For the next year, we'll be listing on more exchanges and bridging to new blockchains. That's just putting the basic infrastructure in place to allow everyone to access the tokens easily, and of course, we'll be spreading the word about the tokens.

MaticNews x Seasonal Tokens AMA Recap and Transcript

MaticNews: Let’s start with your and your team's introduction! What are your past experiences and roles? How many members currently work on Seasonal Tokens?
Seasonal Tokens: Thank you! It's a pleasure to be here.

I founded the project. I've worked in physics, neuroscience, cryptography and finance. I worked as a quant at a major proprietary trading firm for five years, and it was when I was working there that I realized that a collection of prices that oscillate around each other predictably would make an ideal investment. I left finance in 2016 and moved into cryptocurrency development.

The team is great. We've got 12 people working on the project altogether. Polar and Tears, our CMO and community manager, have plenty of experience developing crypto projects. They've worked on various projects in the past, including Moonbear Finance and Shiryo Inu. We also have a great team with mods, coders, farmers, investors and miners. We're all available on discord to answer any questions anyone has any time.
MaticNews: Out of curiosity, why did you choose this name? Is there any background story?
Seasonal Tokens: Yes, it was inspired by agricultural commodities. It's predictable that certain commodities such as fruit and grains will be more expensive at certain times of the year than at other times. They're seasonal. When you can see that prices are going to go up and down in a predictable way, you can make a profit by anticipating the changes in prices.

The goal of the project is to let people make use of that same effect, but in a more controlled way, to optimize the benefit to investors. It's really the seasonality of the prices that are the innovative features of the tokens. Choosing the names - Spring, Summer, Autumn and Winter, was easy once it was clear that we're dealing with seasonality.
As an example of Seasonality https://www.cmegroup.com/education/courses/introduction-to-agriculture/grains-oilseeds/understanding-seasonality-in-grains.html

MaticNews: Please give us a brief introduction of Seasonal tokens protocol!
Seasonal Tokens:
Here's a graph of how the prices might behave over the course of the next few years:

There are four tokens, Spring, Summer, Autumn and Winter, and they've been designed so that their prices will oscillate around each other over the course of years.

The reason for doing that is that, when prices behave that way, investors can trade the more expensive tokens for the cheaper ones. Then later, when those cheap tokens become the most expensive again, the investors can trade again. So it makes it possible to keep increasing the total number of tokens you own, just by trading tokens for more tokens over time.

Winter is expensive now, and Spring is cheap, but the rate of production of Spring has just been cut in half. There have been nine months when Spring was the easiest to produce. For the next nine months, it'll be the hardest, and we can expect the price to rise above the other prices over time. Then the same thing will happen with Summer, and so on.
So it allows investors to hold Spring tokens while they go up in price compared to the other tokens, and then trade them for Summer, which will go up next. That way, investors can keep accumulating more tokens over time just by trading.
If investors follow the rule: Always trade tokens for more tokens of a different type, then the total number of tokens in the investment will go up with every trade and will never go down.
It's a way to profit without relying on the prices of the tokens increasing over time. The number of tokens in the investment keep increasing, so the investment grows in value even if the prices don't rise over time.

MaticNews: On which chain is your protocol currently available? Is there any plan to expand to new ones?
Seasonal Tokens: The tokens can currently be bought and traded on Polygon and on the Ethereum main net. We've just completed the bridge to Polygon recently, and there's some liquidity already available, but we have yet to implement a farm on Polygon, and the website tools for handling Polygon transactions are still being developed. People can trade the tokens using direct links to Uniswap on Polygon:

SPRING: https://app.uniswap.org/#/swap?outputCurrency=0x70d59baa5ab360b2723dd561415bdbcd4435e1c4&chain=polygon
SUMMER: https://app.uniswap.org/#/swap?outputCurrency=0xdd28ec6b06983d01d37dbd9ab581d8d884d95264&chain=polygon
AUTUMN: https://app.uniswap.org/#/swap?outputCurrency=0xfba4d30e964e40775c95b58acf6b5a621b929c0a&chain=polygon
WINTER: https://app.uniswap.org/#/swap?outputCurrency=0x51540d15957bdc0fdb87d32616c8d658d59f77c6&chain=polygon

We're planning to continue expanding to new blockchains and also listing on more centralized exchanges (coinsbit.io and coinstore.com are the centralized exchanges we're currently listed on). We've started a toy project to build a bridge to the Binance Smart Chain, but we'll need to make sure that the security of the bridge is completely perfect before we can go ahead with that. Polygon was a great first blockchain to expand to because of its secure bridges.

MaticNews: Before we go in depth, would you like to add something more as use cases of your 4 native tokens?
Seasonal Tokens: Sure. The main use case that we envision for each token is to trade it for the next token in the sequence, always increasing the total number of tokens in the investment. So, unlike most cryptocurrencies, the tokens aren't intended primarily to be used as money, for payments. They've been designed to be investments rather than money.

