The Path to Sustainability: Wombat’s Strategic Vision
Crypto winters reveal the limits of hype and expose the need for sustainability. As markets cool, generating consistent revenue separates DeFi protocols built to thrive from those destined to perish.
At Wombat, we recognize that running a successful DeFi protocol requires operating as a financially sustainable business built for the long-term. We envision creating an ecosystem poised for longevity by generating robust revenue, strategically managing costs, and promoting long-term growth.
While we incentivize participation by distributing WOM emissions, WOM is not merely another farm-and-dump token. We are committed to continuously enhancing utility and establishing Wombat as a viable revenue-generating business.
The Magic of Strategic Revenue Generation and Cost Management
To drive profitability and growth, Wombat employs several revenue-generating and cost-management strategies:
- Encouraging bribe/rewarder onboarding
- Expanding across chains
- Deploying new pool types
- Emission strategy
1. Encouraging bribe/rewarder onboarding
Wombat’s bribe system enables partners to reward their communities for participating in WOM Wars and voting for preferred pools. Wombat encourages protocols to provide extra incentives in the form of rewarder or bribe to drive growth and adoption, while providing support to minimize their cost of liquidity.
For instance, at a 1.5x bribe efficiency, partners get $1500 worth of WOM emissions for spending $1000, meaning Wombat only contributed $500 on emissions while still benefiting from the potential liquidity brought by increased incentives. This results in a win-win-win outcome — partners get more emissions, veWOM users earn better gains, and Wombat minimizes expense while attracting more partners onboarded.
In cases of less favorable bribe efficiency, protocols can opt to provide direct liquidity rewards, offering superior APR to our liquidity providers, and drawing increased liquidity without additional cost from Wombat. The amplified bribes and rewards revenue keep liquidity pools deep for partners while driving sustainable growth for the Wombat ecosystem.
2. Expanding across chains
To achieve our ambitious growth plans, expanding across multiple chains is crucial. We will broaden our reach and user base by launching on additional blockchain networks, including non-EVM ones including Starknet, zkSync, Optimism, and more. This expansion not only gets more users on board but also opens doors for potential airdrops and grants as additional sources of income. For instance, Arbitrum rewarded protocols for early adoption with $120 million in airdrops in the form of its native token, which demonstrates the significant benefits of early adoption.
However, our core development priority is launching on Ethereum — the dominant player controlling almost 60% of total value locked in DeFi, with over $77B monthly trading volume as of June 2023. Integrating with Ethereum will be a watershed moment, instantly opening our platform to millions of new users and exponentially increasing revenue potential. Onboarding even a fraction of Ethereum’s DeFi users would position Wombat for enormous growth.
By going multi-chain with a focus on Ethereum integration, we will dramatically broaden our user base, revenue opportunities, and utility — ultimately bringing Wombat’s vision of capital efficiency and sustainability to all key corners of the DeFi landscape.
3. Deploying new pool types
At Wombat, we’re all about building something new and original. We aim to introduce revolutionary and innovative pool deployments that enhance our market competitiveness, such as establishing an isolated cross-chain pool, enabling increased interoperability and inclusion of tokens from various chains.
Additionally, we’re proud to be collaborating with mathematics experts and Ph.D. researchers to refine the mechanism of a volatile pool powered by internal oracle, which supports major assets with high market trading volume such as $BTC and $ETH. We’re confident that Wombat will have a more capital-efficient design that will dominate the market. With these pools generating higher trading volumes, it translates to increased trading fee income for Wombat, making us a force to be reckoned within the industry.
4. Emission strategy
Emissions represent one of the largest expenses for Wombat. To promote sustainable growth and strategic cost management, our team regularly review emission and relevant metrics like bribe efficiency and liquidity costs. By doing so, we can dynamically calibrate emissions to strike an ideal balance between sufficiently incentivizing user participation and maintaining a healthy ecosystem.
To further incentivize partner participation in WOM Wars, we will gradually shift emissions from the Main pool to the rest of the pools. This reinforces our bribery system while minimizing expenses. Overall, our emission optimization strategies aim to maximize income and minimize costs, ensuring the long-term prosperity of Wombat and our partners. By taking a data-driven approach to calibrating emissions and incentives, we can build a thriving ecosystem that encourages participation without excessive overhead.
The Road Ahead
Our unique vision sets us apart in the competitive world of DeFi. We take a strategic approach that generates steady revenue while delivering an unparalleled user experience. Wombat’s unwavering dedication to building a sustainable business model demonstrates our focus on long-term success.
Thanks to the invaluable support of our community, Wombat confidently remains resolute in our mission. We will thrive despite market volatility, upholding our unwavering vision of sustainability amid the turbulence, continuing to build a bright future for decentralized finance.
