WIP #2: Building Avalanche Liquid Staking Product

Our second governance vote on [WIP #2] Build Avalanche Liquid Staking for Wonderland has come to an end. With a majority vote of 97.12%, the proposal has passed!

Wonderland will be launching its own liquid staking solution for the Avalanche network, tapping into a $12B USD market. The team that set out the original proposal will be funded with a competitive compensation structure which aligns incentives to build and launch the product on testnet in Feburary 2022, with a targeted Mainnet deployment in March 2022.

A multi year revenue share for the development team will incentivize them in the long-term. Running a Liquid Staking product is an ongoing process, constant integrations, updates and support for new platforms are necessary to keep the product competitive and capture the majority of the market share.

After successfully launching the product on Avalanche, the roadmap of this proposal also includes development of a Liquid Staking solution on Fantom.

Details on the compensation structure, including the multi year revenue share can be found here.

Projections

Avalanche’s current staking TVL is over $12B. Staked AVAX is illiquid until unstaked. Creating a protocol to free up the liquidity users would normally have locked up in staking will help DeFi on Avalanche to boom even more.

If the product can capture 5% of the total addressable AVAX staking market (approximately 8% of existing staked supply), gross staking rewards of $125M per year can be accomplished.
At a 10% fee for running the liquid staking service, the gross revenue that Wonderland can produce is $12.5M per year.

Lido, which is one of the largest liquid staking solutions who offers its service on both Terra and Ethereum chains, managed to obtain a market share of, 17% on Terra and 13% on Ethereum.

If we manage to obtain a similar market share on Avalanche with our product, the corresponding revenue would stand at $50M per year.

Conclusion

An important milestone has been achieved with WIP #2. Wonderland’s governance framework allowed the community to successfully identify an opportunity and build a Wonderland Improvement Proposal around it. The framework also helped attract an innovative team, who were able to use the structure to communicate with the DAO and mature their idea.

As a result, the DAO is tapping into a new market, generating new revenue streams and growing its presence across the industry.

This is the power of a community run DAO.

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