I opened a "bank" on-chain.

Written by: KarenZ, Foresight News

I now have a "bank" under my name.

It has no business hall, employees, or depositors, only a Genesis Charter NFT and a Branch. The page shows that this "Branch" has generated a total of 147 STANDARD, worth about 70 USD at the current price of 0.48 USD.

However, these STANDARDS are only the unclaimed balance recorded internally by the protocol and have not been minted into my wallet. To turn them into tradeable tokens, I need to close the "Branch" and pay an exit fee, while permanently relinquishing any future issuance rights for that "Branch". Since I currently have only one "Branch", closing it will also destroy the corresponding Genesis Charter, and this "bank" will cease to exist.

The Standard Reserve does not distribute tokens directly to NFT holders but binds "cashing out accumulated earnings" to "permanently relinquishing corresponding future issuance rights". This design can easily raise "Ponzi" concerns: participants see a continuously increasing balance, but whether that balance can ultimately convert into actual earnings still depends on subsequent market demand, token prices, exit costs, and protocol liquidity. This mechanism alone is insufficient to draw conclusions; its sustainability still needs to be tested through actual running data.

It should be noted that the terms "bank," "banker," "Genesis Charter," "Branch," and "Branch Expansion License" referred to in the project are all 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 bank accounts, deposits, or other financial services in the real world.

1000 on-chain "bank licenses," raising 583.6 ETH

On September 15th morning, all 1000 Genesis Charters of The Standard Reserve were completely minted. The total revenue recorded by the on-chain contract was 583.594968887 ETH, which is approximately worth 1.47 million USD based on the ETH price at the time of minting.

Of these, 601 were minted by whitelist users at 0.15 ETH each, totaling 90.15 ETH; the remaining 399 went into a public Dutch auction, raising about 493.445 ETH, with most transaction prices between 1.23 ETH and 1.25 ETH.

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

The project party previously stated clearly that 100% of the proceeds from the minting of the Genesis Charter will be used for initial liquidity and protocol treasury; the team will not receive a share of the proceeds from this Genesis minting.

Meanwhile, the zero team share from the Genesis minting does not apply to subsequent income. According to the white paper and the current parameters of the deployed contract, 70% of transaction taxes and other continuous ETH revenues from future Charter auctions will go into the active treasury for the current period, and will enter either the expansion treasury or the contraction treasury based on the net cash flow of this Epoch; 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.

Issuing 700,000 STANDARD daily, how much can my "bank" earn?

The hard cap supply of STANDARD is 1 billion. Among these, 100 million were pre-minted during the Genesis phase and allocated to 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 I wrote in my August 24 article "The Standard Reserve's On-Chain Currency Experiment: What New Tricks Are Being Played?", The Standard Reserve adopts a "record first, mint later" approach: the protocol first records the issuance limits in the internal balances of each "bank", and corresponding STANDARDS will only be minted into wallets when the banker closes the "Branch" and claims the earnings.

The current initial parameters are:

• Base issuance speed: 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 whole network: 1100 (as of September 15th, with 100 being auctioned daily thereafter).

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

Based on my holding of one "Branch": 700,000 × 1 × 1 ÷ 1100 ≈ 636.36 STANDARD/day

If the policy multiplier and total number of Branches do not change throughout the entire 3-day Epoch, the theoretical cumulative output would be approximately: 636.36 × 3 ≈ 1909.09 STANDARD

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

When net cash outflows signal negativity, the policy multiplier for the next Epoch drops by 0.15; when there are sustained positive net inflows, the multiplier will gradually increase by 0.1. Reduction in issuance can occur after a negative Epoch, whereas increasing issuance requires continuous positive signals.

Considering 1100 Branches, at a multiplier of 1.25, one Branch theoretically produces about 795.45 per day; if the multiplier drops to 0.2, it will only yield 127.27 per day.

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

100 new branches opened on the first day, dilution has begun

Each Genesis Charter comes with an initial "Branch", and can later establish up to 10 "Branches". Thus, 1000 Genesis Charters correspond to the initial 1000 branches.

On the first day of the auction, 100 "Branch Expansion Licenses" were also sold, and all these licenses were used to open new "Branches", increasing the total number of branches in the network to 1100.

The new "Branches" do not increase the total base issuance for that day in the network; they only change the distribution of the 700,000 STANDARD. Each "Branch" corresponds to a portion of issuance rights, and earnings from existing "Branches" will decline as the denominator increases.

