Understanding WOO Network: Quarter Three, 2021

Understanding WOO Network: Quarter Three, 2021

Themes, statistics, and analysis from the third quarter of 2021, plus a look ahead at future development for WOO X and other products.

After a slowdown through late Q2, the cryptocurrency industry saw a strong bounce-back throughout Q3. Cryptocurrency prices, trading volumes, and on-chain activities have all recovered strongly. Bitcoin and Ethereum have rebounded significantly from lows of $28K and $1.8K, respectively. Spot trading volumes across centralized exchanges have more than doubled from June to over $1.2T throughout September.

Growth in DeFi has outpaced the centralized sector, with significant user adoption across many layer one ecosystems like Solana, Avalanche, Terra, and Fantom. Aggregate TVL across major blockchains has nearly reached $200B at the end of Q3. A driving factor for this rapid growth has been announcements of major liquidity mining incentive programs. These initiatives encourage users to bridge their assets, interact with applications and provide liquidity by rewarding users with ecosystem tokens.

The industry has also seen increasing adoption from institutional investors, with record venture and private investments. Projects like Arbitrium, Avalanche, and FalconX each raised more than $100M during Q3. Similarly, this quarter saw continued growing interest from financial service providers like Visa, BNY Mellon, and Bank of America.

Despite these positive trends, cryptocurrency regulations around the globe have tightened with China increasing its negative stance on crypto mining and securities regulators increasing their attention on DeFi. That said, the growing regulatory clarity and compliance will support long-term adoption for the cryptocurrency industry.

WOO Network’s Growth

This quarter saw record trading volume passing through the WOO Network, nearly doubling to $29.5B from $16.5B in Q2. This growth was largely driven by increasing volumes in DeFi, with Kronos Research becoming a leading market maker on dYdX and hedging their exposure on WOO Network.

WOO Network’s institutional partnerships saw continued growth. Three major partnerships were added, including major global exchange Kucoin, Nash which offers the first WOO/EUR trading pair, and the EVM-compatible ecosystem Fantom. There are now more than 40 clients trading on Wootrade, WOO Network’s institutional liquidity service.

Figure One: WOO Network Monthly Trading Volumes, Y-axis denominated in Billions (USD).

We saw even larger growth on WOOFi pools, which at one point in September accounted for more than 8% of Polygon Network’s 24-hour volume. What’s more impressive, this was accomplished with just 0.02% of Polygon’s TVL — that’s a 410:1 volume to TVL ratio and highlights the capital efficiency WOO Network is able to achieve on-chain.

Since the WOO Network is chain agnostic, it aims to provide liquidity across the entire cryptocurrency ecosystem. As a result, WOO X now offers many cross-chain integrations, including:

  • Matic Network: WOO and MATIC
  • Arbitrum: WOO
  • Fantom: WOO
  • Algorand: USDT

Despite growing trading volumes, this quarter’s revenue lagged and resulted in a relatively low quarterly token burn. Two contributing factors were hedging costs and WOO X promotional offerings. WOO Network is actively making improvements to its flow trading models, which will translate into increased rebates earned and WOO tokens burned. Since WOO X launched in Q3, many promotional offerings have been given to retail and institutional clients. These benefits range from free trading fees to discounts on margin interest. Together, these benefits reduced revenue but helped bootstrap users and grow adoption on the platform. As we continue to onboard users and expand the product line into futures and yield products, WOO X will have larger and diversified streams of revenue.

The WOO Token

*All statistics in this report are accurate as of October 9th, 2021.

Quick Token Insights

  • The circulating supply is 521,412,228, which accounts for 17% of the 2,991,843,649 total supply. The market capitalization reached $446M, which increased from $315M at the end of Q2.
  • There are now over 15,000 unique on-chain addresses spanning the Ethereum, BSC, Polygon, Fantom, HECO, and Solana networks. This on-chain user base increased 65% from the previous quarter.
  • For WOO, the most liquid AMM pools are Uniswap V2 and Bancor, and as a result, they receive the bulk of the volume and fees. Uniswap V3 also sees high volume despite lower liquidity, making it a high-earning option for liquidity providers. As of the end of Q3, SushiSwap, PancakeSwap, Quickswap, and SpookySwap stakers also benefit from additional liquidity mining rewards.
  • Over 131M WOO tokens are currently staked on WOO X, which represents a 20% increase from Q2. There are almost 2,400 retail users with at least 1,800 WOO staked.
Figure Two: On-chain Liquidity for WOO across DeFi

Tokenomics and Statistics

The circulating supply increased by 53M WOO this quarter, a further 9% decrease from Q2. Around half of the unlocks (24M) belonged to seed investors, who are vesting until Spring of 2024. The remaining increase was due to ecosystem rewards, staking rewards, team vesting unlocks, WOO Ventures, and advisor vesting unlocks.

