My Review of Sphere Finance and AMA With Simsala

Hey, this is James Pelton and you know that during the bear market, I've been keeping my eye open for what projects do I think is going to make it through the bear market. Okay, so not all existing projects are going to die. Most are going to die as there's not new investors coming in right now. Market cap on total crypto is way, way, way down. There's not new investors. And a lot of projects that rely on new investors are going to just, there's nothing that they can do. So what I've been really looking for is, hey, who is adjusting? Who's building revenue streams? And who's setting themselves up well so that when the bull market comes back, they're ready to really pump. And a sphere is one of those that I've been on the fence about. They used to be a auto rebase token, which I do not like the auto rebase tokens. And for those of you who aren't familiar with auto rebase tokens, that's basically when you just hold a token and you get this 2.8% APR every day. But it auto compounds, so it ends up being a million percent APY or something like that. And those APYs sound great, but what we found is when you have that many tokens, inflation gets so bad. And especially when there's not new investors coming in, you just have the charts look very bad for auto rebase tokens. And so the first thing, the first time when I really caught interest in sphere was I talked to Sim Sala. He's very, very, very smart. That's who I have an AMA with him today, kind of about some updates on what the future sphere is going to look like. So that was the first thing is I talked to Sim Sala. I'm like, man, that guy's bright. Second thing is they got rid of their auto rebasing. So I was like, hey, there you go. Now it's not auto rebase. I'm really interested in that. And then the third thing, and this is what we spend a lot of time talking about today, is they have revenue streams. So they have some cool partnerships where they take some of the profit from these other protocols. And these probably deserve their own video talking about Penrose and Dystopia and T2. And there's going to be so many more partnerships coming out with sphere. I'll just tell you that. And one of the big things that sphere has done well in is they have what's called quantum liquidity, where basically for most protocols, your liquidity is just sitting there. It's sitting there on the decks or wherever, and you can't use it for anything. And basically sphere has made a way where you can take your liquidity and invest your liquidity into safe things. But you get some kind of return on your liquidity rather than it just sitting there. And then they've kind of opened it up as quantum liquidity as a service. It's very difficult to program. And so other protocols can come to sphere and give them a cut and then use their liquidity to invest, essentially. So I always enjoy having some Sala on. So let's go ahead. And here's my AMA with some Sala from sphere. All right. This is James Pelton. And I am here with some Sala from sphere finance. Some Sala. Welcome to the channel. I'm glad that you can make it today. Thank you, James. It's a pleasure to be again. Yes. Home now. Right. Seems like just yesterday we were talking about the beginnings of sphere. And so for people who haven't watched your first AMA with me or aren't familiar with sphere, could you introduce yourself and then kind of talk about what what you're building with sphere? Yeah, sure. I'm some Sala. I've been the founding father of sphere since February, since it went live. We've been building and we've been a rebase protocol in the very beginning. We have transitioned to becoming a deflationary protocol. So we have shed our skin. Remove the rebase slash degen in ourselves. And now we have moved to a completely deflationary mechanism where we've been burning tokens. We are sitting at almost nine billion tokens in circulation. Now we are sitting at comfortably 8.4 billion tokens in circulation. We have burned over 500 million tokens. So things have been going great. Currently with sphere, sphere is building a lot of different governance projects and services all over DeFi. We have been building Dystopia, Penrose, for example. We have been improving upon Tattoo and we are expanding with our new products that are on the horizon. For example, Preon and a few other projects that I cannot talk about yet. But it is a lot of projects that we are working on right now. Okay. Very cool. So let's talk. Let's talk first about that transition away from the rebase token. So I'm not a big fan of rebase token. So I was really happy to see that. Can you talk about why you started with rebase and then why you decided to move away? Totally. At the very beginning when we were rebase token, it was a very good way to market the product, seeing the tokens going up. But since the very beginning, we have been very transparent that we don't want to be a rebase token for too long. Even on our website, it was a bootstrapping phase where we have been distributing a lot of SPHERE tokens. Because the next goal coming further down the road was to take the circulating supply that has been printed thanks to the rebases and start sucking that up back into the protocol by creating revenue streams like Dystopia and Penrose. And take the profits that we make to buy back the SPHERE token and burn them, essentially. And that's why we started as a rebase protocol to make the circulating supply grow. And now we are like, okay, now the Treasury is building all these different protocols. The profits that we make are then used to actually buy back the SPHERE tokens that we have emitted out and then force the price of SPHERE to go up, essentially. Okay, very cool. And then could you