Crypto's First Ultra-Deflationary and Elastic Currency Backed by Gold (MWG)

By Lo Mil | Topics in Crypto | 2 Apr 2021

Here’s the idea: What if you were to create an asset that is more deflationary than almost any other currency on the market, but is backed by an ever-inflating reserve of the world’s most historically sound commodity of all time? 

This is MetaWhale Gold (MWG). With a fair launch on Uniswap earlier this year, MetaWhale Gold was DeFi Labs’ next successful project after PRIA, and was built by Dr. Mantis and BitByTheByte, both anonymous but well-trusted developers in the space.

The way MWG works is really quite simple. Starting supply was approximately 1.25M, and burns on both buys and sells gradually take MWG to a minimum supply of 1 (sells burn at a higher rate than buys). In addition to those burns, a small portion of every transaction also goes to a temporary reserve. At certain targets, the protocol then uses the MWG in the temporary reserve both to add to  the Uniswap liquidity pool (increasing the market liquidity for traders) and to buy tokenized physical gold, PAXG, for its permanent PAXG reserve. A much smaller portion of the temporary reserve goes to buy PRIA, which is then used to boost PRIA’s airdrop system and also deliver dividends to PRIA NFTs— ultimately tying DeFi Labs projects together into one ever-churning, mutually beneficial ecosystem.

When MWG reaches its minimum supply, holders can exchange their MWG for their proportional share of the PAXG reserves. At that point, it would not be unreasonable to expect the PAXG reserves to be worth somewhere near $1B. If that was the case and you were to hold 1% of the supply, your portion of the reserves would be worth $10M. After a 35-day claim period, the supply would mint back up to 1M, and the system would start all over again. 

Those familiar with other DeFi Labs projects understand that deflation from a large starting supply all the way down to 1 cannot happen without measures that ensure the movement of money toward that ultimate goal. For this purpose, Dr. Mantis created two parameters. The first is a forced sell rule, which states that every 35 days, holders must either sell or transfer over 6% of their total address balance, otherwise anyone can call a function that sells 5% of their MWG to wETH and transfers 1% to the caller as a reward.

More significantly, holders must make a single sell or transfer every 121 days (~4 months), otherwise, anyone can call a function that burns 50% of their MWG and rewards the other 50% to the caller. In other words, you must sell or transfer some MWG once every 4 months, or you can lose all your tokens. Without these rules, deflation would inevitably get stuck. This might seem a little strange to people who like to “HODL,” but the rules serve a very important function, essentially ensuring the protocol can deflate.

Now let’s take a peek at the larger picture, because like all projects conjured up in the mind of Dr. Mantis, there is often more than meets the eye. In the first 19 days on the market, MWG bought over $164,000 worth of PAXG, catapulting MWG past several Binance wallets and inching it close to the top 50 holders of PAXG, making it, essentially, a whale. 

Next, try to imagine what will happen when MWG becomes one of the top few holders of PAXG. Then try to imagine what will happen with the launch of other MetaWhales that feed on the supply of other fixed-supply tokens. Lastly, think about what might happen to PRIA, as each MetaWhale buys and distributes this genesis token back to the original protocol. Only when you consider this bigger picture, might you have a glimpse into what Dr. Mantis has envisioned and put into the realm of possibility. 



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Lo Mil
Lo Mil

Lo is a cryptocurrency enthusiast, writer and photographer.

Topics in Crypto
Topics in Crypto

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