There is a slight contradictory narrative that suits crypto investors particularly when markets look like they are heading south.

“Just go all in stable bro”. “I’ll buy back lower”. “You can get 20% on USDT-USDC LP at the minute”

I mean, yeah this can work but also isn’t the rhetoric that we are here to protect ourselves against those very assets and the inherent money printing by centralised authorities?

Inflation is here and it is real, those that understand this capitalise on it. Those that don’t are subject to an unapproved hidden tax on nearly every single day-to-day purchase for the rest of their lives.

There are obvious benefits to trading into stables at times I get that but, if you are truly here to be your own bank and explore the future of France, then USDT and USDC may be a little contrarian to everything this industry stands for.

So what would a better trade-off be? Well, you have crypto-collateralised stables like MIM that hold the value of $1 and are backed by other crypto assets to maintain the peg.

This is fine… but we need to get over this obsession of being a decentralised version of TradFi. If we are trying to peg a decentralised currency against the dollar or another fiat currency, we are subject to the same decrease in purchasing power whether it is on-chain or not.

There are a few projects that are truly exploring what it means to be a truly decentralised non-pegged stablecoin that is backed by a basket of underlying decentralised assets. Think how the dollar was once backed by gold reserves but now we are in the digital age.

Yeah, that is a bit of a mouthful and it can fry the brain but the rest of this article will unpack how Wonderland Money and the TIME token are running with this idea and smashing it out of the park for its users.

So what is Wonderland Money? 

Wonderland is a decentralised reserve currency protocol built on the Avalanche network by an anonymous team. I have mentioned this before and I believe anon teams in DeFi are 100% necessary under this current global regime.

The TIME token is at the heart of the protocol and it allows its holders to retain their purchasing power with some of the most impressive and sustainable yields in all of DeFi.

The project is a fork of the extremely successful OlympusDAO (OHM), that defied critics and naysayers which usually chimed in with how they thought the yield is unsustainable and would inevitably fail. I can imagine they are coping pretty hard at the minute…

At the time of writing the current APY for staking TIME on Wonderland is 38,834%… so you can see why some 100 IQ users would think that this could just be another high emission farm that couldn’t sustain price and yield for those that entered.

Shortfalls of regular DeFi products: The carrot and the stick. 

The “carrot” was tried with 5, 6 and even 7-figure yield farms that end up leaving you rekt and underwater despite the yield. Whales could enter with huge positions farm the native protocol token and take them to the market and create huge sell-side pressure.

Anyone unfortunate enough to buy the farm token to enter a single-sided pool saw their token price depreciate whilst the single-sided APY for the pool would not be high enough over time to account for the extreme price movements.

This happens all the time Alameda are terrible for it, despite everyone licking their boots.

More recently, the “stick” was used with harsh paper-hand penalties for leaving particular farms early, forcing users to lock up their LPs or tokens for a considerable amount of time to reduce sell-side pressure from whale farmers.

Whales just took the hit on the penalty or collected more and more tokens from the project inevitably creating a ticking time bomb for the projects impending doom on unlock day.

Don’t get me wrong, I have had successes from both of these types of protocols but I always know they are a stop-gap and never to be held long term. It is yield farm roulette and I am no stranger to it.

There is a better way and I believe Wonderland are on to something.

So, strap in… you may have to read this once or twice but trust me you will understand it by the end of it.

An Idiots Guide to How Wonderland Money and TIME Works 

TIME – As I mentioned above TIME is the native token on Wonderland. It is a reserve back currency meaning that each TIME is backed by a basket of assets in the Wonderland treasury.

So as we all like to say to no-coiners: “The dollar is not backed by anything”, TIME has reserves in the protocols treasury to give TIME an underlying value. This is what I meant by the gold standard earlier. Think of TIME as the dollar which is backed by lots of other decentralised assets, which is the gold in this example.

TIME is indefinitely backed 1:1 with MIM although the price of TIME trades at a premium to this. The premium is completely up to the open market and boils down to supply and demand.

Unlike TIME which is a decentralised and backed stablecoin, MIM is a multi-chain decentralised stablecoin pegged to USD. 

The key differences here are backed and pegged. Backed is ≥1. Pegged is =1.

TIME – Backed by a basket of other crypto assets so it has an underlying value.

Magic Internet Money (MIM) – Pegged to the USD and is minted into circulation using Abracadabra Money. Abra allows users to deposit interest-bearing assets (ibAssets) which they receive when they deposit tokens into other protocols such as Curve, Sushi and Yearn Finance.

So example… I have Tokenx and curve offers a Tokenx pool so I can earn yield. I deposit Tokenx into Curve and I receive ibTokenx, effectively as a receipt.

I can then take my ibTokenx and use it to mint/borrow MIM. This way, my Tokenx may be tied up earning a modest yield in Curve but now I have a highly liquid asset in MIM which I can then take to the market and earn more yield on… I LOVE IT.

