"That sounds rather familiar...is it... Apple?"
No, actually it's Ubuntu Linux which used to be "Linux for human beings" before they tried to cram their solutions down everyone's computers. But, I get it. Big project, big money, big responsibilities. So, from "Linux for human beings" they became "Linux for corporate environments", which is not something inherently wrong, just different people with different interests to please.
What does it have to do with Statera?
That's one of the things I like about Statera. It's a project still in its infancy, just learning to fly, trying to navigate and find its way in this cruel crypto world that can sometimes prove to be one of the most hostile environments. In a world in which projects like Statera die before even a single soul gets to know them, what makes this project special? What makes it rise above the water? What makes it stand tall and draw a breath of this air that all crypto projects hope to one day breathe?
The uniqueness of the Statera project
Statera project describes itself as a "smart contract powered Indexed Deflationary Token" which is a name meant to be understood by level 9000 grand wizards, also known as economists.
"But what if I'm a level 2 warrior with a wooden sword?"
Well, then you're in luck because I'm here to shed some light on the Statera project and what it does. So sit down, put your crypto goggles on and let's roll.
Braking Statera down (figuratively)
Since cryptocurrencies have been invented, people and especially new people (new investors) had one big problem with them. They are too volatile and depending on the market you can win the lottery with a coin or lose your house.
Disclaimer: Never buy crypto with your mortgage!
This volatility scared a lot of people in the past and even though the market sort of found a little bit of balance as time went by, this world remained highly susceptible to huge fluctuations in market value. As such, there are a lot of people that are reluctant to invest in coins and tokens, especially if they rely on that investment to yield them a profit.
Here is where a token like Statera comes into play. The Statera token is an ERC-20 token that's released on the Ethereum network which means that it can be traded, bought, and sold just like any other token. Here are some stats from the almighty CoinGecko:
#1. ... a smart contract powered...
A smart contract is a program, a piece of code, that runs when some events happen on the chain. The fact that Statera uses a smart contract means that they wrote a program that does something regarding the Statera token when events like transactions take place.
A smart contract is more or less like a traditional contract that automatically runs in a decentralized environment. Smart contracts allow two anonymous parties to engage in a process comprised of different transactions in a trustworthy way without the need to involve a general authority.
Since the terms of a smart contract are dictated by the code that the contract runs, to make sure that we don't invest all our money into an asset whose contract will steal it, we must be able to inspect the code ourselves. That's what you'd do with a real-life contract before signing it, right?
So here it is. Behold the Statera Smart Contract: https://github.com/StateraProject/statera-token/blob/master/contracts/Statera.sol
It's not long and it's very easy to understand even without knowing anything about programming.
What does "indexed" mean? It is of course a reference to the way Statera is intended to work as an indexed fund. Did that explain absolutely nothing? Well, don't worry because we are going to take a short trip to the land of the indexed funds.
An indexed fund or portfolio is a balanced fund that is made up of more assets that mimic the way the market fluctuates. Where's the benefit in that? Well if you've been day-trading all your life I can see how this appears to be nonsense to you, but there are some people out there that prefer a more secure and stable way of making investments.
The way an indexed fund works is that instead of buying a large amount of one particular asset and then timing the market to make profits, you buy a balanced amount of multiple assets and keep their share in check.
If an asset starts surging massively, a fund like the one Statera is proposing will start to sell that asset and buy more of the others to rebalance the percentage of each asset.
#2.1 Rich (wo)man's indexed fund on Statera
What I like to call the rich folk indexed fund is the Statera Phoenix Portfolio which is hosted on Balancer Exchange right here: https://pools.balancer.exchange/#/pool/0xcd461B73D5FC8eA1D69A600f44618BDFaC98364D
"But it tells me that this is very risky!"
Due to how new Statera is, services like Balancer and Uniswap still show warning messages regarding it, though I'm sure they'll go away sooner or later. In the meantime, if you checked the whitepaper of the project, which by the way you can find here https://stateratoken.com/assets/Statera_Whitepaper.pdf, and also checked out the contract, you'll be just fine.
