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The Gems & Goblins tokenomics system is designed to create a mutually beneficial relationship between the game and its players. The GNG token, which is integrated within the larger cryptocurrency ecosystem, serves as the backbone of this system.
Players can earn GNG tokens by participating in the game, and they can then use these tokens to purchase in-game items or exchange them for other cryptocurrencies. This not only makes playing the game more profitable for players, but it also drives growth in the player base, and as a result, increases the value of the GNG token.
The total supply of the GNG token is limited, which means that there is a finite amount of GNG tokens available, and this scarcity is expected to drive the value of the token up over time.
Additionally, the game has an in-game marketplace, called the Gemwelry, that allows players to buy and sell in-game items, and this marketplace also utilizes the GNG token as its primary currency. Furthermore, the game's reward distribution mechanics are carefully designed to ensure that players are fairly rewarded for their participation in the game.
The GNG token is the native currency of Gems & Goblins that can be traded, staked and farmed in-game. The biggest advantage of the token however, is that it’s valid outside of the game universe, enabling players to exchange their GNG tokens for any other cryptocurrency thanks to safe and secure blockchain technology.
Passive income mechanisms guarantee rewards to users and long-term holders simply by holding on to their tokens. To ensure that the tokens' value grows over the long term, deflation mechanisms have been integrated which increase as more users step in the game. The GNG token has many in-game utilities and it can be traded for resources, extra weapons, skills, and other improvements for the heroes.
The GNG token is not be tied exclusively to the Gems & Goblins platform, but also serves as a game token for our gaming studio, We Make Games. By holding GNG tokens, users will have the ability to exchange them for tokens of newly released games from our studio. This unique feature provides additional utility and value to the token, ensuring its longevity regardless of the success of any particular game.
The total supply of the GNG token is fixed at 500 million tokens. The distribution of these tokens will occur through a combination of an Initial Coin Offering (ICO) open to the public and a private placement for Venture Capitalists. The goal of this distribution plan is to achieve a high degree of decentralization. The specifics of this distribution plan are outlined in Figure 1.
Figure 1. The token allocation with the different locking periods
Note that percentages may change if the public sale finishes and tokens still remain unsold. The final numbers will be available at the End of the Public sale and the data presented here will be updated accordingly.
The GNG token distribution plan includes a variety of vesting and cliff periods for different groups of token holders. The specifics are as follows:
- Players rewards: 0% unlocked at TGE, then released based on a dynamic algorithm for sustainable operation.
- Airdrop: 0% unlocked at TGE, then fully released 6 months after distribution.
- Staking: 0% unlocked at TGE, then released over 24 months with monthly vesting.
- Marketing: 3-month cliff followed by a 48-month quarterly vesting.
- Team: 12-month cliff followed by a 36-month quarterly vesting.
- Public round: 20% at the time of purchase, rest linearly over 5 months. Extra bonus will be given in the first rounds.
- Private round: 50% TGE, 6-month cliff, rest linearly over 12 months.
- DEX liquidity: 100% at TGE, will be used DEX’s required liquidity.
- DAO: 24-month cliff followed by a 48-month quarterly vesting.
Figure 2. The pie chart of the token allocation
Both new entrants and long-term players are incentivized to engage in the game through the aforementioned token distribution. At the same time, investors may also participate in the ICO and earn returns through farming and staking mechanisms.
The funds reserved for player rewards ensure the game’s long-term sustainability, while the incorporated deflation mechanisms will further increase the value of the tokens as game usage increases.
Gems & Goblins offers an engaging gaming experience where players can earn rewards in the form of GNG tokens based on their ranking across different periods (seasons). The Progressive Reward Phase takes into account players' previous rankings and encourages them to participate more actively by offering an inflationary structure. This, in turn, helps maintain a high level of player availability and participation in PVP battles, contributing to an optimal gaming experience.
The game rewards will be split to players through PvE and PvP rewards, with 15% of rewards going to PvE and 85% going to tournaments. This provides players with the opportunity to enjoy both PvE and PvP game modes and earn rewards accordingly. With this structure, Gems & Goblins incentivizes player engagement and growth of the user base, making it a compelling gaming experience for all players.
