#48 Time Is Money
Today we look at yield opportunities in DeFi
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The Value of Time
Avalanche is a quickly expanding blockchain ecosystem with the promise of faster transactions and cheaper fees than the Ethereum network. These cheaper fees and fast transactions have started to attract users to Avalanche and along with them developers. One project in particular that has recently appeared on Avalanche is called Wonderland with its token TIME. What is TIME and what is its purpose?
From coingecko
In the short term, we intend to optimize the system for growth and wealth creation.
We intend to achieve price flatness for a representative basket of goods without the use of fiat currency, in order to allow the cryptocurrency industry to detach once and for all from the traditional finance world!
TIME is an attempt to create a stablecoin in the Avalanche ecosystem that is not backed by any real world goods or monies (fiat). Some of you may recognize that TIME is a fork of OlympusDAO’s OHM token (running on Ethereum network). Both OHM and TIME have preprogrammed game theory that attempts to incentivize users to use them as their go-to for stable value on the blockchain. The long term belief is a basket of cryptos can be accumulated to back TIME, which will eventual allow its price to remain stable so it can function as a global unit of account and medium of exchange.
Time Is Money
Why should you care?
How does 37,887.1% APY sound? Too good to be true probably. Well it is and it isn’t. Lets talk about the risk.
Time is Money - In order to stake for TIME rewards you must first get funds onto the Avalanche network. This will take some of your time to learn and perform these transfers.
Fees - Transferring funds from fiat to Ethereum to Avalanche could cost you a large % of your initial deposit if the deposit is to small or your fiat to crypto onramp has high fees (e.g. Coinbase).
Protocol Risk - When you move your funds onto the Avalanche network you take on a few key risks: Errors could happen in transferring funds across the ETH→ AVAX bridge, Avalanche network could experience errors, Wonderland’s staking contracts could experience errors. All of these could result in the complete lose of funds.
Price Risk - You must own TIME and stake it to earn rewards paid in TIME. The price of the TIME token is now close to $3000 with the long term goal of $1. If the price falls faster than the APY produces more TIME you’ll lose money.
APY reductions - The APY is preprogrammed to reduce over time exponentially. The APY can also be reduced by more users staking in the pool as the rewards are shared.
Check out our guide for staking TIME only available to paid subscribers.