I understand the above example is basic but it is just to show how in effect this works. Also, don’t go aping into TokenX it doesn’t exist.

That was a bit of a detour but we needed to understand MIM, plus the projects have a lot of overlap both in protocols and in their teams.

Right so as I was saying, TIME at the protocol level is completely backed by at least 1 with MIM… I know what you are thinking well if TIME is at around $2600 now and it is backed 1:1 with MIM that is a pretty big fall.

Well, yes and no… It is 1:1 backed in the sense that if the price of TIME were to ever fall below MIM ($1) then the protocol buys back and burns TIME to bring it above MIM.

The real key feature here is that TIME trades at a much much higher premium to MIM which is completely set by the open market and the treasury reserves it is backed by. So, don’t worry about it, it will make more sense below.

There is currently 66,648 TIME in circulation with around 48,407 being staked, 72.6% to save you the math.

Going back to the backing of TIME by at least 1 MIM, we can see from the treasury that there is $23,459,213 available.

So for each TIME, there is currently a risk-free value (RFV) of $351.98. So if shit was to hit the fan, with the current treasury reserves each TIME would be more than covered to this value.

How does Wonderland stop shit hitting the fan? 

It is a basic example of Game Theory. The Prisoners Dilemma is a great thought experiment that states that for the best possible outcome in a group, individuals must cooperate together.

I have no idea what the prisoners have done to receive such harsh and also such lenient sentences but I didn’t make the model…

How this applies to Wonderland: Staking, Minting and Selling – 

Staking (🎩, 🎩) – So the natural thing to do with your TIME would be to stake it as the returns are excellent. They are so high in fact that any price depreciation would be completely offset over time (excuse the pun). This is how the protocol works.

It is kind of counterintuitive and thinks back to what I was saying about unsustainable farms earlier, the price is not as important as other protocols, with Wonderland you are looking at yield and balance.

The most optimal decision to be made by TIME holders is to buy and STAKE.

Buying increases the TIME price whilst staking removes circulating supply and increases demand.

Stakers don’t need to lift a finger. Every 8 hours the rewards from bonding/minting are distributed proportionally across all stakers based on their staked balance. More on this below…

Bonding (Minting) (🫖, 🫖) –

The other option, less optimal but still completely necessary for the overall protocol is bonding/minting (I will stick to using the phrase minting from now on). Minting is where the Wonderland protocol allows users to Mint discounted TIME in return for their assets.

In effect, users are selling their assets to get cheaper TIME. Users can now mint TIME with TIME-MIM LP, TIME-AVAX LP, MIM and wAVAX.

Once a mint is initiated, the user will receive the quoted amount of TIME linearly throughout 15 epochs, this is equivalent to 5 days with an epoch being 8 hours.

So after 1 day, they would receive 20% of their TIME, 40% after 2 days and so on until the 100% is minted.

You can see the quoted price for TIME for each asset and LP and also the current TIME price in the top right.

The eagle-eyed amongst you will notice that the total purchased amount is the current holding amount of the Treasury ($23m or so). No prizes for working out why that is but I will go over it anyway…

As you might have guessed the assets and LPs used to mint TIME are then held within the protocol treasury which increased the risk-free value we spoke about earlier.

The LPs used to mint time are also such a cool feature. As users are filling the treasury with MIM-TIME LP and TIME-AVAX LPs this allows the protocol to effectively hold the majority share of these pools, generate the majority of the trading fees and consequently increase the value of the treasury. All the while, the increased liquidity for TIME through these LPs is awesome for price stability.

Recap – The RFV is the amount held in the treasury divided by the amount of TIME available. This gives you a rough estimate of how much in dollar terms that the treasury could back each TIME in circulation if required, hence the Risk-Free Value.

So now you know what staking and bonding/minting are, you can see how both benefit the holders of TIME in their own way.

Stakers should be more concerned about their TIME balance whereas minters care about price. If the price is stagnant upon their full mint they have made a profit on the discount and if it goes up they are benefitting from the discount and price appreciation.

I’ll be completely honest I just copy and pasta’d this next paragraph from the Wonderland docs, but they just explain the infographic perfectly and there is no point rewording it.

Outcomes –

• If we both stake (🎩, 🎩), it is the best thing for both of us and the protocol (both users gets The Mad Hatter’s hat.

• If one of us stakes and the other one bonds, it is also great because staking takes TIME off the market and put it into the protocol, while bonding provides liquidity and MIM for the treasury!

• When one of us sells, it diminishes the effort of the other one who stakes or bonds.

• When we both sell, it creates the worst outcome for both of us and the protocol (❌, ❌)

Everyone should follow @blocmatesdotcom on Twitter for the best alpha.

