The Financial Innovation of Blockchain Reformation, The Origin, Logic, and Value of WaykiChain ROG
I. The Space Weapon System RFG and WaykiChain Token ROG
Rods from God (RFG) is a hypothetical space-based weapon system. It would include two satellite platforms. One would house rods of high-density metals like tungsten, titanium, and uranium. The other would house the communications and targeting hardware.
Inspired by RFG, WaykiChain named the smart asset of its decentralized synthetic asset system Wayki-X ROG (Rods of God).
II. The Decentralized Synthetic Asset System Wayki-X Empowers ROG
1. What is Wayki-X?
To understand what Wayki-X is one first needs to understand what synthetic assets (synths) are. Synth is a simulation of the price of the original (initial) asset but it is not the original asset itself. It does not have the other attributes of the original asset. For instance, the USA’s legal tender USD is an original asset. It has such attributes as the mandatory means of payment and receipt and endorsement by the government. USDT is a synth tethered to USD and introduced to blockchain. USDT has practically the same price as USD but lacks other attributes.
Why do we need synths? Synths are important because they fulfill the demand for trading. They provide investors with trading tools but do not require actual ownership or custody of other parties. Assume an investor is bullish on gold. It can buy actual gold or synthetic gold to earn the spread. Considering the wear, loss, and other reasons, it may not want to hold the actual gold. Besides, some original assets like Facebook stocks are not available in all countries, still, global users can invest in them with synthetic assets freely. The key role of synthetic assets is to break through various trading barriers natural to the original assets and provide an alternative solution for unobstructed trading.
Knowing this it is easy to understand Wayki-X. It is a synthetic asset issuance system developed on WaykiChain’s public chain. As of now, it covers three major asset types: cryptocurrency, US and HK stock indices, and US stocks. It has a total of 26 synths including xBTC, xETH, MSFT, AAPL, and NASDAQ Composite, and will support HK stocks, Forex, gold, and commodities later.
2. What Can Users Do in Wayki-X?
The process of synth issuance in Wayki-X is quite simple. First, pledge ROG and generate xUSD. Then buy a synth with xUSD. The system has three types of users with different mechanisms behind each one:
1) pledgers: only pledge and do not trade. They pledge ROG at 800% C-Ratio and generate xUSD. xUSD is tethered to USD at a 1:1 ratio. The generation of xUSD creates debt. In other words, someone used a motorcycle valued at about USD 800 as collateral to borrow USD 100. This USD 100 is the debt. The ratio of personal debt to the total debt is the debt ratio. The system distributes rewards to pledgers as per their debt ratio. The rewards are ROG rewards by inflation (release after one-year lock-up) and xUSD rewards by trading (available instantly after distribution). Additionally, if synth traders suffer loss, the lost assets enter the fund pool. Pledgers share this part of the fund pool.
The action contrary to pledging is redemption. When a user needs to redeem ROG, it needs to burn the respective xUSD.
a) when C-Ratio is over 800%, users can redeem the part exceeding 800% and continue to pledge and mint xUSD to get more rewards.
b) when C-Ratio is below 800%, rewards, minting of more xUSD, and ROG redemption are not available. To redeem ROG, users can decrease their debt by burning xUSD and therefore increasing the C-Ratio to meet the system requirements.
2) traders: only trade and do not pledge. Such users buy xUSD with WaykiChain’s stablecoin WUSD and then use it to buy US stocks, HK stocks, or other synths to earn rewards by trading. They also bear the risk of asset price fall. In transactions with synthetic assets, the exchange actually happens between a user and the smart contract. The user gives its xUSD to the smart contract. The contract burns it, mints synths of equivalent value (like xBTC or xETH), and sends them to the user.
3) mixed type: both trade and pledge. Mixed-type users enjoy the rights and interests of pledgers and traders. Naturally, such users also bear the respective risks.
Users may be curious or confused about the 800% C-Ratio, the origin of ROG, the relationship between ROG and synths, etc.
A. Why can’t we buy synths with ROG directly but have to pledge ROG, generate xUSD, and only then buy synths? ROG price is not as stable as that of xUSD. Buying with ROG directly is unfavorable for the liquidation of synth transactions.
B. How are ROG and synths related? ROG is the vital support and value endorsement for all synths. It ensures synths have value and allows for liquidation.
C. Why C-Ratio is 800 and not 200 or 900%? If ROG C-ratio is too low, when ROG price falls, it affects the market. When C-Ratio is too high, too many ROG is used. Both situations are not ideal. The 800% C-Ratio is quite suitable for the initial stage to respond to extreme market conditions effectively and thus ensure the stability for ROG holders and the whole ROG collateral pool. Actually, C-Ratio is not set in stone. Later, it can be changed through decentralized governance.
D. Where does ROG come from and how can users get it? ROG is issued at the bottom of WaykiChain’s public chain. The first issuance round is 21 million tokens. (Note: 21 million is not the total supply because ROG is used as collateral to mint synths and provide rewards by inflation to pledgers. These rewards release after a one-year lock-up). Of the 21 million, 60% is generated through Phoenix Yield Farming and 40% is generated through ecosystem staking. Users can participate in WaykiChain Phoenix Yield Farming genesis staking where they stake WICC or WGRT to get ROG.
