Fundamental Analysis: ████████ as the Protocol Designed to Profit From All Wars
This blogpost rests on the theory that who is best set to profit from war, wins. You may remember an infamous DegenSpartan post from past season as one of his thesis: profit from war. I agree and nothing has changed since then. Only the scope got much bigger because of all the protocols and narratives in crypto. There’s a lot of “wars” going on nowadays: exchanges, LSDs, stablecoins, etc, so we can step another notch in the abstraction layer and apply this theory to the theory itself if there’s multiple wars. Instead of profiting from a particular war, what if we could profit from all and every war at the same time? And who else to benefit the most but Warmonger itself? The one who provides the tools and means with which to enable war?
Redacted Cartel: The Warmonger
Redacted had a slow start. Many even still associate it with the OHM fork craze from past season, but things has changed. Redacted Cartel built a suit of products that are actually useful for DeFi. This placed the Cartel at the centre of every major narrative in crypto. Think of Redacted as the biggest arms dealer in the world that supplies all weapons to all entities in all wars. A very strategic play as everything starts to take shape.
Redacted covers multiple verticals, or as ct likes to call them — narratives. All the major ones at the moment. Stablecoin + LSDs with Dinero, bribes, exchanges (GMX, Curve, Camelot, Uniswap), major protocols (Curve/Convex, Frax, Balancer/Aura) and even Chains/Layers (like Berachain and Arbitrum) with Hidden Hand, all while growing it’s treasury via Bonds and Pirex to expand its power and influence.
While some may think this causes Redacted to be spread too thin, I disagree and think the exact opposite: Redacted Cartel is at the centre of it all. It’s just focused on 3 base products, which they want to reiterate and improve to provide better services and more value to their partners. These services were designed to serve the major narratives/verticals in crypto and we’re starting to see that now. Keen eyes from the team there.
But what does this imply? For once, it doesn’t make Redacted too reliant on a single protocol. It can source revenue from different places making it more resilient and sustainable. Redacted doesn’t pick sides.
Second, it wins either way. It’s like a casino or the puppet master. Protocols, exchanges, chains, layers, LSDs, etc, all compete amongst themselves and Redacted is positioned to benefit no matter who wins which wars. It can extract rent from everywhere.
In fact, Redacted even helps fuelling these wars. Redacted is a Warmonger. That’s how it profits from them. It provides multiple services to whoever is interested in entering the battlefield. Meanwhile protocols keep competing, competition generates more value and Redacted will be there to take it’s cut. Redacted doesn’t discriminate. It helps everyone complete their missions, for a small fee.
Now that context was given we can now go into the details and talk about Redacted’s token: BTRFLY, that collects all spoils of war to whoever locks it.
$BTRFLY Tokenomics
There will only be a maximum of 650k tokens to ever exist over a period of 10 years. 173,825 tokens are in circulation as of this moment. Out of those, 143,794 are locked, leaving just 30k tokens available on the markets. At current prices that’s roughly $10M only.
The most relevant and interesting stat regarding tokenomics is more and more $BTRFLY keeps getting locked. It’s not just re-locks and tokens from rewards. Trend suggests market participants want to keep accumulating and have a low time preference. Despite the bear market, percentage of locked supply kept growing and even know that prices surged from the lows, market participants keep accumulating as shown by the picture below. Percentage of supply locked went from 72% to almost 83% as of this moment and keeps growing.
Hidden Hand — Cover of All Major Exchanges and Protocols
Hidden Hand real yield has been holding steady even despite the crypto bear market with the biggest loss in value we’ve ever seen. Expect it to start growing steadily as tokens start pumping, more protocols adopt Hidden Hand and more markets are added. So not only should overall $ value of bribes increase, so should the amount of markets bribing and this should keep growing as an eventual altseason unfolds, meaning yield could really compound and grow to way bigger numbers.
Naturally, yield should grow along with token value whenever a bull market or altseason comes, however the team isn’t just sitting idle and keeps expanding, most recently to Uniswap via Bunni. Protocols can now increase their liquidity on Uniswap v3 by bribing $veLIT holders to support their Bunni gauges.
Pirex — Asset Acquisition Without Incentives
Pirex is a product by Redacted which creates liquid wrappers that allow for auto-compounding and the tokenisation of future yield/vote events. In addition, Pirex will also include an ecosystem of applications on top of Pirex liquid wrappers which further enhance the utility of governance tokens for users, enable novel utility and provide yield opportunities which are exclusive to those using Pirex wrappers.
