📈SUSTAINABLE TOKENOMICS
Find out how Pooky's tokenomics contribute to the long-term success of our platform
This section is now outdated, as Pooky and our tokenomics have evolved towards ScoreRush. See the updated Tokenomics in ScoreRush's whitepaper.
Snapshot / Summary
Pooky has worked with specialist crypto economists, token engineers and game designers to create sustainable game economics. A single, capped supply ERC-20 utility token will serve as the title's in-game currency, providing a medium of exchange and player rewards. The game will operate using a rewards treasury chest, which distributes a percentage of its value weekly and refills based on token in-flows.
Unlike play-to-earn titles that suffer from rampant token supply inflation, Pooky does not award tokens for simply playing. Instead, gamers must demonstrate skill to top leaderboards rankings to maximize rewards. Spending tokens on upgrades not only increases their chances of receiving rewards but also burns a percentage of the amount spent, providing further value to the players. The result is a long-term, sustainable circular token economy absent in many of today's play-to-earn efforts. Pooky is built on a “Play-and-Earn” model focusing mostly on gameplay and entertainment, rather than just the earning side.
Defining tokenomics
Tokenomics is the contraction of "token" and "economics". It refers to the mechanics governing the economy involving a given crypto asset. At the heart, tokenomics are a mix between macroeconomics (inflation, growth, etc...); microeconomics (agent behavior, individual reward and cost functions); and finance (lending, staking, trading, etc...).
Building a game integrating crypto is a complex task, it includes managing inflation, monetary mass, NFT availability, tokens pricing, etc.. all of that while creating a sustainable business model for the company operating the game.
The Pooky team has worked with a multiskilled team including crypto economists, token engineers and game designers (ex: the Center for Cryptoeconomics, based in Zürich) to define the principles of a sustainable game economics with the main goal to create value for both engaged and skilled players.
Pooky principles
Pooky will be powered by a single token (ERC-20), classified as a “utility token” (not a governance token) and serving as in-game currency to (1) reward players and (2) enable in-game assets purchases. Beside having a capped supply, we added deflationary mechanics (e.g., a % of all in-game token spendings are burned meaning permanently removed) reducing supply over time, to ensure scarcity of the token hence value for the players.
Since we have a capped token supply, the rewards mechanism is essential, there are two components in making it sustainable: (A) the reward pool ("treasury reward chest") build-up and (B) the rewards distribution rules.
(A) — Rewards treasury chest
The reward treasury chest is initially funded by (0) a % of the total token issued (during the IEO/IDO) defining the minimum rewards pool size and then dynamically fueled by (1) a % of NFTs primary sales that will decrease over time, and (2) a % all in-game spendings (e.g., energy packs, pressure packs, leveling-up, and other mechanics to be introduced).
Pooky reserves the right to contribute directly to the Treasury to support its value throughout the life of the game.
(B) — Rewards distribution
B — To make it viable with a limited reward pool we had to define a reward distribution based on other players' activity. In Pooky there are no financial rewards for just “playing the game” (e.g. repetitive PvE quests), rewards are distributed per competition (football league) based on the leaderboard rankings in a PvP model. It’s not enough to predict correctly, players need to maximize their points. Players need to be skilled and engaged to gain extra power (level-up) to maximize points in order to rank to the top.
The reward treasury chest will distribute a % of its total value to players on a weekly basis. This distribution parameter will start with a base value, and grow with the total Prestige in the economy, binding the acceleration of money velocity with the economy getting stronger.
In other P2E games that reward players based on repetitive PvE quests (e.g. you run, you earn) regardless of other players activity, they need to rely on an uncapped token supply to continuously reward all players, ultimately generating token inflation. To counterbalance the price decrease these games need very strong in-game sink mechanics or a continuous inflow of new players to drive demand. The latter is the definition of a Ponzi scheme hence not viable in the long term and players face a drop in token value.
Pooky approach
We decided to be realistic and not promise continuous rewards to all players, because rewards depend on token in-flow. We see sustainability in promoting entertainment more than earning with a “Play and Earn” concept over “Play to Earn”; and reward top ranked players with significant token rewards, and others with more in-game rewards. On Pooky approximately the top 20% players will be earning 70% of the reward pool, and the bottom 70% players will be earning the remaining 20% and mainly in-game rewards. The majority of players will join for the entertainment value Pooky is offering, contributing to sustainability in the long term.
In order to create a successful economy the circulation speed of the token (token velocity) is fundamental to create value for all stakeholders, we focused our game design on three dynamics: play, earn and spend to create a virtuous loop. Players are attracted to Pooky by the gameplay and fairly rewarded for their multiple actions (predict) and incentivized to reinvest earnings into the game and by this creating a sustainable game economy.
On top of above we have a responsible go-to-market approach: in phase (0) releasing first the free-to-play version of the game to gain data insight on the core gameplay (predicting correct score), then in phase (1) launching a play-and-earn version with a non tradable token in order to test the game mechanics before in phase (2) issuing the native token on a DEX/CEX with the full features of the game available and duly tested.
Comparison between Pooky and other P2E
The table below recaps the key principles making Pooky a sustainable gaming Platform.
Macro economy
Single utility token economy which is easier to balance and clearer for players to identify value drivers.
Dual token economy lacks transparency for users and as one of the tokens could be off-chain.
