Etherstones, a DeFi Project, Resolves Traditional Issues Faced by Similar Ventures
Numerous DeFi projects have been introduced in the last few years. However, the projects lose their momentum after some time. DeFi projects, which guarantee stupendous yields, are based on Nodes, Reflection Tokens, or NFT Nodes. However, each of those models has distinct issues, which prohibit them from being a sustainable, profitable project in the long-term.
A “node” is created when an investor “locks” a pre-determined quantity of tokens forever. As a reward, the node will provide the investor with recurring payment in the form of the token paid.
Nodes Problem and Etherstones solution:
Ring Financial was the first company to provide Nodes as a Service. In the wake of their success, they were forced to close down their operations when vulnerability was discovered in their smart contract. Several profitable protocols have embraced the concept of Nodes as a Service, and it is still a popular investment strategy even now.
Nodes projects in the past have all sought to entice investors with astronomically high annual percentage rates (APRs). Because their model isn’t sustainable, they quickly backtracked to correct their errors. When investors understand that these mechanisms are exposing their shortcomings, they sell their interests, thereby putting an end to the venture. For example, Thor Financial offered 3.50% per day i.e. 1080% APR, but modified returns to 1.31% per day (or 477% APR). The change brought about resulted in token crash and pessimism about the project. The same applies to Louverture, univ.money and Ring Financial.
Among the most prominent DaaS Nodes, Thor Financial, has the largest market capitalization. Likewise, Louverture was the foremost project to introduce the concept of node compounding. Ring Financial was the first DaaS Nodes project. Also, univ.money introduced the concept of implementing NFTs as nodes. Despite their best efforts, almost all of these initiatives was unable to maintain long-term growth after unleashing its tokenomics. None of the Node project has lasted more than a few months as a consequence of this.
There is a fundamental problem with any initiative that promises daily profits of more than 2%. If they don’t reduce their daily profits soon, they’ll go bankrupt. Therefore, Etherstone’s tokenomics have been designed to fall within the safe range of 0.5 percent to 1.5 percent every day.
Reflection Problem and Etherstones solution:
Reflection Tokens show a consistent pattern. A significant price rise occurs just before launch, and then the token’s value drops as the excitement fades. Due to the early investors’ desire to get a bigger portion of the overall supply, they buy as much as feasible. Once the initial excitement has subsided, they sell out and go away with their gains. When the novelty of the endeavor burns out, the volume drops, and the initiative is doomed. SafeMoon is an exception to the scenario.
Because Etherstone provides revenue in the form of $ETHS and Wrapped Ethereum, the problem is alleviated. To put it another way, the project’s backers are able to think about reflections in a way that is quite different from the usual. Almost all the Reflection Token is now taxed on every purchase, sale, or movement of the token. Incentives will be given to all token holders.
Staking Etherstones in the Vault is the only way to gain reflections in Etherstones. Reflection tokenomics will be drastically altered as a result of this. Only a portion of the token’s entire quantity is available for distribution. It will also be more complicated than just buying and selling. Each and every claim or compound in an Etherstone Node is taxed to some extent. In addition, taxes are only levied on $ETHS sales. The number of reflections a Vault staker receives is influenced by these three acts.
As long as a token is being traded, reflections may be created. In other words, when a token’s volume decreases, so do the reflections. However, the majority of reflections currently come from node claims and compound claims. There will be a continuous supply of tokens to sell and reflect because nodes give everlasting return.
NFT Nodes Problem and Etherstones solution:
Univ.money, a protocol that redefined nodes by converting them into NFTs, is the only Node project completed as of yet in the format of an NFT. An unprecedented secondary node marketplace was the driving force behind this first success. Nodes might be traded for AVAX without a need to wait for the benefits.
A Planet NFT may be staked by an investor by paying a certain amount of UNIV. Once they’ve done that, they may either claim the awaiting benefits from the planet or compound their planet. Compounding bonuses will be wiped off if the claim is made. There is an issue with NFT Nodes falling below the token’s market price. In part, this is due to the absence of scarcity and the usage of AVAX rather than the native token on NFT Marketplaces.
The Etherstones project will no longer deploy nodes as NFTs in order to remedy the problem. Nodes will start off as conventional Nodes, but over a period of time, they will all be upgraded to NFTs. As a result, Nodes will become scarce. As an investor makes money, they may keep upgrading their nodes, increasing their total daily return. It’s possible that some individuals may want to upgrade their nodes, while others will just collect their daily payment. Some Nodes will be superior to others over a period of time, allowing for competition and a healthy ecology.
There is a fundamental flaw with existing NFT Marketplaces: rather than dealing in the native token itself, they only accept AVAX. To combat this, the makers of Etherstones have devised a temporary mechanism that allows only authorized users to move Etherstones between accounts. Investors will be able to exchange Etherstones for $ETHS via a middleman mechanism when it becomes live, but this won’t be the case right out of the gate. Allowing users time to build nodes without worrying about price changes is the rationale behind this.
Either an external NFT Marketplace will support Etherstones or Etherstones team will construct NFT Marketplace to facilitate trading of Etherstones in the long run. On the Avalanche Network, Etherstones is an unique DaaS that aims for long-term success and sustainability. Combining DeFi Nodes as a Service with Reflection tokenomics, Etherstones provides an unrestricted APR rate of more than 400%. $ETHS is the project’s native coin, while Ethereum (wETH.e on the Avalanche Network) serves as a source of revenue for the protocol.
There are four types of Etherstones. The following table displays their statistics:
- Pebbles cost between 5 and 8 ETHS
- Shards cost between 25 and 40 ETHS
- Stones costs between 125 and 200 ETHS
- Crystals cost between 625 and 1000 ETHS
Every 12 hours, Etherstones allow an investor to either claim or compound your node. Your node will get a boost from the compound benefit if you compound. A maximum of 540 compounds may be compounded. After then, you won’t get a compounding benefit, but you may still grow your node in the Vault. Compounds are taxed at a rate of 18 percent. Every claim is taxed at a rate of 28%.
In the Vault, the tokens are deposited straight from the compounded form. While these tokens are locked up for four days, the investor will be able to receive Ethereum reflections from the taxes produced while they are staked in the Vault.
After four days, an investor has complete freedom to do with their money as they like. The following fees are imposed in order to keep the coin deflationary and the project viable.
- 80% goes to the reward pool
- 10% goes to the treasury wallet
- 10% is burned
All of the following fees taken will be distributed in the following manner:
- 40% will be distributed as Ethereum Reflections
- 30% will go towards the Marketing Wallet
- 20% will go towards the Treasury Wallet
- 10% will be added as liquidity (5% AVAX, 5% ETHS)
There is a 28% charge on all Etherstone claims. Additionally, there is an 18% tax on every Etherstone compound. As well as the 28 percent stake cost for the Vault Staking service, there are additional 10 percent fees for ETHS sells.
The initial total supply of Etherstone’s native token is variable, but somewhere between 4,000,000 and 6,000,000. The distribution is as follows:
- 3,000,000 will be allocated to the reward pool
- 250,000 will be dedicated to the team wallet
The circulating supply of tokens will be decided on the results of the presale. The maximum wallet size is tentatively 10,000 ETHS.