket size (between 1 and 100 assets).
- Address various flash-loan attack vectors.
- Implement code that allows for the ETP’s to incorporate a fee mechanism.
Originally, we anticipated that the ETP’s would have a 2% per annum AuM fee (typical of legacy ETF fee structures).
This has proven to be sub-optimal — both in code and commercial reality. Instead, the fees will be volume-based, and vary slightly when people buy and sell the ETP’s or swap the assets held in the pool. The trade-based fee model works out better in terms of the generated revenue and as such, is fairer to users than the original annual AuM fee concept.
This model is applicable to both the Stock and Crypto ETP’s — the only difference being that crypto-ETP’s will be paid in ETP tokens, whereas stock ETP fees are captured in various currencies, which will all be transmuted into BUSD.
WSB token hodlers can then vote to burn, create UBI, allocate to the marketing budget, or do something else with the accumulated WSB. The world is their oyster.
2) “Synthetic Stock” Trading DApp — 0.5% Fees generated when buying/selling tokenized stocks.
Think of it as a ‘DeFi-native Robinhood’ where you can buy/sell tokenized stonks such as Tesla, Amazon etc
This is a bit of an alpha leak, but…we built a fully functional trading DApp to complement the ETP’s.
We will be using Mirror protocol (as well as BAND and LINK for various on-chain stock pricing) for this DApp and full product and partnership details will be published shortly.
Being a community driven project, we made sure to allow for the fees and their usage to be changed over time by way of community DAO vote.
All percentages highlighted in yellow (as well as their corollary use-cases) can be changed via the voting mechanism.
This means in the future, if we have to be more competitive and reduce fees — this is possible. Alternatively, the fees can be reallocated if there is a better use for them. Naturally, this may be subject to what is technologically feasible at the time and also available to be voted upon as well.
- WSB DApp has two main products. The first being a tokenized stock interface for Mirror-based assets, and the second being the ETP’s. So far, two ETPs have been conceptualized — The Crypto20 ETP and the Macro Hedge ETP.
- Both product lines will be live within the next 4 weeks.
- The fees generated from all product flows bring long-term substantial and highly scalable utility to WSB holders.
- The fees are in-line with our goal of complete decentralization and a community-led approach (everything can be voted upon).
We are very excited to be near the finish line on product construction and look forward to a very spicy few weeks ahead!
~ WSB DApp team