Token design
Capped supply ensures scarcity and long term value in a deflationary model due to efficient burn mechanics. Beside reducing the supply over time we create a game economy model that has more sinks (spendings flows) than faucets (reward flows) in order to create demand for the token.
In most cases one has an uncapped supply which is per definition inflationary so after the initial hype token value is tending towards zero. Indeed, to compensate for the supply increase, projects put in place different in-game token burn mechanisms but if players do not burn enough because they prefer selling them or the gameplay is not interesting, the supply will keep increasing and without a constant growing demand (new users) the price will decrease in the end. (definition of Ponzi)
Reward pool
Pre-defined reward pool and based on real in-flows of tokens in the ecosystem.
Unlimited based on token generation posing the question of the value.
Gameplay
Attractive gameplay based on existing behavior, focused on sport predictors, but also other profiles due to the multiple in-game roles to contribute to the ecosystem (training, investing, trading, beside playing)
Lack of gameplay on the long term or games based on a new usage where the market fit has not been proven.
Rewards Distribution
Controlled, determined by competition leaderboard rankings on Players versus Players model (PvP) driving more engagement
Uncontrolled because determined by user actions on a Player versus Engine model (PvE). The amount of tokens given away is fixed in advance per action performed in the game, which means that even if nobody else is playing the game, you will still receive the exact same amount of tokens you can then sell on the open market. The only way for the game to be sustainable is then to onboard new players to create a demand to compensate for the price loss, which is the definition of a Ponzi scheme.
Token utilities (including sinks mechanics)
Incentivized to spend tokens in-game (sinks) to increase NFT value hence maximizing reward chances, and ensure the reward pool to be constantly refilled. Strong utilities for the token are an important driver for the demand coupled with scarcity that ensures value for the players.
There aren’t enough token sink mechanics in the game and players can either hold them or sell them. Since the “selling” would be negative for the token value the “holding” is often artificially incentivized via staking for no other reason than decreasing the circulating supply. In most cases, that staking feature is not linked to the game itself which motivates speculators to stake their tokens for free rewards, resulting in a high selling pressure on the token in the end because users are accumulating tokens.
NFT release strategy
Determined by the number of active players in the free-to-play version of the game. This ensures that the demand is always higher than the supply.
Players can breed and generate new NFTs in an unlimited way, flooding the market, ultimately decreasing NFT value and thus their floor price.
Approach
Responsible approach, release strategy including a testing phase to include players feedback and ensure that game played as modeled. Stress-testing the game economy is the worst case scenario.
Often games with un-tested or uncompleted mechanics are released too soon on the market.
Step plan for token introduction
Pooky split the fungible tokens release in two major phases:
Phase 1 - 2023: – Starting with a soulbound $POK token
The team will start with NFTs supported by an uncapped, soulbound token (2023) $POK. $POK is a gameplay token for the early version of Pooky. It is an ERC-20 utility token on the Polygon blockchain. It will have all the functions of the future token, except tradability. It cannot be sold or monetized directly, but can be used to increase the value of the Pookyballs.
An uncapped, soulbound token provides the flexibility to run the game for several months without any token value fluctuation, allows players to experience the core mechanics of the game and improve their Pookyballs, while preparing for Phase 2. In addition to this ERC-20 soulbound token, Pooky will also issue in the first phase the ERC-721 Pookyballs. The NFTs are capturing and accumulating the value in the system thanks to the level-up mechanics mainly.
As this is a transitional system, Pooky has decided to allocate up to 50% of its primary market proceeds from 2023 to the reward pool (MATIC tokens). On top of that, the reward pools will be filled with a certain amount of $POK matching the reward strategy described above and following the reward threshold in place. This allows players to both progress in-game using the $POK, and to earn immediately liquid proceeds from their involvement in the game ($MATIC)
Phase 2 - 2024: – transitioning to a capped supply tradable $TPK token
Note that this is a first version of our system. We're also considering economics based on an established token (MATIC or ETH), or around a dollar-pegged stablecoin.
Here is a first simplified representation of the economy flows in Machinations. This is highly subject to change, but should allow the reader to get a better understanding of how the system flows. https://my.machinations.io/d/pierres-modelling/32d11fa3dd1f11ed915c02f943517e50
This will be the transition to a Capped token $TPK. Once the platform has the main burn mechanics (or “sinks”) in place the team will transition towards a Capped supply token, the $TPK. The $TPK main allocation over time will go to the reward pool, spread over several years. It will also be an ERC-20 utility token on the Polygon blockchain. It will cover all the use cases of the $POK, and will be tradable.
$TPK will be the main fuel of Pooky’s ecosystem but people will still be able to finish spending their $POK and will be able to convert any residual $POK they have into PXP for the Pookyball of their choice.
The details on the capped token will be released soon.
Supply
$POK supply
$POK supply is uncapped, but is generated through the use of the platform. It can be assumed that the $POK generation function is a linear function of the total number of players and total Pookyballs minted.
As such, total $POK supply increases in parallel with use of the platform.
Token creation is linear to global player activity in the play-and-Earn mode. Burning scales with player activity and the number of collectibles.
$TPK
Final mechanics and numbers will be updated in the coming weeks.
$TPK is a Capped token with a fixed supply.
A majority of the fully-vested $TPK will be allocated to Reward pools throughout the coming years, to reward players in the game.
We will update this section with the following information as soon as it's ready:
Introduction date
Initial supply
Allocation
Release schedule
Vesting
Launch price
Market introduction
Last updated