Dragginz DKP (SNS-1) Tokenomics

Governance
1

Hi there!

There is a lot of curiosity about the status and future of DKP/SNS-1. We have been giving this a lot of thought and we wish to discuss with the Dfinity community the first steps that we envision for the DKP/SNS-1.

Firstly, we want to update the ticker symbol from SNS-1 to DKP (Draggin Karma Points). We understand that this requires a vote on this aspect at the NNS level, to which you would be invited to give your opinion. @domwoe @lara Can you please confirm that this will be possible with an NNS vote? Do you have any time frame when we can expect to be able to submit a proposal to make this change?

Secondly, we wish to increase the amount of DKP in circulation for functional reasons. This step simply ensures that when people use DKP, they are using whole numbers rather than small fractions like 0.002 DKP. Note that as part of this measure, no token holder will be diluted. We will simply mint more tokens with an NNS proposal, which effectively will multiple everybody’s holdings by a certain factor x percentage, quite possibly to multiply by several hundred thousand.

@domwoe @lara : Can these two NNS proposals be combined or should there be one vote for the ticker symbol update and another for the increase of circulation?

We also wish to split the locked Dragginz neuron into two equal neurons to enable us to participate in community voting without affecting the decision-making process.

One big question is how to ensure that every holder of DKP gets updated when we multiply the number of tokens. Our initial thoughts are to pause any exchange activity after giving two weeks or more notice. Then take a snapshot of everyone’s holdings and reallocate the new amounts accordingly. At this point we envision to be able to unlock the token and the token holder can then choose to opt in to locking and voting, or not.

Once that is completed, we wish to propose both an inflationary and deflationary mechanism:

Inflationary will be in the form of voting rewards based on a staking mechanism . Voting would take the form of fantasy governance. The voting rewards the Dragginz neurons earn would be used to cover the cost of cycles and development.

Deflationary would involve burning DKP according to a mechanism yet to be determined in further detail.

We wanted to make sure that a) this was possible, and b) we had done everything we can to ensure the exchange goes smoothly. We are in close contact with both our technical as well as our legal team to further specify details. We will share further information as soon as they are available.

As you can appreciate, the proposed changes are something we only wish to do once, so we really want to ensure that we do this correctly. As we are dependent upon the NNS to proceed on a technical and governance level, we invite you to comment on our intentions / plans, which shall also allow us to get a better understanding of the technical and procedural timeframe .

Any thoughts or feedback would be most appreciated.

28 Likes
2

I agree with the decimal adjustment proposal but in regards to voting rewards/inflation this would enable you and Borovan to essentially mint 48% of the daily inflation rate.

Acknowledging future FUD… what’s stopping you from dumping the rewards?

3 Likes
3

Are the dkp going to be burned for cycles or sold for cycles. If it’s sold then we’re just going to result in constant inflation unless the burning mechanism you guys havent announce will be on par with rewards.
I love the current tokenomics of this coin and am fine with moving decimal places for holders but just would be sad to see the coin with best tokenomics in all of Crypto in my opinion just turn into another inflationary mainly token where barely dkp is burned

4

The plan was to burn for cycles

5 Likes
5

Thanks for the clarification

6

Would the lawyers be providing clarity on inflationary side or deflationary side?

7

Also this part is a little confusing for me, “The voting rewards the Dragginz neurons earn would be used to cover the cost of cycles and development.”

How does voting reward relate to cost of development.

Would the staking reward match exactly the amount of cycles & development?

Effectively making inflation=deflation?

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Im not entirely sure you can just burn for cycles as you need to provide value to purchase the cycles… but we’ll sort something out that keeps everybody happy.

Details will be forthcoming

1 Like
9

This is still TBD. Adam and I do not want to personally profit from voting rewards, we do however want to push Dragginz towards self-sustainability whereby the voting reward proceeds would be used to pay developers, artists, moderators, costs of cycles and all other associated costs of running a large scale game on the IC.

This is where we would love to hear suggestions or comments to how we can do this fairly and transparently.

How much it costs to run the game is very much a big unknown right now as we dont know how many cycles are needed per player etc.

3 Likes
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Basically our hope is to throw out our initial thoughts, get feedback from community and then we go back to lawyers and see what we can and cant do.

4 Likes
11

Curious, are there any plans for people who had SNS1 that was locked for a significant amount of time pre-takeover?

If there are voting rewards will there be a time bonus for example?

EDIT:

Sorry glossed over this bit:

At this point we envision to be able to unlock the token and the token holder can then choose to opt in to locking and voting, or not.

1 Like
12

how about keep SNS-1 as it is for governance, and add new DKP token for game?

4 Likes
13

I like the idea of a single token for everything in this game instead over complicating things and start to add more tokens for different purposes. Also think DKP should be more than just a regular governance token.
The question now is how can you create the perfect equilibrium of tokenomics where the game can sustain it’s self, sustain devs, and intrigue and sustain players and investors.
Itll be the first of its kind where a game actually sustains every single one of those categories from its internal ecosystem. It’s a very complicated problem.
We’re in for some interesting times and am excited to see how all this pans out. Also grateful to be apart of this since sns was launch and seeing how everything has developed post launch.

2 Likes
14

Rather than having to mint tokens, can the team take a 30-50% cut from all the products sold to make money for development and upkeep? The team can then increase and decrease the tax to stay at no profit/loss.

Also, the team can look at other ways to make money by taxing other parts of the game. The NFT marketplace, token transfers etc.

This would ensure there’s no inflation and rather a slight deflation from the token transfer burns, which could also be tweaked.

2 Likes
15

The idea is to create multiple utilities for DKP and then tax a % of it for maintenance.

16

Part of this tax can be given to stakers as well. That incentivizes staking and voting.

17

We don’t have to mint tokens, the issue is really how do we pay for growing game development costs over the next 2-3 years while income from the game is low.

Eventually sure, we’d have a lot of players and any revenue would go directly to the game hosting and development costs (no fat salaries or shareholders etc.) I don’t want to slow down the pace of development before we get to that point.

The 1 billion/year was just the first concept we came up with.

18

This makes total sense, the team should make the calls in the initial days.

How about rather than having a fixed inflation of a billion tokens each year we mint tokens after a week/month minus the revenue from in-game buys and other revenue sources?

Ex.

Week/Month Revenue (Mil.) Expenses (Mil.) Minting (DKP@$0.01)
1 0.1 0.125 2.5M
2 0.12 0.2 8M
3 0.15 0.25 10M
4 0.2 0.35 15M
5 0.5 0.5 0
6 1 0.7 -30

By having the weekly/monthly minting we can navigate the conditions more nimbly. We only mint what we have to. By minting a Billion upfront sure we get the predictability but what if the in-game revenue more than made up for the expenses or it’s way less than the expenses?

The team should first use the in-game revenue/other sources of revenue for their expenses and then go on to mint tokens.

I understand this might not sit well with others as it leaves scope for the team to mint tokens at their whims but then the team would anyway be in the control with majority of voting rights so if they really want to dampen the token they can.

1 Like
19

We’re sort of limited by the SNS right now. We’ve already requested a few features that weren’t on the roadmap, but something like this would be a much bigger change.

It’s probably easier to just have no inflation to be honest. Lock 51% up for the SNS control and then the rest for the community… Just have to explore other options when it comes to growing the team.

A bull market would really be nice, but it’s not essential :slight_smile:

6 Likes
20

Well wouldn’t that make everyone happy. No inflation! :star_struck:

2 Likes