ERC-20 Staking Tokens Compared

Lately, there has been a boom in Ethereum based staking tokens. This article will compare and contrast the tokens and I will give my opinion on which one I think will come out on top. The article will just go in alphabetical order, no order of importance is given.

Axion(AXN) came into being after following the footsteps of Hex(HEX) and the developers of the AXN environment claim that they have improved upon the HEX code, tokenomics, and distribution methods to attract more investors. Currently the AXN metrics are as follows:

• 101b AXN circulating
• 10m USD market cap
• 76.5% Staked
• 8% inflation rate
• 1.3m USD in liquidity pool on Uniswap
• Anonymous Team

HEX is the brain child of the controversial figure Richard Heart. Richard Heart created HEX in late 2019 by mimicking a real world financial product known as the certificate of deposit. How it works is, you lock away your funds and earn interest from the bank and can not access your funds in the said locked period. If you try to withdraw you incur heavy penalties. This was exactly copied onto the Ethereum ecosystem. Currently the HEX metrics are as follows:

• 567b HEX circulating
• 7.1b USD market cap
• 3.69% inflation rate
• 6m USD in liquidity pool on Uniswap
• Richard Heart

Wise Token(WISE) was launched in late 2020 with a 50 day presale period where investors locked their WISE reservations over daily auctions. After the presale the ETH used for reserving for WISE was locked away in its Uniswap liquidity pool. WISE founder Peter Girr has been stating that WISE token will attract large investor due to this giant liquidity pool on uniswap. Currently WISE metrics are as follows:

• 497m WISE circulating
• 97m USD market cap
• 4% inflation rate
• 91m USD in liquidity pool on Uniswap
• Peter Girr

Now that you are aware of the basics of all three tokens, let’s get into the analysis part.

HEX was launched first and the other two (no matter how much they like to deny it) are trying to feed off of the success of HEX. AXN even has a freeclaim period for HEX holders. WISE founder Peter Girr compares HEX market cap to his token when speaking about the potential of WISE. So AXN and WISE came after HEX trying to emulate the success HEX has had over 2020 as a blockchain certificate of deposit. So this gives your a small background on how these projects came to be.

The circulating supply of all tokens are very high and they constantly inflate. This is because the stakers have to be rewarded for staking their coins. Keep in mind, NONE of these tokens are capped supply. So there is a constant sell pressure on all of them to match the previous day price. Just to remain in constant price HEX has to onboard 3.69% more USD yearly, AXN 8%, and WISE 4%. So every year, even if all things remained the same, all these coins have to grow by their inflation rate just to remain at their current price.

Looking at the market cap we see that HEX is in the stratosphere compared to the other two. First mover advantage can be seen clearly. AXN has the lowest market cap. WISE token launched around 90m USD market cap and it also has a lot of room to grow if it matches what HEX has done. So the biggest possible grower here is probably AXN if we were to just look at the market cap.

AXN however has the highest inflation rate which again means more sell pressure and more need to grow. HEX and WISE have very similar inflation rates.

Liquidity pool… now here is what really determines how much these tokens will pump in the next year. HEX has done fine with around 5m — 15m USD in Uniswap LP over the last year. Most investors in HEX are pretty happy with how many multiples their holdings have made. This is due to HEX having small enough of an LP to be volatile but not too small that smaller holders get rekt if a big whale dumps. Same goes for AXN, with small LP it can pump the hardest amongst the three.

WISE took a big risk with its large liquidity pool. The initial thinking was with a huge pool they will attract biggest of whales in Ethereum and have it launch from there. This in theory is a good idea but it quickly falls apart given the realities of the crypto ecosystem. Crypto does not have large institutions holding millions of Ethereum at the moment. Only recently Bitcoin has been attracting large institutional investors. For this to flow into Ethereum it will take some time. Given these premises and given the fact that MAJORITY of Ethereum holders are average Joes that want to flip their 1 ETH into 5ETH, 10 ETH WISE team may have over estimated the flow of investors. Moving a 100m USD LP is extremely hard, as time goes on and as price remains stable people will dump their WISE bags to move onto something they think will give them higher returns. This will be the Achilles heel of the project. You can not expect the price to move up or down too much with 9000 wallets holding WISE. The project may fail due to this massive LP on Uniswap. Crypto is all about price movement and without that movement eyes will not turn to WISE no matter how strong the project mechanics are.

I think HEX will keep going up due to it’s network effect and it will be followed by AXN. WISE in my opinion will eventually stagnate and interest will die down due to lack of price action. I expect HEX to 5x — 10x in 2021, AXN to possibly 10x-50x, and WISE to possibly 2x-4x.

I see AXN as the most risky bet as they have had two re-launches after their initial launch. WISE on the other hand seems to be the safest bet with its’ huge LP, however that could work against them. HEX is in the middle of the two with potential for growth but also beware of massive price volatility.

Thank you for reading.