Wormhole #4: Sandman Finance Review
This review is independent and non-sponsored, but as always, we encourage you to DYOR.
We launched our third batch of Wormholes for PolySage yesterday, and we’ve got a new batch coming right up! The next project (or investment vehicle) that we’ve selected for Wormholes is Sandman Finance!
But as a quick illustration, think of it as you visiting a bank to make some investments. You get recommended investment products based on your risk level / what returns you’re expecting. You invest in one currency, and you earn the returns in that same currency.
Think of us as your “fund manager”, and we review each project before deciding to add it to our Wormholes.
Sandman Finance is a little different from the standard “basic” yield farm. Although it’s a layered farm, the project has a narrative (with 7 chapters) that follows the comic Sandman, written by Neil Gaiman.
Its goal after finishing all 7 chapters is to become the first Polygon community owned AMM.
Having completed its Delirium layer, Sandman Finance is now moving on to Despair. However, Delirium holders will still be able to stake Delirium and get rewards via the project’s partnership with JetSwap.
Aside from typical farming features, the project has a focus on NFT cards, where each card has a set of randomly generated skills.
Each layer has its own NFT card and card holders will be able to boost earnings in the active layer’s dividends. Usage of cards also allows for the gaining of “experience”, where Total Experience Value is distributed as a reward amongst members of a pool — based on the deposited amount and whether the user has a boost.
Other NFT utility include NFT card battles as well as boosted rewards if one plays a price prediction game and wins — thereby reducing harvest lockup period and earning other tokens.
For the newest layer, Despair:
- Max Supply: 500,000
- Emission Rate: 0.526 DESPAIR per block
Assuming that emission rate remains constant, max supply will be reached at block 20974605 (~approx 25 days from farming launch).
Price action observations
Based on what we can see:
- Liquidity providers for L2 native token are still incentivized through the farming of L3 token — via the project’s partnership with JetSwap
- L2 native is following the standard farm chart and found a stable price floor — which means it could be consolidating for an upward movement. Nonetheless, natives are rather volatile, and providing liquidity can result in potential IL.
- L3 native will return to a stable price after ATH. APRs will continue to fall due to profit taking, so get in fast before it’s all gone!
Security & audits
The project has a Low Risk rating for all 3 of its layers. The project owner has also done a KYC, and you can read more about RugDoc’s KYC process here.
Any malicious actions from the KYC’ed applicant can be prosecuted with legal action, so developers undergoing the KYC process show the first steps towards transparency.
The project has completed a total of 3 audits across its layers:
Paladin is one of the leading audit firms in the DeFi space and also a RugDoc recommended audit firm.
There are 3 risk levels that we’ve assigned to Sandman, namely:
- High Risk: Potential IL due to the project’s earlier layers dumping. If there’s low liquidity for the earlier layer, we recommend staking with small amounts, then DCA in with larger amounts to make the most of your profits. Our Wormhole contracts also protect you from any large slippage risks with a maximum slippage of 5%. This safeguard will thus cause your transaction to fail, thereby keeping your capital safe.
- Medium Risk: Potential IL is possible but less of a concern. For instance, let’s take a WMATIC-USDC LP. A chain native like WMATIC is naturally more stable than a farm’s native token. In fact, chain natives typically follow the movements of large caps — when paired with a stable, we can expect the LP token price to be less volatile as compared to single staking of the chain native. There are also deposit fees (to the specific project, not Timeleap) but you’re likely to earn it back through farming.
- Low Risk: Assigned because of deposit fees (to the specific project, not Timeleap), but once again, you’re likely to earn it back through farming
Standard risks also apply across all Wormholes regardless of project:
- Project decides to adjust multipliers to encourage liquidity migration to other pools
- Project decides to change emission rates
- Insufficient utility for native token may cause native dumping, which affects APR
- Poor community management resulting in FUD
Please make sure you understand the risks and the associated terminology prior to staking in a Wormhole!
Find Sandman Finance
Sandman Finance Wormholes
At the time of writing, we’re seeing some amazing APRs and APYs — we had to display some of those APYs as such because there’s no way we could fit all the numbers into the card UI 😂
Even the Low Risk Wormholes are getting some of the sweetest APYs in the market for stables and large caps!
We’ve also done a UI improvement — you’ll now be able to see the exact farm that you’re staking in (right below the token to be staked for a Wormhole).
Wormholes are estimated to launch within the hour after Sandman launches its Despair farming layer.
This is so that we can verify that the project’s MasterChef used on chain is the same as the one on their UI — a safety precaution as projects switching out their MC is a common type of rug.