For an investor, though, the tokens have another use apart from just trading them for more tokens. Each token has a period of a number of months when it's expected to rise in price compared to the other tokens. That means that they can be used as hedges for other investments with seasonality. If you have an airline business that does badly during certain months, you can reduce the seasonality of your portfolio by adding in whichever Seasonal Token is expected to rise while the airline investment is expected to fall.

That makes it possible for portfolio managers and asset managers to smooth out the growth of the value of the investment over time.
MaticNews: Would you like to explain to us your proof of work concept?
Seasonal Tokens: Yes, that's an important component. We're effectively trying to control the prices of the tokens relative to each other, so we need something economically real to push against. The way we can do that is by using proof-of-work mining.

Each token has a cost of production, so they can't be created at zero cost. We've arranged the mining schedules so that, for each nine-month period, one of the tokens is the easiest to produce and another token is the most difficult. After that period is over, the one that's the easiest to produce becomes the hardest. So the last nine months, when Spring was cheap and easy to produce, is now going to be followed by another nine months when Spring is expensive and difficult to produce.

The era of plenty is followed by an era of scarcity, which really restricts the supply in terms of both the total number of new tokens available to the market, as well as the cost of producing them. So we can expect the market to respond to the new scarcity of Spring tokens over the coming months, and it's being forced to happen because the increase in the difficulty is wired into the smart contracts. It's the proof-of-work mining that gives the token prices a connection to a real economic resource (energy), which makes it possible to control the relative market prices this way.
MaticNews: Furthermore would you like to add something else on how people can profit from volatility and fixed cycles?
Seasonal Tokens: Yes, definitely - those are two ways to trade tokens for more tokens in a systematic way and build up the number of tokens in the investment. Using fixed cycles is the easiest way for casual investors to do it. They can buy Spring tokens now, for example, and then trade them for Summer nine months later, and then trade those for Autumn nine months after that, and keep going. That's a simple way to keep gaining tokens as each one goes from being the cheapest to the most expensive.

Investors and traders who are willing to watch the prices every day and trade when they see good opportunities can do better. There are fluctuations in the prices of the tokens relative to each other. I'll show a graph of the historical prices so everyone can see what I mean.

If you want to trade tokens for more tokens of a different type, you can watch the price charts and see when the price voaltility causes a fluctuation that you can take advantage of. You might only get 40% more tokens in total if you trade Winter tokens for Spring tokens on a random day, but if you watch the prices every day, you could get maybe 70% or more tokens in total with a single trade.

When people trade tokens for more tokens, they push the prices closer together, but when people buy and sell the tokens for other currencies like USD or ETH or MATIC, it causes the prices to jerk around randomly. If you're watching the prices, you can convert those fluctuations into profit.

MaticNews: Vaults look like a trend in the last period. Do you have in plan to add  them in the future?
Seasonal Tokens: We have a farm on Ethereum where investors can lock their tokens up securely and receive 9% of new tokens mined by the mining pool while their tokens are locked in the farm. It doesn't have the auto-compounding feature of some vaults because we're using mined tokens and Uniswap v3 positions, but it does offer users the security of knowing that their tokens are earning a return and can't be hacked or stolen while they're in the farm. We'll have the same setup working on Polygon hopefully in the next few weeks.
I hope that answers the question! We don't have a way to protect users who are using devices that may have been hacked. Deleting MetaMask and remembering the 12 words might be the safest way to protect funds from hackers.

MaticNews: Next is tokenomics! Which is yours and why did you choose it?

Seasonal Tokens: The tokenomics is different to most tokens because we're using proof-of-work mining. None of the tokens are burned, but that's not necessary to support their long-term value, because the tokens are all becoming more difficult to obtain over time. Once every nine months, the rate of production of one of the tokens is cut in half. Each token's rate of production is halved every three years, so in 20 years, they'll be produced at less than 1% of today's rate, and if the mining power remains constant, they'll be more than 100 times as expensive to produce.

So it's a long-term project, and the long-term value is supported by the limited and decreasing supply of the tokens. There'll be about 33 million tokens of each type produced over the next 200 years. So they're easier to mine and buy today than they will be in the future.

There's income generated by mining as well as farming and those are allowing current investors to operate profitably and it also brings in revenue to people supporting the project and allows them to continue participating. We don't have a corporation because it's a community and each participant makes their own profits and looks after their own token investments. We're actually pretty well-capitalized because we made sure that there would be enough funds to bring the project to the market (even taking into account a possible 90% plunge in crypto prices, which seems to be happening!) and keep it going. It's been tough watching the market crash, but we're secure and we're going to be able to continue expanding the infrastructure and bring the tokens to new markets.

