OlympusDAO Fork ‘TIME Wonderland’ set for VE(3,3) model | Sustainable future for Defi

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Is moving from the OHM to the VE (3,3) model more sustainable for Wonderland (TIME)? DeFi is moving forward in Wonderland with ve(3,3).

The cryptocurrency market is expanding in many directions, one of them being decentralized finance (DeFi) which is also expanding pretty fast. Traditional decentralized finance such as yield farming is now getting old, even though it appeared only a few years ago and now we have platforms like Abracadabra which offers leveraged yielding by using the collateral in the locked pools as a non-fungible token (NFT) which you can reinvest over and over with a certain amount of risk. Wonderland is moving away from its “traditional” Olympus V2 OHM into a more advanced VE(3,3) model, which brings further benefits to users, which we will explain below.

What Is Olympus OHM?

Olympus runs as a DAO (decentralized autonomous organization) existing as a set of contracts on the Ethereum network. aims to create a floating but stable decentralized cryptocurrency that can also be a global medium of exchange. The native token of Wonderland is OHM which is a decentralized backed cryptocurrency controlled by its token holders. The minimum price for OHM is one DAI, but a premium and the treasury value is added to the price of OHM.

Olympus sees stablecoins at the mercy of central banks, so they suffer from inflation, while normal cryptocurrencies are extremely volatile and are prone to manipulation. So, Olympus is more like a decentralized central bank, with a floating coin that tries to keep it stable.

The Olympus protocol is well known for staking and bonding.

Staking – In order to earn rewards from the revenue of the protocol, you have to stake your OHM coins, which auto-compound every eight hours. The rewards (annual percentage yield APY) depend on the amount of OHM staked and the reward rate.

Bonding – Bonding is considered a major innovation in DeFi, by which users can acquire OHM coins at a discount rate, in exchange for various assets such as cryptocurrencies, stablecoins, liquidity tokens etc. After five days which is the vesting period, users can stake their OHM coins to increase their share or sell them at a normal rate. Users benefit from the discount rate after removing the fees, while Olympus receives assets as mentioned above. This is the way Olypus can build up a treasury of different assets to back OHM coins it issues, which acts as its own liquidity, so it doesn’t have to rely on yield farming rewards as incentives

What Is Wonderland?

Wonderland is the first fork of Olympus DAO, so the protocol warks similar to that of Olympus and it is based on the Avalanche blockchain. Via economic and game-theoretic dynamics, Wonderland is trying to build a policy-controlled currency system.

Wonderland has its own token TIME, with each token backed by liquidity tokens and Magic Internet Money (MIM). TIME is expected to stabilize over time and be backed by a basket of goods and not by fiat currencies like other stablecoins. This is an OHM mechanism that Wonderland has adopted from Olympus, making sure that the value of TIME coin cannot fall below a decided value.  There is no limit to the upside in TIME coin, but if the price falls below for a short period of time, the treasury would buy back and burn TIME, sending the price higher above the floor.

Wonderland and TIME are closely connected with Abracadabra (SPELL) Money whose founder is Daniele Sesta, an Italian web3 developer. Same as with OHM, users can bond, meaning that they can buy new SPELL coins at a disount price after the treasury mints them or stake and benefit from accrual auto-compounding with a massive APY of up to 90,000%.

Wonderland Leaving OHM for Ve (3,3)

As Daniele Sesta put it in a series of tweeters, “It is $TIME to move away from the $OHM model, as everyone saw is good exclusively to fundraising but as much as we try to make it sustainable it becomes unreasonable.” Andre Cronje who is another well known name in the crypto industry has laid out a quick road map to explain how this transfer will happen. The OHM model has become an old one apparently with the industry progressing at an enormous speed and now it is moving to ve(3,3).  

The emission of the new tokens is adjusted according to the circulating supply. It means that if the circulating supply is higher, the token emission would be higher. If 20% of the tokens are locked for ve, that would leave a circulating supply of 80%. If the rate of minting is 10% for a total of 1 million tokens for instance with a circulating supply of 800,000, then 80,000 new tokens would be minted. If the percentage of locked coins increases to 50%, the minted token would be 50,000 and if all tokens are locked there will not be minted any new ones, which means that there will be fewer token emissions as more get vested.

As lockers increase, their holdings also increase accordingly. If half (500,000) of the total supply (100,000) in the example above are locked, at a rate of 10% 50,000 new coins would be minted, which means a 5% increase in the total supply. Since lockers increase their holdings proportional to the weekly emissions, their holdings increase by 5% as well.

Wonderland has extended locks into NFTs which allows holders to trade them on secondary markets, which makes them equivalent to cash. That is what Abracadabrw basically does. The revenues from the sale of NFTs can then be reinvested in the same way. They will also allow holders to borrow on these locks/NFTs in future lending markets. Besides that, this addresses the capital inefficiency problem of ve assets.

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