Reconfirm and extend WIP #2: request DAO approval to make delivery payment and launch Wonderland’s “Tea Time” liquid staking solution, and to issue a new governance token to capture the current Liquid Staking Derivatives (LSD) narrative.
- Make $2mm payment for delivery of Tea Time liquid staking, as per WIP #2, and as retainer for additional chain.
- Launch Tea Time liquid staking to begin generating new revenue for the DAO.
- Issue a governance token in Tea Time to capture the LSD narrative earn immediate token sale revenue.
Tea Time is Wonderland’s liquid staking product, intended to expand Wonderland’s portfolio of revenue-producing products.
- [WIP #2] Build Avalanche Liquid Staking for Wonderland
- WIP Snapshot vote, passed with 97% in favour of proposal
This work is now completed and ready to launch. This vote allows the community to ratify the original DAO vote to make the delivery payment and launch Tea Time liquid staking.
As well as covering delivery, this payment also funds development of additional chains for liquid staking, to be decided by the management team and in consultation with the DAO.
This vote would allow the DAO, at the management team’s discretion, to create a new governance token in order to capture the current LSD narrative and create an additional source of treasury revenue. In addition to governance, the token would have utility both as an incentive for staking and LPing the Wonderland staked AVAX ($wlAVAX) token to increase adoption. This is the same mechanism employed by Lido with its $LDO token.
In order to continue the alignment of development and management team incentives, revenue is shared as per the original vote, with the majority going to Wonderland, and the development team’s share reducing over time: 2.5% share for the first year, 2% for the second year, 1.5% each year thereafter. Milestone payments will be put on hold, to be ratified in a separate vote after launch based on market conditions and the success of the platform.
The Tea Time liquid staking protocol, as named by the Wonderland community, allows fully configurable reward and revenue sharing with users depositing stake. Users’ AVAX is restaked automatically, and Wonderland and the user earn staking revenue continuously.
Users receive the $wlAVAX (“Wonderland AVAX”) staking token in return, representing their stake, which will allow Wonderland to continue to form closer relationships as a trusted brand in DeFi.
With an 80:20 user:protocol reward split (fully configurable by the DAO), Wonderland can capture over $1M a year in revenue from only 2% of the current staking market. As the crypto market rebounds and the Wonderland brand brings new stakers to market, this number could be much higher.
Despite the bear market, Avalanche’s transaction volume and gas usage is at ATHs. Almost 60% of all AVAX is staked, representing around 250M AVAX, or $3B at current market valuation. With staking rewards standing at 8.2% this is $246M of staking rewards being paid out annually.
The LSD (“Liquid Staking Derivatives”) narrative is pumping hard right now: Lido, RocketPool, Frax and BenQi are all top performers in 2023, pumping by double- or triple-digits:
- RocketPool, an Ethereum staking service, has seen its $RPL token pump 32% from yearly open just 10 days ago.
- Frax’s $FXS token is up 37% over the same period.
- Lido, the largest liquid staking provider, has seen its $LDO token has more than 2x over the same period.
- BenQi, a new entrant to the liquid staking market, already has an FDV of $50M for its $QI token.
By issuing its own governance token in Tea Time, Wonderland can capture this narrative and earn instant revenue for the treasury from the token sale. By keeping the majority of tokens back, Wonderland still retains overall control of the protocol.
Comparable liquid staking providers such as BenQi already have FDVs of $50mm. By issuing a token with a $10mm FDV and selling 20% (keeping 80% for treasury), Wonderland immediately covers delivery cost in full while adding a revenue generating product and growing its treasury by $8mm in Wonderland Tea Time ($WTT) tokens.
The Tea Time protocol is architected so that all parameters are settable directly on the protocol’s smart contracts. Functions that are currently controlled via Wonderland multisig can be straightforwardly moved under direct token governance control by the new $WTT token.
The original WIP included the possibility of adding other chains after Avalanche liquid staking launch.
The delivery payent additionally serves to fund development of additional chains for liquid staking, as decided by the management team and in consultation with the DAO.
As additional sources of revenue, Wonderland could choose to further grow its treasury by running Avalanche validators of its own: validators collect a fee of at least 2% on delegated staked assets, compounding the above staking revenue numbers.
Tea Time positions Wonderland not simply as a classic “DAO fund”, but as an investor in revenue-producing assets that bring income to the DAO over the long term. It’s this sort of long-term vision that brings value to the DAO’s governance tokens.
Lido, one of the largest liquid staking solutions, has already recognized this opportunity and is in the process of building an Avalanche staking solution of its own. Wonderland’s product is ready to go right now. We can beat Lido to market and start earning revenue today.
Tea Time liquid staking has been audited by Peckshield: Peckshield Audit Report, August 16, 2022