ThetaCash (TBILL) — Metaverse Rebasing Liquidity Token
A new TNT20 token is born, providing utility for not only the Theta community & its ecosystem but the entire cryptoverse and coming Metaverse. ThetaCash (TBILL) is an example of a purely algorithmic approach to reducing the volatility of cryptocurrencies. It is a synthetic commodity money based on algorithmically enforced elastic supply. TBILL does not claim to be a stablecoin but rather a low volatility coin that is designed to diversify risk.
ThetaCash (TBILL) is launching as the first TNT20 token that can cross over to multiple networks. With the protocol being chain-agnostic TBILL tokens can simultaneously exist on multiple platforms, giving TBILL the possibility of expanded utility on other blockchains & Metaverses in the future. (TBILL currently exists as TNT20 token on Theta Network & ERC-20 token on Ethereum Network)*.
ThetaCash (TBILL) was forked from Ampleforth which was created in late 2018 and launched in June 2019 with the intent of providing the world a low volatility coin that is designed to diversify risk.
What are the advantages or disadvantages to using TBILL compared to a fiat currency like $USD, or a fixed supply cryptocurrency asset, like Bitcoin (BTC).
- Money printing by governments in the trillions of dollars each year creates inflationary pressures on that currency, in the case of $USD this means the end user needs more currency to buy the same goods they bought last month or last year.
- When the Federal Reserve prints $USD, do you end up with a share of the increase? In most cases the increase in the number of dollars was not distributed pro rata to all holders of dollars, expansions in the money supply may induce price inflation, meaning that the purchasing power of each unit decreases.
In contrast when TBILL is in its expansion state, the supply of TBILL tokens is proportionally increased pro rata across all wallets holding TBILL as part of the protocol’s rebase function.
TBILL’s Current Target Price is $1.112 (TBILL’s Target Price is derived from the purchasing power of the 2019 US dollar, adjusted for inflation as measured by the CPI as such it is subject to changes).*
Currently if the 24hr weighted average Oracle Price of TBILL is +5% above the Target price of $1.112 ($1.167) there is a positive rebase & the supply expands. If the 24hr weighted average Oracle Price of TBILL is -5% below the Target price of $1.112 ($1.056) there is a negative rebase & the supply contracts. The rebase price component strives to remain relatively range bound from $1.056 — $1.167. Although this can be affected by daily changes in demand for TBILL, the protocol is designed to adjust to the above range.
Due to the large price swings in an asset such as Bitcoin (BTC) or other popular cryptocurrencies it is problematic to price goods and services using it as a Unit of Account (UoA) or Means of Exchange (MoE). During bear market cycles other more traditional crypto assets can lose 50% of their value or more.
- TBILL can offer investor growth even during bear market cycles, via rebasing as well as provide an aggressive APR to investors. (See Liquidity Provider incentives*)
- If TBILL can maintain a steady state around the target then it would represent a more optimal Unit of Account (UoA) since the target rises with fiat $USD dollar price inflation. Opening the door for an alternative Unit of Account (UoA) to price goods and services or Means of Exchange (MoE) within the crypto sphere & emerging Metaverses. Consider digital wearables priced at 1.00 TBILL remaining relatively consistent & range bound.
Fiat currency such as the US dollar ($USD) is elastic but dilutive. Bitcoin (BTC) is inelastic, non-dilutive & prone to large swings in price. TBILL is both elastic and non-dilutive, so even though the number of your TBILL tokens can change automatically, you’ll always own the same proportion of the overall supply.
By having the rebase function, TBILL aims to solve the following problems:
Inelasticity Problem, fixed-supply crypto currencies are vulnerable to sudden shocks in demand that make denominating goods & services more problematic.
Diversification Problem. Today’s cryptocurrencies are tightly correlated. In theory TBILL’s unique properties allow it to decouple from Bitcoin’s price pattern.
Other cryptocurrencies, such as Bitcoin, Litecoin, and Ether have a correlation of 0.7. This means that 70% of the time, the prices of these coins rose and fell simultaneously. This makes it difficult for a cryptocurrency investor to diversify his/her portfolio as one token (e.g. Ether) is not very effective in offsetting the losses of another token (e.g. Bitcoin).
