Statera’s Twist: Deflation and Balancer Loop

Finance + Deflation

As the title states, Statera (STA) is a Token that makes an interesting combination between deflation and decentralized finance (defi). Although deflation is the trend during this COVID-19 pandemic where central banks are inflating the currency supply, deflation alone will not give Statera much value with many reasons. One of them is that deflationary currency is nothing new where the earliest deflationary token that is surviving well until now is BOMB and I will be directly frank that if all you want is a deflationary token then go to BOMB instead of Statera.

For deflation to be attractive, it must occur due to market movement. Like BOMB, Statera burns 1% of each transaction. Now, the question is, how to make people perform more transaction? Ofcourse, the answer is to deliver value. One of the best way to deliver value is to have a product and what product does Statera provides? A balancer, a great product to twist deflation.

Coincidentally (or maybe not), the logo or icon of Statera matches with the concept that I learned from their whitepaper and that is the loop of balancing and deflating: (1) to start the loop, the price of the assets in the balancer needs to change due to market etc., (2) this triggers balancing where always STA needs to be either added or substracted, (3) 1% of STA is burned due to the transaction occurred in balancing, and (4) here is the twist that the price of STA changes due to deflation which triggers rebalancing which triggers deflation again and the process repeats in an infinite loop. In concept, deflation occurs infinitely which can make your imagination go wild of how much the price can increase due frequent deflation. Well I do think that rebalancing does not occur in micro level but macro level where there is threshold for rebalancing which does not necessary occur everytime a deflation (1% transaction burn) occurred. Disclaimer: I am newbie and I only read the whitepaper once, the information I wrote may not be accurate.

Statera is designed to be an investment where currently is suited to be put inside an index fund and mutual fund. By having STA in the funds or portfolios, they can enjoy the benefit of STA’s deflation where deflation most likely pressures an up-price. Currently Statera have three index fund which are Delta Token, Delta Liquidity Token, and Statera Phoenix Fund. The source of the image is from Statera’s whitepaper where it shows Delta Token a 50% wETH and 50% STA, Delta Liquidity Token a 25% STA and 50% ETH, and Statera Phoenix Fund a 40% Delta Token, 30% wETH, 10% SNX, 10% LINK, 10% wBTC.

Getting their Index Fund