Market Value Reaches $50 Million, NFT Floor Price Hits $30, What Are The Returns of The Standard Reserve?

Author: KarenZ, Foresight News

I currently own a "bank."

It has no branches, employees, or depositors, only a Genesis Charter NFT and a Branch. The page shows that this "Branch" has generated a total of 147 STANDARD, valued at approximately $70 based on the current price of $0.48.

However, these STANDARD are merely recorded as pending balances within the protocol and have not yet been minted to my wallet. To convert them into tradable tokens, I need to close the "Branch" and pay an exit fee, permanently relinquishing any future issuance rights associated with that "Branch." Since I currently have only one "Branch," closing it will also destroy the corresponding Genesis Charter, thereby terminating this "bank."

The Standard Reserve does not directly issue tokens to NFT holders but ties the "redemption of accumulated earnings" to the "permanent relinquishment of corresponding future issuance rights." This design raises concerns of a "Ponzi scheme": participants see a continuously growing balance, but whether that balance can ultimately translate into actual earnings depends on future market demand, token prices, exit costs, and protocol liquidity. This mechanism alone is insufficient to draw direct conclusions; its sustainability must be tested through actual operational data.

It should be noted that the terms "bank," "banker," "Genesis Charter," "Branch," and "Expansion License" used by the project are internal concepts of the protocol. The Standard Reserve is an experimental on-chain protocol and is not a regulated financial institution, nor does it provide real-world bank accounts, deposits, or other financial services.

Risk Warning: The Standard Reserve is still in its early stages, and participation carries high risks. The price of STANDARD may fluctuate significantly, Genesis Charters are currently non-transferable, and the output displayed on the page does not equate to directly sellable earnings. Participants need to close branches and bear dynamic exit costs when redeeming tokens, while also facing risks of branch dilution, policy multiplier adjustments, and smart contract security.

1,000 On-Chain "Bank Licenses" Raise 583.6 ETH

On the morning of September 15, all 1,000 Genesis Charters of The Standard Reserve were minted. The total revenue recorded by the on-chain contract was 583.594968887 ETH, valued at approximately $1.47 million based on ETH prices before and after the minting.

Of these, 601 were minted by whitelisted users at 0.15 ETH each, totaling 90.15 ETH; the remaining 399 were put up for public Dutch auction, raising approximately 493.445 ETH, with the majority of transaction prices between 1.23 ETH and 1.25 ETH.

The Dutch auction originally allowed participants to wait for prices to drop, but in reality, most bidders chose to transact while prices were still close to the starting price of 1.25 ETH. The average price in the public auction was about 8.24 times the whitelist price, indicating that the market was purchasing not just an NFT, but the initial issuance participation rights represented by the Genesis Charter.

The project team previously stated that 100% of the proceeds from the minting of the Genesis Charter would be used for initial liquidity and the protocol treasury, and the team would not receive any share from this minting income.

Meanwhile, the zero team share from the Genesis minting does not apply to future income. According to the white paper and the current parameters of the deployed contract, 70% of transaction taxes and future Charter auction income will go into the active treasury for that period, with net fund flows entering either the expansion treasury or contraction treasury; 15% will be used for the protocol's own liquidity (half of which has been exchanged for STANDARD for pairing), and 15% will be allocated to the team.

700,000 STANDARD Issued Daily, How Much Can My "Bank" Earn?

The hard cap for STANDARD supply is 1 billion. Of these, 100 million were pre-minted during the Genesis phase and placed into the protocol's own liquidity, while the remaining 900 million constitute the future issuance budget.

However, these 900 million will not enter the market all at once. As mentioned in my article on August 24, "The Standard Reserve's On-Chain Currency Experiment: What New Tricks Are They Playing?", The Standard Reserve adopts a "record first, mint later" approach: the protocol first records the issuance quota in the internal balances of each "bank," and only when the banker closes the "Branch" and claims the earnings will the corresponding STANDARD be truly minted to the wallet.

