Statera

Statera: Index Investing and Liquidity Pools


Disclaimer: this post is an entry for the Statera writing contest

 

Statera

So before I give my two cents on Statera and some ideas for a potential route for Statera, I will begin with a short introduction on Statera. As numerous  authors have noted Statera is a decentralised deflationary token which burns 1% of the STA transaction fee. This means the total amount of STA decreases as time passes on unlike the USD with J.Powell and his turbo charged money printer(printer goes BRRRRRR). So if a transaction costs 10000 STA, 100 STA will be burned and the total amount of STA decreases with 100. See the official Statera introduction video below. 

                                                       

 

For me, the most interesting part of Statera is it being an index fund(sorta). For those who don't know what an index fund is, it is a large fund which holds stocks of several(up to thousands) different companies. Investors can buy part of this fund and trade this freely if it as an ETF. With index funds it is possible to invest in multiple companies while just buying 1 thing. In this case, the Statera Phoenix fund has Statera, Bitcoin, Ethereum, Chainlink and Synthetix Network Token. These coins are all bought in a certain split and this fund gets rebalanced by buying or selling coins. This also includes STA and the burning of 1% of the STA fees. A major (dis)advantage of index funds is the risk reduction and portfolio protection. When one coin suddenly drops in value, you don't lose your whole portfolio but only a part. This of course also applies to sudden spikes in the price. 

Currently there are 3 funds for investors to buy. These funds are liquidity pools on Uniswap. 

  • The Statera Token Pool(Delta Token)
    • This pool consists of a 50/50 split between STA and ETH. 
  • The Delta Token Pool(Delta Liquidity Token) 
    • This pool consists of a 75/25 split between STA and ETH for those who want to bet more on ETH.
  • The Statera Phoenix Fund
    • This pool consists of a 40/30/10/10/10 split between STA, wETH, wBTC, LINK, SNX. With this fund you are more diversified with  BTC but also with DeFi pioneers such as LINK and SNX. This pool offers the most diversification and this the biggest risk reduction

Some thing to note. An older pool of Statera has been hacked and all of the content was lost to the hacker. It turned out an outsider found a flaw in the code and was able to exploit it. However, this was not the fault of Statera and their new pools are safer than ever. Check out their medium post on it https://medium.com/@stateraproject/statera-phoenix-e80d77c44f7b

So how do you buy Statera?

This is the part where it gets too complicated for someone who just used binance and coinbase all of his life. This is also in turn a major drawback of Statera since it is not newbie-friendly to invest via a fund. This might scare new consumers away and hinder real life adaptation. Anyways, you just buy your ETH wherever you want and send it to a private wallet(MetaMask is recommended). Then on Uniswap(v2) you connect your wallet and exchange part of your ETH for STA. You pay the gas fees(a couple of dollars) via your wallet and boom you are done. You just bought Statera.

But what if you want to join a liquidity pool? On Uniswap you press the pool option and then add liquidity. This is why you did not use 100% of your ETH. Depending on which you pool you want to join, you have to deposit the tokens in the same split as stated in the pool. So 50/50 or 75/25 or 40/30/10/10/10. So this means you need to have these coins in your wallet before joining a pool. When you have these, you just add liquidity and confirm the transaction by paying the gas fees(again) and boom you are done. You just added liquidity the pool, you minted yourself a new token because you joined the pool and you will mint more while staying in the pool. Moreover, you will also farm some fees from the networks. Jpow could learn something from this!

What are some future options for Statera?

Well first and foremost, creating more liquidity pools with other coins. I can image how a significant amount of crypto enthusiasts might want to invest a pool with their favourite coins in it, so that is an option. However, a better use case would be adding deflation to existing pools. With deflation, the total supply of STA decreases and this in turns adds a stimulant to the price and the net profit of the pool. A very interesting but also very optimistic option is combining crytpo and real stocks/precious metals or natural resources. Just imagine a one stop solution for a diversified portfolio. I would definitely buy a stock/metals/crypto ETF if I could buy one via Vanguard or Ishares. Perhaps Statera could pave the way for big financial institutes like Vanguard.   

Conclusion

So this ability of buying a crypto index fund is something I was looking for when I started in '17. So discovering Statera via the writing contest(thanks Igor) was a big deal to me. However, as some of you might have noticed, my technical knowledge regarding the new developments is lacking. I was looking at how to buy STA and one of the pools and turns out you can only pool on uniswap and you have to pay ETH gas fees to get to that part. Moreover it requires multiple steps to add liquidity to the pool. I have previously written about my portfolio and it's low value. So truth be told I am not going to spend over 10% of my portfolio on a new coin, especially not when a quarter of that is spend on gas fees. Does this mean I will not have buy STA? Absolutely not, I will buy some STA on some traditional exchanges. 

 

Thanks for ready and as always, leave a like and comment if you found this useful. 

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Marcus_
Marcus_

Fervent crypto enthousiast who's always on the lookout for an optimal yield/risk portfolio with a focus on staking, dividend and other methods of earning more crypto.


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