Trip To The Moon… Vault
Multi-Chain Vaults for us common folks
Once a while, whilst exploring the world of DeFi, you might get some recommendation from someone you know or just randomly saw some news on your social feeds about a project and somehow felt that you should check it out or pay a little more attention to it. This was close to what happened when I discovered Moon Vault.
A little bit of history here — so back in August 2021, I started to talk to a fellow user called Nico. At that time, we were discussing a soft rug on another platform and doing some CSI investigating (I think he basically made me addicted to deciphering blockchain explorers info!) into the situation. From that interaction, I realized he was actually building his own DeFi platform but it wasn’t ready and still had quite a lot to do.
He told me it’s just a simple vault DApp and that it was built for people that knew him, as a service to them. At the same time, he shared his unique idea for a native token with tokenomics that I have not seen before, or understood. To be honest, I had a headache trying to imagine how it would work initially.
It was only until late September that I realized that it was gonna happen. Nico contacted me again and shared an article that was published by Moon Vault. (It’s a good read — link here) We also started a collab on a Metamask guide here and I think it’s from this point onward that a stronger bond started to forge between us.
The launch of Moon Vault was a quiet affair. No huge rush of crazed investors screaming, “Take my money!” or moderators in Telegram feeling stressed over the non-stop queries from an endless stream of incoming folks. It just popped up one of those days and like I mentioned above, used by friends and people who knew Nico.
DeFi is for advanced crypto users who can manage their own bank and can accept any consequences of their own actions. Moon Vault is made for users already familiar with the space. In a nutshell, Moon Vault is an autocompounder and nothing else. From my perspective as a user, it has 3 features which sets it apart from the rest of the autocompounders out there.
A huge plus for the developers at Moon Vault is the focus on presenting information to the user. On my initial day using the platform, I actually had to pause for a few minutes in between depositing liquidity to look at some of the charts and data.
There is price information about the token for each vault, when the last compound happened, how much you have deposited as well as your pending rewards. For LP vaults, how much of each token is needed to create 1 LP token, the price of each LP token. These are information that I have not seen any other vault provider display to their users and it shows that the Moon Vault developers do actually try to understand and learn about the tokens that they are providing vaults for. That is a huge plus for me as it leads to the next thing.
They actually have working vaults for reward tokens too! It was just released recently, a vault for the Baby Banana token, a first that I have seen for tokens with reward/reflect properties.
After depositing your tokens in the vault, there is a profit calculator that shows the earnings — in USD/Tokens for the amount that you have staked. I swear that this calms me down every time I look at it.
Before every deposit is made, assuming there are factors that taxes the token amount being deposited, the above will be shown to give the user an idea of how long he should stay in the vault to recoup the tax involved. It’s not critical information but as I mentioned, the effort that is put into understanding the token does show the passion of the developers.
Customized Vault Strategies
The next feature that I want to share would be what I call custom vault strategies. Almost all autocompounders I know in DeFi would just create a vaulting service for an existing pool. What usually goes on for a vault would be to stake XXX token for YYY tokens and swap rewarded YYY tokens back to XXX tokens and recompound it.
There are a few unique vaults for Moon Vaults where it takes XXX token to stake for token rewards that yield the highest APR and swap those rewards for more XXX tokens. These will generate a higher rate of return for the user and is actually the secondary reason why I use their vaults.
Here’s how it is being differentiated.
The TVL values show just how popular the Banana+ vault is. Having a strategy that switches to the best performing pool will consistently yield the highest returns for participants. As of this writing, there are 2 known vaults that are performing in this manner.
I am intimately more familiar with the ApeSwap/BSC ecosystem so these are the 2 vaults that I know, produces better results as opposed to a regular vault. It will be good if someone can share if there are custom strategies for other chains because…
Moon Vault is Cross Chain
This is the third feature that I would like talk about. The usual platforms that goes cross chain are usually the big names, with the huge army of highly paid developers that can help accelerate go-to-market in the shortest time possible. I’m not saying Moon Vault is better than them, but achieving what has been done, given the time and resources Moon Vault has, is nothing short of an amazing feat as well.
