Wheyfus Anonymous is an NFT project pushing the boundaries of the NFT market. What it’s starting now will almost certainly become one of the best ways to make money with NFTs next year. 

The project features a collection of 30,000 anime-style NFTs. 9,000 were initially minted for free, and 3,000 were allocated by the team. The remaining 18,000 NFTs are reserved as yield farming rewards. The remaining NFTs will be released to ecosystem participants over 900 days (2,5 years), keeping inflation fairly slow and steady, and the value where it is wanted.

Source.

Wheyfus offers two reward types: safe and risky. Both require users to provide liquidity to the sudoswap pool. If you don’t know what sudoswap is, I have a concise and in-depth explainer here. 

You will need to put a Wheyfu (or several Wheyfus) into a pool, which will give you back liquidity provider (LP) tokens. You will then need to bond (lock-up tokens in exchange for another asset) the LP tokens on Wheyfus’ website. 

Bonding periods can go up to one year, and rewards are claimed only at the end of the lock-up period. In return, Wheyfus will boost sudoswap rewards by up to 200% in either Wheyfus or ETH, depending on the bond duration. 

The safer profit strategy is to receive boosted sudoswap swap fees in ETH at the end of the lock-up period. The only downside here is potential impermanent loss, which could occur regardless of which reward choice is taken.

The riskier, potentially very rewarding alternative is to bond the LP tokens in exchange for Putty Finance call option contracts. Each option token gives the holder the right to buy one Wheyfus NFT at a strike price of 0.1 ETH at any time before the contract expires in five years.

Currently, the Wheyfus collection is trading at around 0.01 ETH. The options contract’s strike price therefore implies a return of over 10x, with almost no downside risk other than the aforementioned impermanent loss. Interested?

This integration with Putty is probably the first of its kind and should appeal to anyone looking for a cheap way to gamble on capturing large gains. The gamble is whether or not the collection’s floor price will be 0.1 ETH or greater within five years. If it does, you as an option holder would be able to buy at 0.1 ETH and instantly sell for more.

Let’s explore the likelihood of Wheyfus going 10x and more.

Eventually, when the options contracts become worth exercising, the availability of the sudoswap pool will mean there’s a guaranteed buyer available no matter how high the price. This makes the trade safer and will encourage buyers.

Next, the NFT artwork itself also needs considering, as this often gets NFT buyers excited before it is revealed. Wheyfus artwork is currently unrevealed and shows a placeholder image with a pastel-colored background and a few lines of text. The backgrounds have various colors, alluding to the idea of different rarities; however, there’s been no comment on whether or not this is the case.

The current Wheyfus Anonymous placeholder images. Source.

In fact, the team seems to be deliberately taking their time with the reveal, teasing followers about it with disinterest and irreverence. This fits waifu culture, in which the waifu is a woman that someone has intense feelings for. Viewers are typically left wanting, and Wheyfus could be playing on this idea, leaving typical NFT buyers obsessing about the artwork they desire while options traders who don’t care simply make money.

The guy seems to be left wanting by the disinterested waifu. Source.

The tactic makes sense. Reveals cause short-term dumps, but the five-year expiry on the options contract implies long-term intentions and a need to manage demand accordingly.

Perhaps the biggest risk is in the team’s ability to maintain long-term interest in the collection. There is no public roadmap or marketing plan, only technicalities of how to make money. And this is where the price of the NFTs takes on unfamiliar importance.

Something to note is that in an options trade, the buyer of a call contract usually pays a premium to secure the right to buy the underlying asset at the strike price. Within this Wheyfus options trade, the price of the NFT effectively becomes that premium since the NFTs yield options contracts.

On that basis, expect NFTs prices to remain low, but don’t see this as failure, it’s normal with options premiums. The expiry date and strike price are both a long way off, meaning the risk of the options failing to become profitable is high. Consequently, the market should value the options/NFTs low. For some, this is the time to buy – downside risk is minimal, and reward is high.

Risk-averse options traders will enter the trade later, when the chances of making profit, albeit a smaller one, are better. When they do, their purchases will probably increase the floor price further, drawing in yet more traders wanting even lower risk opportunities, and so on. 

A speculative flywheel begins to emerge. It goes against the logic that we’re used to seeing. The NFT market is typically about getting in early at the lowest possible cost, ideally zero, because most projects have no fundamentals and sell off after the reveal.

Now, integrating options trading with the NFT market allows sustainable long-term demand. This is because the project is backed by a fundamental that no other project is built for: the potential pay-off from options contracts. It should at least turn the collection into a “productive” asset.

Traders can perpetuate the flywheel for themselves by using profits from the options contracts to buy more Wheyfus to get more options contracts. The sudoswap pool can too, with LPers using earnings to buy more Wheyfus to capture more fees from the pool.

Ouroboros: the two snakes feed each other. Source

Wheyfus is a double Ponzi-style scheme with each reward method feeding the other, and you can get in now for cheap. The only thing the team needs is to keep new buyers interested. Without them, the project will dry up. The catalyst to get the ecosystem going, though – perhaps the artwork – remains to be revealed. Until then, take your chances.

Until next time

Disclosure: At the time of writing, the author held several NFTs, ETH, and other cryptocurrencies. Read our trading policy to see how SIMETRI protects its members against insider trading.