📊Tokenomics: A sustainable GameFi Design
The tokenomics of DungeonSwap V2 is carefully designed to sustainably balance the minting of token & burning of token, incorporating the new play-to-earn model and the play-to-burn model.
The DungeonSwap V2 has a uniquely redesigned tokenomics model to achieve sustainability for the long term future, with a combination of Play-to-Earn, Risk-to-Earn and Defi together with NFTs, all playing a crucial part in the whole tokenomics.
DungeonSwap, on the other hand, adopts an approach which balances token minting and token burning by combining the Defi yield-farming reward with the Gamefi element to create a balanced tokenomics where the long term supply can be maintained in the future.
What is a Sustainable P2E and how is DungeonSwap different from competitors?
The concept of "Sustainable P2E" was emphasized by DungeonSwap for their P2E model where the long term target is the sustainability of income generated for players and the long term survival of the game and the $DND token itself.
Competitors in the market, including the biggest players, consider P2E reward as "a portion of the total supply" or "a limited marketing budget", which by nature would one day run out of reward. This makes their "play-to-earn" games are, by definition, non-sustainable.
DungeonSwap's vision, as indicated on our white paper, is to build a sustainable, user-centric and entertaining decentralized ecosystem. This vision has never been shaken, and the migration to a Play-to-earn gaming model means we are committed to develop a way to ensure such P2E experience would be a sustainable, user-centric and also entertaining one.
How do we sustainably fund the Play to Earn game?
The following steps illustrates how the Play-to-Earn reward is funded:
The Ancient Ruin gets DND-BUSD LP Tokens by selling Relics (P2E NFT Assets)
The Ancient Dungeon gets the LP Tokens and stake them into the DND-BUSD Yield Farm
The Ancient Dungeon harvests the reward regularly from the yield farm
The Ancient Dungeon distribute the rewards to play to earn players, in the proportion determined by the participation and gaming performance of each player.
This approach has the following advantages from a tokenomics perspective:
Slowing enlarging and scaling up of liquidity: We offered different payment options for users, where the DND-BUSD LP token purchase option encourages user to provide liquidity which will at the same time:
Increase the price of $DND token
Provide additional liquidity to the trading pair (DND & BUSD) in the Dex.
Perpetual liquidity guaranteed: LP Token held by the smart contract would not be removed due to market fluctuation or price speculation. This will provide long-term stable liquidity which contributes to a long term price stability.
Development funding without price impact: A portion (not more than 50%) of the fund from the NFT selling will be funded for future development purpose. The fund will be in terms of LP token where cash in BUSD can be obtained by removing the LP token without selling any DND token. This is a way that allows the development and marketing team to obtain necessary funding without impacting the price stability.
Balance of token minting & token burning: Our long term target
Sustainability means the DND token will maintain a long-term stable supply at a reasonable price, which also means that it will neither be inflationary nor deflationary in the long term, but to have a balanced minting and burning rate.
To achieve the long term balanced token minting and burning, the key is to handle the problem from the two fronts in parallel:
Token Burning: As indicated in the diagram above, there are several DND burning mechanisms already available in our V2 release, including the Classic Risk-to-Earn Dungeon and the NFT market. In the future there will be more token burning features to be released (refer to Roadmap & Strategy)
Token Minting: We will ensure the token minting is controlled at a reasonable level where in the long run, a portion of the reward earned by liquidity provider will be transferred to play-to-earn players. On the other hand, the depreciation effect of the Relics (NFT assets) means that the game won't be only dominated by early players, although they would maintain some advantage. The key is to distribute the reward to those who actively participate into the game. From an economic perspective, this means that the gaming reward is distributed to those who can play the game well, as compared to defi/ traditional finance where reward is passively distributed to investors in proportional to their investment amount (they will stay in the Defi yield farm to enjoy a lower APR% than the P2E game).
The Story behind DungeonSwap's Tokenomics
Considering a traditional yield-farming model, the reward comes from the "MasterChef" and which essentially is a reward to the liquidity provider. DungeonSwap tried to answer the question "How will the reward go?" question by introducing the V1 Classic Dungeon back in August 2021. The V1 Dungeon, being a token-burning machine in nature, was controversial and not fully accepted by all the users.
The users wanted a play-to-earn solutions, and they complained by selling their holdings. In light of this, the DungeonSwap development team quickly reacted and designed a unique Play to Earn models. Since then, the development team have been full force developing the P2E features, which is the DungeonSwap V2 you can see today. The tokenomics and the offering lineup users can see today is the combined effort of our V1 and V2 deliverables which in essence is realising our vision of building a sustainable, user-centric and entertaining decentralized ecosystem into the play to earn family.
Basic Info of DND Token
Name: DungeonSwap Token
Symbol: DND
Decimals: 18
Maximum Supply: 5,000,000 (5 million Token)
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