Michael Saylor

What You Need to Know About Cryptocurrency and DeFi Today! (The Wise Way)

This one’s a game-changer.

What are cryptocurrencies? The answer is not as confusing or complex as you think. They are digital assets built on a technology called Blockchain.

The “blockchain” is a global network of computers that can transfer information near-instantaneously. Each computer on the blockchain has access to an identical and continuously updating database of ownership, or “Ledger”. This database is stored across the network, allowing any computer to check the validity of another computer’s request or transaction. If a computer attempts to break the rules defined by the network, which are detailed in the database, the request, or transaction, is denied.

Cryptocurrencies use the decentralized blockchain for speed and safety. Unlike a centralized bank, the ownership records for a cryptocurrency are recorded on a communal and unalterable database and, therefore, cannot be stolen or tampered with.

Why are cryptocurrencies useful? In short, they make operations faster, more secure, transparent, and much cheaper.

The first cryptocurrency application was Bitcoin. Bitcoin is really good at one thing — storing value, much like gold does. But Bitcoin is low tech compared to some of the newer cryptocurrencies in decentralized finance (or DeFi). One ~ more useful ~ cryptocurrency worth mentioning is Ether, the tradable token of the Ethereum network, and the second biggest cryptocurrency after Bitcoin. If Bitcoin is gold, then Ether is both silver and oil. Ether stores value, much like Bitcoin — but Ethereum is the programming language that almost all cryptocurrencies use to operate.

In the simplest terms, these two cryptocurrencies represent three of the most fundamental commodities — gold, silver, and oil — in digital form. Consider the sum of civilizations that were built on these three treasured resources throughout our history; and now consider the potential of a global, decentralized network able to trade these resources rapidly and securely.

Already thousands of cryptocurrencies aim to disrupt or revolutionize just about every modern industry imaginable — supply chain logistics, art, real estate, video games, music, data aggregation, car rentals, and — most of all — banking. The subsection of crypto that is working to destructively innovate traditional finance is called Decentralized Finance, or “DeFi.”

The issue is that most of these projects that call themselves “DeFi” are not actually decentralized. Many crypto ecosystems remain partially centralized to the benefit of the team. These teams can manipulate the supply, give tokens to “VIPs” for a discount, and they often take profits for themselves. Well, why wouldn’t they? It’s a business after all. Wrong. This is not what DeFishould represent. This common frustration felt by investors is precisely why the Wise Token has been making such a splash!

The Wise token team (WiseSoft, LLC) is providing the general public with the first trustless, fully decentralized, manipulation-free, interest-bearing DeFi ecosystem — and you can still get in while it’s early days. Refreshingly, the Wise ecosystem was started not to generate profit for a team, but from the desire to create something incredibly useful for all. In keeping with the team’s ethos, 100% of profits are returned to the community.

The founder, Peter Girr, previously a U.S. Army intelligence officer, has been working on this project ever since 2016. He says, “This is what happens when an entrepreneur jumps into a crypto project in 2016, gets scammed, and then spends the next 5 years building the project he wanted to invest in.” And invest he has but with his own money and without allocating himself any free or discounted tokens.

What is Wise Token?

Wise token is the first asset-back cryptocurrency; the gold-backed dollar for the digital age. But, instead of gold, WISE is backed by Ether, a high-value blockchain commodity (as we’ve learned), so Wise token is inherently a highly secure store of value for this reason. As a result, investors can be confident that their investment is safe, as long as the greater DeFi space is operating. This “tokenomic” built also allows Wise token investors to take advantage of a price floor, where, if everyone sold, every investor would be guaranteed some amount of Ether back, which is not the case for 99.99% of crypto projects.

*The team does have a second token in a presale-phase currently, which will be touched on at the end — this token (WISB) is backed by BNB, the underlying asset for the Binance blockchain.

What can you do with Wise?

The Wise ecosystem services an appealing array of key DeFi tools, which are built to replicate traditional financial instruments. The current financial suite includes:

Staking Wise

The staking contract also allows investors to earn interest on Wise token time deposits called “stakes,” which are most similar to bonds, but more flexible. A stake earns interest like a bond, but with the added feature of allowing interest withdrawals at any time during the life of the stake; not something bonds allow. These bond-like, interest-bearing stakes are always fully in the custody of the user and their crypto wallet, never held, influenced, or able to be confiscated by any third party (provided the user does not share their password).

Similar to how Bitcoin rewards miners every 10 minutes, the Wise token contract rewards stakers every day. A steady rate of 4% annual inflation is used to create the interest pool. Stakers can increase their share by staking longer. There are 3 staking options:
1 day — 42 years of Regular Staking,
1 day — 3 years of Insurance Staking,
1 day — 5 years of Collateral Staking.
Annual return on investment (ROI) currently sits around 8–12%.

Liquid Wise

The pure design and fair distribution of the token create the potential for exponential gains. On top of that, since WISE is backed by a pool of ETH, and WISB (their new token) is backed by a pool of BNB, investors experience the safety of the #2 and #3 market cap cryptos, while also having the potentially explosive growth of a new project. Wise tokens are NOT stable coins, they can fluctuate relative to the price of their backing asset. Ex. if ETH goes up 2x and WISE goes up 2x, investors get to double-dip for a near 4x gain.

Of course, markets can also go down in value and that’s where staking comes in. Staking is the best way to earn, especially in a bear market, since investors earn more Wise tokens for the duration. Once the market recovers, investors realize a profit from the interest they earned during the downtrend. On top of that, staking ensures that a majority of the tokens are locked away. For WISE right now, 88% of all tokens are staked and for an average of 2.5 years. This means the price of the token can only fall -20% relative to ETH.

This has implications for liquidity providing on partner DEXs (Decentralized Exchanges) too. Providing on a WISE/ETH liquidity pair is almost no different than providing on an ETH/ETH pair, since WISE is backed by ETH and moves with ETH (with a maximum of -20% to the downside). This means essentially no risk from Impermanent loss.

Lend/Borrow Wise

Coming in Q3, WiseSoft is looking to introduce a new smart contract. It will allow Wise token holders to participate in borrowing and lending of practically any crypto found on a DEX but with a key differentiator of requiring no human intervention or centralized price aggregators, like Aave or Compound. This contract will include an innovative leveraged lending function as well. Imagine being able to lend 3 Ether when only having 1 Ether and earning interest on the 3 Ether. This is a billion-dollar industry Wise is pushing into, and they have an ace up their sleeve: profit sharing. Currently, the Aaveand Compound teams make millions in profits — Wise wants to give those profits back to its community. Which service would you rather use?

Conclusion

The team raised $40 million on the Ethereum blockchain in January 2021, which would be quite the achievement if it wasn’t overshadowed by their now $350+ million in liquidity. With such high demand for their product, the team is now attempting to do the same on the BinanceSmart chain — and the presale is now open, but ending soon! This token is designated (WISB) as it is backed by BNB, instead of Ether.

This makes a total of TWO fair launch presales in existence, both have been Wise tokens. And for those wondering “why two?” both tokens have access to essentially the same ecosystem, just on different blockchains.

Perhaps the most refreshing piece in all this is how responsive their team is, most of whom are volunteers. Ask a well-intentioned question on their telegram and you can expect an immediate and helpful response. Wise is certainly setting a new standard for DeFi, and finance as a whole.

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