talk about, so when you go to your website, the first thing that you see, I'll share my screen here, is the S&P 500 of crypto. Could you talk a little bit about what you mean by that? Yeah, for sure. With the SPHERE, what we are building is a protocol that has a lot of different little satellite projects, essentially. If you scroll down on the very bottom, you can see that we are building, these are products that are within the SPHERE ecosystem. We also hold a few other governance tokens where we are earning profits from. And essentially what we are doing is build all these different protocols, have all these different tokens, all these different governance protocols where we have a saying. And essentially what you want to do then long term is to hold SPHERE so that you have direct exposure to all these different projects. Because these projects came to fruition because of SPHERE, and that's why SPHERE has a direct revenue stream in these different protocols that we build. And essentially the S&P 500, it should represent like, we build a few projects, we acquire a few projects, we have governance rights over a few projects, and having then this median worth of all these different projects as revenue streams coming back to the ecosystem to you, the holder. So essentially the goal, the future is that you hold, let's say Bitcoin, Ethereum, and then you hold SPHERE, because SPHERE becomes this direct representation of these protocols that are very profitable and quite good. Okay, very cool. So actually my first three questions might be pretty similar then. I was going to ask about revenue streams and partnerships, and those are kind of one and the same with you guys. But could you talk a little bit about the revenue streams and then how the revenue helps token holders? Totally. So right now what we are doing is we have Paneris and Dystopia, and how Paneris and Dystopia actually generate revenue. Essentially Dystopia has VE tokenomics. The tokenomics incentivize the user to lock in their tokens for the longest period of time. If they have locked in their tokens for a long period of time, they then in return earn governance rights over the protocol. And you can, for example, vote for high volume projects or LP pairs. So let's say USDC and USDT, right? It's like an LP that has like two million daily volume, right? So if you vote for that pair, you get an equivalent amount to your vote in terms of profits. So what happens here is Dystopia has this tokenomics where you lock in for four years, but a lot of users don't want to lock in for four years. So how can we actually appeal also to this community? So essentially we have also built Penrose that is on top of Dystopia, and Penrose effectively locks in for four years. And because it always locks in itself for four years, it always gets the highest voting rights over Dystopia. And because then smaller projects like Autoclam, like Vesp, like Sphere have a stake in Penrose so that they can vote on their pairs on Dystopia as a proxy. And because we have built Penrose, we always earn, you know, equivalently to our share, of course, pen and disk tokens. So you can see here, for example, you can see that we earn like 43 pen, 10 disk, 50 pen, 12 disk, 147 pen. And these are like little chunks that our treasury earns the entire time, right? Like we keep earning all these tokens into our treasury. And because we earn these tokens, we can lock them back into the system and have like this positive flywheel effect with Penrose and Dystopia, where we then vote for these pairs that are like high volume. And because we vote for the high volume pairs, we also get dividends back. So that's how it rolls. So, you know, we have active revenue streams working already for us and how we already earn money from that. On top of that, we also have our treasury. We use our treasury and deposit a lot of our yields into different protocols around Polygon. And with that, we always earn, you know, profits. We deposited $3.9 million into MeshSwap. You know, we have our $400,000 LP. Then we have like $456,000 in USDT on Dodo. Then $950,000 in Dodo earning 7% APY each. Then we have like APY, sorry. And then we have like $1.27 million in MeshSwap earning 5%. $150,000 give or take on MeshSwap. Then we have like $1 million in Arrakis earning us 10%. Then we have $170,000 on Arrakis on USDC. And stuff like that where we always have like an entire team that is working on searching for the highest yields. On Polygon, for instance, audits the contracts of these different protocols where we then deposit our liquidity. And, you know, we move our treasury around to earn high profits and take these profits. You know, to build our treasury, to quantify our treasury, to compound it for the bull market. And then our big plan is once we have built all these different revenue streams that we then directly buy, spear, and burn it. Okay. Okay. Very cool. And have you seen these partnerships so far help the price? Or are we still kind of waiting for them to kind of build up before that revenue, you know, helps the price? So essentially right now, Distopia and Penrose hold half of the market cap right now of Sphere. So I think they hold like $15-17 million in TVL. Sphere's market cap is roughly $30 million. So it's like half of that. We already made these profits. What we are doing right now is we compound these current market conditions. We don't know if the market goes even worse. So we are very conservative. We are saying, you know, as we don't know how the market is going to unfold, we are going to keep farming our liquidity and build our treasury further. And when we know, okay, the market finally had this relief or it's starting to rally up, we want to pair that with then the buybacks to