Back to my own words now…

MEMOries – There is an additional token within the Wonderland realm and that is MEMOries (MEMO).

This is what your staked TIME balance will be reflected as in a 1:1 ratio. This is where the rebasing occurs. Each epoch of 8 hours your MEMO balance will be automatically increased and auto-compounded.

If you have 100 TIME staked and the reward yield is 0.5484% once the 8 hours is up your MEMO balance would be 100.5484. If you decided to unstake your TIME after 8 hours then your TIME balance would also be 100.5484. Make sense?

I wouldn’t worry about it too much for now just think TIME and once it is staked you effectively have an equal amount of MEMO.

That being said, I would keep an eye on the developments of the utility of MEMO, I wouldn’t put it past this crazy team to also make that token into a yield generating monster too… stay tuned for that one.

Tying it all together to achieve yield.

So as minting and burning are controlled by the protocol, there is a reward rate that the protocol is trying to maintain.

The current reward rate is around 1.6% a day from a compounded 0.5467% 3 times a day. (8 hours per epoch).

To achieve this, the protocol will have to sell enough bonds to cover this.

Once a user mints TIME at a discount the following occurs –

• The user receives their quoted amount of TIME over 5 days.

• The treasury receives the funds used to mint the TIME.

• The DAO receives an equal amount of TIME as profit

• An equal amount of TIME is placed into the MEMO distribution contract that allows stakers to benefit from the new TIME being minted.

This is where the yield and rebasing comes from. If the protocol requires increased liquidity for MIM-TIME or TIME-AVAX, then an increased discount can be provided on these to incentivise users to part with their LPs for cheaper TIME.

The same applies to MIM reserves and AVAX.

On top of that, the treasury reserves can step in at times of extreme market volatility to help support the price of TIME. As the RFV of TIME is generally very high, the value of reserves can protect the protocol from sell-side pressure if it were to occur. This is another factor of the protocol which gives me a lot of hope for longevity despite crypto market volatility.

Community –

At the heart of all good projects, there is a thriving community. The community aspect of a project is a make or break for me. If I enter a Telegram group and people are complaining irrationally about the price it’s an immediate red flag. If anyone has checked out the Wonderland Telegram and the unofficial trader’s group you’ll see that this is not the case.

The CM’s in there are extremely patient with folk which is always a good sign because let’s admit it, it is a pretty difficult project to wrap your head around. So, Kudos to the CMs in there, you are doing a great job.

You don’t have to scroll very far on Twitter to see the (🎩, 🎩) suffix in peoples names and bios either. This is derived from the (3, 3) that the OHMies use but once you catch either of them a few times it tends to lead you down the Wonderland rabbit hole looking for answers.

Little nuggets of subtle marketing all add to the togetherness and unity of its holders who as I have mentioned above, are incentivised to stick together and do what is right for the group. It is a super neat touch and I am all for it. And yes, I also have the hats on my Twitter name…

The team are highly connected within what appears to be one of the most innovative and emerging groups of projects in all of crypto. Figurehead by Daniele Sesta who is the founder of Wonderland Strategy which may or may not be responsible for other projects such as Abracadabra Money (SPELL and MIM) and Popsicle Finance (ICE).

There may be some articles in the works for these two projects too, who knows…

This post is for all the people that said my goals were too big, for all the haters that tought we would ngmi, for all the people that sold the bottom, for the ones that DDOS attacked us for days and days, for who smiled wen we falled, for the ones that tried to push us down… 👇

— Daniele Sestaylor 🧊🧙‍♂️🔺 (🎩, 🎩) (@danielesesta) September 28, 2021

I am all for this energy.

I for one, back people and anons that deliver and that is one of my main reasons for backing all of these projects to succeed with very high conviction. You will start to see this name pop up more and more so just watch this space.

The protocol is moving towards being a completely Decentralised Autonomous Organisation (DAO). The governance token for the decision making will be MEMO (staked TIME) so this is also something to look out for going forward and adds another dynamic to the community involvement.

Predictions – 

Usually, when taking a look at where I think a project will go and what potential room it has for growth and value there are lots of other projects that I can compare to give me a best guess.

With rebase projects like this, there tends to be a lot of other dynamics to take into account and often the projects are okay to compare but in this case I believe there is only one project to use as a stencil for my projections. This is of course Olympus DAO and OHM.

Not to dwell too much on other projects but as Wonderland is a fork of Olympus DAO, I would be an idiot not to compare them.

So, as a little history lesson, Olympus DAO conducted an Initial Discord Offering (I know, awesome) in March 2021. From what I can tell from looking at trading data from Sushi Swap the OHM token price went over 10x in roughly 1 month.

On top of that OHM is up about 318% from the horrendous May lows which every project in crypto suffered from. But… I don’t think the price should be the metric we are looking at here.

