INITIAL POOL STAKE OFFERINGS IN CARDANO: anetaBTC
This article is a subsection of a larger article “INITIAL POOL STAKE OFFERING IN CARDANO: a critical overview”
- This is not financial advice. I have no training whatsoever in the finance sector and I am in no way or capacity a licensed financial advisor.
AnetaBTC — reviewed by Frosty
The project brings its delegators a very distinct model. ISPO’s are mutating, and fast! Don’t take current models for granted! In their innovative take on the ISPO model, the team will only keep 10% of the staking rewards (research and development), injecting the other 90% in a community-owned fund composed of BTC (35%), ADA (15%), assets from partnering DEX’s (45%) and NETA/cNETA (10%). The fund will then be used to earn yield by providing liquidity in the partnering DEX’s (Minswap, ErgoDex and KyberSwap). Most of the revenue (70%) will be reinvested in the community-owned fund, while the remainder (30%) will be distributed to NETA/cNETA holders.
This constitutes a large step away from the previous ISPO models. Even though it’s hard to predict the performance of the community-owned fund, I am cautiously optimistic. However, there is one aspect that warrants clarification. Following the project’s tokenomics, the allocation of ca. 44% of the total supply was still undisclosed at the start of the ISPO. This means that delegators were contributing to a fund whose ownership was partially unknown. In the meantime, the team disclosed how 30% of the total supply will be allocated, but 14% remains undisclosed. See details here. This surely contributes to the transparency of the project, but it should have been done before the start of the ISPO.
The ISPO started with the largest bonus seen so far (166x). Delegators will receive 1 cNETA per 1 ADA staked in the first epoch, instead of 1 cNETA per 166 ADA staked (baseline ratio). The bonus is incredibly generous, but its fairness is questionable. Delegator (#1) stakes 100,000 ADA in the first epoch earning 100,000 cNETA, while Delegator (#2) that stakes 100,000 ADA in the second epoch will need over 2 years to earn 100,000 cNETA (assuming no bonuses). Furthermore, ADA stake from Delegator #2 needs to remain allocated to the ISPO for 2 years, during which its contribution to the community-owned fund will be 166x larger than that of Delegator #1, who may leave after one epoch. The disparity is monstrous and hardly fair. The example is extreme but shows how wildly reward ratios may vary relative to staking effort and contribution to the community-owned fund.
The design relies heavily on bonuses, which weigh more on the rewards than the ADA staked, which is arguably a poor choice in terms of fairness regarding the contribution to the community-owned fund. However, the long-term delegation bonuses proposed by the team in the past days should help to reduce disparities. Delegators who qualified to “surprise 1”, by delegating on epoch 318, will be eligible for “surprise 2” and will be airdropped an amount of cNETA equal to 50% of the average ADA staked in the ISPO over a period of two months. In essence this constitutes a 7x bonus. Furthermore, the team announced additional delegator airdrops for those who remain staked for at least 4 months, 6 months, and one year, which will be announced soon.
There is still no rewards calculator or dashboard.
It took over six months of closely following ISPO’s to put this together and ultimately for the benefit of the whole Cardano community. Please contribute.