How the WOO token will be utilized as B2B clients and professional traders seek to unlock zero or even negative fees on the Wootrade network.
Wootrade’s Vision: To create a superior trading environment by unifying liquidity across exchanges, DEXs, and other trading platforms. These platforms can source their entire order book from Wootrade at zero cost, provided they stake the WOO token as a right to access the network. In this article, we will look at how staking will function among the B2B clients and professional traders.
Introducing: Wootrade’s Zealous Rhino Staking Program
Across the cryptocurrency space, most projects struggle with inflationary tokenomics due to ambitious staking plans offering very high short-term returns. Tokens without a practical use case are released at an excessively high rate, leading to rapid inflation and insurmountable sell pressure.
Few people understand markets better than Wootrade, a project incubated by leading quant trading firm Kronos Research. In the Zealous Rhino staking program, we will avoid token inflation by closely linking the WOO token to highly sought after incentives on the platform.
This staking program targets two main audiences — professional API traders and trading platforms (exchanges, institutions, wallets, etc).
Professional traders: These can be defined as CTAs, arbitrageurs, and more sophisticated algorithmic traders who don’t care about the user interface and live purely in math and code. They probably feel lost if they needed to make manual trades. They care most about execution quality and fast withdrawal/deposit speeds. They are willing to stake large amounts of WOO tokens since every bit of fee reduction matters a lot to their bottom line.
Trading platforms: Broadly categorized as B2B clients, these platforms care most about order book and execution quality, easy integration, leverage and credit for capital efficiency, and only need to withdraw a few times a day. They need popular tokens listed quickly (before mainstream exchanges like Huobi, Binance, and OKEx) and would benefit tremendously from a centralized AMM model to bootstrap liquidity for new coins. Although they use the website to transfer funds and settle, they trade via API. They don’t mind staking large amounts of WOO if they see enough value in the system.
Note: A third category of retail investors and traders are not included in this Zealous Rhino program, but will have a separate model to reward token holders at a later date.
The main benefit of the staking program is to offer reduced fees, zero fees, or even rebates (negative fees) to those who stake enough WOO. Participants who don’t wish to stake WOO can also use the platform but will pay a higher percentage in fees.
The fee structure:
The fees are expressed in basis points (bps), a common financial term that refers to 1/100th of 1%. For example, 1bp refers to .01% or around $1 on every $10,000 traded.
Fees are differentiated by maker or taker fees; which simply means that those who place orders on the order book are a maker; whereas those who accept an existing order at market price become a taker. For reference, a standard fee on a centralized exchange can be anywhere from .1% to .5%; which is equal to 10–50bps.
The different tiers available are shown in the chart below. Tiers 0–2 are unlimited, while Tier 3 will be limited to 10 clients at any one time.
How will this impact the supply?
According to the current agreement with existing clients, Wootrade will have 8 clients (Tier 2) and approximately 40,000,000 WOO pledged at launch. It is expected that the Zealous Rhino plan will see 500 million tokens staked in the first year which accounts for approximately 80% of the WOO circulating supply during that period.
For non-API traders and institutions, Wootrade will launch a trading platform with a separate staking plan. The platform is expected to be available for trial at the end of November with special staking benefits given to the first 1,000 registered users.