actually exponentially grow the price. Right now, the liquidity pool is, I think, at $400,000 or $500,000. And our treasury is over $10 million. So our liquidity is, you know, back 20 times over. So we could essentially move the price up if we were to do that. But as the current market conditions are, we don't really believe that throwing the money that way around is going to be beneficial for the protocol long term. And that's why we're waiting for, you know, the market to rally back up so that we can then use our liquidity that we have amassed throughout the bear market, essentially, to, you know, grow the protocol. Okay, very cool. And then I don't know if you mentioned it or maybe you could get a little bit more into it, but how did these partnerships come about? And, you know, do you think there's going to be more? You know, how many partnerships do you think there's going to be in the next, you know, next six months or anything like that? Yeah. So essentially, what we have been doing is we have been looking at different teams. We are working very, very closely with Polygon, the chain. So, for example, the partnership with Tetra came through Polygon as a middleman, right? Like they said, we wanted to build... Sphere had like a smaller vision back then that we also wanted to build a liquid market within Sphere. But Tetra has been building that and we have been, you know, we have worked with Tetra thanks to Polygon saying, hey, instead of you both building, you know, different liquid markets and saturate the market, why don't you, you know, essentially Sphere overtake a big chunk of Tetra and support it financially to grow since it had all the technology ready and we could, you know, become the single biggest holder of Tetra, which we de facto are now. And, you know, have this liquid market then work for us and essentially have Tetra build different products with its own team instead of the Sphere team building that and, you know, spread the team capacities thin. Now Tetra since then has built crazy stuff, like they have built a cross-chain liquid wrapper token, essentially. And that is like a mouthful, say that three times. And how that works is, for example, a lot of people don't use Ethereum, right? So they cannot participate in a few protocols like Balancer, right? They have VeBal on Ethereum. And for you to vote and stuff like that costs gas. So what they did is they built essentially a mirror on Polygon so that users can vote through Polygon on Ethereum. So, you know, very cool and innovative stuff with the Tetra team. Then the Dystopia team also has been, you know, around for some time. We have been working with them together. They have been building Dystopia with me. We looked at Solidly's code, you know, on Phantom. We looked at the tokenomics. They were, in essence, quite cool. And what we did then is build also Penrose that is also by our team, like the Sphere team. And, yeah, like part of that is our own team. Part of that is separate teams. We have a few different teams within our little ecosystem that are building different products. And the list of partners here is going to grow massively in the next months. Like I think we have been working on a new design for this partner section, to be fair, where we have like, let's say, Penrose, Dystopia, Tetu, and a few other projects. But because we didn't want to oversaturate our landing page, we plan to add a subpage for our partners in the future because we plan to launch on Binance, on Avalanche, on Kronos, on Aurora, on Phantom, on Arbitrum, on Meteor.io, on Neon that is going to be the EVM-compatible Solana chain, Swapdex. Did I say Meteor.io? I did, right? Arbitrum and a few other chains we are in talks with to bring our utility items to their chains. And so far we have had very positive feedback from all these different chains. Essentially, the partners list with our product is going to be massive. Can you talk about what Sphere offers to these partners? Maybe talk a little bit about the quantum liquidity. Is that the main thing that you guys are offering? Or what does Sphere bring to the table with these? Sphere is bringing to the table the liquidity as a service. So what we are building is the infrastructure for Dex, for a chain to operate smoothly. Essentially, we want to build a hyper-capital efficient way for users to use the Dex, the chain, sorry. Because I keep saying Dex because of dystopia because I want to talk about dystopia. Essentially, we have something like Curve and Convex on Ethereum. But these are like layers on top of each other but they are not in conjunction with each other. They don't rely on each other in that sense directly. And what we want to do is we want to build different products that help each other. And because we build these products, we can then dictate how these products are going to be working together. So since we hold a big chunk of Penrose and Dystopia, we can make decisions on Penrose and Dystopia that helps Penrose and Dystopia's longevity. So let's say we have Preon that is coming. It's going to be a stable coin. The name is going to be decided by the experience. And for example, for Preon to grow big, we will need a lot of liquidity. And how can you incentivize that? You can then incentivize the pool on Dystopia with high rewards so that people can then deposit POSD. That's currently the name for it because Preon, Preon USD. And then let's say USDC for the peg, right? Because it's going to be a stable coin. And because we also build Dystopia and Penrose, we can then incentivize, like I said, Preon USD's LPs on Dystopia to maintain the peg and other chains do the same thing. So we are building an entire ecosystem and different utility items that work together very well. And that is