As I saw plenty of “I don’t understand” pic related posts, I am going to explain it to you now in details. Forget about what it is being marketed as: index/deflationary/fund/etc… Call it whatever you want after you read the below.
Starting off with basics: market cap = supply x price
As an example for 5,000 supply at $2: $10,000 = 5,000 * $2
Whenever STA is traded between wallets, 1% gets burnt. Now let’s assume two things:
1- Volume of 50,000 STA gets traded, causing 500 STA to get burnt reducing the supply to 4,500
2- Ignore the demand/price force for STA’s utility (for now)
Since we are ignoring demand, the market cap will remain the same. This burn will therefore cause price to increase:
10,000 = 4,500 x p, which means price should theoretically be pushed to 2.22.
This price increase will cause the STA value in Balancer (or Phoenix) to increase, forcing the pool to rebalance. Rebalancing means selling STA and buying the other 4 coins to keep the percentages as initially agreed upon (50 ETH / 20 STA / 10 BTC / 10 SNX / 10 LINK). Now remember, selling STA will cause STA to be burnt again (supply decreasing), causing a ripple effect: the cycle will keep repeating itself at a decreasing rate, even if no further human-triggered trades happen.
Now we can talk about STA’s utility: why would people demand STA? What does it do?
Balancer gives a return of 1% of total transactions volume that happened from all the rebalancing. Remember, rebalancing does not only happen from STA’s ripple effect mentioned above, but it also happens when the other 4 coins move in price (which by the way means more STA is burnt). That 1% on volume does NOT mean you get 1% on what you are pooling. It means the following:
Example: if you are pooling $10,000 and there is a total of $100,000 being pooled, with a 24h rebalancing volume of $50,000, then you will receive = ($50,000 x 1%) x ($10,000 / $100,000) = $50. Your daily rate of return is therefore $50 / $10,000 = 0.005, which means an annual rate of return of 0.005 * 365 = 183%. People called Phoenix’s return as scam because they are high, but they are not a scam but actually STA’s genius.
A lot would be very happy with such return, making them want to pool. You would think that as the pool gets bigger, your portion of the reward gets smaller but remember that when people pool, STA is being transacted and burnt, causing the rebalancing volume to rise and therefore increasing the 1% total reward as well.
Now add to the above all the demand action from wanting to buy and hold or buy and trade.
P.S Props to the user who made nice STA pics
Oliver Robinson
This is great stuff, user. Thanks for taking the time. I bought my first Statera last week. I think it's time to join the pool. Am I right in saying that the higher the volume, the higher the fees?
Hunter Gomez
Thanks for the explanation user, it’ll help a lot of people get a better understanding on why and how STA has price appreciation built into it. STATERA TO INFINITY AND BEYOND. Stay woke 2020.
Owen Cook
Yes user, the higher the volume whether from trading or pooling, the higher the fees/rewards investors get from pooling.
Ethan Smith
An actually informative post on biz. Well done op
Dylan Evans
brainlet here
>EOW? >EOM? >EOY? >2021? >2022?
Jackson Butler
Cringe thread and sell signal. This hacked and manipulated shit will dump to sub 5 cents for sure
Jayden Moore
I dont understand what the pool is. Do you get payouts in that? Is it like staking?
Cameron Russell
Weak fud nigger go buy PNK
Christopher Rogers
Sounds good!
How does the actual price of assets in the pool affect the fees? Or don't the prices matter?
Jonathan Watson
doesnt take a genius to see the chart is clearly a pump n dump... easy money for smart folk
Mason Cruz
Thank you, user.
I can't help with that, sorry.
I did my part, you do whatever the shit you want.
Pooling can be thought as having a saving bank account with a highly volatile variable interest rate. The reason why you will want to pool is to get percentage return on your investment. You can add/pull-out the pool whenever you want.
Jack Powell
Does your analysis take into account the black swan event
Kevin Cruz
This post makes me want to sell my hudbay minerals stock right now and buy 40,000 dollars in Statera coin.
Nah. I'm not buying until you statera holders stop being homophobic
Christopher Barnes
The more volatile any of the assets are, the better in terms of Balancer transaction fees.
But if you are a STA holder, it is better if the other assets increase in price as the Balancer will sell those assets and buy STA to rebalance, and vice-versa if prices wen down.
Wyatt Young
You're forgetting an important factor in all this. STA or Statera Delta can be added/paired with any asset.
Luis Price
Agreed, but the aim of the post was to explain the very basics of STA with a focus on Phoenix. Once other anons understand it, they will get what we mean when we say STA's future is bright.
Mason Edwards
Oh fuck off already. This is a clone of bomb and nuke. Don’t fall for this shit biz. Just check the chart if you don’t believe me.
Logan Brooks
x30 in one month? Yeah shitty chart....
Isaiah Rodriguez
Reddit spacing means nobody takes you seriously. It's like wearing an "I'm with Retard" shirt and attending a debate. Just... stop. Because you have a great deal of good research here that anons should read. And they won't because you're talking about math in a 'tard-slur.
Joseph Morgan
The dumb YAM whale just dumped again.
Aiden Murphy
You are trying too hard.
Kevin James
Well you sound like a retard yourself with such a pointless post. Unlike you, I wouldn't know what gets posted on Reddit because I am not a Reddit faggot like yourself.
Sorry user, had to use that word for that one.
Gavin Hughes
No one's dumping just crabbing
Anthony Lopez
To pool in Phoenix, do I need the 5 tokens or can I pool just Delta? Also, if I pool in Delta and then pool the Delta tokens in Phoenix I get returns from both pools?