Figure 3. The token allocation at the different rankings at the end of the season
Gems & Goblins central element is the marketplace which will offer players consumables, NFTs and item bundles. The tokens collected from the purchases will be distributed as shown in Figure 3.
It is essential to note that when purchases a large portion of tokens will be burned, resulting in deflation, which in turn will further increase the value of the game tokens in circulation.
Figure 4. The Gemwelry income distribution
Note that the coins allocated for staking will be released during the game’s development period to reward early adopters. After that, if there are any remaining tokens, they will be burned. Gems & Goblins players are entitled to two types of in-game rewards:
- A percentage of the marketplace revenue.
- A portion of the reward tokens.
These tokens will be distributed to the legions in the following manner:
Figure 5. The amount of reward tokens distributed to the different legions
The reward token distribution scheme is designed to significantly reward players who reach the top leagues. The reason is twofold. First, the reward distribution structure increases with the degree of difficulty. In addition, as the difficulty of each league increases, fewer players may be able to participate in the more rewarding leagues, resulting in a fewer players sharing greater rewards.
Over time, the league rankings may evolve to ensure efficient distribution among the players.
GNG token holders will have the opportunity to deposit their GNG tokens into the farming and liquidity contracts of decentralized platforms such as Soy Finance and receive the platform reward token (e.g., SOY, Cake, Banana, etc., depending on the DeFi platforms) as well as extra rewards in GNG tokens. The GNG distribution will mirror the DeFi platform’s rewards token distribution, while a dynamic mechanism will ensure a fair distribution between the different DeFi platforms.
Another option offered to GNG token holders and investors is to freeze their tokens for a predefined period in a process called “staking.” Staking is similar to a term deposit, an account with interest, and a maturity date. Funds must be held for a specified period to receive the interest and deposit. The longer the duration, the higher the interest rate the depositor receives.
Three distinct staking periods will be available, each with a specific pool of GNG tokens to be distributed based on the period weighting factor, as shown in Figure 4.
Figure 6. The weight of the different staking periods
The GNG staker reward will be calculated based on the following formula:
User_Reward = (number of user staked tokens)/(total staked tokens)*(duration weight),
With duration weight equal to (i) 0,2 for 1 month, (ii) 0,3 for 3 months, (iii) 0,5 for 12 months of staking. Thus, the staking contract will distribute the tokens to the different stakers pools, which will be shared equally to the stakers according to their number of staked tokens.
The following chart presents the number of tokens that will be minted during upcoming periods, assuming that all tokens from both the public and private sale rounds are sold.
Figure 7. The token release rate
We performed a quantitative analysis of the GNG platform's token economy. The tokens in the GNG platform also serve a dual purpose. Firstly, they enable users to benefit from the platform's projected growth and popularity, thereby increasing token adoption as token prices appreciate, making them an attractive investment.
Secondly, as the platform's technology matures and more users adopt it, the expected token price appreciation decreases, which helps to moderate the volatility of the user base and the token price. Hence, the token's price is influenced by various factors, including the size of the user base, the incentive to purchase the token, the platform's productivity, and the total and maximum token circulation.
We evaluated three distinct scenarios for the user base and platform productivity growth: a pessimistic scenario of 100,000 users, a realistic scenario of 500,000 users, and an optimistic scenario of 1 million users. Our token evaluation relied on the fundamental productivity of the platform, taking into account that users, or agents, can make two-step decisions when trading tokens – whether to acquire tokens and how many to acquire – which depend on their transaction motive and the expected future token price. The user base impacts token price through its impact on flow utility and agents' token demand.
The results of our analysis are presented in the accompanying chart.
Figure 8: Pricing projections under different assumptions of user base size
The initial coin offering (ICO) will be conducted in two phases. The first phase will begin in February and end in September, lasting a total of 8 months. It will consist of 5 rounds, with the first 3 rounds lasting for one month each and the last 2 rounds lasting for 2 months each. Simultaneously, a private placement round will be held for venture capital investors.
In the private placement round, two parallel sales will take place. The first sale will be targeted at large investors with a minimum size order, while the second sale will be open to everyone. The following table shows the token allocation and pricing for each round:
Figure 9. The first phase of public and private placement
Based on the aforementioned token allocation and pricing, the total capital expected to be raised during the first phase of the ICO is 2,015,000 USD.