What I am more interested in due to the nature of the protocol and its active auto-compounding is the projects market cap (apologies for the poor chart stolen from CoinGecko).

So as the newly auto-compounding and rebasing occurs the proportion of OHM the users hold would be equivalent to their contribution to the market cap. So in effect, the OHM stakers from the very early days of a $37m market cap Olympus DAO will have seen roughly a 37x return based on the current $1.3bn market cap of OHM.

I’m not even going to mention the returns the IDO participants have seen what I will say is that from the Olympus Medium I believe the initial price was $4 per OHM… makes you feel sick, doesn’t it?

There are a few lessons in all of this.

1) When you get a project that comes along like Wonderland you best forget what the unstake button looks like.

2) If you understand everything you have read above ignore the price and pay more attention to your balance.

3) Initial Discord Offerings are cool.

4) Someone needs to build a market cap chart function that doesn’t look like a child has drawn it (if there is one please let me know).

So, where does that put us as TIME holders?

Well, I expect volatility that is a side-effect of the protocol but I also expect that TIME will eventually stabilise to a point where it hopefully is super boring on the price action front, similar to how Bitcoin is now…

OHM has traded between $161 and $697 ($446 range) for the past 140 days. Taking into account the current 5 day ROI of 6% 1 OHM would have yielded 4.31 OHM over this time.

TIME has a larger 5 day ROI of 8.522% and is a lot earlier in its life cycle with it only being live since the 2nd of September.

The fact that TIME is deployed on the Avalanche network fills me with a lot of hope too. Avalanche Rush is beginning to get underway with increasing numbers of bridgoooooors coming over to see what all the fuss is about.

I have found this Calculator online which was linked within this cool article on Wonderland and a nice strategy for the TIME token.

Anyway, you can make a copy and run your own numbers based on TIME price, APY and other predictions.

Using a worst-case scenario I plugged into terrible numbers and to be honest I was pleasantly surprised.

Suffering an 80% drawdown at current prices of $2394 to $485 and a reduction in yield to 10,000% APY (which doesn’t take into account the starting APY which is around 39,000%) over 180 days you would be still in profit 93% and over 365 days a ridiculous 1880%!

As I say this is a bad scenario that is yielding over 18x return, so have a play around with it and prepare for the worst and hope for the best. That way, if we outperform this we will be sitting very very pretty indeed.

Even suffering a 99% drawdown with an average 10,000% APY will see you with a -1% return… Not financial advice.

Inflows to Avalanche – 

There are only a few select blue-chips on the network Wonderland being one of them. If the continued inflow of capital has increased by over 1000% over the past month according to DeFi Llama.

Large amounts of capital are still being bridged over from Ethereum according to UniWhales which kind of got skewed the other day after a huge amount was bridged over dwarfing the previous inflows.

What I am trying to get at is that the Avalanche ecosystem is attracting some real big players all in anticipation of the lucrative incentives programs coming to this thriving chain and they will be looking for some places to put their funds.

If they continue to buy and stake time or even mint it for that matter, Wonderland its users will benefit massively.

You can also do a little bit of snooping using DeBank and search for Wonderland in the search bar. This will bring up the top portfolios that are holding TIME and you can also have a look at their strategy. From my own invasive investigations, there are at least 24 users with over $1m worth of TIME staked in the protocol, make of that what you will.

Summary – 

If you can’t tell from reading this I am a massive supporter of Wonderland and yes I hold and stake it (🎩, 🎩). I honestly have no idea of what the price action is going to be like, maybe the perceived high price puts off investors who don’t understand the project, but if you know anyone like this, show them this article, please.

What I do know is that staking TIME is a huge asymmetrical bet that actually allows its users to benefit from inflation which goes against everything that you have previously learnt. I think there is a nice philosophical aspect to it that gives me a lot of hope for crypto and DeFi going forward. Anything that empowers users that are sick to death of the 0.01% premium interest rates at the bank and constant loss of purchasing power, is a project I can get behind.

Maybe if the SEC advised younger adults to invest just $5 a week into Wonderland and not into a “savings” account, they might be better off, but what do I know…

Wonderland has managed to achieve quite ridiculous yields with TIME in all honesty… and for the first time in a long time, I feel as if selling this token would come back to bite me on the arse big time.

FRENCH TRANSLATION

Finally, if anything doesn’t make sense as I do get that it is a pretty difficult one to get your head around, just give me a shout on Telegram, I’ll happily try to explain it more if at all possible.

P.S. If there are any projects out there that would like this kind of content just get in touch and if it is something I am interested in, we can sort it out :).

Teddy next… 👀

Wonderland Resources –

Website and dApp – https://www.wonderland.money/

Twitter – https://twitter.com/Wonderland_fi

Telegram – https://t.me/WonderlandMoney

Where to buy TIME – https://www.traderjoexyz.com/#/trade