Remember Nico said that he is building vaults for folks that know him as a service? Cronos chain was briefly mentioned to the developers about a week and a half ago by some of the guys in chat and I believe they worked to add it in since there was demand for it. Does feel more and more like a community now, doesn’t it?
These 3 benefits are my personal takeaways from using the platform and engaging with the developers. There is another aspect of the platform that I am not exactly very familiar with but I shall attempt to try my best to describe it below.
The MOON Token
The $MOON token is the native token of Moon Vault. If you notice, I hadn’t mentioned it up to this point because it is designed as a separate product from the vaults. A user can be using the vault services at Moon Vault and never interact with the $MOON token if he/she chooses to.
The tokenomics of this token is the hardest for me to visualize it for easy reading and I have struggled for a long time with making it simple for everyone. So please forgive me if I do a bad job at this and feel free to clarify any doubts that you may have at the Moon Vault Telegram group.
Without further ado, let’s begin!
The $MOON token is used for governance on the platform and it can also be used to stake for $BUSD rewards in the Moon pool. Moon Vault takes a 4.5% performance fee from all compounds and distributes 2% of it to the Moon pool and another 2% of it to be distributed to all $MOON in the form of increasing it’s price. Thus, the $MOON price chart ends up looking like this over time, a steady increase as more TVL is locked on the platform.
I suppose at this juncture, you may be wondering that this isn’t possible and immediately discount this impossible characteristic. Bear with me and keep on reading.
$MOON is designed to grow at a rate of around 1000 per day with a starting supply of 1 million. Newly minted tokens do not add to the circulating supply unless they are bought from the platform. This means that the current market cap is determined by only the purchased tokens that are in circulation multiplied by the price shown on the homepage at Moon Vault.
As $MOON price will never fall, the purchase price is 1.5x of the current value or a minimum of $0.75, whichever is higher. The 1.5x multiplier may be adjusted over time.
The above diagram is taken from the Moon Vault docs but the focus should be on the distribution of 1.25x to the $MOON token, increasing it’s price and the 0.25x allocation to the pool to be farmed as $BUSD rewards.
This way, with both profits from compounds and users buying the token, it will steadily push prices up over time and eventually reach parity with the purchase price.
Now, let’s look at a scenario where somebody decides to sell their $MOON token. In most scenarios, selling tokens will reduce the price and a huge sell order will push it down further. In $MOON’s case, a user cashing out will not affect prices negatively at all. Allow me to elaborate.
Using this diagram, if $MOON was priced at $1 and a user sells a single token, the only impact will be to the market cap. The sold token is returned to the contract and taken out of supply and the price is maintained.
I hope you have a better understanding of a unique native token that I’ve not seen anywhere else and it can help you with deciding if you want to become a holder for the $MOON token. It is entirely optional (just like the BiFi token) but I can imagine as the TVL grows over time, the amount of compounded profits will increase and accelerate the price of the token.
From my interactions with Nico, I do understand that there are more features that are upcoming for the platform in 2022. If you are looking for a homely vault provider with a very active developer team in Telegram to provide support or to answer any queries, Moon Vault should be one of the DApps you should consider.
Another plus point would be that Nico himself has been self-doxxed, which is quite rarely seen in the decentralized finance space. Moon Vault have completed an audit with Brewlabs & have also been reviewed by RugDoc.io — there are plans to be audited with other firms as well but that will happen after major enhancements are added.
It may not be as huge as other leading vault providers in the space in terms of TVL but what it lacks, it makes up for it with innovative vaults that maximizes the value to the user. The interesting tokenomics of the $MOON token also introduces new trading strategies for investors looking to grow their portfolios.
It is the end of 2021 and this should be my last article for the year. It has been a great run for me this year in the DeFi space and I am humbled to be able to know many great folks who have inspired and motivated me.
Before I sign off, I would like to wish everyone who has read up to this point a wonderful Christmas and equally delightful New Year with friends and family. May this holiday period bring you cheer and happiness! Eat and drink well and don’t worry about the crypto world. It will still be when you are ready to jump right back in!
Best regards — JP (Derek)s