Exploring Tokenomics Models and Developments
In today’s landscape, we are confronted with numerous challenges when it comes to designing sustainable tokenomics. Through extensive research and experience, we have observed that even the most prominent crypto projects have encountered issues such as high inflation rates, mismanagement of treasury funds, limited token utility within the ecosystem, conflicting stakeholder interests, significant price drops after token generation events, illusory liquidity, and even the dreaded death spiral.
To address these potential pitfalls and safeguard users from associated risks, we have devised a pioneering tokenomics framework. This framework incorporates elements such as Token Allocation, Token Vesting Schedule, and Value Accrual. It draws inspiration from the framework proposed by Binance Research in December 2023 and has been further refined and tailored by the StarryNift team. In this article, we will provide a general overview of the logic and blueprint behind our approach, followed by a more detailed exploration through a series of illustrations.
By implementing this novel tokenomics framework, we aim to establish a robust and sustainable ecosystem that mitigates the aforementioned challenges and ensures the long-term success of our project.
- Token Allocation
1.1 “Short-term Growth” VS “Long-term Value” Weight Balance
In general, token allocation typically involves setting aside tokens for the Ecosystem, Partners and Advisors, Investors, Treasury, DAO, and Team. To strike a balance between short-term growth and long-term value, we will adopt an approach that considers both aspects.
From short term growth perspective, we will incorporate common practices such as “Play to Earn, Create to Earn, and Stake to Earn.” Additionally, we will explore innovative methods aligned with our roadmap, such as “AI Agents to Earn” and “Social to Earn.” This ensures that our token allocation aligns with our vision and provides diverse opportunities for our community to participate and benefit. Partners and advisors encompass various entities, including KOLs, Guilds, Projects, and experts. We welcome collaborations with ambassadors, volunteers, and builders who share our values and contribute to our ecosystem. Token funds allocated for short-term growth will be distributed proportionally to the users and contributors mentioned above. This distribution will be carried out through mechanisms such as cold-start airdrops, marketing events, liquidity mining rewards, or other bootstrapping activities like market making.
As for safeguarding of long term value, we are fortunate to have visionary global tier one investors like SIG, Binance, and OKX, who will support us in the long run. Additionally, influential Web3 entrepreneurs like Jihan Wu, founder of Bitdeer (NASDAQ: BTDR), and Richel, founder of Synfutures, are both individual investors and consultants, providing valuable guidance and support. Treasury funds will be utilized for long-term goals, such as token buyback and burn programs. These initiatives will be supervised by both the DAO and Team, who will act as safeguards and have voluntarily extended the token vesting period to ensure the community’s long-term development. We firmly believe that this fair launch model, aimed at distributing tokens in a sustainable manner, will foster a more cohesive and powerful community. It empowers all contributors in a decentralized and healthy way, aligning with our mission and values.
1.2 “NFT Holders” & “Active Users” & “Eco Supporters” Airdrop Allocation
A balanced token allocation is a crucial aspect of our tokenomics model. It aims to ensure fair distribution of tokens to all contributors while maintaining a healthy level of decentralization and competition among token holders. This approach fosters organic growth within our ecosystem. While it is important to remember and protect the interests of our initial supporters, we also strive to cultivate a more inclusive community that attracts a growing user base and caters to diverse demands. This long-term strength lies in the collective participation and engagement of our community. To achieve this, we are committed to allocating up to 10% of tokens for an initial airdrop. These tokens will be distributed using a comprehensive model that takes into account various factors, including holders, users, supporters, and partners. This ensures a fair and equitable distribution that benefits all stakeholders.
Our Code Green Holders, who have been with us since the beginning, hold a special place in our community. Tokens will be presented to holders through mechanisms such as staking, governance, and rewards sharing. The Code Green NFT will play a significant role in the model algorithm, considering parameters such as price, scarcity, time, and other relevant production factors. For certain tournaments with substantial incentive pools, the Code Green NFT may serve as a threshold for participation. In other entertainment events, the Code Green NFT could be used as VIP tickets for entry into the world we have created. Generally speaking, we aim to provide both functionality and benefits to holders through significant events. However, we also encourage fans to appreciate the artistic value of these cute designs and view them as precious collections rather than purely speculative assets. We aspire to witness increased decentralization through the adoption of more active addresses and on-chain transactions. Multiple airdrops will be executed over time, aligning with our unwavering commitment to cocreation empowerment.
Citizenship is a central theme in the development of the Starryverse civilization, encompassing various narratives and worldviews. We highly value proactive citizenship pass holders who not only engage with our world but also bring in new friends, socialize with fellow citizens, and contribute to our ecosystem through interacting with other platforms developed by strategic partners like Trantor and Synvision. As a token of appreciation, these users will be incentivized. The reward plan is designed to provide greater opportunities and rewards to users based on their accumulated XP and the level of their card. The more XP you accumulate and the higher your card level, the greater your chances and potential rewards. In addition to enjoying leisure games, creating 3D spaces, and participating in entertainment events, we have exciting plans to roll out more social functions and AI tools in early 2024. These additions will offer a completely new and immersive experience, combining the power of AI and Web3 technologies.
