Is it Smart to Get WISE?
So what is WISE token anyway?
So I’ve been seeing some buzz about $WISE token in Telegram and on Twitter and decided to see what all the fuss was about. I was seeing people exclaim “Dude, you are stupid if you don’t stake for at least 3 years (or 5 years.)” Now, right out the gate I have a lot of trouble trusting staking/yield farms so I’m thinking to myself “How crazy do you have to be to lock money in a new project for YEARS?” It looks like the entire use case being built around WISE is just simply “Stake and get rich.”
Here is what their website https://wisetoken.net has to say about it:
WISE is designed to be the most decentralized and secure store of value in crypto, making it the star candidate for long term investments. While Bitcoin is the first and foremost king of this use case, the crown is shared with cryptos that have intrinsic value such as Ether, which is needed to power all projects in the Ethereum network. Given that 90% of new crypto projects are built on Ethereum, the intrinsic value of ETH is unshakable, and WISE is backed by a large pool of ETH. The WISE contract’s innovative use of Uniswap created a way to utilize the initial ETH sent to buy WISE to directly back the value of all WISE tokens purchased (Liquidity Transformer Epoch). This act permanently bonded the value of WISE with a pool of ETH on Uniswap, so WISE’s use case is a matter of how many investors desire the additional features WISE offers as opposed to simply holding ETH. All future investors must ultimately purchase WISE on Uniswap, driving up the price as the supply becomes scarce. Investors may earn interest on their WISE by locking it up in stakes, and like bonds, certificates of deposit, and time deposit bank accounts, longer stakes provide higher yields.
So the Use Case is “Store of Value” Huh?
Yeah, I think we’ve all pretty much seen this before. My big concern is A LOT can happen over the course of years. Hell, I have a problem with locking into something that’s six months and ALREADY proven itself to be a solid project. So what else do they have? I mean, I get that if you stake it you will receive rewards but let’s face it — that’s over 90% of tokens/coins on the market anyway.
We will get to the ETH part of the mix soon, but let’s take a quick look at the section of the website titled “What makes WISE unique?”
The first reason:
Superior security: WISE is an immutable smart contract with maximized security via professional audit (see link below), 100 ETH bug bounty, extensive testing, and 100% up-time
Well, it has been audited by CoinFabrik at the time of writing. The bug bounty is a nice touch also, eh?
Second reason: Promotes financial self-sovereignty by providing an attractive alternative to traditional CD and time deposit bank accounts, a multi-trillion dollar market.
I’m impressed by the fact that someone could write “promotes financial self-sovereignty” about a new project without falling out of their chair. Traditional legacy banking CD and deposit accounts are a multi-trillion dollar market so that’s no lie. However, is $WISE token on par with with the faith and trust that we have in the traditional brick-and-mortar legacy banking systems here in the United States?
(***LAUGH TRACK DEAFENING***)
Did I just you use the phrase “faith and trust” in the same sentence as “legacy banking systems in the U.S.?”
Now I think it is time to fall out of my chair.
Third reason:Truly trustless, with no backdoors, administrative keys, or greedy distribution schedules like other DeFi projects.
Again with the “trustless” statements. They did pass an audit though so the chances of it being a “rug pull” are slimmer than without one, that’s for sure.
Fourth reason:High percentage of staked tokens: the high percentage of owned WISE that has been staked (see pie chart on wiseinfo.io) reflects strong faith in the project, and will help reduce volatility and promote price appreciation by limiting the circulating supply.
A high percentage of staked tokens? Isn’t staking the tokens the entire reason for buying them in the first place? I suppose you could load then onto a hardware wallet and store them in your sock drawer but why miss out on all that juicy staking action?
Let’s just combine the fifth and sixth reason before I lose you:
A user-friendly alternative to staking ETH, with the potential for much greater profits due to price appreciation (relative to ETH). In this era of very low and even negative bank interest rates, the DeFi boom reflects a tremendous demand for trustless user-friendly yield. WISE does it best! Centralized and decentralized financial products have already been built on top of WISE, with more on the way. Plus, the WISE token can be easily incorporated into the huge variety of existing projects (DeFi and others) on Ethereum.
So the “Use Case” is Store of Value, huh?
So it’s a “user-friendly alternative” to staking ETH with potential for awesome profits (depending on how many years you stake.)
Also the obligatory “future use cases TBD in the future” that no HODLER token has ever failed to include in its white paper. I would have liked to see some examples of these “future use cases” that don’t involve staking on another swap or another “CD alternative scheme” that’s roughly same the thing as what traditional banking has to offer.
So yeah it is your standard “white paper HODLER token redux.” The big draw is supposedly larger staking gains to competitors as well as timed airdrops. According to the stake calculator at https://wiseinfo.io/staking you can stake for up to 42 years. Is that a reference to the “Answer to the Ultimate Question of Life, the Universe, and Everything” in a joking sort of way? I hope not even though I am a fan of Douglas Adams.
WISE is backed by ETH?
We all know the cryptocurrency world is one fraught with danger and cryptos tend to be extremely volatile in comparison with legacy banking (not to mention rug pulls and Telegram scammers) so it’s always nice to have something backing a coin or token that just doesn’t involve “full faith and credit” in the token itself. According to the website, the WISE token is backed by ETH and that means that even if every single person that holds WISE would all sell at the same time, everyone would get some amount of ETH back (how much though?).
Here is how they describe it:
Layman’s terms: There are 2 forces affecting the price of WISE 1) The price of ETH vs the USD and 2) The price of WISE vs ETH which is affected by buys/sells on Uniswap. Both factors could be going up, both could be going down, or one could be going up while the other one goes down. All cryptocurrencies experience the market conditions from buys/sells of their native token, but no other crypto is backed by ETH such that even if people were selling the token, the price of ETH can carry the price.
Here’s the technical version:
Technical explanation: 55,900 ETH ($40 million+ at the time) raised by selling selling ~250 million WISE was paired with another ~250 million WISE to create the initial Uniswap liquidity pool, which the contract locked forever. WISE is backed by that pool of ETH, meaning even if all WISE holders sold everything, everyone would get some amount of ETH back, with even 28,000 ETH remaining in the pool after the last holder sold. WISE is backed by ETH and has a price floor in ETH.
So even if everybody sells then they at least get some ETH back if the price goes into zero depths territory? My big question is if it goes that way and everyone gets the same amount of ETH back then why does the pool still have 28,000 ETH remaining? Does literally HALF of the ETH go back to the wallets of the founders/dev team?
I’m genuinely curious as to how ETH could carry the price if there was a massive sell-off all at once! The claim that they are the first crypto backed by ETH is interesting and I would love to hear more about how anyone reading this thinks this would play out in the real world.
So is it Smart to Get WISE?
So should you “Get Wise” so to speak? According to CoinMarketCap it peaked at .93 cents and currently sits .53 cents at the time this article was written. I will check back in with them from time to time to see if their plans materialize. I do like the idea of incentivized high-reward staking so I think this project is at least worth keeping tabs on and the BNB airdrops sound rather nice. Their Telegram chat was up to 9,311 members with 1,078 online at the time this was published.
As always, this is not financial advice and you should always do your own research!
If you are interested in purchasing $WISE you can do so on UniSwap.