Introduction: Into the Behavioral Economics Rabbit Hole 🐇🎩

Would you rather have $100 now, or a year from now? Assume it’s inflation-adjusted.

If we were perfectly rational, and inflation was truly accounted for, the answer would be it doesn’t matter. 🤷🏽

But if you are an actual human being, the answer is most likely right now, immediately, gimme. 😉

There is a science behind it, and this effect is called temporal discounting (or hyperbolic discounting). Psychologists and economists discovered it in recent years, and Daniel Kahneman even won a Nobel prize in 2011 for his work with Amos Tversky. They pioneered the study of all quirky, systematic irrationalities of presumably cold and calculating economic humans.

In the 1970s, Stanford professor Walter Mischel conducted the now widely known Marshmallow Experiment. Children received a marshmallow, and if they HODLed it instead of eating right away, a second marshmallow would be their reward.

How much exactly do we want to be paid extra to take the money next year instead of today? What’s the value of the second marshmallow to make the wait worth your while?

The visualization below shows the transaction count for freezing (locking) ETH on True Freeze.

There have been 33 transactions at the time of writing, but this number will continuously update, as this chart auto-refreshes once a day.

Methodology

In this dashboard, you will find:

the number of transactions to freeze ETH (mint frETH rewards and a True Freeze NFT that represents the principal amount),
the amount of frozen ETH,
True Freeze NFTs minted daily, by token ID and amount locked,
frETH rewards minted to users who lock ETH,
True Freeze NFTs redeemed at maturity,
and ETH unfrozen early.

The charts automatically refresh daily, although some of the interpretive text may refer to the metrics at the time the analysis was initially conducted (29 July 2022).

The contracts examined here include:

`0x6c4e530a6f5cec117bbd1ed2937584a71c75ca22` for True Freeze NFTs,
`0xa4b41efc1b6f73355c90119aeefddb1ffcf907b0` for the True Freeze Governance contract, which is an immutable and non-upgradeable contract that handles mints, burns, rewards, fees, etc.,
`0xb4bd4628e6efb0cb521d9ec35050c75840320374` for frETH, the rewards token,
and `0xc02aaa39b223fe8d0a0e5c4f27ead9083c756cc2` -- the standard smart contract for WETH, which is the form of ETH that is lockable on True Freeze.

About

Author: mar1na (catscatscode) - reach out on Twitter!
Date: 29 July 2022
Data Source: Flipside Crypto
Disclaimer: This dashboard represents the author’s best effort at interpreting the available data. It is not financial advice.

The chart below illustrates the True Freeze NFTs minted each day, with their token IDs and amounts of ETH each of them represents.

TF NFTs are minted for each transaction that locks ETH, and represent the principal amount. They can be redeemed free at maturity, redeemed early for a cost, or sold on a secondary marketplace at a slightly discounted price (that the market determines).

At the time of analysis, 33 NFTs have been minted. This number will continuously update, as this dashboard auto-refreshes once a day.

The chart below shows the amount of frETH that users have received as a reward at the time of locking ETH.

As of this writing, users have received just under 30 frETH in rewards (about 9,000 USD at the current frETH price). The market determines the frETH price (tokenized value of time-preference, a.k.a. how much that second marshmallow is worth to users). frETH is a key part of True Freeze tokenomics, helping regulate the protocol tokens’ supply & demand.

Below, you will find the visualizations of timely unlocked/unfrozen ETH transactions (this happens at the time of deposit maturity, which every user can set individually).

At the time of analysis, no True Freeze deposits have reached maturity yet, but this chart continues to refresh every day automatically to show up-to-date redemptions.

The users can also exit early, at a cost. The visualization below shows the number of early redemption transactions.

This chart shows up-to-date information (for instance, at the time of analysis at the end of July 2022 there have been 2 early redemptions).

Concluding Thoughts

True Freeze, although a new protocol with few transactions at the time of this analysis, represents a unique approach to helping users who wish to HODL with the least risk (since the frozen assets are not invested, LP-ed, or otherwise exposed to DeFi risks). It also helps understand in practice what exactly the time-preference and HODL willpower is worth -- one needs only to take a look at the market-driven price for frETH token. As the protocol grows, this dashboard will refresh automatically to provide current metrics to the day.

In addition to this dashboard, I have analyzed True Freeze user actions, and the ownership of each of the 3 tokens in the TF ecosystem. You can find these additional dashboards here:

Enter True Freeze 🧊

True Freeze may have an answer to the questions asked above (and actually pay you for your patience).

True Freeze is a willpower protocol for lower-risk HODLing of crypto assets (like ETH). Users can lock ETH (or more precisely WETH, Wrapped ETH) in a “freezer” ❄️ (immutable smart contract) for a self-determined length of time. They will receive frETH rewards immediately, and the principal upon maturity, but early redemption costs fees and a small portion of the principal amount. The True Freeze NFT which represents the principal is also sellable on the secondary market at a discount (the market determines its value). Those who would like to earn a portion of impatient users’ fees can burn frETH in exchange for FRZ, the dividend-type earnings token. Much like the marshmallow psychologists, True Freeze rewards patient users, while the less patient ones miss out.

The reward token, frETH, represents what the protocol deems “tokenized time-preference”.

frETH market price is the monetary value of how much users dislike (and wish to be compensated for) locking and not touching their ETH for a set period of time
(as opposed to keeping ETH in a hot or even cold wallet, where you might be swayed to sell, put in a riskier place like a DEX, or simply spend the ETH).
In other words, frETH is the patience reward. The second marshmallow you receive for not immediately eating your first one -- except this reward is given upfront. 😉
At the time of this analysis, the market values the willpower to lock 1 ETH for 1 year (a.k.a. 1 frETH) at almost $300. 🤔

The below visualization shows the amount of ETH (as WETH) locked on True Freeze, per day and total.

Slightly over 11 ETH has been locked at the time of writing, but this number will continuously update, as this chart auto-refreshes once a day.