We extend a warm welcome to friends from other ecosystems, such as BNB holders, OKX wallet users, and Inscription players, to join us and share in our prosperity. We value achievements from various perspectives and believe in fostering collaboration and growth across different communities. To provide more clarity and transparency, we will release quantified diagrams and detailed plans in accordance with our product launch roadmap. These resources will offer a comprehensive overview of our vision and the steps we are taking to bring it to life.
2. Vesting Mechanism
2.1 Sustainable Vesting Schedule and Moderate Inflation Rate
The token vesting schedule plays a crucial role in managing token price volatility and ensuring the long-term sustainability of a project. A longer cliff time and vesting schedule for team members, investors, and advisors demonstrate our confidence and commitment to building a project for the long haul. Moreover, spreading out token rewards over an extended period can facilitate sustainable growth.
At our project, we are dedicated to creating a leading and enduring ecosystem. To showcase our commitment, we have voluntarily extended the token vesting period for both the team and treasury. This ensures steady development and dynamic operation of the ecosystem. Our team will only take 5% of the token allocation which is comparatively lower than the most projects since we wish to share more benefits with our ecosystem, DAO and partners. Besides, team and treasury tokens will have a 1-year cliff, followed by a linear vesting over 5 years. Our equity and token investors will receive limited vested tokens during TGE and the slow release approach reflects our focus on long-term value investment.
We believe that our community deserves both short-term rewards and long-term benefits for their continuous support. The initial airdrop will be unlocked after listing on centralized and decentralized exchanges (CEX and DEX). Furthermore, additional incentives with larger percentages will be released based on active engagement and community growth achievements and momentums. Together, we can accelerate our progress and achieve our dream of becoming the most influential Metaverse.
2.2 Dynamic Adjustment Mechanism & Information Symmetry
We believe in maintaining open and transparent communication with our community and stakeholders in an efficient and effective manner. However, it’s important to note that our mechanisms may be adjusted dynamically based on various factors such as market conditions, product pivots, DAO governance, and exchange requirements.
While we adhere to cautious and stringent rules similar to traditional finance, including clear financial statements and regular auditing, we also recognize the need for flexibility in the Web3 world due to its fast-changing pace and decentralized governance. Our priority is to ensure information symmetry and avoid moral hazards, always keeping our users’ benefits as our top priority. While specific details may shift, the general direction will remain secure. We are committed to managing the inflation rate within a reasonable range and closely monitoring the maximum inflation rate through pressure tests. This ensures that we maintain a sustainable and stable ecosystem for our users. Community trust and support are crucial as we navigate the ever-evolving landscape of the crypto industry.
When evaluating the impact of a token’s supply on its price, it is important to consider the concept of Maximum Inflation. In the context of crypto tokenomics, Maximum Inflation refers to:
The inflation rate will undergo a provisional evaluation and will be conveyed to our community upon the completion of finalizing the tokenomics, prior to the TGE.
3. Value Acrual
Many projects conduct token generation events before launching their products. However, valuing these tokens can be challenging due to the lack of true intrinsic benchmarks and tangible use cases. Unfortunately, some teams take advantage of these opportunities as cash-grabs, accumulating wealth without delivering on their roadmap.
In contrast, we are fully committed to our vision and goals. We have dedicated almost 3 years to building and finding our unique path after pivoting to create something different. Our long decision process to prepare for a token generation event is not a disregard for our community’s voice or for market trends. Instead, we firmly believe that trust and binding within the community can only strengthen over time if the token accrues value and demonstrates utility. We understand the importance of delivering on our promises and ensuring that our token holds real value. By prioritizing utility and value accrual, we aim to build a strong and trustworthy community that stands the test of time.
Our tokens offer a wide range of utility and benefits. They can be used to access the services of AI agents, serving as assistants for investment, gaming and advertising. Users can use tokens to claim gifts and surprises in our Merchandise Hub, which caters to both Web2 and Web3 users. Tokens also grant VIP access to our entertainment events and offer opportunities to win limited editions of SBT and virtual equipment. Additionally, tokens can fuel the citizenship upgrade to carry more social achievements. Furthermore, token holders can share in the profits of our launchpad and gain access to the whitelist of StarryLabs incubated projects. In the future, tokens can be used as gas to deploy dapps on new protocols and sidechains. These governance tokens symbolize the users’ authority to oversee and propose suggestions for the project’s development. As our development progresses, we will unveil more utility and functions for our tokens.
While some meme coins have gained market traction without token utility, we believe that strong token utility is essential for the long-term health of the ecosystem. It not only stimulates market engagement but also draws new participants into the cryptocurrency sector. Our goal, by emphasizing value accumulation and broadening utility, is to promote enduring growth and stability across the entire industry.
To conclude, we fully acknowledge the importance of tokenomics within the blockchain industry and its capacity to deliver a multitude of advantages to our community. After nearly three years of dedicated effort, we have reached this pivotal moment to share the future success with all of you. Our roadmap has been meticulously planned, and our team has executed it with unwavering determination. Let’s join forces and work together to turn our vision into reality.
About StarryNift
