Abstract: I Opened a "Bank" on the Blockchain

Author: KarenZ, Foresight News

I now own a "bank".

It has no business halls, employees, or depositors—only a Genesis Charter NFT and one Branch. According to the page, this Branch has accumulated 147 STANDARD tokens, worth about $70 at the current price of $0.48 per token.

However, these STANDARD tokens are just unclaimed balances recorded internally by the protocol and have not been minted to my wallet. To convert them into tradable tokens, I need to close the Branch and pay an exit fee, while permanently giving up the Branch's future issuance share. Since I currently only have one Branch, closing it will destroy the corresponding Genesis Charter, and this "bank" will terminate as a result.

The Standard Reserve does not directly distribute tokens to NFT holders; instead, it ties "redeeming accumulated earnings" to "permanently giving up the corresponding future issuance rights". This design is prone to Ponzi scheme suspicions: participants see growing book balances, but whether these balances can ultimately be converted into actual profits depends on subsequent market demand, token prices, exit costs, and protocol liquidity. This mechanism alone is not enough to draw conclusions directly; its sustainability still needs to be tested with actual operational data.

It should be noted that the project's terms like "Bank", "Banker", "Genesis Charter", "Branch", and "Expansion License" are all internal protocol concepts. The Standard Reserve is an experimental on-chain protocol, not a regulated financial institution, and does not provide real-world bank accounts, deposits, or other financial services.

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 in the on-chain contract was 583.594968887 ETH, worth approximately $1.47 million based on the ETH price around the end of the minting.

Of these, 601 were minted by whitelisted users at 0.15 ETH each, totaling 90.15 ETH; the remaining 399 entered a public Dutch auction, raising approximately 493.445 ETH, with most transactions priced between 1.23 ETH and 1.25 ETH.

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

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

At the same time, the zero team cut for Genesis minting does not apply to subsequent revenues. According to the whitepaper and current parameters of the deployed contract, 70% of ongoing ETH revenues such as transaction taxes and future Charter auctions will go into the current active treasury, which then flows into the expansion or contraction treasury based on the net capital flow of the Epoch; 15% is used for protocol-owned liquidity (half converted to STANDARD for pairing), and 15% is distributed to the team.

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

STANDARD has a hard supply cap of 1 billion tokens. Of these, 100 million were pre-minted during the Genesis phase and placed into protocol-owned liquidity, while the remaining 900 million form the future issuance budget.

However, these 900 million tokens will not enter the market all at once. As mentioned in the author's August 24 article The Standard Reserve's On-Chain Currency Experiment: What's the New Trick?, The Standard Reserve uses a "book first, mint later" approach: the protocol first records the issuance quota into the internal balances of each "bank", and only when the banker closes the Branch and claims earnings will the corresponding STANDARD be actually minted to the wallet.

The current initial parameters are:

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

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

Calculated with one Branch I hold: 700,000 ×1 ×1 ÷1100 ≈636.36 STANDARD/day

If the policy multiplier and total number of Branches remain unchanged throughout the 3-day Epoch, the theoretical cumulative output is approximately: 636.36 ×3 ≈1909.09 STANDARD

However, 636.36 tokens are just the current book gross output rate, not a stable daily income. It is affected by two variables: the total number of Branches across the network and the policy multiplier.

When net capital outflow forms a negative signal, the policy multiplier for the next Epoch decreases by 0.15; only when there is a continuous positive net inflow will the multiplier gradually increase by 0.1. A reduction in issuance can occur after one negative Epoch, while an increase requires consecutive positive signals.

Calculated with 1,100 Branches: when the multiplier is 1.25, the theoretical daily output per Branch is about 795.45 tokens; if the multiplier drops to 0.2, it only leaves 127.27 tokens per day.

An increase in Branches will reduce the issuance share per Branch, but if the policy multiplier rises simultaneously, the increase in total issuance may offset part of the dilution; if the number of Branches increases and the policy multiplier decreases, both the share and output will be suppressed.

100 New Branches Added on Day One—Dilution Has Begun

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

On the first day, 100 Expansion Licenses were sold at auction, and all these licenses were used to open new Branches, increasing the total number of Branches across the network to 1,100.

New Branches do not increase the total daily base issuance across the network; they only change the distribution method of the 700,000 STANDARD tokens. Each Branch corresponds to one issuance right, so the earnings of existing Branches will decrease as the denominator expands.

