What’s a Goose Dollar Worth?

If you go to Goose Finance today and browse their vaults page, you will see that you can deposit Bitcoin with them for around a 51% annual yield (APY).

That sounds incredible! All I have to do is place my precious 0.10 BTCB in Goose’s outstretched wing, and they will hand me back around 0.15 BTCB in a year from now, right? …right?

No, Timmy. Not right at all.

Goose’s claimed 51% APY is, in fact, made up of two parts. About 3% of it is paid in Bitcoin and the remaining 48% is given to you in GUSD.

And what are these GUSD?

They are Goose Dollars. The Dollars of the Goose.

For the APY on Goose’s vault page to make sense, a Goose Dollar needs to be worth the same as a real dollar. In the world of Binance Smart Chain, a ‘real’ dollar is not one of those ridiculous pieces of green paper that your great-grandfather bought a biplane with in the 1930s. It’s 1 BUSD, also known as a Binance Dollar. Binance Dollars can be cashed out on the Binance exchange for dollars in a bank account, which can then be used for items of real world utility, such as heart defibrillators or Pokemon cards. So we have to give Binance Dollars some respect.

How does a Goose Dollar compare to a Binance Dollar? Let’s consider some options.

1 Goose Dollar = 1 Binance Dollar?

Goose Dollars control a fund of locked up Binance Dollars at a rate of 1:1. To actually use one of those locked up Binance Dollars, one Goose Dollar needs to be deposited in one of the special Goose Dollar vaults on Goose’s website.

Depositing Goose Dollars here causes those locked Binance Dollars to be invested. Any profit gets paid in lovely, useful, REAL Binance Dollars.

So Goose Dollars are a sort of ‘remote control’ for those locked up Binance Dollars: the owner of the Goose Dollar gets the profit from the remote controlled Binance Dollar. So a Goose Dollar must be worth the same as a Binance Dollar, right?

Well, not quite. If you check the small print on a Goose Dollar vault, you will see this:

Profits on Goose Dollars lose 10%+10%+10%=30% to various fees. Do Binance Dollars do this? No, they do not.

(Although all currencies pay entrance fees, so that last line is nothing special.)

Goose Dollars are Worthless Junk?

If you take nothing and invest it in Goose Finance’s GUSD vaults, you will get back…nothing. If you invest a Goose Dollar, you will get back 70% of what you would have got for investing a Binance Dollar. So the Goose Dollar is far from worthless.

1 Goose Dollar = 0.70 Binance Dollars?

At this point, it probably sounds like a Goose Dollar is worth 70 cents of a Binance Dollar. But that is probably too generous. The thing about a Binance Dollar is that you can invest it in places other than a Goose Finance GUSD vault. You can transfer it to any blockchain and trade it for any available crypto asset. You can even trade it back to fiat and use it to buy a sandwich. Burger or $BURGER? Both are available with Binance Dollars. Neither can be bought with Goose Dollars.

Also, Binance Dollars are backed by the financial institution of Binance, the world’s largest cryptocurrency exchange. Goose Dollars are backed by Goose Finance, the world’s largest frog filled Telegram channel.

0.70 BUSD is arguably a bit more valuable than 1.00 GUSD, therefore.

1 Goose Dollar = 0.50 Binance Dollars?

What does the free market have to day about this? Well, the trading rate on PancakeSwap between Goose Dollars and Binance Dollars is currently around 2:1. So the market is currently valuing a Goose Dollar at about 50 Binance cents:

There are some who would say that this is decisive: whatever the market is valuing an asset at, that is what it must be worth. Maybe you agree with this principle. But, if you do, my question to you is: how did you get this far through the article? You should have just gone straight to PancakeSwap yourself.

The reason you are reading this article is that you understand an asset in a market can be overpriced or underpriced. You are considering whether the market price of Goose Dollars is a bargain.

In my humble opinion, it is. I think that 50 cents for a Goose Dollar is underpriced.

So What is a Goose Dollar Truly Worth, Timmy?

As a person with a bundle of grass in his profile image, I am, of course, the best person to judge the value of crypto assets, and I personally think that a Goose Dollar is worth about 0.60 Binance Dollars.

This is just my personal opinion, and certainly not financial advice, but I think that buying a Goose Dollar for 60 cents is reasonable. You pay 60% of a BUSD to get the returns of 70% of a BUSD. Those returns are a bit riskier and less flexible. Still, it seems like a fair deal to this grass bundle.

So why are Goose Dollars selling for just 50 cents? I think it’s because a lot of people either don’t understand them, or don’t have enough Goose Dollars to justify the gas fees to use them. They are, therefore, oversold and underpriced.

Adjusted APYs

For pure speculation, and certainly not for financial advice, I converted some of the current Goose Vault APY rates to what I think they should be. In other words, I reduced their Goose Dollar (GUSD) rates to 60% of their current value. It’s only fair to say that, even with these reductions, Goose vaults still look attractive.