$DUST Update | February 21, 2023
Note: The following was originally written as a twitter thread, but wanted to post here for anyone who does not use Twitter.
Though there hasn’t been an announcement yet, my bet is that $DUST will be on Coinbase or Binance by the end of the year.
Today (Feb 21, 2023) was a massive day for DUST and, as usual, the market has completely missed the mark, just like it did when the DeGods & y00ts migration was announced.
Here’s the full breakdown.
- DUST Emissions
- DUST Utility
- Exchange Listings
DUST has a max supply of 33.3M tokens which were distributed to DeGods stakers over the past year.
- DUST Emissions
DUST has now been fully distributed, moving from ~35% annual inflation to 0% as of today.
This is huge. People under estimate how much sell pressure aggressive emissions create.
It’s why every early DeFi project’s chart looks like this:
Aggressive emissions to attract users (short-term demand) which spike price, but as growth stalls and people sell their token rewards, price plummets.
Structural emission-based sell pressure for $DUST is gone.
35% inflation → 0% is big. But it’s even bigger when we zoom in a notch and take into account the actual supply of $DUST that is readily liquid is much smaller.
8702 DeGods staked x 3.75 $DUST per day = 32.6k $DUST/day in emissions.
At $2 per $DUST, that’s ~$65k in emissions into only ~$1M in DEX liquidity.
Now obviously, not all that DUST gets sold every day, but it’s still significant emissions into a low liquidity token.
This is the same issuance reduction dynamic that drives entire bull markets after a Bitcoin halving.
- DUST Utility
Up until this point, $DUST has had no utility other than paying small staking/unstaking fees for y00ts and DeGods.
The new Dust Protocol website dropped today and guess what was found in the html:
Utility was found in the html.
Governance - $DUST will be used for governance of some sort. My guess, based on the partnership announcement with Horizen Labs Ventures, who recently wrote a post on DAO voting, there will be a DAO to govern the $DUST token.
Dust Pay - Dust Labs is a SaaS company. They build tech. If Dust Labs is going into payment processing of any kind, it’s a huge narrative. Much bigger than the metaverse. Doubt this is simply a “Pay with $DUST” option.
DeID - Decentralized ID? y00ts are moving to Polygon and Polygon has been working on Polygon ID for a while. Would be surprised if the two aren’t related in some way.
Staking/Unstaking (DustOS) - It currently costs a small fee to stake/unstake a DeGod or y00t. DeLabs is building a launchpad/incubator on Polygon and the projects that launch will have access to Dust Labs tech, like the staking/unstaking feature.
For DeGods and y00ts, this feature currently uses a collective ~1k DUST per day. The demand for DUST from an additional 5-10 project in the ecosystem would create a significant and constant source of demand for DUST.
- DUST Exchange Listings
Once DUST emissions ended, Dust Labs promptly announced a partnership with Horizen Labs Ventures.
This is the team that:
- Orchestrated the most successful metaverse NFT land launch with Otherdeeds ($560 million primary sales).
- Served as the strategic, operational, technical, and tokenomics minds behind on of the most successful fungible token launched ever, ApeCoin.
- Provided technical and design support to the ApeCoin DAO’s launch of the ApeStake platform.
If Horizen Labs Ventures is coming in to help, a large centralized exchange listing is on the table.
Frank also tweeted this shortly after DUST emissions ended:
It is quite obvious a large centralized exchange listing is in play.
Referencing the “governance” tag in the html snippet, it’s also likely that Horizen Labs will help design the DAO governance aspect of $DUST, like they did with ApeCoin.
Referencing the Ethereum and Polygon tags, it’s obvious $DUST will be bridged to both Ethereum and Polygon.
TLDR:
With the migration to Ethereum and Polygon, the two themes for DeLabs this year have been “Chasing liquidity” and “Going mainstream.”
There are two entities that sit at the crossroads of those two themes: Coinbase and Binance.