We wanted to write this article to give our current thoughts on the current state of DeFi and how Planet will be positioned after the release of new features that are under development.
Hopium Is Dead (For Now)
DeFi valuations should revert back to their intrinsic values = Profit + Utility
Let’s be frank, DeFi is currently in a bear market and no one knows how long it will last. In our view, DeFi is here to stay and the projects that make it through these challenging times have a great shot at being the future market leaders.
In a bull market DeFi protocols are arguably valued by 3 factors:
1. Total Protocol Profit
2. Total Protocol/Token Utility Value
3. Hopium value that there will be some value generated in the future that isn’t clear today
In a bear market arguably the valuations should revert back to items 1 and 2 with most of the hopium being wiped out. This is healthy for any industry.
What does this mean for the current state of Planet?
In our opinion, the Planet Market Cap (of both AQUA + GAMMA) should be valued on the total protocol fees plus the value of GAMMA utility. A key driver of Planet’s tokenomics is that all protocol fees are driven back through AQUA and GAMMA and we maximize the GAMMA utility as much as possible.
This is why we are trying to use this time between relaunching the markets to think about how we maximize our intrinsic value.
Focusing on Point number 1, Protocol Profits. There are 3 key components that we intend to focus on in the short/medium term to boost protocol fees:
- Relaunching lending markets.
- Relaunching the non-stable swap.
- Launching the Stableswap.
Relaunching The Green Planet Lending Markets
As of today the market leader in lending on BNB Chain is Venus. It’s no secret that Binance is involved in this project and they have had the advantage of being the first lending market to launch on the chain.
To compete with Venus, Green Planet offers better lending rates (through a different interest rate curve) and a discount for borrowers based on the GAMMA utility token. Soon anyone will also be able to earn more on the supply side by staking more GAMMA as well.
On top of this all, the fees from the lending market are used to buy AQUA (and burn it), buy GAMMA for the GAMMA reserve (to ensure we will always have GAMMA rewards even when the last GAMMA token is minted — making it self-sustainable), and a percentage going towards the treasury to be used to help grow the protocol.
In comparison Venus uses only 20% of the fees to buyback XVS and another 20% of fees being used to buy XVS to pay stakers, 100% of fees generated on Green Planet are driven through the protocol.
As Green Planet relaunches soon, we’ll be adding 3 new features that should give Planet a competitive advantage. These include:
- Increased yields from extra GAMMA based on the users GAMMA supplied.
- All GAMMA rewards will go to the infinity vault as opposed to being claimed immediately (this will likely reduce the liquid supply of GAMMA and reward GAMMA infinity vault stakers further).
- Decreased gas fees when using the lending protocol through smart contract optimizations.
Relaunching Planet’s Non-Stable Swap/AMM
The non-stable swap market leaders as of today on BNB Chain are PancakeSwap and Biswap. There are three main factors that contribute to their market dominance in our opinion which include
- Trade fees (0.25% for PancakeSwap and 0.1% for Biswap)
- Deep liquidity to enable big trades
- A referral system (Biswap)
To compete in this area Planet will be redeploying the non-stable swap with a trade fee of 0.09% meaning Planet will have the best swap rates in the space (Planet’s already on 1inch which means with this new rate we should nearly always be utilized first over other protocols).
Additionally, Planet will be adding a GAMMA boost based on users GAMMA locked in the infinity vault to all liquidity providers. All GAMMA rewards earned from the protocol will now be claimed and staked into the GAMMA infinity vault with one-click. This should help to drastically reduce the liquid balance of GAMMA and reward GAMMA infinity stakers even more.
A competitive referral program is something we are exploring as well.
Launching Planet’s Stableswap.
The Stableswap market doesn’t have a clear winner yet in our opinion but in the future we believe that the Uniswap AMM model that PancakeSwap is using will lose out to the curve style AMM model that ellipsis is using as it is a much more efficient way to swap stable coins.
To be a competitive player in this space we’ll be re-launching our swap using the curve style AMM with trade fees of 0.035% making it the most competitive Stableswap in our space. Just like our non-stable swap, the farm rewards will be based on the amount of GAMMA users have staked in the Infinity Vault and all farm rewards claimed will go to the Infinity Vaults.
Focusing on point number 2, GAMMA utility Value:
This is much harder to quantify as it can change a lot based on market sentiment. However, the main features that we as a community can control are:
- Giving a yield boost on all farms and lending markets based on users staking GAMMA in the Infinity Vaults.
- Giving discounts on borrow rates for users who stake GAMMA.
- Increasing the protocol fees that are used to buy GAMMA and send it to the GAMMA reserve.
- GAMMA will have massive utility on Pink Planet. This will lock up a tremendous amount of GAMMA and anyone will be able to spend GAMMA to earn with the creators of NFTs that they like. (more to come on this)
If this is your first bear market or major setback just know that it gets better. Stay patient and stay focused. Your health is the most important thing. Think long term.
We wanted to just mention again that everyone who contributes to Planet is as motivated & committed as ever. We’re excited for the future ahead and are hyper-focused on continuing to build. The communities & protocols that continue to build through uncertainty will be rewarded. Good times are ahead for Planet, AQUA & GAMMA.
Stay tuned for the Development Update & Roadmap that will be released in the next day or two!
