The Pic One Emissions Schedule
PIC token emissions schedule is designed to link future supply with current demand, benefiting players and holders.
PIC is an ERC20 token used natively in Pic One, a blockchain game built on Ethereum, and future titles in the PIC ecosystem. Players earn PIC through their share of the global daily betting volume in Pic One. It will also be distributed via token lockdrops, to leaderboard winners, and through other competitions within Pic One.
Pic Labs will use 35% of ETH revenues from Pic One to periodically repurchase and burn PIC tokens on the open market. Each day, 15% of the collected ETH revenues from Pic One will also be distributed via a jackpot. * Players are incentivized to obtain and hold PIC for these daily lottery tickets, early access to new formats, and purchase of exclusive NFTs, skins, and other in-game items.
Objective
Demand and growth in demand determine the success of a product or service. Our vision for distributing PIC is via a mechanism that tracks these two variables and is controlled by a minimal number of arbitrary variables. Our benchmark emissions period for PIC is 1,666 days and we aim for balanced distribution throughout this period.
Design Overview
There are currently 2 dominant supply curves. Most decentralized Proof of Work projects follow the bitcoin model of higher initial block rewards before pre-determined reduction periods. Fundraised projects usually have multiple stages of vested tokens which results in pre-determined supply shocks. We believe neither is suitable for what Pic One wants to achieve.
Our solution with PIC token distribution is to link future supply with demand and demand growth. If the adoption of Pic One exceeds expectations, theoretically the genesis supply will be emitted within our benchmark of 1,666 days, and after if it does not.
Our arbitrary variables
1. Benchmark distribution period of 1,666 days, with a benchmark daily emission of 0.06%;
2. Daily emission rate capped by a lower bound of 0.02% and upper bound of 0.10%;
Incorporating demand and growth of demand
Assuming a normal distribution, 99.9% of the “population” is within 4 standard deviations of the mean. A z-score is the number of standard deviations a data point is from the mean.
1. A z-score is calculated by comparing the daily change in betting volume on Pic One against historical daily changes. This intends to directly reward players each day for their play;
2. A volume multiplier is calculated by comparing the daily volume to the historical daily volume as an indication of long-term adoption;
3. A pre-adjusted daily emissions rate is calculated using [default daily emission + (z-score * 0.01% * volume multiplier)];
4. The daily emissions rate is adjusted by the lower bound of 0.02% and upper bound of 0.10%.
Case Studies
We have taken 4 datasets of current cryptocurrency products with differing daily volume and growth patterns to illustrate how the emissions schedule will hypothetically adapt.
*End-to-end growth is a comparison of the first 30MA data point with the last 30MA data point in each dataset
Insight
XBTUSD and IDEX volumes benefited from the general increase in adoption and interest in cryptocurrencies. XBTUSD volumes grew 200x in a 2.5 year timespan, while IDEX volumes grew 80x in 1.75 years, peaking at 1250x at one point. Hypothetical average daily emissions for XBTUSD would be 0.081% and 0.057% for IDEX. WINk (TRONbet) emissions matched our base-case at 0.060% with a 3.85x increase in volume over 320 days. Despite several large individual days of volume, Bustabit volumes have declined 62% since inception, and would emit 35% slower than our base-case.
The case studies highlight the ability of our emissions schedule to adjust supply based on demand and change in demand. Long-term sustained growth is also rewarded more than bursts of high usage. The value proposition of the token ultimately determines its market value and for PIC this comes from its utility and the repurchase-and-burn mechanism.
Pic Labs is surprised to see the lack of experimental emissions schedules within the current blockchain ecosystem. We believe the tokenomics of PIC fulfill our objective of connecting inflation with current demand. For a project without a price floor from raising funds or a price target, this emissions schedule allows the market to decide a sustainable value for the token. Though experimental emissions won’t suit all projects, we hope this may inspire other teams to take a chance.
*Daily jackpots will begin at the start of Season 1. There will be one large raffle conducted at the end for 15% of the site’s revenues during the beta.
*We’d like to thank hedgedhog for his contributions to the creation of the emissions schedule as well as the authorship of this article.