Assuming the policy multiplier remains at 1:

After adding 100 Branches on the first day, a Genesis Charter without expansion has already seen its share drop from 0.1% to 0.0909%, with theoretical daily output decreasing from 700 to 636.36, a relative decrease of about 9.1%.

If 100 Branches continue to be added daily, when the total number of Branches in the network reaches 2000, the daily output for one Branch will drop to 350, only about 55% of the current level.

However, the daily 100 additions are just the parameters at launch and not a permanent fixture. The white paper allows owners to adjust the daily supply of expansion licenses within the protocol constraints, with a cap of 2000. Future Genesis Charters will also come with their first "Branch," which will similarly increase the denominator.

It is important to note that new "Branches" will only dilute the future outputs after they are opened. The STANDARD that has already accumulated in the Bank's internal balance will not be retroactively diluted.

For Bankers, purchasing "Branch Expansion Licenses" amounts to actively combating dilution, but expansion itself also has costs.

The starting price for 100 "Branch Expansion Licenses" on the first day was 12,000 STANDARD, with a closing price of 11,888.34 STANDARD, and the average price on-chain was approximately 11,927.71 STANDARD. The proceeds from these "Branch" expansion license auctions, approximately 1,192,800 STANDARD, will all be destroyed.

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

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

However, the actual payback period is likely longer, as new "Branches" will continue to increase, and the policy multiplier may decrease. To ultimately claim the tokens, one must close the "Branch" and pay the exit fee, which is related to the level of exit pressure.

Expansion also presents a very direct game: if only a few bankers increase their "Branches", they can boost their issuance shares; if all bankers expand by the same ratio, the relative shares everyone holds will change little, merely jointly paying for and permanently destroying a batch of STANDARD.

Token market cap reaches 50 million USD, NFT floor price rises to 30,000 USD but cannot be transferred

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

In the first hour after trading started, a temporary anti-scam tax was set: both buying and selling taxes started at 90% and decayed exponentially. As of 10:00 AM Beijing time on September 15th, the on-chain tax rates had dropped to regular levels: 2% for buying tax and 3% for selling tax. Actual trading also needs to consider Uniswap LP fees and slippage.

Screenshot at 9:13 AM on September 15th

According to GMGN data, the market cap of STANDARD surged to about 44 million USD shortly after its launch, then fell back to 27 million USD, and now the market cap has rebounded to around 50 million USD, setting a new high, with pool liquidity of about 17 million USD, and a total transaction volume of 46.3 million USD since launch.

For Bankers, an increase in STANDARD price will raise the book value of the unclaimed balance, but it will not change the claiming rules.

The issuance limit generated by the protocol each day is merely recorded within the Genesis Charter. To convert these limits into real tradeable ERC-20 tokens, a Banker must close one or more Branches:

• Closing one of the 10 Branches allows claiming one-tenth of the book balance;
• The claimed amount must deduct an exit fee of 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 allocated to Bankers still remaining in the system during the next Epoch.

Therefore, a Genesis Charter that has only one "Branch" cannot extract profits while retaining earning capacity. It faces three choices: continue to hold and bear 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 Founding Charter floor price is 30,000 USDG, with the highest bid around 7,500 USDG. There is a significant price difference between the two.

However, Genesis Charters are currently still in Soulbound status, the transfer switch of the contract has not yet been activated, which also means that trading is not currently supported.

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

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

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

Summary

The sale of Genesis Charters has sold out, and the floor price has skyrocketed, the first round of "Branch" expansion licenses has been snapped up, and the market cap of STANDARD once surged to 44 million USD, all indicating that the market displayed strong demand for this mechanism during the launch phase.

However, these data cannot prove that the protocol can operate stably over the long term.

As more "Branches" are opened, existing participants' issuance shares will be diluted; when net ETH inflows weaken, the policy multiplier may be adjusted downwards, which would also decrease the total issuance speed of STANDARD. Bankers wishing to realize book earnings must also permanently close corresponding "Branches" and pay exit fees as high as 60%. Furthermore, factors such as the price of STANDARD, market liquidity, smart contract security, and certain reserve operations still executed by the owner will all affect the final returns.

More importantly, within this system, "cashing out" will itself permanently destroy the tools that generate earnings. DYOR.