The Phoenix fund is made out of WETH (wrapped ethereum, which is like...ethereum you get for Christmas. Wrapped.), WTBC, Synthetix(SNX), ChainLink(LINK) and UNI-v2(https://etherscan.io/address/0x59F96b8571E3B11f859A09Eaf5a790A138FC64D0)???.
More on that later. For now, just remember that this token is a token you get on Uniswap for adding to the liquidity pool of ETH/STA. So the last token is actually an ETH/STA pair.
According to the whitepaper, which you should read before investing, seriously, states the following shares for each token:
- 10% Chainlink
- 10% Bitcoin (WBTC)
- 10% Synthetix
- 30% Ethereum (WETH)
- 40% (ETH/STA) coin pair thingy (they call this Statera Delta Token)
Now, an expert eye might have already found out why I call this a fund for rich people. Even though you can provide only one type of token to the Balancer pool, to get the most out of this fund you should provide all of them which means you'll pay a ton of fees on the Ethereum network.
Buuuut, if Statera's computations are right you should see around 38% return in fees from your Statera Delta Token + 30% from Balancer balancing your funds + 5-20% in Balancer token airdrop (because when you pool all the funds together you get a pair token just like on Uniswap). That's a lot of percents and whether or not they'll turn out to be true that remains to be seen, but Statera did pretty well in the past.
"In the past? What do you mean...past?"
When the time comes, young padawan.
#2.2 Poor (wo)man's Statera Portfolio
This one is much simpler and I've already introduced it. I'm talking about the Delta Token which is the ETH/STA pair on Uniswap.
The way this liquidity pool works is that you put equal parts of STA and ETH in the pool and that will be used when people do swaps between those two tokens. Since you are a liquidity provider, you get to cash out on some fees that the pool takes.
The bigger your share in the pool, the bigger the rewards.
#3. ...deflationary token
Now, this is one of the major selling points of Statera. Most of us are familiar with inflationary assets we use every day called money. Inflation in a nutshell represents an increase in prices due to an increase in the money supply. How does the money supply grow? Through money printing. In an inflationary period, the purchasing power usually declines.
Did I lose you?
Alright, let's say that a loaf of bread costs $1. Just like in "La casa de papel" you go ahead and print $980 million (well they printed euro but it doesn't matter). But since you wear a suit and a tie and call yourself a politician, you can go even bigger and print $5 billion, who cares. You then decide to distribute a bunch of money to everyone, communist-style. Since now everyone has a bunch of money, instead of everybody being rich, they are all poor because companies have to keep up with the purchasing power of the people otherwise they would just collapse since they would be unable to keep up with the demand.
UPDATE: I forgot to mention what happened with the bread 😂. In the end it'll cost $25 dollars and a lot of people won't be able to buy it anymore because c'mon it's just a loaf of bread. Moral of the story? Stop relying on the money printer to solve every issue.
A deflationary asset instead of increasing its quantity over time, it diminishes. As the quantity gets lower and lower, the value of the asset increases. While many tokens implement the concept of burning, Statera takes it to the next level and burns a mandatory 1% of all transactions.
You want to send STA to cousin Pete? BOOM, 1% burned.
You want to congratulate aunt Mary on her beautiful 4th wedding with some STA?, BOOM, 1% burned.
You get the idea.
Now even though I'm making it sound like the world is on fire, this systematic burning of STA will only make the value increase over time, so both cousin Pete and aunt Mary are going to be happy when they receive their gifts.
The shady past of Statera
Like every other bold and ambitious project, Statera had to abused by hackers. Many projects don't ever recover after some form of abuse of their system is discovered, but Statera is not like other projects.
You see, Statera had a Balancer pool some time ago, in June, that was much like the pool that they have right now but instead of the Delta Token, they used pure Statera Token.
Some hacker had the idea to abuse the deflationary nature of Statera. By doing a bunch of back-and-forth transactions between WETH and STA he successfully depleted the STA in the pool due to the 1% burn rate. Since the pool was low on STA he was then able to sell some STA for a huge price against the other assets in the pool.
Many people were furious at this point and even called Statera a scam accusing the team of being involved in this hack. The team, however, instead of vanishing like you would expect some scam-artists to do, they were very actively trying to repair this mess and refund everybody's money. They were also trying to come up with solutions so that kind of attack never happens again.