3. What are the Advantages of Wayki-X?
The transaction objects of Wayki-X are synths rather than original assets. Unlike traditional trading with counterparties, it uses the generation/burn mechanism. This unique design allows for seven significant advantages:
1) low transaction cost, short settlement time. When buying stocks in traditional ways, there are usually intermediaries like brokers and market makers who charge direct or indirect fees. In Wayki-X, transactions do not need intermediaries. This helps save a part of fees, reduce costs, and shorten the settlement time;
2) low entrance barrier. In traditional finance, synthetic assets are only available to experienced large-scale investors, while Wayki-X allows small-scale investors to participate. Besides, it has no market restrictions and users of both cryptocurrency and traditional finance markets can participate. Actually, anyone in the world can participate.
3) users are the dealers themselves. Wayki-X adopts the pledge pool mechanism. Like shareholders, all ROG pledgers share the income of the whole pledge pool and bear the risks of traders’ synth positions. Pledgers share the money lost by traders. Similarly, the money earned by traders is the money lost by pledgers. In fact, if all pledgers together are the “big dealer”, each pledger is a “small dealer”.
4) asset safety. The fund pool is decentralized and has no special control party. No one can misappropriate the assets from the pool. Decentralized price oracles set the price of synths. It is difficult to empty the fund pool by changing the price to make unilateral market transactions. Besides, third parties do not have the user’s funds in escrow. The users keep the funds themselves.
5) unlimited liquidity. Assume investor A wants to spend USD 50,000 to buy 5 BTC but the market’s sell book has 4 BTC at USD 10,000 and 1 BTC at USD 10,000.1. Therefore, A can only buy 4.9999 bitcoins (without the fees). If it wants to buy 5 BTC, it needs to spend USD 50,000.1. The order book of the exchange makes the transaction price slip and the transaction depth is not ideal. Whereas on Wayki-X, there are no counterparties. Investor A interacts with the smart contract and burns the USD 50,000 equivalent of xUSD to generate full 5 xBTC. There is unlimited liquidity, no price deviation, no slippage.
6) barrier-free trading. We break the barriers between the cryptocurrency and the traditional financial markets. Users can directly invest cryptocurrency in traditional assets like gold and commodities. We also remove the barriers between countries and regions. Investors can trade various global assets. For instance, Chinese investors can invest in US stocks.
7) no regulatory risk. Synths are not real-world assets but just their simulation. When users buy synths such as stocks or gold, they are actually trading cryptocurrencies and the laws and regulations of traditional finance like securities do not apply.
WaykiChain decentralized synthetic asset system Wayki-X removes various entrance barriers of the financial market. It allows any person or institution to trade various global financial products, meets the users’ demand for open finance, and follows the current development trend of finance. It seamlessly connects cryptocurrency and traditional financial markets and provides a feasible mechanism for trading real-world assets on blockchain. It can expand DeFi to increase the market value of the entire cryptocurrency market and empower its development strongly. Synth trading is significant for the industry transformation and will be the next inevitable trend in financial transactions.
WaykiChain’s ROG is the basic asset and necessary tool of the decentralized synthetic asset system Wayki-X. Without ROG, the synthesis of various assets and the experience of investment in global assets would be impossible in Wayki-X. ROG has entered the traditional finance and gained the value momentum of Wayki-X!
III. WICC + WGRT Dual-pool Staking Shape the ROG Value Tether
ROG is not an isolated token. Wayki-X supports its implementation. It is woven into the unbreakable value network and gets the full support of WaykiChain’s DeFi ecosystem.
Unlike tokens based on traditional models, ROG has no ICO, no pre-mining, and no reserve for the team. During genesis, it can only be obtained through WICC or WGRT collateral staking and truly belongs to the community. Any WICC and WGRT holders can get ROG for free. The close relation of ROG to WICC and WGRT lies in the following:
1) the generation of ROG through WICC/WGRT staking allows for ROG value tethering;
2) WICC/WGRT staking will reduce their circulating supply and help them appreciate it.
Decentralized synthetic assets are a new trend in financial development. WaykiChain’s ROG uses the decentralized synthetic asset protocol Wayki-X as an application scenario to obtain a steady value momentum from traditional finance. ROG relies on the native token WICC and governance token WGRT that is an indivisible part of WaykiChain’s DeFi ecosystem. This relationship helps ROG get a better value foundation.
The space-based weapon system RFG has the advantages of wide attack range, fast response, and great power. It has higher strategic significance than conventional weapons and the military favor it more. It is an important direction for the future development of global weapons. Whoever owns the RFG system will have the supreme right to dominate in military weapons. At the same time, with accelerating globalization, the finance-based ROG can meet the people’s demand for open finance and unobstructed investment in global assets. ROG is the driver of the future financial reform, the spark that can start a prairie fire, the beginning of the era of global DeFi!