Since inception Ampleforth has been proven to be less correlated to other crypto majors which allows you to mitigate risk. The following are the exact correlation figures of Ampleforth with some other crypto currencies:
- Bitcoin: 0.42
- Ether: 0.38
- Ripple: 0.44
Gauntlet Network’s August 2020 report concluded that on a market capitalization basis AMPL’s “historical returns have been uncorrelated from both BTC and ETH across various timescales.”
How does it work, why do the number of my TBILL keep changing ?
There are 3 states that the TBILL protocol can be in, Expansion, Contraction or Equilibrium. Before we explain how they work let’s introduce one more key component — price oracles.
Price oracles are used to provide external prices to smart contracts. There are two main functions of price oracles in TBILL. The first is to provide a current exchange rate of TBILL/USD. The second is to provide a Consumer Price Index value. The CPI is used to establish a “target price” which is the price of 1 TBILL that the protocol tries to aim for. The target price is currently at $1.112 and it represents the 2019 purchasing power of the US dollar as represented by CPI. The target price plays an important part of the protocol as it is used in conjunction with the current USD price to determine if there should be a change in the total supply of TBILL.
High correlation among cryptocurrencies results in a vulnerable ecosystem and introduces systemic risk. TBILL’s elastic supply tackles this challenge by an algorithmic rebasing mechanism that applies countercyclical pressure against the fluctuation in the market. The rebasing mechanism helps maintain stability by incentivizing users to stabilize the system via arbitrage opportunities.
The Three States
Expansion. If the market price of TBILL is above the Price Target plus the Price Threshold, then the algorithm expands the token supply, reducing the price. In this state, the supply of TBILL tokens is proportionally increased across all the wallets holding TBILL tokens. If the current price is above the target price ($1.112) + 5%*target price ($1.167), the supply expands.
Contraction. If the market price of TBILL falls below the price target minus the price threshold, the algorithm contracts the supply by automatically and directly removing tokens in user wallets to increase the TBILL price. This is the opposite of the expansion state. If the current price is below the target price ($1.112) -5%*target price ($1.056), the supply contracts.
During the expansion phase, there is a limited sell opportunity for fast actors; while during a contraction phase there is limited buy opportunity. This buy and sell opportunity incentivizes traders to correct the price and bring the
system to equilibrium after expansion or contraction phases. As long as enough traders are willing to benefit from trading opportunities, the platform can be maintained theoretically.
Equilibrium. Is the only state where the algorithm doesn’t seek to increase or decrease the supply of TBILL. This is basically a state where there is no need to do anything as the current price is within range of the target price. If the current price of TBILL is within 5% of the target price ($1.112) the algorithm classifies the state as equilibrium and doesn’t change the supply of TBILL.
TBILL’s Target Price & 24hr Oracle (Rebase) price can be found here, TBILL.io
Expansion and contraction are achieved automatically by the rebase function in the protocol. Every day at approximately 02:00 (UTC) the rebase function can be called. The function makes use of price oracles to get the target price and the current price of TBILL or to be precise a 24h volume-weighted average price.
The rebase function is executed no more than once every 24 hours. This operation is also stateless, meaning that the protocol has no memory of the previous day’s supply change, so it has to recompute the potential supply change every day based on the latest information.
The percentage that is used in the rebase function is also called the equilibrium threshold and it’s one of the 2 main parameters in the TBILL protocol.
The second parameter represents a smoothing factor also called a damping factor. The damping factor is used to avoid sharp supply changes. Currently, the protocol spreads the supply change over a period of 5 days. This means that if, for example, the rebase function results in a 50% expansion. That 50% expansion would be spread over 5 days, so it would result in a 10% supply increase on the first day when the rebase function is called.
Important to note that the algorithm can only affect the supply of TBILL. It cannot dictate the price directly. It’s up to external players to notice the supply change and this should, in theory, drive the price in the correct direction.
Recap of the protocol’s underlying mechanics:
- Everyday at 02:00 (UTC), TBILL’s smart contract can expand or contract the total TBILL supply. This daily supply adjustment is called a rebase.
- The supply adjustments each day are applied universally and proportionally across each wallet’s balance. After a rebase, all holders own the same share of the network as they did before the rebase. The rebases (both positive and negative) are non-dilutive because they affect all balances pro-rata.
