When I started investing in crypto, I watched some videos about security. I learned about cold wallets, key encrypters, secured emails, and private browsers. I have the private browser down as I already had the Brave browser. Brave is built upon the chrome browser, however, it has a lot of privacy protections. These protections help to keep advertisers from getting your data. Brave does have advertising, though the idea behind it is that the user is actually paid to view the advertisements. The user is paid in Basic Attention Tokens (BAT), Brave's crypto token. If you as the user want to see ads from Brave, you can do so and be paid. It is a great concept and one that should attract a lot of major companies. At this time it seems like most of the advertisers are related to internet privacy or investment.

One day I opened the Brave browser and saw a pop-up ad. The ad was for www.wallstreetbets.com, a newly created decentralized exchange (DEX). While the DEX has the same mindset as the Wallstreet Bets Reddit community, it is no affiliated. The ad called for people to join the DEX's airdrop campaign to get their native token, WSB. I am no stranger to airdrops, though I am aware they normally provide me with a bunch of tokens that are essentially worthless. For information, an airdrop campaign is where people are given a number of tokens in order to generate interest in that token. They are "free", though an investor has to pay a small gas fee to claim the tokens; therefore, claiming every airdrop you see will add up in costs. On top of that, not all tokens are useable. There can be issues with the token contract or the token may not be sellable (scam coin).

Anyone that knows me knows I like free things. I try to be discerning when it comes to airdrops, however, when I see an ad on Brave, it gives me more confidence. Brave has two ad types, a sponsored ad, and pop-up ads. Sponsored ads cost $50,000 a day and pop-up ads cost $10,000 for 30 days. That means WSB DEX spent $10,000 for an ad and is also giving away free tokens. I was instantly in and clicked the link. I was taken to a website where I was asked to provide my email address. I happily did so knowing I would then be giving the DEX the ability to shower me with emails I didn't want, however that really didn't happen. One day I received an email from the DEX giving me a link to claim my airdrop, 4,300 WSB. I clicked the link, input my ethereum compatible wallet address, and was good to go.

At the time the DEX had not launched. I received an email about the date of the launch and another that the DEX was live. At the time my family was on a trip to Boston for the fourth of July weekend and then we were traveling to Rhode Island for an orientation for my daughter's University. We just arrived in Boston and had gone through three Airbnb locations and we were moving onto the fourth (Long story, one location the person that was staying there before us had Covid so we couldn't stay there, the second location was extremely dirty, the third location was actually flooded. Luckily, the fourth was great (location and comfort-wise), so I couldn't really be bothered by looking at the DEX. After settling in and getting a good night's sleep I decided to go to the website and claim my WSB.

I gave WSB DEX my address, which was input into a smart contract. This smart contract then allows me to claim my WSB. It is all automated, therefore is fair (at least based upon how the contract is written. That will be another article). When I went on the website, I connected my wallet and a button showed up saying "Claim WSB". I clicked the button, had to pay a small fee in ETH and received my WSB. Just like any good airdrop receiver, I immediately used the DEX to swap 2,150 WSB for ETH. To my surprise, the 2,150 WSB was worth $150 in ETH. I confirmed the swap, paid a little more ETH and the transaction was successful. I was shocked.

I was shocked because I have seen airdropped tokens before that will give claims of such payouts. Generally, when you actually try to send the transaction, it will fail because the smart contract doesn't actually allow the sale of the tokens. This is a scam coin. The fact that 2,150 was worth $150 and that I received $150 in ETH was so shocking because that meant the founder of the token put a lot of money into the project. I knew this was a great sign. The DEX at launch had three liquidity pair reward pools, WSB-ETH, WSB-UNI, and WSB-USDT. Each pool was providing rewards at 9.7M WSB. This meant if you create a liquidity pair and stake it, your share of the pool will earn you rewards. All you have to do is check back every once in a while and claim the WSB. How can it get any better than this?

Let's go through the WSB DEX interface. The DEX has four important parts:

• Swap
• Pool
• Staking
• Vote

We will go through each item on a more technical level. If you have ever seen Uniswap V2, these items are familiar as WSB is a clone of Uniswap V2.

