Market cap quickly hit $50 million, NFT floor price at $30,000 — What are The Standard Reserve's returns?

Original author: KarenZ, Foresight News

I now have a "bank" to my name.

It has no branch offices, employees, or depositors—only a Genesis Charter NFT and a single Branch. The page shows that this "Branch" has cumulatively generated 147 STANDARD, worth about $70 at the current price of $0.48.

But these STANDARD tokens are merely a pending balance recorded internally by the protocol, not yet minted to my wallet. To turn them into tradable tokens, I would need to close the "Branch" and pay an exit fee, while permanently forfeiting that "Branch's" future issuance share. Since I currently have only one "Branch," closing it would also burn the corresponding Genesis Charter, and this "bank" would be terminated along with it.

The Standard Reserve does not distribute tokens directly to NFT holders; instead, it ties "redeeming accrued earnings" to "permanently giving up the corresponding future issuance rights." This design also lends itself to "Ponzi" accusations: what participants see is an ever-growing book balance, but whether that balance can ultimately be converted into actual returns still depends on subsequent market demand, token price, exit costs, and protocol liquidity. This mechanism alone is not enough to draw a direct conclusion, and its sustainability still needs to be tested through actual operating data.

It should be noted that the project's terms "Bank," "Banker," "Genesis Charter," "Branch," and "Expansion License" are all internal protocol concepts. The Standard Reserve is an experimental on-chain protocol; it is 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 completed minting. The total revenue recorded by the on-chain contract was 583.594968887 ETH, worth about $1.47 million based on the ETH price around the end of minting.

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

The Dutch auction was designed to allow participants to wait for the price to keep falling, but in practice, most bidders chose to transact while the price was still close to the 1.25 ETH starting price. The average public auction price was about 8.24 times the whitelist price, indicating that what the market was buying was not just an NFT, but the initial issuance participation rights represented by the Genesis Charter.

The project team previously made clear that 100% of the proceeds from the Genesis Charter mint would be used for initial liquidity and the protocol treasury, and the team would not take a share of the proceeds from this Genesis mint.

At the same time, the zero team share on the Genesis mint does not apply to subsequent revenue. According to the whitepaper and the current parameters of the deployed contracts, of the ongoing ETH revenue such as transaction taxes and future Charter auctions, 70% goes into the current active vault, flowing into either the expansion vault or the contraction vault based on that Epoch's net capital flow; 15% is used for protocol-owned liquidity (half of which has been swapped into STANDARD and paired); and 15% is allocated 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 constitute the future issuance budget.

But these 900 million will not enter the market all at once. As described in my August 24 article, "The Standard Reserve's On-Chain Currency Experiment: What New Tricks Is It Playing?," The Standard Reserve adopts a "record first, mint later" approach: the protocol first records the issuance amount into each "bank's" internal balance, and only when a Banker closes a "Branch" and claims earnings are the corresponding STANDARD tokens actually 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 network "Branches": 1,100 (as of September 15; 100 auctioned each day thereafter).

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

Calculating based on my holding of one "Branch": 700,000 × 1 × 1 ÷ 1,100 ≈ 636.36 STANDARD/day

If the policy multiplier and total number of Branches remain unchanged throughout the entire 3-day Epoch, the theoretical cumulative output would be approximately: 636.36 × 3 ≈ 1,909.09 STANDARD

But 636.36 is only the book gross output rate at the current point in time, not a stable, unchanging daily yield. It is simultaneously affected by two variables: the total number of network "Branches" and the policy multiplier.

When net capital outflow forms a negative signal, the policy multiplier for the next Epoch drops by 0.15; only when sustained positive net inflows occur does the multiplier gradually rise by 0.1. Issuance reduction can occur after a single negative Epoch, while raising issuance requires consecutive positive signals.

Based on 1,100 Branches, when the multiplier is 1.25, one Branch's theoretical daily output is about 795.45 tokens; if the multiplier drops to 0.2, only 127.27 tokens remain per day.

An increase in "Branches" reduces each individual "Branch's" issuance share, but if the policy multiplier rises simultaneously, the increase in total issuance may offset some of the dilution; if the number of "Branches" increases while the policy multiplier also declines, both share and output will be suppressed at the same time.

100 New Branches Added on Day One—Dilution Has Already Begun

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

On the first day, the auction sold another 100 "Branch" Expansion Licenses, and all of these Expansion Licenses have been used to open new "Branches," increasing the total network "Branch" count to 1,100.