- There is no airdrop or transaction associated with the change in units in your wallet, it’s just a function of the TBILL token smart contract.
- The daily rebase is determined by the market price of TBILL. If the price of TBILL is trading 5% or more above the target, the rebase will expand supply to all wallets holding TBILL. If the price of TBILL is trading 5% or more below the target, the rebase will decrease units in all wallets holding TBILL.
- The Target price is derived from the purchasing power of one 2019 $US dollar as adjusted for inflation. When the 24hr Oracle Rebase price (as reported by oracles) is (+/- 5%) of Target Price, then no rebase occurs that day as the current state is in equilibrium.
In the case of TBILL, since price and supply are constantly being adjusted, the focus from an investment perspective is primarily on network value. Our view is that demand is a much stronger determinant of network value relative to supply. Within TBILL, supply is a function of demand.
So the real question is what drives demand?
- (1) The Power of Incentives
- (2) Short-Term Speculation
- (3) Economic Utility of TBILL
- (4) Expansion of the User base
The Power of Incentives
Liquidity Provider Incentivized Pools. (See tbill.io,)
TFUEL / TBILL — Liquidity Pool (LP) ThetaSwap / Theta network
Note: Incentivized USDC liquidity Pools are slated for launch in 2022.
USDC.eth / TBILL — Liquidity Pool (LP) ThetaSwap / Theta network
USDC / TBILL — Liquidity Pool (LP) Balancer / Ethereum network
Liquidity Providers three stacked incentives — (1) income generated as a LP (2) rewards generated based on deposit amount; and (3) rewards generated based on deposit length of time.
The Annual Percentage Rate (APR) is your yearly rate without taking compound interest into account.
TBILL, APR — 50.00%
Liquidity Providers for TBILL will earn a Static 50.00% APR Yield. “Static” means that the base 50.00% APR will not change as more Liquidity providers enter. A drop in APR Yield is commonly seen in other LP scenarios as more liquidity providers enter.
Note: For the APR calculation we look at the $USD price of both sides of the LP. Every 10 mins we look and record a reward event, so 144 of them a day. For example if you were providing liquidity in the TFUEL / TBILL liquidity Pool & the price of TFUEL goes up so does the amount of reward as we look at the $USD price of both sides of the LP when making our APR calculation. This provides stakers an added benefit not commonly seen in LP staking.
The Annual Percentage Yield (APY) is the real rate of return earned on an investment, taking into account the effect of compounding interest (rewards). The quoted APY % is based on compounding daily.
TBILL, APY — 64.82%
Compounding means taking one’s LP rewards received in TBILL & adding them back into the liquidity pool (LP) with an equal value amount of the corresponding (LP) pair (TFUEL, USDC.eth).
Note: Reducing this compounding activity from once a day to once a month lowers the APY % to 63.21% APY.* The other compounding possibility is to sell half of one’s TBILL rewards for the corresponding (LP) pair (TFUEL,USDC.eth) & re-enter the (LP). In which case the overall APY % achieved would be lower than the quoted 64.82% APY. *
Note: LP Staking Rewards will be paid daily at 00:00 UTC.*
Multipliers, 1.5x and 2x
Liquidity providers are further rewarded for the length of time they are staked inside the Liquidity Pool. 180 days staked inside the LP will earn the 1.5x Multiplier NFT. 365 days staked inside the LP will earn the 2x Multiplier NFT.
By adding a temporal component, the program incentivizes not withdrawing liquidity deposits.
When these NFT multipliers are added to your wallet, you can apply them to the Liquidity Pools to increase your APR from the base 50% Static APR. You may also choose to compound earned rewards to gain the higher APY% seen on the 1.5x & 2x multipliers.
Note: The NFT Multipliers activate on TBILL only. For example, a 2x NFT multiplier will raise the APR on TBILL from 50% to 100%. The APR on TFUEL remains at the Static 50% APR. Giving an effective overall APR of 75% & APY of 111.53%.
