A non-inflationary reward mechanism
The HK ecosystem has different games and features for users to interact with. Keeping up with the play to earn idea, like any other games in the crypto space, we need to put in place some incentives for all these interactions to be profitable.
So in order to reward all the players who are interacting with our features and games, we came up with a treasury system for our ecosystem. This treasury will be responsible for distributing various kinds of rewards among users. Let's see how this system forms an essential part of our ecosystem.
While rewarding players is the key feature in a play to earn system, making the system sustainable for the long run is vital. Most games approach this by minting new tokens and rewarding their users with it. This can be very harmful for the tokenomics as the supply of new tokens, in other words inflation, gets out of control. Most games suffer with this, specially when there's a high inflow of new users, and the token ends up losing value over time.
To do things differently and to make our entire ecosystem sustainable for the long run, we came up with a treasury system instead. This system does not mint any new tokens for the purpose of rewarding players, it rather only deals with the distribution of whatever is in the treasury. It reserves a percentage of rewards for distribution among different games and features, these games and features include raids, staking, liquidity pools etc.
Since we have multiple tokens in the treasury, the percentage of rewards dedicated towards different features and where these tokens come from varies. let's look at them individually.
This part of the treasury deals with our primary token, BUDS. To be able to mint new seeds, players need to stake their MOTA, and to get MOTA, players will have to deposit BUDS in the MOTA pool everyday. All the BUDS deposited into this pool each day go straight into the treasury, which later become available to be distributed among players.
Since MOTA pool is a vital part of the game and impacts the farming, players will consistently need to deposit BUDS. This means there will always be BUDS filling the treasury for future rewards. Also, this whole process does not mint new tokens, having zero impact on the supply and inflation of BUDS.
The distribution of BUDS towards different games and features is as follows :
This part of treasury is made up of EXP tokens. Players need to upgrade avatars in the game to get access to some features and earn rewards, this primarily includes the raids. In order to upgrade avatars, users will need to smoke joints and increase their experience points. When users buy joints in the store with any of the tokens, except EXP tokens, the treasury gets filled with amount of EXP tokens that are equal to the value of total user purchases. This action happens once a week, calculating the total value of joints purchased by users.
Smoking joints are upgrading your avatars gives you more rewards in the raids and other features, so there is always a demand for joints in the game. This also means that EXP tokens will continue filling the treasury once a week for rewarding users. Again, the minting of these tokens is directly related to joint purchase and doesn't create any unnecessary inflation.
The distribution of EXP towards different games and features is as follows :
- LP rewards - 20%
It is also important to note that these percentages are subject to change when new features get added to the game.
As we add more games and features to our ecosystem, we'll continue tokenizing those and follow this way of treasury distribution. It's the most effective way to distribute rewards and at the same time preserve the value of those rewards.