Free money printing or Ponzi Scheme — Decoding Wonderland Money
Disclaimer: this is not financial advice and only represents my personal opinions.
This article was first published on Nov 15th 2021. It was then updated in some details on Nov 16th 2021 after hearing the AMA with Daniele, creator of Wonderland Money.
TLDR at the end.
The first time I went to Wonderland Money’s website, I thought the APY I saw was 50%. A new defi project, seemed lovely. Later I saw a Youtube video talking about it, saying about 50k% APY bla bla bla. I replayed twice and contemplated 3 seconds: did my eyes disguise me? I returned to Wonderland’s website, approached the screen and used a mouse to highlight each digit and counted: 55,515.10%!!! Mental bias automatically tricked me the first time. Never seen something so crazy. There must be something…weird?
Wonderland Money is a place on Avalanche network where stakers of its native token $TIME get the I-cannot-believe APY. At the time of writing, it is 84,834.9%. The concept is to create a decentralized currency backed by a basket of crypto assets, to detach cryptocurrency from fiat currency. Mmhmm. It sounds crazy, but something is fascinating about this idea. It reminds me of what I read from The Denationalization of Money, written by Fridrich Hayek, an economist that won the Nobel prize in Economics. The book was published in 1976. The currency-issuing mechanism idealized by Hayek is very much like what crypto is doing today:
- Private business has the right to issue a currency.
- Different currencies compete with each other in the market.
- A good currency is stable when benchmarking to a basket of products’ price but not fixed in price.
It is incredible how Hayek’s idea back in the 70s reflects the reality of today! I will definitely write a review of this book. After this reflection, I decided that Wonderlands is worth investigating, and I started studying about it and invested a small amount as a beginning. I…