The current initial parameters are:

• Base issuance rate: 700,000 STANDARD per day;
• Policy multiplier m: initial value of 1, dynamic range of 0.2 to 1.25;
• Epoch length: 3 days;
• Total number of "Branches" in the network: 1,100 (as of September 15, with 100 auctions daily thereafter).

The basic output formula for a "bank" is: Daily output = 700,000 × policy multiplier m × number of own branches ÷ total number of branches in the network.

Calculating with one "Branch" I hold: 700,000 × 1 × 1 ÷ 1,100 ≈ 636.36 STANDARD/day.

If the policy multiplier and the total number of Branches do not change throughout the entire 3-day Epoch, the theoretical cumulative output would be approximately: 636.36 × 3 ≈ 1,909.09 STANDARD.

However, 636.36 is merely the current point's gross output speed and not a stable daily yield. It will be influenced by two variables: the total number of "Branches" in the network and the policy multiplier.

When net fund outflows create a negative signal, the policy multiplier for the next Epoch will decrease by 0.15; it will only gradually increase by 0.1 when there is continuous positive net inflow. A reduction can occur after a negative Epoch, while an increase requires consecutive positive signals.

Calculating with 1,100 Branches, when the multiplier is 1.25, one Branch theoretically produces about 795.45 STANDARD per day; if the multiplier drops to 0.2, it will only yield 127.27 STANDARD per day.

The increase in "Branches" will reduce the issuance share of each individual "Branch," but if the policy multiplier rises simultaneously, the increase in total issuance may offset some dilution; if the number of "Branches" increases while the policy multiplier decreases, it will simultaneously depress both shares and output.

100 New Branches on the First Day, Dilution Has Already Begun

Each Genesis Charter initially comes with one "Branch," and can establish up to 10 "Branches" thereafter. Therefore, 1,000 Genesis Charters correspond to the initial 1,000 Branches.

On the first day, 100 "Branch" Expansion Licenses were also sold at auction, and these expansion licenses have all been used to open new "Branches," increasing the total number of "Branches" in the network to 1,100.

New "Branches" will not increase the total base issuance for the day across the network; they will only change the distribution of the 700,000 STANDARD. Each "Branch" corresponds to one issuance right, and the earnings of existing "Branches" will decrease as the denominator expands.

Assuming the policy multiplier remains at 1:

After the addition of 100 new Branches on the first day, a Genesis Charter without expansion has seen its share drop from 0.1% to 0.0909%, and its daily theoretical output has decreased from 700 to 636.36, a relative reduction of about 9.1%.

If 100 new Branches continue to be added daily, when the total number of Branches in the network reaches 2,000, the daily output of one Branch will drop to 350, only about 55% of the current level.

However, the daily addition of 100 is merely the auction parameter at launch and is not permanently fixed. The white paper allows owners to adjust the daily supply of expansion licenses within protocol limits, with a cap of 2,000. Future new Genesis Charters will also come with the first "Branch," which will similarly expand the denominator.

It is important to note that new "Branches" will only dilute future output after their establishment. The STANDARD already accumulated in the internal balance of the Bank will not be retrospectively diluted.

For Bankers, purchasing a "Branch" Expansion License is akin to actively countering dilution, but expansion itself also incurs costs.

The starting auction price for 100 "Branch" Expansion Licenses on the first day was 12,000 STANDARD, and the closing price was 11,888.34 STANDARD, with an on-chain average transaction price of approximately 11,927.71 STANDARD. The proceeds from these "Branch" Expansion Licenses, about 1.1928 million STANDARD, will be completely destroyed.

Based on the current gross output of 636.36 STANDARD per day for one Branch: 11,927.71 ÷ 636.36 ≈ 18.74 days.

This means that if the policy multiplier, the number of "Branches," and the price of STANDARD remain unchanged, the simple gross payback period for purchasing a "Branch" Expansion License on the first day is approximately 18.7 days.

