Scope:
Authorize the Treasury Council (TC) to do a private OTC deal and allocate a maximum amount.
Current Governance Limitations:
As per WIP #28:
[…] the Risk Officer will now identify and share with the Treasury Council the risks associated with each strategy prior to the council’s vote […]
Based on community feedback from a previous deal, WIP #14 will also by applied:
Explicit DAO Approval for allocation of tokens into long term defined lock ups […]
While the proposed investment can be voted on by the TC, the above guidelines cannot be followed as expected due to the current lack of Risk Officer and vesting period. A TMP is being used to assist treasury personnel with decision making by having the DAO review the proposal, assess the risks and make the final decision.
Objectives:
- Invest $1.5mm into Interport and accept the vesting terms.
Interport Background:
Brief summary:
Interport is a decentralized exchange that allows you to perform Interchain swaps (cross-chain swaps) at the best rate due to cross chain liquidity aggregation contracts that source over 250 DEXes and liquidity sources looking for the best price.
Interport allows you to buy tokens on any supported chain without the need to bridge. Interchain swaps will be available on 6 networks including Ethereum, BSC, Polygon, Avalanche, Fantom, and Arbitrum.
From Interport:
Interport is a decentralized exchange (DEX) that allows you to perform Interchain swaps (cross-chain swaps) at the best rate due to cross chain liquidity aggregation contracts that source over 250 DEXes and liquidity sources looking for the best price! The protocol works with cross-chain messages to communicate with contracts on other chains and build transactions. Users always know the exact amount of desired tokens they will receive on another chain! No need to bridge assets, look for the liquidity pairs or worry about price volatility. We have it all covered for you! We are building an ecosystem that will bring trading in DeFi to another level! We are excited provide various outstanding opportunities for our users:
- Interchain swaps
- Stable coin liquidity utilization
- Arbitrage opportunities
- Revenue share model
- Integrations and partnerships
Investment Details:
The purchased ITP tokens will be vested over 2 years with a 6 months cliff. In other words, the first claim will be available after six months and would account for 25% of purchased tokens. The remaining vesting period is linear. At a price of $0.30/ITP token we would be effectively investing at a $45mm FDV. With an investment size of $1.5mm, WL’s exposure to Interport would be a little over 1% of its total treasury size.
Rationale:
Interport’s objectives of making cross-chain easy aligns with Wonderland’s vision of expanding DeFi by investing in projects that lay foundations for the future.
Taking part in this private raise could have significant upside for Wonderland should the project prove to be successful while having limited downside due to the amount of capital allocated (slightly above 1% for the proposed amount of $1.5mm).
Interport has a finished product awaiting audit and imminent launch. We have had the opportunity to test the product and are very excited about it and the upcoming launch.
Interport has a lot of potential and a favorable risk/return at current valuation. This would also help Wonderland continue the diversification of its treasury.
Conservative calculations indicate:
Assumption: $1 million trading volume per day, per network
Expected result: $2.2 billion yearly volume, $4mm revenue
Valuation: P/E ~11 (based on $45mm FDV)
Assumption: $2 million trading volume per day, per network
Expected result: $4.4 billion yearly volume, $8mm revenue
Valuation: P/E ~5 (based on $45mm FDV)
Assumption: $4 million trading volume per day, per network
Expected result: $8.8 billion yearly volume, $16mm revenue
Valuation: P/E ~2.5 (based on $45mm FDV)
Our investment would put Interport at a valuation of $45mm FDV.
Volumes on other major DEX:
Uniswap v3 ~300mm-1bn
Pancakeswap v2 ~100-300mm
Dodo ~80mm
Curve (eth) ~50mm-80mm
Kyberswap (Arbitrum) ~60mm
Total daily DEX volume in the current bear market is in the $1-3bn range. In the previous bull market DEX volume was around $7-8bn daily.
This means that Interport needs to capture less than 1% market share in order to achieve favorable returns.
It is worth noting this napkin math only takes basic swaps into consideration.
Other factors that will increase earnings include:
- Arbitrage revenue from performance fees
- Optimal swap fees through routing advantages
Token Utility:
Having ITP tokens, Wonderland will be able to participate in revenue share staking (single sided or LP, whichever preferred). This revenue is shared in USDT and represents 40% of protocol earnings. Staking also gives ITP tokens.
https://interport.gitbook.io/interport/itp-utilization-and-economics
Team Details and Potential Conflicts:
Interport is run by a core team consisting of the dev lead (DSB), project manager and tech lead (whereto) and Sifu (advisor). Whereto is also tech lead on UwULend, a project we are deployed on and hold vesting tokens. The primary TO proposing this investment (Ferengi) has met both DSB and whereto in person to discuss this project and our potential investment into it before Sifu was asked to join the project.
Whereto studied finance in London, worked on models, and brokered deals for IPOs. His first crypto project was in 2017 and he has been working in the space since then with deep experience in both finance and software development.
Snapshot:
TBD
Voting options:
- Authorize investment
- Don’t authorize investment
Risks/Considerations:
Smart Contract Risk:
While we would not be directly affected by Smart Contract risks because we would be holding spot tokens, any new protocol has smart contracts and exploit risks present that may reduce the native token price. Interport is currently in process of getting audited by Hacken and it will not be deployed until that has been completed to safeguard user funds.
They will be added to the documentation page as they become available:
Price Risk:
Interport is a new project in the launch phase and there is risk it may not succeed. Our entry price is significantly below market launch price (currently trading around $1.40 compared to our entry at $0.30).
Redemption
Just like any illiquid token, these would be excluded from the redemption value while they are locked. Additionally, given the nature of this deal, a minimum of 75% of the liquid tokens would be excluded from the redemption value.
Disclosure:
Some moderators and team members at Wonderland are helping at Interport and receiving a small (0.2% each) allocation (Alice, Bamchicka, Catalyst, ruian, Gin). The proposing TOs also hold exposure to Interport due to their confidence in the project’s success.
Team members roles:
Alice - handles announcements, point of contact for BD
Bamchicka - compiles information, assists with Discord support
Catalyst - Discord side tech support, testing
ruian - docs editing
Gin - Discord support
Re-vote of the TMP:
This TMP has been voted on in a similar form before and each previous vote showed that there was need for more information. We ask our voters to check the various links to previous discussions in the #TMP channel on discord and invite you to @ the Treasury Team to clarify further, before voting.
