Yield farming is this thing where you add liquidity to a liquidity pool and then it prints out a new token that isn’t the same as the token you staked and so the new token has to have some value to it and that usually is in the governance of the system that you just staked your tokens in and that means that everything is peachy and number goes up. Get it? No? Great. That’s because you’re dumb. Give me your Ether.
Frankly, I think that people want to be involved in a system that rewards those who are more successful at analyzing it and taking advantage of it at certain times. The thesis of ‘Burn The State’ is that a token or a trading instrument generally consists of a few core concepts that traders get around:
- Culture to the instrument.
- Certain dynamics to the system that are known.
- Certain dynamics to the system that are unknown.
- Certain beliefs as to how the system will behave under certain conditions.
Take the EUR/USD forex asset. Traders have to believe in both economies and understand the differences between the two to really get a grasp as to why the currencies are performing in a certain way against each other. This is the crux of how I designed Antiample, Tokens of Babel, and Boa. Each one has a bit of culture to it, each one now has its own followers who trade it, and each one has certain events that occur that influence the system of each instrument.
So when I approach yield farming, I don’t get it. There is no real culture behind any of the ‘YF’ tokens besides pure hype. I don’t see how there is any long term viability. There can never be a ‘lull’ in the instrument because if there is, the belief in the entire system has been shot and there is total and complete capitulation. Therefore, if we are to design the ‘ideal’ yield farming token, it has to actually have some long term effects to it besides ‘put token in, get token out’ because if you’re black-pilled on crypto like I am, you understand that we are in a jet-fueled bull market that will flip at some point in time. A good system is impervious to these macro trends.
First, let’s go through the dynamics of each token in the Burn the State ecosystem:
- OG. Probably the ‘first’ token that people get to know when entering the ecosystem.
- Simple anarchist / cryptopunk message.
- Simple value proposition: rebase on down days.
- Medium-term token.
- Slow trends.
Tokens of Babel
- The ‘bear’ version of Antiample.
- Was designed to behave like the VIX.
- Makes many people angry.
- Savvy traders pair trade Tokens of Babel with other coins.
- Tokens of Babel has the highest liquidity between all the BTS coins.
- Burns on rallies.
- Short-term token, fast and volatile trends.
- The ‘baby.’
- Ridiculous price valuation can turn off traders.
- Similar to Antiample, but not ‘digital.’ Requires a completely organic system to work.
- Long-term ‘HODL’ token.
Compare this to Bitcoin or Ethereum. The culture basically fluctuates between ‘the new paradigm’ and ‘scam coin piece of shit’ depending on whether or not Bitfinex and Whalepool decide its a bull market or a bear market (which is determined by whether or not Bitcoin has halved or not, but this is not an article about the black-pill of Bitcoin…)
The entire goal here is to create long term value and create new types of assets that gamify the crypto trading experience and are impervious to the macro trends. I believe that the tokens we have made so far do this. Therefore, our yield farming token should do this as well.
Ash is the name of the token only because people were making rumors about what the next token would be so we thought it would be funny to make their rumors come true. However, although Ash implies burning, there is no burning in this token. The name is just a nod to our crazy community.
The mechanics of Ash are much different than other yield farming tokens and all other tokens we have made thus far. Firstly, there is no capped supply. The supply of Ash is technically infinite with an exponential decay rate of what we call the ‘emission rate.’ When the Ash contract is deployed, the first staker gets the maximum emission rate. This is the number of Ash that you can ‘withdraw’ per block per ‘amount of stake.’
The Ash smart contract has a ‘global emission rate’ which is reduced by 1% every time anyone withdraws. When you stake, your personal emission rate is determined by whatever the global emission rate happens to be at that time. This means, the later you stake your tokens from when the Ash contract launches, the lower your emission rate is.
Also, anytime you choose to withdraw your Ash, you forfeit your personal emission rate. Your personal emission rate is then updated to the current global emission rate. This means that you have very little incentive to withdraw your Ash.
However, if you add to your stake, you get the Ash that you have farmed up to that point and you don’t lose your personal emission rate. Therefore, it is best for you to continuously stake tokens rather than just withdrawing. Unstaking obviously follows the same concept.
Secondly, the amount of Ash that you get does not depend on the number of tokens you stake. It depends on the number of tokens you stake comparative to the circulating supply. What does this mean? It means that you can stake any Burn the State token and receive Ash in proportion to the number of tokens pertaining to the circulating supply. Ok…
In other words, if you stake 1% supply of XAMP/ASH LP Tokens, it might have a value of 1000 Ether. But if you stake 1% supply of TOB/ASH LP Tokens, it might have a value of 500 Ether. This means that it is a better economic decision for you to stake TOB over XAMP. This causes the market to purchase TOB, and sell XAMP. Therefore, the tokens all begin to balance out in proportion to each other. When one token’s market capitalization is lower than the others, it becomes more profitable to stake that token for Ash than it is to stake other tokens. This causes all tokens to rise in proportion to each other as they become staked for Ash. Percentage of supply is recorded in ‘points’ which are divided into small subunits of a single percentage point so you can stake however much you have.
So let’s say you have an emission rate of 1 ASH per block per ‘point.’ You have 10 points of XAMP staked. If you wait 100 blocks, and then withdraw, you get:
1 Ash per block * 10 points * 100 blocks = 1,000 Ash
However, now if the global emission rate has reduced to 0.5 Ash per block per point, your personal emission rate has reduced as well, which means the next time you withdraw, you will get less Ash.
We believe that Ash is the ‘capstone’ to the Burn the State token ecosystem. It solves the problem of ‘too many tokens’ that some members of the community have voiced. It solves the problem that yield farming without marketing and hype is nothing. It solves the problem of each Burn the State token being separate ecosystems. We think that this is a great remix of yield farming that should push the crypto community towards experimenting with new concepts rather than copying and pasting the same code over and over again with just a bit of spice added on top.
What’s next for the Burn the State ecosystem? Well, we think four is a nice round number. Ethereum is getting pretty expensive for the average enthusiast. It’s not scalable to pursue more complex projects. Tons of bugs have been occurring due to the obtuseness of Solidity and the lack of sophisticated testing tools (as seen with YAM, LID, etc.) What we do next will be addressing the higher needs of crypto.
Remember the original thesis: to bring crypto back to its roots. The roots are dug deep into the DIY community. If people can no longer do it themselves without risking catastrophic failure and massive sums of money, then there is a more important problem to address than making another token.