Fixed-Rate Yield, ASTO Auction, & Agora Tooling

MAR 31, 2022 • 7 Min Read

Joo Kian + 2 others

DISCLOSURE: DELPHI VENTURES HAS INVESTED IN ALTERED STATE MACHINE. MEMBERS OF OUR TEAM OWN MATIC, GENESIS BRAINS AND ARE PARTICIPATING IN ELEMENT FINANCE. THESE STATEMENTS ARE INTENDED TO DISCLOSE ANY CONFLICT OF INTEREST AND SHOULD NOT BE MISCONSTRUED AS A RECOMMENDATION TO PURCHASE ANY TOKEN. THIS CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND YOU SHOULD NOT MAKE DECISIONS BASED SOLELY ON IT. THIS IS NOT INVESTMENT ADVICE.

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Chart of The Day: Element Finance, The Fixed Rate Protocol
  • Element Finance is a protocol that allows users to access fixed-rate yields in a volatile yield market. This is done by splitting a yield-bearing token—Yearn Finance vault tokens in this case—into Principal and Yield tokens over a fixed duration. Element effectively allows users to hedge their yields and secure their future yields, a unique value proposition that has propelled its adoption.
  • This creates a market for users to trade their yields which were previously not possible. To fix your yields, you just have to swap your Yield tokens into more vault tokens. Once the time period is up, each Principal token can be withdrawn for its original vault token, and the yield tokens will be of no value.
  • The main bulk of the TVL comes from stETH and USDC, mainly due to them being two of the most popular deposit assets in Yearn.
  • Element Finance recently announced that they’ll be dropping a new NFT, Elfiverse, for its community.
  • AIRDROP Alert! Element Finance just announced that their token, ELFI. 7.5% of the tokens will be retroactively distributed to Element Users.

$ASTO Discovery Auction, Murakami Flowers & Notable Mints
[Excerpt from our Mar. 30 NFT Insights]

Weekly Highlight – $ASTO Discovery Auction

Introduction. Altered State Machine (ASM) is a platform for the ownership, training and trading of AI agents via NFTs, which can be used across gaming worlds and financial applications. The NFT collections include 10,000 Genesis Brains and 40,000 AIFA All-Stars. Brains are the containers that house machine-learning AI models for the AI agents. AIFA is a soon-to-be-released online soccer game with players who can compete with one another. For more details, we covered ASM in a previous report (for Delphi Pro members) and hosted the founders on The Delphi Podcast (available to all).

This week is a major milestone for ASM with the launch of the $ASTO token. Practically, this means:

  1. [From 29 Mar 6pm ET] Genesis Brain owners will be able to claim $ASTO here
  2. [From 30 Mar 6pm ET] $ASTO Discovery Auction lasting 1 week

The total supply of $ASTO is 2.384 billion and the only circulating supply of $ASTO at the start of the Discovery Auction will be from the Genesis Brain airdrop. The utility of $ASTO includes:

  • Genome staking – Stake $ASTO to mine Gen 2 brains
  • Training of brains for various use cases
  • DAO governance
  • Potential use as a currency in future games

Genesis Brains & All-Stars. Genesis brains will be airdropped 3% of the total $ASTO supply (~71.5M $ASTO). This means each brain will be entitled to 7,152 $ASTO.

It was also revealed in Twitter Spaces this week that AIFA All-Stars will receive 2% of the total $ASTO (~46.6M $ASTO). However, this will happen at a later date (not announced yet) via a reverse claim mechanism, where owners would receive more $ASTO the longer they wait before claiming. There may also be a rarity mechanic involved that affects claim amounts. Several All-Stars are trading for less than 0.2E on the secondary market.

Discovery Auction. This is a 7-day long event that establishes the starting price of $ASTO and also generates deep liquidity for the token. It is open to the public, even if you do not own any brains or ASM NFTs. Unlike typical LBPs, all the $ASTO in the discovery auction is provided by genesis brains holders and not the team, thus it is not a fundraising mechanism. Refer to this FAQ for details.

The discovery auction is a modified version of the Liquidity Bootstrap Auction (LBA) designed by our team at Delphi Labs.

Key things to note:

  • $ASTO can only be deposited in the 1st three days of the auction while $USDC can only be deposited in the 1st five days. Once $ASTO is deposited, it cannot be withdrawn. Deposited $USDC can be withdrawn day 5, with the amount eligible for withdrawals tapering off on day 6 through the end of day 7 (see above chart).
  • After the 7-day event, all deposited $ASTO & $USDC will be converted into LP tokens proportionally and locked up for 3 months. A Uniswap pool will be available for trading of $ASTO.
  • The main advantage of participating is that depositors will earn weekly $ASTO rewards. 1% of the total $ASTO supply will be distributed to locked LP token holders over 12 weeks, with 75% going to $ASTO depositors and 25% going to $USDC depositors.

Final Thoughts:

  • If you have a genesis brain and $ASTO, your main decision point is whether to participate in the auction.
    • If you choose to participate, you will need to claim and deposit your $ASTO by Day 3. Note that some of your $ASTO will be converted into $USDC (as LP tokens). You will lock your tokens for 3 months and earn LP rewards but risk impermanent loss if $ASTO price rises significantly after the auction. $ASTO depositors receive the lion’s share of the rewards, so it could be substantial depending on the total amount of $ASTO deposited.
    • If you do not participate, you have the option to sell your $ASTO on Uniswap after the auction is over.
  • If you do not have $ASTO, it is better to watch how the auction goes before deciding whether to participate, as there is no advantage to participating early. After Day 3, the amount of $ASTO deposited will be locked in. You can then calculate the freely circulating supply of $ASTO immediately after the auction and also have a better estimate of what the potential LP rewards could be.
  • As of 30 Mar, the floor price for ASM brains that have claimed $ASTO is 2.5E, a drop from 4.5E before the claim. This may indicate that market participants are estimating the value of $ASTO to be approximately $0.95 (2E / 7,152 tokens per brain) before the start of the discovery auction.
  • Before purchasing a genesis brain on OpenSea, remember to check whether its $ASTO has been claimed. You can also check the IQ level and genome rank of brains using this tool.
  • Note that none of this is financial advice. Altered State Machine is a trailblazer in the NFT space with a solid passionate team behind it and I am extremely excited for what is to come!
  • For more, Delphi members can see our latest NFTInsights here.

Web3 is a Shared Experience: Reka and Raz, Co-Founders of Agora
[Excerpt from Delphi Podcast]
  • For more, you can see our latest Delphi Podcast releases here.
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Joo Kian + 2 others