It has managed to attract a good amount of TVL in CVX and GMX without any kind of incentives whatsoever. Market participants chose to deposit on Pirex merely because of first mover advantage and quality of the product. This is great as liquid wrappers are often incentivised with protocol emissions for deposits as a way to try and boost yields. Redacted team however has mentioned several times on calls they won’t dilute BTRFLY token holders. The product speaks for itself.
Anything that can be compounded could technically be added to Pirex. Any war participants are a potential addition that could boost revenue for token lockers and grow treasury value (which is important as we will see at the end of this post). My bet for the next asset would be AURA. Maybe Sami agrees? Wink wink.
Dinero — Liquid Staking Derivatives and Stablecoin
Dinero is a stablecoin collateralised by LSDs. Sami has mentioned Pirex was developed to enable $DINERO. As we know, Pirex is a solution for liquid wrappers and one of the ways for Redacted to grow their assets. This allows us to speculate that Pirex could create a liquid wrapper for some LSDs and then proceed to use these to back $DINERO. While most accrue value vs ETH and don’t need to be compounded, Pirex could request LP tokens (for example frxETH/ETH pair), compound liquidity rewards (CVX, CRV, FXS for example). This way Redacted now holds LSDs with which to back $DINERO. Obviously this is all speculation and “made up” as the team has stated multiple times they’re keeping details close to themselves so tbh I’m only expecting any news, hints, details or whitepapers after Shangai. This is literally pulled out of my ass, don’t know if it makes much sense. I’ll leave that to someone smarter than me, tho it isn’t as relevant to this post.
Point is stablecoins have experienced tremendous growth. One of the most, if not the most profitable business in crypto. It may take time to develop Dinero but rather wait and have something solid than not. As we’ve seen with UST and multiple other failed stablecoins, there’s no room for screw ups. In the event of success — and I think the team is poised to create one of the best stable solutions (along with Curve of course) — this could benefit Redacted tremendously as stables often have huge marketcaps, adoption and volume. To help, Redacted has one of the biggest CVX holdings in the gane which will definitely play it’s part in it. If successful I expect Dinero to boost yield significantly and become the biggest yield source for Redacted.
No one knows how Dinero will exactly work yet however there’s some threads that could give you some ideas. See here and here.
Compounding the Spoils of War
This is one of the main reason why I think the project will be successful. Real yield right sits at ~7% APR in ETH. However let us speculate in the scenario of an altszn:
- Assume prices pump 10–20x overall which is normal for altcoins. 7% then will be a 10–20x in $ from current rewards.
- HH keeps expanding. It covers all major protocols and exchanges, most recently Uniswap. Meaning more markets and more bribes. This compounds if amount of protocols bribing grows to 2x-3x during a bull market. More rewards from more sources.
- Dinero adoption and yield which hasn’t even entered the equation yet. Stablecoins are big. Expecting this to become the biggest source of yield for Redacted.
- Treasury rewards distribution will be key and haven’t seen it mentioned much. Treasury is worth $30M now. At 10–20x as assets are carried by an altseason means it could go into $200M tier or more. Now notice rlBTRFLY share from treasury rewards is just 15%. At max tier at 42.5%, the percentage directed to BRFLY lockers almost does a 3x compared to what they’re receiving now.
- All of these factors compound on top of each other meaning in the end a BTRFLY allocation could not only be worth more due to price appreciation, rewards paid in ETH could get a huge boost compared to what we’re currently seeing. Imagine getting a bi-weekly reward during altszn the has the same $ value as your entire $BTRFLY position today. A bag that pays for itself while you sit back and enjoy the wars definitely sounds nice.
This is my thesis for expecting significant $BTRFLY growth during the bullmarket (whenever it comes, if this isn’t the start of one). All of what’s mentioned could only be achieved because the team keeps delivering solid products with real demand from the market. They started off slow and things took it’s time because everything has been done with security in mind. Now, everything is starting to come to fruition. Slow and steady wins the race and we can now finally start to see the smol larvae grow into a beautiful mercenary captain-commander warlord butterfly.
Don’t be a retard. Don’t invest more than you can lose. Make a plan and stick to it. There’s some FUD around that devs are coughing. In the eventuality if you wanting to acquire BTRFLY, pls do so via an aggregator or you’ll get slipped hard. Again, please don’t be a retard. Thanks for reading and feel free to share. Hope you enjoyed a shitload of speculation. If that’s the case feel free to use my GMX reflink for trading: http://gmx.io/#/?ref=AkadoDeFi
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