New "Branches" do not increase the total base issuance for that day across the network; they only change how the 700,000 STANDARD are distributed. Each "Branch" corresponds to one issuance entitlement, and the earnings of existing "Branches" decline as the denominator expands.

Assuming the policy multiplier always remains at 1:

After 100 new Branches were added on day one, the share of a Genesis Charter with no expansion already fell from 0.1% to 0.0909%, and its theoretical daily output also dropped from 700 to 636.36 tokens, a relative decrease of about 9.1%.

If 100 new Branches continue to be added each day thereafter, when the total network Branch count reaches 2,000, one Branch's daily output will drop to 350 tokens, only about 55% of the current level.

However, 100 per day is only the auction parameter at launch, not a permanent constant. The whitepaper allows owners to adjust the daily Expansion License supply within protocol limits, with a cap of 2,000. Future new Genesis Charters will also come with their first "Branch," likewise expanding the denominator.

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

For Bankers, purchasing a "Branch" Expansion License is equivalent to actively fighting dilution, but expansion itself also has costs.

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

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

In other words, if the policy multiplier, "Branch" count, and STANDARD price all remain unchanged, the simple gross payback period for purchasing a "Branch" Expansion License on day one is about 18.7 days.

But the actual payback period is likely to be longer, because new "Branches" will continue to be added, the policy multiplier may decline, and ultimately claiming tokens still requires closing the "Branch" and paying an exit fee. Among these, the exit fee is related to the degree of a bank run.

Expansion also involves a very direct game theory dynamic: if only a few Bankers add "Branches," they can increase their own issuance share; if all Bankers expand at the same ratio, everyone's relative share ultimately changes little, and they merely collectively pay and permanently burn a batch of STANDARD.

Token Market Cap Quickly Tops $50 Million, NFT Floor Price Rises to $30,000 but Cannot Be Transferred

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

A temporary anti-sniper tax was set for the first hour after trading launched, 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 conventional levels: a 2% buy tax and a 3% sell tax. Actual trading also needs to account for Uniswap LP fees and slippage.

Screenshot at 9:13 on September 15

According to GMGN data, STANDARD's market cap briefly rose to about $44 million shortly after launch, then fell back to $27 million, and has now rebounded to around $50 million, hitting a new high, with pool liquidity of about $17 million. As of now, trading volume since launch has reached $46.3 million.

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

The issuance amount generated by the protocol each day is merely recorded inside the Genesis Charter. To turn these amounts into truly tradable ERC-20 tokens, a Banker must close one or more Branches:

• Closing 1 of 10 Branches allows claiming one-tenth of the book balance;
• The claimed amount is subject to an exit fee of 2% to 60%;
• A closed "Branch" permanently disappears and no longer receives future issuance;
• If the last "Branch" is closed, the Charter is also burned.

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

Therefore, a Genesis Charter with only one "Branch" cannot withdraw earnings while preserving its output capacity. It faces three choices: continue holding and endure dilution; purchase "Branch" Expansion Licenses to expand the number of "Branches"; or close its only "Branch," claim the balance, and end its entire journey in the protocol.

The OpenSea page currently shows a Founding Charter floor price of 30,000 USDG, with the highest bid at about 7,500 USDG. There is a large spread between the two.

But Genesis Charters are currently still in a Soulbound state, and the contract's transfer switch has not been enabled, meaning trading is not currently supported.

According to the whitepaper, this is a one-way switch: once enabled, Charters will remain permanently transferable and cannot be switched off again. At that point, selling a Charter would transfer it along with its "Branches" and pending balance.

The Standard Reserve has also set another one-way switch: contraction-period buybacks and protocol-owned liquidity pairing operations are initially executed actively by the owner, and in the future can be permanently opened for anyone to execute.

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

Summary

Genesis Charters selling out and the floor price soaring, the first round of "Branch" Expansion Licenses being snapped up, and STANDARD's market cap briefly rising to $44 million all indicate that the market showed strong demand for this mechanism during the launch phase.

But these data are not yet enough to prove that the protocol can operate stably over the long term.

As more "Branches" are opened, existing participants' issuance share will be diluted; when ETH net flows weaken, the policy multiplier may be lowered, and STANDARD's total issuance rate will also decline. For Bankers to realize book gains, they also need to permanently close the corresponding "Branch" and pay a dynamic exit fee of up to 60%. In addition, factors such as the STANDARD price, market liquidity, smart contract security, and the fact that some reserve operations are still executed by the owner will all affect final returns.

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