going to be like the next wave of DeFi, right? Instead of building all these different products that then try to have this connection to each other, we build these products that rely on each other like an onion, right? And you have different layers, layers, layers. And so far, things have been pretty, pretty successful, I would say, in terms of, like I said, in TVL, we had, I think, like 50 million total on Penrose and Dystopia together at one point. So, you know, during a bear market saying that is pretty, pretty nice to say. Yeah. Yeah, no, absolutely. And I was going to actually ask about that. How has the bear market affected Sphere and how has it affected kind of your strategy as you go forward? I think I wouldn't say it affected us as much. Like the mentality didn't change. Of course, like everything took a dip. So a lot of people have been looking at the price and were like, doesn't look good and stuff like that, which I can totally see and understand. But, you know, Sphere has been building, continually building. Like I said, Dystopia, Penrose have been launched. We are in talks with over 10 different chains who deploy also our technology there. We're bringing Preon out. Sphere has built partnerships with, for example, Batswirl. We have built Sphere Games. We have, I think, 20% or 13% of the circulating supply locked into Sphere Games. So, you know, things are going quite, quite nice considering the conditions of the bear market and the entire community is stoked to see what we are continuously building. We keep expanding, you know, the team. We have added like a tokenomics team that is only focused to build products that tokenomically are efficient, right? Like how can we improve Sphere's tokenomics? How can we improve Penrose's tokenomics? How can we improve Dystopia's tokenomics? How did we change Preon's tokenomics? Like we changed a lot of things at Preon. So that's why I'm personally very, very excited with that. We have been in talks with big DEXs as well to optimize them. For example, what I can say is a project or a DEX on Polygon right now is sitting at, give or take, 270 million TVL. We are building to optimize that DEX and have a small, you know, share in the volume of that new DEX that is going to come with that 270 million TVL. So, you know, like a lot of different, you know, very, very interesting and very profitable revenue streams are coming with Sphere next to already, you know, established revenue streams with Dystopia and Penrose. Since launch, we have exceeded $100,000 already in profit that we keep compounding now and, you know, building that massive treasury. So when the bull market comes and, you know, let's say we have, I think we have like 10 million in Matic. So if Matic hits $2 again, it's going to be like a 20 million treasury plus. Like it's going to be plus $20 million. So, you know, very, very nice. These kind of things. Yes. No, absolutely. Is there anything else that you think would be really good for potential investors to hear for your community? Wash your hands, guys. You know, don't look at the charts for too long. You know, make sure, you know, that you stay with your family. Crypto is not everything. Well, for me it is, but you shouldn't follow that. You know, build, prosper in your life and you can always join our Discord community and, you know, ask questions, whatever you have. And, you know, we are very, very open to, you know, any sort of questions and we're looking forward to be talking to you guys. And yeah, God bless you all. Awesome. Well, very cool. Well, hey, thank you so much for hopping on and giving us the quick update. I'm excited about what Sphere's doing. Once you guys announced getting off of the rebase, I was like, I think I'm going to start getting in. So I kind of just been dollar-cost averaging in and excited for what we're building in the future. Awesome. Thank you so much, James. It's been a pleasure. All right. I hope you enjoyed that AMA with Samsala from Sphere Finance. Always a joy to talk with him. Very smart guy. So if you want to go ahead and get involved, then you just go to Enter App. This is how you buy. And what I've been doing is kind of these long-term projects, I don't look too much at the short-term. I just kind of dollar-cost averaging in and then I'm looking to the long-term. So you go into the app here, you can click on Purchase and you can swap Sphere here with Dystopia. And if you're a Sphere holder, it makes sense to use the swap they're partnered with and the bridge that they have. But if you have things already on the Polygon network, then you can just use Dystopia and swap for it. So that's one nice thing about... Matic is available now on Coinbase and FTX and Binance and everywhere. And so you can just buy Matic and then send it over to your Metamask wallet and then you can swap here for Matic or whatever you happen to have. Dye is the stable coin kind of on Polygon that people like. So you go ahead and swap here. And it's cool because the revenue generated in part goes back to Sphere holders. So if you're a Sphere holder, yeah, use Dystopia. But then a lot of times if you don't have anything on Polygon network, you can go into Swappy here on BSC and say I want to swap over my BUSD is what I usually have a lot of. And I want to go to Polygon, Sphere. So you can buy Sphere with your BUSD. So that makes it pretty easy to get that taken care of. So again, I just kind of dollar-cost average. If you believe in it long-term, then you dollar-cost average in and it is what it is. So I hope this was helpful for you. Let me know your opinion of SimSala, your opinion of Sphere. Appreciate you guys. Please hit like and subscribe for more of this content and hope you all have a great rest of your day.