Let’s calculate the valuation of $WTN first.
- $WTN = (8-year-neuron-icp * 8-year-interest-rate + 6-year-neuron-icp * 6-month-interest-rate) * age-bonus * dividend-ratio * PE / (WTN-total-supply * WTN-staking-rate)
Using relatively ideal parameters:
- age-bonus = 1.25, i.e. the user has already staked for 4 years without triggering the dissolve
- P/E = 25x, i.e. the user holding $WTN receives interest annually, and its valuation is calculated as 25x
- the staking rate of $WTN is only 20%, but it is expected to be higher, as $WTN cannot earn interest outside and has no real use case
- 8-year-neuron-icp = SNS Direct Commitment + SNS Neuron’s Fund Commitment = 350000 + 85963 = 435,963 ICP
- 6-year-neuron-icp = 128,000 ICP
- WTN-total-supply = 116,000,000
Therefore, 1 $WTN = (435,963 * 14.9% + 110,000 * 7.8%) * 1.25 * 10% * 25 / (116,000,000 * 20%) = 0.0099 ICP
Currently, 1 $WTN = 0.019 ICP on Icpswap, indicating that the market is 1.9x more optimistic about $WTN than the ideal parameters, possibly due to the perception of $WTN as the leader in the IC ecosystem as the first liquid staking project, and thus receiving a premium.
So, when would someone be willing to stake $ICP to obtain $nICP, or burn $nICP to redeem $ICP?
- The first case is arbitrage opportunity with the $WTN airdrop, where 1 $ICP < 1 $nICP + X $WTN - swap-fee. Currently, X is 4, the swap-fee is 0.0003 ICP (3 transactions), and 1 $nICP = 0.91 $ICP on Icpswap. Therefore, 1 $nICP + 8 $WTN + 0.0003 = 0.91 + 0.019 * 8 - 0.0003 = 1.0617, so there is still an opportunity to sell $nICP.
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The second case is for someone who already plans to hold $ICP long-term. If they find that $nICP is trading at a discount and can be guaranteed to be redeemed for the original $ICP (even get more as the exchange rate is increasing) in 6 months, they may choose to be the counterparty to the first case, but they need to bear the risk of contract code vulnerabilities in the WTN DAO or the project’s rug pull.
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The third case is without the $WTN airdrop, where users will only stake $ICP to obtain $nICP due to their own liquidity needs. In this case, the exchange rate of $nICP will increase as it earns interest, and users can simply use it normally.
In summary, I believe that the WTN DAO, as the first liquid staking project in the IC ecosystem, will not enter a death spiral and can help the growth of the IC DeFi ecosystem. At least on platforms like CoinMarketCap, we can see a significant increase in the TVL of IC DeFi, if they don’t intentionally ignore us (they have already been doing so, as ICP is not even categorized in the AI sector, LOL 
).
Feel free to correct me if I have missed anything.
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