Also see TBILL calculator here https://gpool.io/calculator
Stack Multipliers Linear or Cross-chain. If you own an NFT Multiplier, for example you own a Wounded Warrior 2x on 100k TBILL NFT Multiplier. You can use that NFT Multiplier in the TFUEL/TBILL liquidity Pool staking on Theta Mainnet. When an incentivized USDC/TBILL Liquidity Pool is launched on Balancer you may also use the same Wounded Warrior 2x on 100k TBILL NFT Multiplier in the USDC/TBILL incentivized liquidity Pool on Balancer (Ethereum Mainnet) an example of cross-chain. Or if a USDC.eth/TBILL incentivised liquidity Pool is launched on Theta Mainnet, you may also use the same Wounded Warrior 2x on 100k TBILL NFT in this liquidity Poool staking instance.
Impermanent Loss (IL) is the difference between holding 100% TFUEL versus entering the TFUEL/TBILL Liquidity Pool (LP). As soon as you start LP staking we track if there is any IL for your connected wallet address. If on leaving LP staking you have any IL we have an IL prevention measure. If you have any IL you will be issued with our Governance token to the amount of any IL you might experience. Our Governance token is not live yet but it is coming. We are also going to display on the TBILL.io dashboard the current position for each connected wallet in relation to IL. The overall design of high APR, Rebases, Rewards & fees is the main driver of mitigating IL. The IL prevention measure using the issuance of the Governance token is an extra layer of prevention.
TBILL is optimizing around a commodity-money use case, and reliable money requires reliable liquidity. The incentives created establish a deep pool of liquidity catalyzed demand. Going forward there is a strong focus on decentralization, liquidity, network health, and broad rewards.
The second source of demand is short-term speculation. The idea here is demand begets demand. As the asset gains momentum, more speculators pile in hoping to make a quick profit. Repeated episodes of rise and fall are characteristic of cryptocurrencies as they go through the maturation process. The long run success or failure will be a function of the usefulness of the protocol and strength of the community. Speculation may provide a window into the market’s views on that usefulness, but the short term volatility in the network value is also a bit of a distraction.
Economic Utility of TBILL
Crypto cloud economies are the next emerging market investment frontier and the Metaverse is at the forefront of this Web 3.0 internet evolution.
The Metaverse is still being birthed, but many key facets have already started to take shape and are revolutionizing everything from e-commerce, media, entertainment and even real estate.
As mentioned in our most recent interview, GPooL is expanding out into the Metaverse frontier with Gworld,
An early representation or first foray into the Metaverse will be the launch of Gtwins (Avatars). We are very excited about this part of Gworld. We are also developing Gtwin wearable items that will be fun for everyone. But what excites us most is building out the design studio so people can come and create their own wearable styles and have outlets to sell them to the broader crypto community on the NFT Marketplaces. TBILL’s utility within the emerging Metaverse landscape is inextricably linked to all these exciting developments.
Expansion of User Base
For a more in depth look at the emerging & rapidly growing Metaverse opportunity. https://grayscale.com/learn/the-metaverse/
Gworld is building for the emerging Metaverse opportunity now.
A key component of that strategy is the addition of ThetaCash (TBILL). A low volatility coin that is designed to diversify risk.
Function as an alternative Unit of Account (UoA), Means of Exchange (MoE) and Store of Value (SoV).
With the added benefit of generating increased yield through our Liquidity Provider incentives.
Also with further DeFi integrations entirely possible there is a lot of use case & inherent growth potential for ThetaCash (TBILL).
The market opportunity for the Metaverse may be worth over $1 trillion in annual revenue and may compete with Web 2.0 companies worth ~$15 trillion in market value today. This potential has attracted companies like Facebook to pivot towards the Metaverse, which may serve as a catalyst for other Web 2.0 tech giants and investors to follow.
Join us on our journey into the Metaverse!
ThetaCash (TBILL) will be available for purchase on ThetaSwap.io & Balancer
ThetaSwap.io is designed by GPooL in consultation with Theta Labs. ThetaSwap.io uses Theta Labs Smart Contracts and code. ThetaSwap.io has additional features and allows for use with the Metamask wallet. ThetaSwap.io is a mirror of the Theta Labs site https://swap.thetatoken.org/swap
Complete Guide list for TBILL (TFUEL/TBILL liquidity Pool)*
Each of the Guide Series 1–4, outlines the steps for wallet set-up, Swapping TFUEL for TBILL on ThetaSwap.io, Adding…