March 28, 2024 | Comprehensive overview of the OTC Whales Market

In the cryptocurrency space, users can engage in a variety of activities, such as Staking assets, purchasing Token and Non-Fungible Token, conducting research, developing decentralized applications, and participating in Airdrop mining activities, etc. However, what all these activities have in common is trading. Almost everyone is involved in trading, whether it's taking a long or short position on an exchange, trading assets in a liquidation pool, or trading on the Non-Fungible Token market. Interestingly, even liquidation assets are mostly traded through peer-to-peer (P2P) trading.

Due to the lack of a liquidation market for liquidation assets, trading of items such as crypto tokens, Airdrop distributions, and Whitelist frequently takes place in the OTC (over-the-counter) market. In this case, the individual needs to participate in the transaction dialogue and negotiation during the transaction process. However, whether the parties can trust each other becomes an important challenge. Trust is important because a particular user must own the specified assets and be willing to entrust them according to the proposed transaction. Malicious activities may occur and pose some risks.

Is it possible to create a trustless third party that provides secure transactions for both parties, ensuring safety and preventing fraudulent activity? This is the goal of Whales Market.

Introduce

Whales Market aims to integrate OTC transactions into a unified platform so that both buyers and sellers can conduct on- chain transactions. Funds are secured in smart contracts and are paid to the parties involved only after the transaction is successfully completed. This feature not only simplifies the trading process but also significantly reduces the risk of financial loss that can occur due to fraudulent activities.

Whales Market is developed by LootBot development team. LootBot was created in the summer of 2023, when Telegram Bots were becoming popular. Based on past development experience, the LootBot development team decided to create a more ambitious and complex product - Whales Market.

Product Description

Whales Market supports 3 types of markets: pre-market, OTC market and spot market.

Before the market

Whales Market's pre-market allows purchasing Token distributions before the TGE ( Token Generation Event). Although such transactions are quite popular in various privacy communities and some central platforms, the security is not enough and traders are susceptible to fraud and not entrusting the promised Token . Whales Market changes this process by using smart contracts, which enable on chain transactions between buyers and sellers, effectively preventing fraudulent activities.

There are two ways to buy and Token Sale:

• Create your own buy and sell quotes.
  
• Complete other people's buy and sell quotes.
  

Both sellers and buyers need to wait for TGE to settle or cancel orders. When TGE occurs and Token are issued by the fund, settlement between buyer and seller will count down within 24 hours. If the seller does not settle on time, the mortgage funds will be forfeited. If the buyer decides to cancel the order, these funds will be transferred to the buyer.

OTC market

Traditionally, the OTC market has facilitated the P2P trading of Token and Non-Fungible Token through various informal channels such as chat rooms and social networking sites.

Although these methods are convenient, lacking strict security measures, traders are vulnerable to scams and fraud. Similar to the pre-market, the Whale market uses smart contracts to resolve vulnerabilities to minimize the risk of potential loss.

To ensure user safety, Whale market provides a Token list. The various Token on this list all have a minimum liquidation of $300,000 on the DEX.

Users can also trade Token that are not listed, but the platform will display a warning icon advising users to check the original address before proceeding with the transaction.

To ensure privacy, Whale marketplace has launched a new feature, where buyers and sellers Chia quote access links with restricted access, so that private quotes are not visible. market on the public market.

Point market

Similar to the OTC market, the points market allows secure P2P point trading. The number of projects using the "point system" is gradually increasing. Whale Market uses smart contracts to enable on chain transactions to be agreed between buyers and sellers.

After the Token is issued, Whale Market will automatically convert the points into corresponding Token according to the fund's announcement.

Related risks

Point orders must be placed in advance, but the final conversion rate to Token will not be announced until TGE. This can result in the seller's final score being significantly greater than the value of the Token they receive, which can have negative consequences for the seller.

Currently, Whale market allows trading of Friend.tech points. There are future plans to add these capabilities to protocols such as MarginFi, Kamino, EigenLayer and Rainbow.

Tokenomics

Whales Market's entire ecosystem revolves around its native Token , WHALES. The main practical functions of the WHALES Token include:

• Revenue Chia : 60% of collected fees will be redistributed to WHALES Token holders.
  
• Development Fee: 20% is used to cover ongoing development costs.
  
• Buyback and destruction: 10% is used for Token buyback and destruction to achieve deflation mechanism.
  
• LOOT Revenue Chia : 10% is Chia between LOOT pledgers and xLOOT holders.
  

