October 6, 2021
WSB’ers — the day has finally arrived!
Building a world-first Decentralized “ETF-like” product has been no small feat. Those involved have been dreaming of decentralizing powerful passive index-tracked products for years and it was only this year that the DeFi sector’s infrastructure became stable and scalable enough to take on such a global challenge.
This ETP concept has arguably been an industry effort, requiring coordination and relying on multiple 3rd party technologies to get it right.
We are now live with ETP #1 — The WSB Macro Hedge and would like to thank our key partners in this effort, Balancer Labs, Blockchain Labs and many others.
Also a BIG thanks to the WSB community! We couldn’t have done it without your support and patience!
Why are ETP’s such a big deal?
While we have seen other products come to market promoting themselves as ETP-like structures, they fail to be deemed an “ETP” for lack of some key features. Mainly they rely on fractional reserve practices and do not fully buy the underlying assets.
The concept of truly decentralized ETF-like or index-tracked passive Exchange Traded Portfolios (ETP’s) relies on a few key pillars.
ETP’s must have the following key features:
Good luck to Jonathan Steinberg trying to do anything this innovative and borderless :P
Why is the Macro Hedge ETP such a big deal?
We find ourselves in the most transformative time anybody alive has ever lived through.
The entire concept of money and value is being questioned during the global reorder we are witnessing today. Uncertainty around not just returns, yields and inflation but also mass uncertainty and growing distrust in institutions globally is reflected in the question:
- “What’s’ left worth trusting?”
While the past decade has seen continued asset appreciation, relatively little action in metals and inflation and stable just-in-time supply-chains: that era is now over.
We too have asked ourselves, “WTF is left to buy (that is ‘safe’)?”
Property is too illiquid and anything physical has restrictions. Crypto can be volatile and Bonds are a joke at this point. Stocks are showing global weakness and supply-chain disruptions are going to result in various currency crises. We even have to consider the reliability of the internet at this point *sweats in facebook*.
The Macro Hedge ETP is inspired by the redundant Special Drawing Right, issued by the mother of all scams, the International Monetary fund. A basket of assets that is freely transferable to act as a Global Currency.
We looked at the SDR and thought “can we build something less draconian, more democratized and modern for the DeFi era?”
The concept of ETP’s is not just convenient, it’s in-tune with the ethos of crypto and DeFi. Don’t trust — verify!
Our ETP’s are designed to be transparent and you hold the keys. When you do, you physically hold your share of the assets contained therein. No fractional reserve fuddy duddy.
A diversified global currency-like product for a turbulent world — it’s perfect timing for our launch.
How would I use the Macro Hedge ETP?
If you use any stablecoin, you already know how to use the Macro Hedge ETP.
The Macro Hedge ETP is not designed to ‘go to the moon’.
It’s designed so that when you want to park wealth somewhere and not worry about losing purchasing power, you are auto-hedged.
While there are ample hedge products around, non of them are tokenized and capable of being used to transact with. It’s like a USD Stablecoin — without the risks of USD losing purchasing power or the single-counterparty which issues the stablecoin.
Set it and forget it. Denominate yourself in a diversified inflation-hedge currency: The macro hedge ETP.
Where to from here?
1.) Today represents a soft launch. The product is live. You can buy/sell it 24/7/365 from our interface on https://etp.wsbdapp.com/ right now.
This interface is modelled after the familiar design DeFi users are accustomed to. It will be improved with better comparison charts, further links and product information.
Our WSBDApp interface defaults to buy/sell with $USDC only for now — the largest % asset in the Macro Hedge ETP. This is to ensure transaction fees and slippage are the tightest they can be. If we defaulted it to buy/sell with only $ETH (which is only 5% of the basket) then users would essentially be auto-selling 95% ETH for the ETP system to route and buy the other 95% of assets which comprise this product.
However purchases with ETH or any asset in the basket IS possible.
Due to the nature of the product, in specie purchases and redemptions are also actually possible.
These types of interactions with our Macro ETP are more technical and are done directly through the Balancer interface.
We have created a simple how-to video for those who wish to either buy in larger volumes (less slippage if buying/selling ‘in specie since no assets need to be swapped in the process).
A ‘Full Launch’ is essentially when the ETP has a few million AuM and we don’t need to throttle how much traffic we send to it. The only risk is if some Ape tries to buy 10m on day 1. They would experience more slippage than buying a few thousand dollars worth. These teething issues will smooth out over time as AuM increases in the smart-pool. Whales for the time being are directed to buy in specie directly from the balancer UI.
2.) Token Health.
Each ETP itself is an ERC-20 token (and multi-chain down the roadmap).
We will now proceed with applying to list on CEX’s, DEX’s and all the information websites such as CMC, Gecko, Nomics, etc as well as various wallet integrations. As you all know these are all individual processes with 3rd parties and we will report as success occurs with each application. We want the whole world to know there’s a Macro-Stable coin finally available!
3.) More ETP’s.
Now that the front and back-end technologies are live for ETP #1 with all key partnerships in place, it becomes infinitely easier to roll out further ETPs.
As a community we voted on a stonks 20 ETP and a crypto 20 ETP.
As time passed, the reality became clear that we are hostage to what is liquid on Balancer V2 pools to construct a methodology out of. Top 20 stonks and crypto are not yet at that point of being viable. The liquidity and tokens available to work with will increase over time.
But not to worry, instead of stonks or crypto top 20, we have partnered with a well recognized blockchain benchmark administrator (index house) to acquire the data and infrastructure to come up with a methodology for a top 8 DeFi ETP. This “DeFi Blue Chip Index” product is already a perpetual swap on a crypto derivatives exchange and building an ETP with ‘exposure parity’ (same % of assets in the ETP basket) to the perp, would afford some significant advantages for traders, arbitrageurs and speculators. We are personally excited about the opportunities that open up between the primary and secondary markets with such a set-up.
We will publish a full proposal on the WSB governance forum for the WSB DeFi ETP and proceed to do a $WSB governance vote on it. If approved, it will take less than 2 weeks to roll out ETP #2.
4.) How do the ETP’s benefit $WSB holders?
Buying and selling the Macro-hedge ETP generates a small transaction fee. Half of the fees go to liquidity providers and half towards WSB.
We will take the same approach as other products and use the fees as following:
⅓ to buy and burn $WSB tokens.
⅓ to lock liquidity in $WSB pairs.
⅓ to the WSB DAO for the community to vote on what to do with.
Going live with the first ETP represents a significant milestone for the project and reason to celebrate.
We won’t stop here. Aside from more ETP’s, we have been working on a number of globally scalable initiatives and intend on bringing a higher cadence of communication in our efforts to sustain the momentum. The rest of this year is packed full of partnerships, listings, products and feature improvements + a few surprises along the way.
Thanks again to the WSB community for the insights, input, patience, feedback and support.
~ Jaime Rogozinski and the entire WSB DApp team and partners.