I don't know about you, but this doesn't sound like a scam team to me. They sound like a passionate team that had something bad happen to them. The price of STA dropped more than 70% at the time of the hack.
The bright future of Statera
Since then, the Statera team refunded the stolen tokens and found a solution in Uniswap whose exchange code doesn't allow for such an attack vector. While the Statera Token is still the deflationary marvel it was intended, the Delta Token (ETH/STA) is not deflationary and can safely be used in the Phoenix Balancer fund. The value of Statera grew again and we can say the project has been reborn from its ashes.
Further integrations for Statera are yet to come and the team envisions they'll build a larger network of users soon as more and more liquidity pools are created.
Statera is ready to become a deflationary currency that's used worldwide as it can provide a lot of utility through financial instruments like indexed funds. As time passes the token will gain value in and of itself and can become a means of direct exchange of value.
"Now these are all pretty words, but is it actually possible?"
Statera can have a very important role to play in deflationary environments and even though I think that people will use more popular tokens for direct exchange, they'll want to use something like Statera when it comes to their long-term HODLING plans just because a token like that will only increase in value as the supply becomes lower and incentivizes wiser economic choices.
As they state in the whitepaper, acceptability is the main hurdle here. If they can get their foot in the door with liquidity pools that earn money for providers they will be here to stay.
My Statera Project
All this talk about Statera makes my ego hungry for attention so let's talk about me for a second. How do I plan to use Statera and what usage do I envision for it in the sort and longer terms.
Before using Statera though, we must acquire it. I did buy some Statera through Uniswap by exchanging some Ethereum. How did I do that? I first went to the landing page of the Statera project where they have a nice "Trade" link. Here it is: https://app.uniswap.org/#/swap?outputCurrency=0xa7de087329bfcda5639247f96140f9dabe3deed1
TIP: You might want to increase the slippage with the little cogwheel in the top right. I used 1.1%.
As you can see I have almost no Ethereum so that's why I ended up not being able to buy a lot of Statera because of the fees on the network. I bought a little more than the image above says I did, but that's just between you and me m'kay.
How did I make STA appear in my Metamask/Brave CryptoWallet extension? Well I scrolled down and pressed on "Add token":
Then I selected "Custom Token" and pasted the address of the Statera contract which is this one: 0xa7DE087329BFcda5639247F96140f9DAbe3DeED1
As you can see it tells me that I have already added the token in my wallet.
My next move was to wait for some more funds to enter my wallet so I can get more ETH. With new Ethereum locked and loaded I was ready to put my Statera to good use by acquiring some shares in the liquidity pool.
That's me right here:
Hopefully, the amount of pooled tokens will start going up pretty soon instead of going down.
In short-term my use case for Statera will be to pool it in the Uniswap liquidity pool for the purpose of gaining fees, but I do envision a much serious way we can use Statera. I'm not an economist, I'm a developer so excuse me if my vision is unfeasible, but I envision a platform that could be used for middle to long-term savings. There are multiple apps nowadays that we use to manage our funds, some of them are very popular with something like Revolut at the top. Most of these apps offer a saving feature that rounds all your expenses and puts the excess in a saving account.
My idea would be to use the same automated system to be able to invest a portion of your savings with as little human input as possible. You should be able to choose what percentage of your savings you want to invest and if you want to invest in an inflationary environment like the stock market or a deflationary one which, in my mind, would leverage the nature of the Statera Token.
As I've said before, I don't see Statera being used as a normal token due to the increased popularity of other projects like Ethereum, Tron, Tezos, etc. but I do see a bright future for Statera as a means to safely create a long-term investment strategy in cryptocurrencies.
One question for the Statera team
I'm sorry I couldn't participate in the AMA session you had here on Publish0x, but at that time I wasn't as informed on the project as I am now. If anybody from the team reads this, could you explain to why is there a destroyFrom() function in the contract? And how exactly is the destroy() function used because to me it seems like the burning happens without the aid of these two functions.
I had a lot of fun writing this article and I loved that I got the chance to do some research into an area I'm not that familiar with, kind of took me out of my comfort zone. I want to hear your honest thoughts on the Statera project, is it a great tool for long-term investment strategies or a "4chan scam" as some people suggested?