Swap

The WSB DEX is a place to swap tokens. As long as the tokens being swapped are held within one of the liquidity pools on the DEX, the investor may swap from one token to another. Investor A has 100 USDT and wants to swap for WSB. With their wallet connected to the DEX, the investor may select the 100 USDT and select the WSB token, and the DEX will automatically calculate the number of WSB which may be obtained. Once a transaction is successfully complete, Investor A will lose their 100 USDT and gain their WSB. If Investor A tries to swap a token that is not contained on the liquidity pool, instead of allowing the transaction to go through, the DEX will provide a message stating there is insufficient liquidity for the trade. In order to trade in as many tokens as possible, investors would need to create numerous liquidity pools.

Pool

Liquidity pools are the heart and soul of WSB DEX, as they allow investors to swap one token for another token. To swap a token like BAT for WSB, WSB DEX needs a liquidity pool that allows for receiving BAT and sending WSB. There are two avenues to handle this swap. If there is a BAT-ETH liquidity pool and an ETH-WSB liquidity pool, the swapping of BAT to WSB requires a swap from BAT to ETH and then from ETH to WSB. If there is a BAT-WSB liquidity pool, the swapping is simpler and will simply swap from BAT to WSB. For the investor, direct liquidity pools are better as the more liquidity pool swaps that are necessary (BAT->ETH->WSB), a liquidity provider fee will be charged for each swap. Direct liquidity pools (BAT->ETH) will only be charged a fee once, thus reducing overall gas fees.

Staking

WSB DEX currently has three liquidity pools that are paying staking rewards. By staking a liquidity pool, the investor is locking the liquidity pool on the DEX, and in return, they are rewarded with staking rewards. There is a maximum reward payout and time period associated with a staking pool, and the investor’s share of the liquidity pool results in their share of the staking rewards. Staking is a way to generate additional passive income just as gaining a fee from liquidity pool usage, only staking does not last forever, and therefore once the staking period is complete, the investor will un-stake their liquidity pool and only earn the 0.3% fee. Staking rewards are generated live, and the investor may view their rewards as they are interfacing with the WSB DEX. In the Staking tab, the investor can deposit their liquidity pool into the staking pool. The Manage button will then appear and will give a running tally of the WSB earned relative to the investor’s share of the staking pool. The investor may at any time claim their WSB staking rewards by clicking the Claim button in the Manage area. Note that claiming WSB has an ETH gas cost, therefore holding WSB staking rewards for longer periods of time as well as finding the right time to make the claim can result in the best bang for the buck, lower ETH gas fees. The removal of WSB staking rewards does not affect the price of WSB, only the swapping of WSB has that effect. Once WSB staking rewards are claimed and in the investor’s wallet, they may be swapped for other tokens or held for future use in voting on WSB DEX proposals.

Vote

WSB DEX’s voting system is built around the premise that every WSB token holder has a voice. Per the system, proposals may be submitted, and those investors holding WSB in their wallets may use each of their WSB as a vote for or against the proposal. For example, Investor A has 32720 WSB tokens in their wallet, therefore they have 32720 votes. This is an incentive to hold WSB for use in governance proposals. Voting may be done by the investor or the investor may delegate their votes to another investor. This should only be done if the investor trusts the person they are delegating their votes to, as this allows them to control all voting power for the tokens. Delegating also allows for the pooling of WSB in order to submit proposals. Proposal submitters must have 1% of the total WSB supply in order to submit, therefore it is important that WSB tokens be delegated in order to meet that amount. Proposals are the method of change within the WSB DEX. When proposals are submitted and approved, the smart contract code shall be changed to reflect the proposal’s intent. Proposals that are rejected by the community will have no effect on the smart contract code.

This little rundown means everything is good, right? Well, the staking is great because you earn rewards for providing liquidity to others. You are the liquidity provider, essentially giving the DEX the fuel it needs to run. One problem is there are limited liquidity pairs on the DEX. If I had Shiba and I wanted to buy WSB I currently can't. That is because there are no liquidity pairs for these two tokens. Someone can easily create a pair, however, they will not receive the staking rewards the other three pairs provide. This means if you want to swap Shiba for WSB, you will need to go to another DEX (for example Uniswap), swap the Shiba for ETH, and then go to the WSB DEX and swap ETH for WSB. This is inconvenient and needs to change. People do get the .3% fee relative to their portion of the liquidity pair, however, it is not as lucrative as the staking rewards, so there isn't a lot of incentive to pair.