For Q3, the WOO token burns were as follows:

July: 48,930

August: 217,523

September: 312,936

Q3 Total: 579,389

2021 Total: 8,440,649

Product Development and Roadmap

Q3 Product Highlights

Some key milestones accomplished in Q3 are:

  • WOO X officially launched in August, which features zero-fee trading and fully customizable trading workspaces. Now traders can access the ultimate trading experience of deep liquidity with low execution costs.
  • The Mobile app for WOO X also launched, which gives our users access right in the palm of their hand.
  • After investing in DODO earlier this year, WOO Ventures has announced its first airdrop for WOO X stakers.
  • Spot Margin v2 was implemented on WOO X, which improved interest rates on borrowed tokens, added more tokens allowed as collateral, and improved the collateral ratios.
  • Vaults were introduced within users’ wallets, which enables users to exclude their assets from trading collateral and safeguard their assets from liquidation risk.
  • The WOO Network improved its website with the launch of woo.org, which differentiates between the business lines of our institutional gateway Wootrade, centralized exchange WOO X, DeFi integrations via WOOFi, and the strategic investment arm WOO Ventures.
Figure Three: These tokens were listed on WOO X in Q3 2021.

Product Roadmap

Development teams are now working in parallel on a few major products. A few key priorities include:

  • Improving the mobile app, including the development of an Android version.
  • Subaccounts to allow users to segregate trading accounts within one master account.
  • Futures (perpetual swaps) on major tokens and new indexes.
  • Social trading to enable users to follow the trading strategies of top traders or their favorite influencers while allowing others to monetize their trading strategies.
  • Yield products allowing users to earn on their assets held on WOO X.
  • Decentralized products that can bridge users and trading volume across layer ones.

WOO Network will look to release a more comprehensive product roadmap later in Q4.

Legal and Compliance

Regulatory compliance remains a top priority for WOO Network:

  • In response to the latest regulations worldwide, a mandatory KYC/AML process was implemented on WOO X, with support for 90+ countries.
  • Identifiers were implemented to accept multiple ID types for 50+ countries.
  • WOO Network is forming partnerships with external legal counsel to legally onboard and open services for users in currently unsupported countries.

Heightened regulatory scrutiny has been most evident in China, a country that has a large representation within the cryptocurrency trading industry. WOO X has suffered very little impact due to these regulations, mainly because WOO X has never supported Chinese users. Additionally, the fragmentation of users off of platforms due to regulatory changes has created more demand for DeFi liquidity, causing a spike in interest for DeFi services that WOO Network can provide. In summary, tighter regulations will benefit WOO Network in the long term as we expand our operations while remaining compliant.

Business, Talent Acquisition, and HR

  • There are 96 total team members in WOO Network with 34 new members added in Q3.
  • To further expand our talent pool, we’ve set up our new office in Poland and have strategized our hiring plan for Q4 which focuses on building DeFi products and growing our engineering teams.
  • At the same time, we are making significant progress in Ukraine as we will onboard a Head of Fiat Strategy, along with building BD/MKT teams in the region.
  • After revamping our internal meeting structure to accommodate larger and more decentralized teams, employees’ satisfaction ratings have been gradually rising.

WOO Community

  • The total social media following across all WOO Network’s channels increased over 100% from 40K members in Q2 to over 80K members in Q3.
  • WOO Network has 11 active communities which host 25.5K members. These include groups of traders and WOO holders in English-speaking countries, Taiwan, India, Spain and Latin America, Arabic-speaking countries, Turkey, Vietnam, Russia and CIS, and Central Europe.
  • The total traffic to woo.org and x.woo.org webpages increased over 170%, with the highest traffic coming from the US, Central Europe, and South-East Asia.
  • India and Arabic-speaking countries, including Bahrain, UAE, and Saudi Arabia showed the highest increase in traffic to x.woo.org with over 300% in comparison to Q2, 2021.

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The content above is neither a recommendation for investment and trading strategies nor does it constitute an offer, solicitation, or recommendation of any product or service. The content is for informational sharing purposes only. Anyone who makes or changes the investment decision based on the content shall undertake the result or loss by himself/herself.

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