To ensure that issuance volume contributes to the growth of the protocol, Token Issuance volume is linked to specific key indicators (KPIs) related to volume.

The Whales Market team has allocated 9.5% of total supply, with a 9-month "Dip" period and a 36-month "consolidation" period.

Commit

Whales Market generates revenue by collecting fees from the OTC market, with 60% of fees allocated to WHALES holders. When users pledge WHALES, they are rewarded with xWHALES, which has two purposes: to receive a share of the revenue and to serve as collateral in all OTC markets.

The commitment mechanism works as follows:

• The commitment contract includes a pool of two Token: WHALES and xWHALES.
  
• Participants pledge their WHALES Token and receive xWHALES Token in return.
  
• Holding xWHALES Token allows pledgers to receive an increasing amount of WHALES rewards.
  
• To achieve this, revenue is generated by a continuous contract to purchase WHALES Token , which are then added to the pledge pool.
  
• The exchange rate of xWHALES to WHALES increases, benefiting pledgers.
  

This mechanism also prevents the immediate sale of WHALES Token after receiving rewards, as rewards are distributed gradually over time.

Distribution of rewards

Depending on the blockchain (EVM, SOL, etc.) and the market, fees are calculated in different assets. To simplify the process of claiming rewards, the protocol will periodically convert these earned Token into WHALES Token .

These transactions can be found on the protocol's dashboard. Allocated WHALES Token will be distributed equally among pledgers as rewards.

Stakers can withdraw xWHALES Token and convert them back to WHALES Token at any time.

Income

As mentioned in the Token Economics section, Whales Market earns revenue through collecting fees from pre-market trading, OTC markets, and point markets. The following describes the fee standards and which activities require payment.

In pre-market trading, there are fees for closing quotes, settling orders, purchasing Token , and canceling orders. If you choose to close the offer, you will need to pay a 0.5% background fee. For settlement (purchase) orders, a 2.5% background fee is charged. When you make an offer to buy or execute another user's offer to sell, there is also a 2.5% background fee on the total Token purchased. If a Token purchase order is canceled due to the seller being out of contact, a 2.5% background fee will be incurred.

In the OTC market, Whales Market only charges registration and selling fees. Every time an offer is created, whether to buy or sell, a 0.1% fee is collected and included in the total profit. When you make a Token Sale sale offer, a 0.1% fee will be charged and deducted from the amount received.

In the points market, users pay fees for closing quotes (buy or sell), settling and canceling orders, and purchasing points. If you choose to close the quote, the platform fee is 0.5%. For all other cases, the fee is 2.5%.

Pricing

To determine Whales Market's valuation, a comparative analysis will be performed using three key metrics:

• Revenue/TVL Ratio (Total Assets)
  
• Market Capital /TVL ratio
  
• Ratio of committed assets/market Capital
  

These metrics will be compared to two main competitors: Uniswap and Blur. By comparing these metrics, the goal is to gain insight into the relative valuation of Whales Market compared to the major established players in the blockchain space.

Revenue/TVL ratio

The current ratio of revenue to TVL is as follows:

• Whales Market: 0.02
  
• Blur: 0.36
  

These fees have been incurred since the contract was signed. While Blur's rates are much higher, it's also worth noting that Blur came out a lot earlier than Whales Market, only launching in early January 2023.

However, when XEM at the figures for the past two months and comparing them with TVL's earnings over that period, significantly different results emerged:

• Whales Market: 0.02
  
• Blur: 0.02

Obviously both now have equal rates, which implies that they generate almost the same percentage of costs. Blur's current FDV is $2.26 billion, while Whales Market's current value is $264.33 million, which means the gap between these two numbers is almost 10 times.

Market Capital /TVL ratio

• Whales Market: 1.35
• Uniswap: 1.13
• Blur: 5.94

Blur has the highest ratio, suggesting it may be overvalued compared to Uniswap and Whales Market.

It's worth noting that TVL under market Capital is a bit different. It is called Total Inventory Value (TVE) in Whales Market and acts as a passbook between the two parties. Uniswap 's mechanism is a bit different from other DEXs.

Ratio of committed assets/market Capital

This indicator is only available for Blur and Whales Market.

• Whales Market：35%
• Blur: 30%

Whales Market still has a lot of space to grow in pledging assets in protocols, the ratio of protocols is very close, but it is also important to remember that Whales Market is only 3 months old.

Conclude