However, the actual payback period is likely to be longer, as new "Branches" will continue to increase, the policy multiplier may decrease, and ultimately, to claim tokens, one must close the "Branch" and pay exit fees. The exit fees are related to the degree of redemption.

Expansion also presents a straightforward game: if only a few bankers increase their "Branches," they can raise their issuance shares; if all bankers expand at the same ratio, the relative shares will not change much, merely paying and permanently destroying a batch of STANDARD together.

Token Market Value Reaches $50 Million, NFT Floor Price Rises to $30, But Non-Transferable

After the Genesis Mint concluded, the protocol immediately injected liquidity and opened STANDARD trading.

In the first hour after trading began, a temporary anti-sniping tax was set, with both buy and sell taxes starting at 90% and decaying exponentially. As of 10:00 AM Beijing time on September 15, the on-chain tax rate has dropped to normal levels: 2% for buying and 3% for selling. Actual trading also needs to consider Uniswap LP fees and slippage.

Screenshot at 9:13 AM on September 15.

According to GMGN data, the market value of STANDARD briefly rose to about $44 million after its launch, then fell to $27 million, and has now rebounded to around $50 million, setting a new high, with liquidity in the pool at approximately $17 million. As of now, the total transaction volume since launch has reached $46.3 million.

For Bankers, the rising price of STANDARD increases the book value of pending balances, but it does not change the redemption rules.

The issuance quotas generated by the protocol each day are only recorded internally in the Genesis Charter. To convert these quotas into truly tradable ERC-20 tokens, Bankers must close one or more Branches:

• Closing 1 out of 10 Branches allows claiming one-tenth of the book balance;
• The amount claimed will incur exit fees ranging from 2% to 60%;
• The closed "Branch" will permanently disappear and will no longer receive future issuances;
• If the last "Branch" is closed, the Charter will also be destroyed.

Half of the exit fees are permanently removed, while the other half will be distributed to Bankers still in the system in the next Epoch.

Therefore, a Genesis Charter with only one "Branch" cannot extract earnings while retaining output capacity. It faces three choices: continue to hold and endure dilution; purchase a "Branch" Expansion License to increase the number of "Branches"; or close the only "Branch," claim the balance, and end the entire journey in the protocol.

The OpenSea page currently shows that the floor price for Founding Charters is $30,000 USDG, with the highest bid around $7,500 USDG. There is a significant price gap between the two.

However, Genesis Charters are currently still in a Soulbound state, and the transfer switch of the contract has not yet been activated, meaning trading is not supported at this time.

According to the white paper, this is a one-way switch: once activated, the Charter will permanently remain transferable and cannot be closed again. At that time, selling the Charter will transfer both the "Branches" and the pending balances along with it.

The Standard Reserve has also set another one-way switch: the buyback during contraction periods and the protocol's own liquidity pairing operations, initially executed by the owner, can be permanently opened for anyone to execute in the future.

This means that The Standard Reserve has preset a path for gradually reducing control, but it is not a completely permissionless protocol at launch.

Conclusion

The sell-out of Genesis Charters, the soaring floor price, the first round of "Branch" Expansion Licenses being snapped up, and the market value of STANDARD briefly reaching $44 million all indicate strong demand for this mechanism during the launch phase.

However, these data do not yet prove that the protocol can operate stably in the long term.

As more "Branches" are established, the issuance shares of existing participants will be diluted; when the net inflow of ETH weakens, the policy multiplier may be adjusted downward, and the total issuance speed of STANDARD will also decrease. Bankers wishing to realize book earnings will need to permanently close the corresponding "Branches" and pay dynamic exit fees of up to 60%. Additionally, fluctuations in the price of STANDARD, smart contract security, and other factors will affect final earnings.

More importantly, in this system, "claiming earnings" will permanently destroy the tools that generate those earnings. DYOR.