Deeper dive into [insert name] tokenomics.

empoderat (72)in LeoFinance • 3 years ago (edited)

First of all, let me say 'thank you' once again to everyone for showing such amount of good vibes in my yesterday post where I suggested the possibility of launching my own token (effectively tokenizing part of my trading business).

In this post, I'll deep a bit more into the tokenomics and how things will go in the first stages of the project.

Once again, all possible input will be taken into consideration.

General Token Metrics for [insert ticker]

Max supply: 100.000
Initial price: 1$
3 decimals to start.
No presale or owner allocation. (I'll buy my own tokens).
Cannot be staked.

Users will send $HBD or $HIVE ~~(or $HIVE, not decided yet)~~ to the designated account and will receive the token in exchange.

Main Tokenomics

The token will be 100% backed by HBD. This HBD will be allocated into a dedicated savings account receiving a 10% APR which will act as the 'treasury' for the project (feature included by default into the Hive Blockchain).

@empoderat is setting up a 5000$ bankroll to kickstart the trading fund in the first stages of the project (instead of a 20 'bankroll'/80 'HBD' allocation). More details on that later.

The operator of the keys is @empoderat (me) and I will remain as the single operator of the project for the time being.

Weekly-biweekly reports will be posted (don't want to set the periodicity in stone). One report every two weeks is the absolute minimum. Maybe (in addition to the weekly ones) more detailed monthly reports with. I'll also set up a dedicated Telegram channel to solve doubts and chat from .

I also defined three core phases of growth for the project. This also could serve as a flexible roadmap.

Phase 0 or 'Testing phase' [estimation of 1-3 months]

In this phase, I will conduct the sale of the token for 1$/unit.

100% of sales will be allocated to the 'treasury' in the form of HBD savings generating a 10% APR.

At this phase, everyone will be able to get out with a 0% penalty (yeah, it's called 'testing phase' for a reason).

That means If you don't feel comfortable with my management or for whatever reason you need to get out you'll be able to do so at cost 0. (I'll keep the APR% generated by the HBD).

That means that I'll return to you HBD at a 1:1 ratio in case you decide to get out.

In the meanwhile, I will start to do my thing with my pre-allocated 5000$ (I don't need much more to start out).

More reasoning on that:

My main concern is that I want to keep people safe and that can only happen If the fund is highly collateralized in HBD. If I set a collateralization ratio of ~80% I would need 25-50K worth of tokens sold 'just' to get a 5000-10.000$ trading fund.

And I don't want to wait for ages to let the 10% APR build a buffer to start trading.

With that simple measure, the project is working since day 1 while our treasury fills up.

On a side note, If I'm losing any of this 5000$ won't incur any loss for any token holder. I'm simply bootstrapping the progress. My project, my risk... and once the time comes; Profits.

I also don't want to be very optimistic about the token sale. I prefer to keep my expectations regarding the token sale very low and build from that point. I'm expecting ~10-20K tokens (10-20K$) max. to be sold in the first weeks-months (not counting my own purchases).

That would let us with 10-20K HBD in treasury (plus corresponding tokens issued) + 5000$ (+ potential profits). I'm perfectly OK with that.

This phase ends when:

All tokens are sold.
Token sales are almost non-existent (minimal tokens are being issued to new buyers).

This leads us to the most important phase: The growing phase.

Phase 1 or 'Growing phase' [estimation of 3-9 months]

This is where the project 'makes or breaks'.

At this point, I'll destroy the remaining unsold tokens (If they have not all been sold, of course).

I'll also consider a few ways to 'repay myself' my initial 5K$ (probably with reserved tokens solely for that reason at the initial price).

Profits!

At this phase (probably!) we shall have seen the first results and my intention is to start increasing the value of the token more or less aggressively.

That means that as profits start to roll in, a % of them will be transformed into HBD and deposited into the treasury. Increasing the ratio of HBD:[token] and thus increasing your value held. Probably I'll be increasing the price in tranches of 0,05$ every time (so, a 5% since the initial selling price).

Management Fees

Although This phase can extend as long as I (we) really want, and after giving it a few thoughts, I find it reasonable to apply the following management fees:

The first +25% of profit/year will be free of management fees.
All profits exceeding that 25% will be charged with a 10% fee. Preferably charged when moving profits from the trading account to the treasury.

It's easier to understand with an example:

Let's say that we start the fund with 100K$.

Then after 1 year, the profits are +40%. That means that from that 40K$ I'm charging nothing on the first 25K$ and a 10% fee of the following 15K$.

The net profits of the fund for that year would be 25K$ + 13,5K$ [(15K- (15K*0,1)] = 38,5K$.

Next year we would be starting from 138,5K$ and so on.

I would like to say that I'll keep the right to change the rules for the sake of the project.

The key is finding a balance between making all of this worth it for you & me. So expect tweaks & changes on the way. I'm hearing all the suggestions.

Phase 2 or 'Endgame' phase [+1 year]

My official response to what happens at this point is 'I don't know'.

I won't be working on any of this yet (however I'll be doing my own diligence on the different matters). My #1 priority will be keeping funds safe 100% of the time and generating profits to increase the underlying value of the token.

Few ideas:

Setting up a DAO; Decentralization of the treasury.
Liquidity Pools for HBD-[token]
Setting up a Witness on HIVE and/or Hive-Engine.
More automation on the management.
Partnerships with other projects.

One last thing...

I already have a ticker $'''' decided and I'm already in contact with a designer for a logo & other branding materials, but I'm still not sure about what should be the name for the project.

If you're so kind, drop me in the comments with your suggestions. I'll be dropping some upvotes for sure.

Any questions? Thanks for reading :)

You can follow me on Twitter