Assuming the policy multiplier remains at 1:

After adding 100 Branches on the first day, the share of a non-expanded Genesis Charter dropped from 0.1% to 0.0909%, and its theoretical daily output decreased from 700 tokens to 636.36 tokens, a relative reduction of about 9.1%.

If 100 Branches are added daily thereafter, when the total number of Branches reaches 2,000, the daily output per Branch will drop to 350 tokens, only about 55% of the current level.

However, 100 per day is just the auction parameter at launch and is not permanent. The whitepaper allows the owner to adjust the daily supply of Expansion Licenses within protocol limits, with a maximum of 2,000. Future new Genesis Charters will also come with their first Branch, which will also expand the denominator.

It should be noted that new Branches only dilute future output after they are opened. The STANDARD tokens already accumulated in the Bank's internal balance will not be retroactively diluted.

For Bankers, buying Expansion Licenses is equivalent to actively fighting dilution, but expansion itself has costs.

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

Calculated based on the current gross output of 636.36 tokens per Branch per day: 11,927.71 ÷636.36 ≈18.74 days

In other words, if the policy multiplier, number of Branches, and STANDARD price all remain unchanged, the simple gross payback period for buying an Expansion License on the first day is about 18.7 days.

However, the actual payback period is likely longer because new Branches will continue to increase, the policy multiplier may decrease, and finally, claiming tokens requires closing the Branch and paying an exit fee, which is related to the degree of run on the bank.

Expansion also involves a direct game: if only a few Bankers add Branches, they can increase their issuance share; if all Bankers expand in the same proportion, their relative shares will eventually change little, and they will just jointly pay and permanently burn a batch of STANDARD.

Token Market Cap Quickly Reaches $50M, NFT Floor Price Hits $30K 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-snipe tax was set, with both buy and sell taxes starting at 90% and decaying exponentially. As of 10:00 Beijing time on September 15, the on-chain tax rate had dropped to normal levels: 2% buy tax and 3% sell tax. Actual transactions also need to consider Uniswap LP fees and slippage.

Screenshot at 9:13 on September 15

According to GMGN data, STANDARD's market cap once rose to about $44 million shortly after launch, then fell to $27 million, and now has rebounded to around $50 million, hitting a new high. The pool liquidity is about $17 million, and the trading volume since launch has reached $46.3 million so far.

For Bankers, the rise in STANDARD price increases the book value of unclaimed balances, but it does not change the claiming rules.

The daily issuance quota generated by the protocol is only recorded inside the Genesis Charter. To convert these quotas into real 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 claimed amount is subject to an exit fee of 2% to 60%;
• The closed Branch disappears permanently and no longer receives future issuance;
• If the last Branch is closed, the Charter is also destroyed.

Half of the exit fee is permanently removed, and the other half is distributed to Bankers who remain in the system in the next Epoch.

Therefore, a Genesis Charter with only one Branch cannot extract earnings while retaining its output capacity. It faces three choices: continue to hold and bear dilution; buy Expansion Licenses to expand 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 of Founding Charters is 30,000 USDG, and the highest bid is about 7,500 USDG. There is a large price gap between the two.

However, Genesis Charters are currently in a Soulbound state, and the transfer switch of the contract has not been turned on, meaning that trading is not supported at present.

According to the whitepaper, this is a one-way switch: once turned on, the Charter will remain transferable permanently and cannot be closed again. At that time, selling the Charter will transfer the Branches and unclaimed balances along with it.

The Standard Reserve also has another one-way switch: the contraction phase repurchase and protocol-owned liquidity pairing operations, which are initially executed actively by the owner, but can be permanently opened to anyone in the future.

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

Summary

The sell-out of Genesis Charters, the skyrocketing floor price, the snatching up of the first round of Expansion Licenses, and STANDARD's market cap once reaching $44 million all indicate that the market has shown strong demand for this mechanism in the launch phase.

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

As more Branches are opened, the issuance share of existing participants will be diluted; when the net ETH flow weakens, the policy multiplier may be adjusted downward, and the total STANDARD issuance speed will also decrease. To cash out book earnings, Bankers need to permanently close the corresponding Branches and pay a dynamic exit fee of up to 60%. In addition, factors such as STANDARD price, market liquidity, smart contract security, and some reserve operations still being executed by the owner will all affect the final earnings.

More importantly, in this system, "claiming earnings" itself permanently destroys the tool that generates earnings. DYOR.