One of the great things about proof-of-work tokens is that they're not all created in bulk at zero cost and given to the founders to run a business. Even if the founders of the project disappeared like Satoshi did, the economics would continue to work, because the mining economy keeps the prices in the right order and maintains the long-term value of the tokens. So investors who buy the tokens don't need to rely on the founders to run a business. It's completely decentralized in principle, even though we do have a dedicated team who will continue to promote the project.

MaticNews: Talking about the security side, the clichè question that we ask in all AMAs:  are there any audits or KYC done for the current moment?
Seasonal Tokens: Absolutely, yes. I've been through KYC with RugDoc, and we got three independent teams of auditors to review the contract code for the tokens. There are links to the audits at the bottom of the website at https://seasonaltokens.org.

We need to make a few modifications to the farm to get it to work on Polygon. Even though they're small changes, we'll still need to go through a complete audit to make sure that investors' funds are secure. We're dealing with other people's money, so we need financial-grade security. One of the things I learned when I was working in finance is that you really have to take security absolutely seriously. There have been so many huge hacks of large crypto projects lately that we can't afford to be lax about security, so we'll do everything needed to make sure investor funds are secure.

MaticNews: Talking about the marketing side, what are your plans to increase the number of users in your token ecosystem?
Seasonal Tokens: We have a number of initiatives planned. The main focus for the moment is on increasing our visibility and educating investors about the tokens and how they work. At the moment, we're still a small project and we'll be continually producing press releases, explainer articles, educational videos and other material, and we'll be expanding the number of websites where we're promoting the project.

We have other events planned too. We intend to have an airdrop on Polygon when everything is set up, so that large numbers of people can get the experience of trading tokens for more tokens at close to zero cost (Thank you, Polygon!).

We'll also be starting a podcast soon, where we can have regular discussions about the tokens and the broader crypto economy. We hope to attract a regular audience to our youtube channel where we can keep the audience informed about the tokens, while also sharing information about how proof-of-work, smart contracts and so on interact with the economics.

MaticNews: As recap, do you have a road map or long-term plans that you can share with us?
Seasonal Tokens: For the next year, we'll be listing on more exchanges and bridging to new blockchains. That's just putting the basic infrastructure in place to allow everyone to access the tokens easily, and of course, we'll be spreading the word about the tokens. There are important dates when major events, like the halving of the production rates, will happen, and obviously we'll be producing press releases and other promotional material when those happen

Over the longer term, we have a big goal in mind. Right now, there are Bitcoin ETFs, which allow institutional investors and asset managers to gain exposure to bitcoin prices. Because the tokens fall under the same regulatory regime as bitcoin does, we have the same regulatory clarity and that means that it will be possible to have Seasonal Token ETFs in the future. Maybe 4 or 5 years from now, we could have financial instruments that are traded on major exchanges, which would allow everyone who has a portfolio, that is more seasonal than they would like, to be able to add a Seasonal Tokens component to their portfolio.

The market for investments is the biggest market in the world, and almost every investment manager wants to remove unwanted seasonality from their portfolio. The theoretical demand for the seasonality-hedging features of the tokens would require the total market cap to reach several trillions of dollars if the tokens were to become the seasonality-hedging financial instrument of choice, and there are no other existing options right now.

MaticNews: And the last question will regarding your opinion: What do you think about the current market moment ?
Seasonal Tokens: I think we might be about to enter into a new era of financial discipline, where people need to be more careful about their own personal finances and much more careful about the crypto projects that they choose to invest in. I'm afraid that the current geopolitical situation means that energy, food, fertilizer, metals and other commodities are going to be more expensive in the future, and it's going to force everyone to think very carefully about their investments. People should only invest what they can afford to lose, and unfortunately people will be able to afford to lose less.

But for the tokens, I think this new era will be beneficial. People will be less inclined to chase crowds and will be more careful and will think about the economics and the mathematics of their investments. That will be good for the tokens, because there's a way to reduce risk: Trade tokens for more tokens and you don't risk making a loss, measured in tokens.

So I think that the increase in risk-aversion and in investing for value instead of chasing crowds will make the tokens more attractive to investors over the coming months and years.
MaticNews: Would you like to add some final words?
Seasonal Tokens: The only final thing I can think of mentioning is that the project is still small and the market cap is tiny. Anyone who wants to invest in the tokens would be well-advised to do it slowly over time. Buying a large number of tokens at once will push up the price, and you'll get a worse deal.

There are miners producing and selling tokens every day, so if you buy small amounts regularly, then the price will have time to recover and you'll do a lot better than if you were to buy a huge amount all at once.

And I'd also like to thank you and the team for organizing the AMA!
MaticNews: Thank you for joining us, this was great and very informative!

Project Links:
Website - https://seasonaltokens.org/
Discord - https://discord.gg/Q8XZgJEDD3
Twitter - https://twitter.com/Seasonal_Tokens

Written By

Petrache Ionut

Jul 4, 2022