Upcoming Launch Review: Pendulum

Assessment of Pendulum vision and Tokenomics

Hello Anon,

Market trend has started showing signs of reversals and lot of projects are preparing for new launches in the coming weeks.

We screened the market for the most interesting ones, both in terms of tokenomics and project vision.

One that caught our eye was Pendulum project, whose token ($PEN) will launch in mid February.

Pendulum will start on Polkadot, but in future will connect to DeFi on Ethereum, Cosmos and more.

WHAT IS PENDULUM?

• Pendulum will provide an infrastructure facilitating the integration of some services which are typical of traditional finance (TradFi) into DeFi, making DeFi more accessible to TradFi users

  • TradFi services which will be integrated into DeFi include, among others:

    • Forex services

    • Saving accounts

    • Lending

    • Cross Border Payments

  • They will be integrated into DeFi application such as

    • Forex AMMs to introduce scalable liquidity pools for fiat currencies, where fiat holders can earn yield

    • Lending pools where, again, fiat holders can earn yield

    • Yield farming

  • Example: Forex market (TradFi) integration into DeFi

    • The daily FOREX volume is on average around $6.6tn

    • Pendulum aims to bring Forex deep fiat liquidity into the DeFi ecosystem

    • Local currencies like the Euro, Mexican Pesos, and Turkish Lira can be used within DeFi via Pendulum protocol

• Pendulum makes DeFi accessible to the masses who use TradFi services and want to diversify their investment allocations

KEY PROBLEMS PENDULUM TACKLES

Key problems

• DeFi users are forced to go through USD to participate in the DeFi activities instead of using their local currencies

• Compliant on-ramps and off-ramps into the traditional financial system are either inefficient or too complex for a smooth user experience

• Existing financial markets, such as cross-border payments, savings accounts, lending, and foreign exchange are largely disconnected from blockchain networks and DeFi

• Forex AMMs currently have high fees

How Pendulum solves the above:

• Pendulum connects the multi-currency fiat banking system to DeFi products and services in a cost efficient way

KEY TOOLS OF PENDULUM: SPACEWALK + AMBER

1. Spacewalk

• To reach Pendulum vision, the team leverages the Stellar ecosystem which is an ideal breeding ground for connecting the existing financial system with DeFi

  • 15+ world currencies (and counting) are currently available as fiat tokens on Stellar via on/off-ramps compatible with traditional finance

• Spacewalk is a decentralized and secure bridge between the Stellar network and Polkadot, enabling Pendulum protocol to access fiat stablecoins on Stellar

  • Users lock their Stellar assets in stellar

  • Equivalent wrapped tokens are issued by Spacewalk in Pendulum protocol

  • Spacewalk uses Stellar Oracles to have correct information about transactions on Stellar so it can reliably mint wrapped tokens after the user locks tokens

2. Amber

• Amber is the Proactive Market Maker which allows bringing forex liquidity on DeFi

• Allows cost efficient Forex swaps which are not possible with traditional AMMs, where impermanent loss has to get offset with trading fees in order to attract and hold liquidity

  • Forex swap fees on Amber are 0.05%-0.10% vs. 0.32% on Uniswap

• Low costs enable Amber to tap new sources of liquidity (like forex) and operate with significantly lower slippage and fees compared to other AMM designs

PENDULUM TOKEN ($PEN): WILL LAUNCH IN MID FEBRUARY. BELOW A TOKENOMICS ASSEMENT

Utility

• Gas token of the whole $PEN ecosystem

• Staking

• Governance on topics such as listings, rewards, technical modifications, community suggestions

Allocation (200,000,000 tokens):

Vesting schedule:

Tokenomics Commentary: 

• Token allocation seems very well distributed as community incentives account for 50% of total token distributions

  • This shows interest by Pendulum team in having an engaged and active community, which will be rewarded for participating to the project

• Vesting schedule of private sale / strategic sale seems reasonable and seems able to support positive price action: there are no major cliff unlocks, only slow linear inflation across 24 months

• Would monitor first unlock date of the Team allocation in August 23: again, the unlock size is very small and should not impact price in any significant way. Future inflation seems again very sustainable across 18-month vesting

• Rewards, which account for 20% of the allocation, will be distributed to token holders and community members, therefore there should not be any major dumping risk given it will be very fragmented

TL,DR:

• Solves real problems creating a bridge between TradFI and DeFi

• Facilitates attracting capital of users outside Crypto

• Enables compliant crypto on-ramps and off-ramps into the traditional financial system with smooth user experience

• Unique cost efficient solution for swaps involving Forex in the market

• Sustainable tokenomics

EXTRA

• Reply to this email or DM us if:

  • You are interested to purchase the token unlock schedule in Excel for 180 coins

  • You are building any projects that you want us to review like the above

  • You are interested in purchasing an excel model for tokenomics assessment