Another negative is the rewards you earn are able to be swapped for other tokens, as they should be, however swapping is buying/selling, therefore every time WSB is sold for another token the value goes down. This actually makes the WSB staking less lucrative. At one time I had 30K WSB at $0.05 per, giving me $1,500. 30K WSB is now at $0.02 per, giving me $600. While I am not going to complain about the profit, it is very apparent this is due to major selling of WSB and not enough buying to make up for it. I am all for rewards, but the truth is as rewards are claimed more WSB is introduced in the market. The more WSB there is with the market cap staying the same, the less value WSB will have. Price stability is created with strong liquidity pairs which reduce the impact of selling and buying. How do we get more people to provide liquidity? We provide staking rewards! When we provide staking rewards the value of WSB goes down. See how this can be a vicious cycle? The lite paper for WSB suggests future rewards vaults where you freeze your liquidity for a long period of time, and once that period of time ends you receive the staking rewards. This is not for the sell happy, it is a long-term commitment, but it is a commitment that pays well and enforces more price stability. I hope this is introduced soon, as I am willing to lock liquidity for a long period of time for a greater reward.

One reason investors may not be buying is due to low marketing. The founder provided the initial marketing and airdrop, and now it is up to the community to provide additional marketing. This can be hard to do, as not everyone wants to "shill" the token. There is one undeniable fact to shilling, though you will upset 99 out of 100 people seeing the shill post, 1 person at least will go on the site and buy WSB to participate in the staking pools. Tokens are shilled on Reddit, Twitter, Instagram, Facebook, etc. I have shilled this token (technically you might say this is a shill simply because I am talking about it, though I am trying to do it in an educational way, and will be doing so with other tokens and exchanges) on Reddit and Twitter. People ask what tokens they should look at, and I tell them. Perhaps they come to the DEX, perhaps they don't. If there isn't either a monetary generated advertising campaign or a concentrated social media shilling campaign, the growth of WSB will be slow going.

Another reason, and probably the largest reason, is the staking rewards will end at the end of August. While there is a voting feature, at this time no proposals have been given to provide additional utility for WSB, and people may be afraid of what will happen when the staking ends. I can't lie, I am afraid. I have a large sum invested in this platform and to me, this is a really good grassroots effort, but I do wonder if the other shoe drops will we all be running like rats off the WSB DEX ship. Only the founder or developers have enough WSB to propose and while there has been talk of extending the staking pools or creating new pools, the proposal hasn't been submitted. At the time of this writing, there are 22 days left of the 60-day staking period.

I am afraid of the future of WSB but I have a level of confidence in the founder and the developers of WSB. They put a lot of their own funds into the DEX with the idea that the community will build the DEX. They want the DEX to grow and therefore they will create additional momentum. The momentum on the DEX is slow, however, it is building momentum. The total liquidity in the DEX is over $4.3M and growing. The volume of trading is around $1M in 7 days. Once the proposal is submitted and community members vote, momentum will continue to grow. It may not be slow, but it will grow. The DEX is only as good as its members and they are a dedicated community. Trust me, I know. I am in their Telegram and Discord groups. We are all supportive of each other and have a common goal in mind. We want the WSB DEX to be successful as many of us have been there from launch (or even prior, as is the case with the founder who can be found on Telegram regularly). We want to help each other and anyone new to the DEX.

I will follow up from time to time on this DEX to give updates as I plan to do with any other exchange I write about. The truth is anyone can create a DEX because of the open-source nature of crypto, but that doesn't mean they can be successful. In my opinion, WSB DEX is successful. I am not a millionaire from it. I don't have a lambo, but I have made a good amount of money from the staking rewards and I am happy with that. I don't think the DEX is going to explode overnight. In crypto, many people hope for that. It simply isn't normal for that to happen and is the exception, not the rule. But I want nice steady growth and WSB DEX is doing that. That is all I can ask for at this time.

References:

Wallstreetbets.com Website - www.wallstreetbets.com

WSB Analytics - https://analytics.wallstreetbets.com