I’ve recently been exploring the opportunities available with the emergence of platforms such as Olympus DAO and its growing army of clones, all of which offer some quite remarkable returns. Or, at least, they do for now. One that especially caught my attention was Time Wonderland and in this post, I’m going to take a run through what it is, how it works and share my thoughts as to why it might, or might not, be a good investment.
What Is Time Wonderland?
Time Wonderland is a clone of Ethereum based Olympus DAO, which has itself only been up and running since earlier this year and has already spawned a handful of clones. Time, which runs on the Avalanche blockchain with its own token called TIME, went live in September 2021, so it’s very new.
As with Olympus, Time has created its own, decentralised, reserve currency, the asset backing for which comes from bonds that it sells for a variety of other crypto assets. This provides an asset value per TIME token which, the theory goes, acts as a floor for the price of TIME. In the long term, Time aims to see their token operate as a global unit-of-account and currency, whilst in the shorter term the emphasis is on growth and wealth creation.
Time hasn’t yet offered anything notably different to what is available via Olympus, appearing to have stuck to the same model, based on the same code; though it is worth pointing out the gas fees on Avalanche are a tiny fraction of those on Ethereum.
Why All the Fuss?
The reason Time and Olympus etc. are attracting so much noise is easy to see, it’s the jaw-dropping APYs they are currently offering. At the time of writing, Time is offering 78,240.3% APY. Yes, you read that right, 78,240.3%.
How to Use the dApp
It’s really easy to stake to get a piece of that huge APY. Just connect your wallet (Metamask works), enter the number of TIME you want to stake and hit approve. You now get MEMO tokens allocated to your account in return, which you swap back for TIME when you want to unstake.
There’s a dashboard you can access which includes the current size of the treasury and the backing this provides per TIME, as well as the current APY.
The dApp also has a calculator that lets you test out scenarios for your investment, including the future price of TIME and the duration in days of your investment. So, for example, if you wanted to take a more conservative view, you could use a future TIME price equivalent to the treasury’s asset-backed value and see how that impacts your potential profits. I played around with this a lot, even setting the future price of TIME to just $10.
How Does it Make a Living?
As mentioned above, Time builds its treasury by issuing bonds in return for other crypto assets. It does this by offering people the chance to buy TIME at a discount on the price in place at the time of issue. This process of minting TIME is seen as offering an active, short-term investment strategy to those who prefer such an approach when looking to grow their funds.
What About that Huge APY?
From the staker’s perspective, the magic behind that huge APY is the power of compounding. By rebasing, or paying out, every 8 hours and auto adding your interest to your pot each time this happens, Wonderland ensure your committed stake is bigger each time and, therefore, you are earning against an ever-growing pot. Compounding makes a vast difference to any investment and this one is no different in that respect and it is this that allows the likes of Time Wonderland to offer such massive APYs, even if only for a while.
Time provides an example themselves, showing that if the protocol targets an APY of 100,000%, this would translate to a rebase rate of about 0.6328% or a daily growth rate of about 2%.
If you want to see the maths behind the way Time work things out then take a look at the Wonderland documentation.
Modern Day Alchemists?
OK, now we’ve seen what it’s all about and how it works, let’s consider the pros and cons and try to decide whether or not these people are modern-day alchemists, trying to create gold from base metals.
Let’s start with that APY. To be fair to the project team, they do point out themselves that such a huge APY is not sustainable. They see the project as being in a more volatile growth-focused phase right now that will eventually be swapped for lower returns and more stability.
Going back to the example they give in their documentation. An APY of 100,000% would equate to a rebase rate of about 0.6328% or a daily rate of about 2%. If there were 100,000 TIME tokens staked, the protocol would need to mint an additional 2000 TIME daily from bond sales to achieve this daily APY.
This also shows why such growth can’t go on forever because eventually there wouldn’t be enough new money to mint the required level of new TIME.
It is this need to bring in new money that tends to have some people viewing this as a Ponzi scheme. The retort to this is that the typical Ponzi scheme hides what it is up to and is constantly paying out incoming funds so there is nothing left when it collapses. Time Wonderland and others are open about the way things work, share their numbers and have a treasury with real value. That assumes, of course, that what we see is true.
So, are these people modern-day alchemists, trying to create gold from base metals? Is it a Ponzi scheme certain to collapse in on itself as soon as there are no more mugs to suck into the trap? There are certainly those who believe this to be the case, but on the other hand, there are those who point out that the established monetary system has its fair share of flaws and relies for its survival on the public’s willingness to believe it works. Perhaps the differences between the two aren’t so great. Perhaps. Depends on your point of view. Personally, I’m not even sure the creators of these DAO know what the outcome will be for their creations; after all, everything is new and experimental right now.
A couple of other things to note here. At present, Time Wonderland is run by the project team itself. Though the stated intention is to move to a DAO model there is no timeline given for this to happen. The platform is also currently unaudited, though the team say they are in the middle of being audited.
Dipping a Toe in the Sea of Plenty
Let’s get straight to the point here, I have invested in Time Wonderland. It’s only a very modest sum, but it’s an investment. Why have I done this? Well, for one thing, I believe the biggest returns will come from getting in early, in line with what the team say themselves. It will also give me a chance to see how things go and encourage me to track progress closely.
I’ll not shy away from the fact that the current enormous APY has a big, big pull on me. I’ve felt the usual tug of war going on inside me at such times, with greed facing off against fear, and it’s been tricky trying to take a dispassionate view. Maybe I am dipping a toe in the Sea of Plenty before the tide goes out.
As a means of keeping a lid on the risk, I am going to adopt an approach I often do in such situations. Assuming my initial stake grows, then once my holding gets to a decent size I will withdraw my initial stake and leave the rest to run, with no predetermined view as to when to sell out altogether. It could go to zero, but it could go a whole lot higher.
However, there’s another factor at play here. I don’t want to simply sit on the sidelines, watching as the world passes me by. These are new times; exciting times; never to be repeated times. And I want to take an active part, even if it means I’m going to get a bloody nose every once in a while. So, I’m in for the ride, wherever that might take me.
So, there we have it, an overview of Time Wonderland and some thoughts of my own on this recent arrival into the crypto space. But what do you think? Scam? Opportunity? Pointer to the future? It would be great to hear what you think in the comments below.
In the meantime, where’s the next Olympus DAO clone?
Until next time…
Renaissance Man
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The Usual Disclaimer
Please don’t take any of the above as financial or investment advice. It is intended to be nothing other than a little entertainment and information sharing. Always, but always, do your own research before committing your money to anything.