Serendale 2.0 Move and Tokenomics Changes — Summary— My Initial Thoughts
I will attempt to keep this article updated as we get more news so that its in one spot. Will try to keep a clear change log below with dates.
Change Log:
- Initial Draft: August 29, 2022
Since the AMA on August 25, 2022 and in the Discord as well as the talk.defikingdoms.com there has been quite a bit of information disclosed about the upcoming move of Serendale off of Harmony blockchain and onto the Klaytn blockchain as well as the associated tokenomics changes.
If you missed the August 25, 2022 AMA you can catch the transcript here. there was also a lot of alpha dropped in the discord. I’ve compiled it here and am also sharing my thoughts.
Table of Contents
1- Summary of Serendale 2.0 Known Details
- Background on Current Jewel/Crystal Tokenomics
- General Overview of the Proposed Tokenomics Changes
- What happens to my Locked Jewel? A Numerical Example.
- What happens if this doesn’t happen before the Locked Jewel unlocking starts?
- When will my locked tokens unlock?
- What’s the benefit of holding Jewel (xJewel once staked at the Jeweler)?
- What does this mean for Crystal?
- What happens to Unclaimed Serendale Garden Rewards?
3- Hero Changes in Connection with Serendale 2.0
1. Summary of Serendale 2.0 Moving to Klaytn Known Details
General and Timing
For those that have been living under a rock, DeFi Kingdoms is a cross chain game that is currently housed on two blockchains: (1) Harmony and (2) DFK Chain, an Avalanche subnet.
Each chain has its own realm with its own art styles. Due to various reasons laid out in the prior AMAs (see my pinned Index of DFK Articles and see all of the AMA’s during the months of July and August 2022), Serendale, the realm housed on Harmony is moving to Klaytn blockchain. More on that here from the DFK Medium page.
Timing of the move to Klaytn— End of Q3 (End of September) or Early Q4 (October)
[Samichpunch Note: I’m going to assume this will realistically be end of Q4, though I have no inside knowledge, just basing this on historical performance]
How is the move going to work?
Transcribing the prior AMA’s and reading what is available in Discord and talk.defikingdoms.com, it appears that what will happen is they will shut Serendale off in phases (i.e. duels shut off, then certain quests, then more, until nothing is left) with the goal that everything is Bridged to DFK Chain and Crystalvale (this is part of why they have been so focused on Crystalvale Parity).
There will not be a bridge from Harmony to Klaytn [Source], only DFK Chain to Klaytn, so you’ll want to move all of your assets to Crystalvale on DFK Chain. If you do not do so, it sounds like they have plans to snapshot anything that wasn’t bridged and get it to people on Klaytn, but you won’t have access to your assets for who knows how long while they wait for that.
Other Interesting items of note:
Hatching pet eggs on DFK Chain is coming soon it sounds
Duels will kick back off with Season 1 on DFK Chain and the raffle tickets will generally be a DFK Chain thing
Guild stuff planned for Serendale 2.0
[Samichpunch note: yeah yeah we’ve heard this for months. Don’t hold your breath for this, let’s let Wisdom Gaming get PVP out and a succesful roll out of Klaytn and then maybe I’ll let myself get excited for this.]
Tokenomics Vote and Proposal
Vote time: The vote opens up tomorrow, August 30 at 3pm ET and will run for 2 days until September 1 at 3pm ET.
Vote Power/Details: Vote using xJEWEL held in Serendale and Crystalvale (including xJEWEL in Gardens), xCRYSTAL, Heroes, and Lands
- Voting weight: 1 xJEWEL or 1 xCRYSTAL = 1, 1 Hero = 10, 1 Land = 100
The vote to move Serendale to Klaytn as Serendale 2.0 IS NOT A PROPOSAL BEING VOTED ON. That is happening.
The vote is for the tokenomics of the move, not the move itself — Hubert Cumberdale [Source]
The vote is regarding some major tokenomics changes for the Serendale power token, Jewel and the Crystalvale power token, Crystal.
Frisky Fox
I want to echo Hubert’s answer as well. Any time we make a significant change to the protocol, we hold a vote with the community to accept a proposal to do so. This is the symbiotic nature of the governance token at work. If the proposal does not pass, we will go back to the drawing board and put together a new proposal, taking into account the feedback.
We have already gone through many different iterations of the current proposal, and feel that it is the strongest one for the good of the project, but we can not and will not execute on it without the governance vote passing first, as it is a major Tokenomics change.
2. Tokenomics Changes
Background on Current Jewel Tokenomics
So that it’s helpful to understand, here’s a very high level of the current DFK Tokenomics. Some of the Jewel token is unminted, some of it is minted and unlocked (freely usable) and some of it is minted but locked, and unusable (these locked tokens were yield farming rewards).
$JEWEL — CURRENT
Max Supply: 500M
Current Circulating Unlocked $JEWEL: ~109M
Current Circulating Locked $JEWEL: ~283M
Unminted Jewel: ~118M
Jewel is currently both an in-game power token used for certain key actions in Serendale (summoning a hero, hatching pets, wagering for duels, buying/selling/renting heroes on the Tavern) and other certain in game activities. Jewel is also the governance token, when staked and converted to xJewel. Jewel, when staked as xJewel also is able to share in protocol revenue from the DEX and other in game fees.
$CRYSTAL — CURRENT
Max Supply: 125M
Current Circulating Unlocked Crystal: ~33M
Current Circulating Locked Crystal: ~42M
Unminted Crystal: ~50M
Crystal utility is the exact same as Jewel, but just on Crystalvale instead of Serendale. Yes, so that means if Jewel is cheaper than Crystal, you could just bridge your heroes to Serendale and summon for 60 Jewel on Serendale rather than 60 Crystal Crystal on Crystalvale
General Overview of the Proposed Tokenomics Changes
Here is my quick and dirty summary of the biggest changes (DFK also issued this one pager):
- Jewel will no longer be the in game token, instead it will be a governance, fee sharing, and protocol token usable on any chain, rather than used in game for in-game activities (even more has been said on this, but see below for more details).
- There will be a new power token on Klaytn (name not determined, so its referred to as Klaytn Power Token (“KPT”)
- KPT and Crystal will be the two in-game tokens (future expansions may have their own).
- Locked Jewel (283M of it) is no longer going to unlock as just Jewel but will instead be converted into Locked Crystal, Locked KPT some liquid tokens and the remainder staying as Locked Jewel.
- Locked Jewel remaining as locked jewel unlocks on its normal schedule (should start in 2–3 weeks from now) and unlock linearly over a year. Locked Jewel converted into Locked Crystal would start to unlock next April and unlock linearly over a year when all the current Locked Crystal would start to unlock. Locked Jewel converting into Locked KPT would start to unlock 1 year from token emissions starting on Klaytn, so much longer than one year from now.
- Crystal Supply will increase to 250M from 125M
- KPT the new power token on Klatyn will have a supply of 250M
- Jewel supply decreases from 500M to 125M (the reduction coming from Locked jewel being converted into Locked Crystal and Locked KPT and no more Jewel emissions from yield farms).
So lets drill down on some of the more important items that people are probably concerned about:
What happens to my Locked Jewel? A Numerical Example.
The exact percentages will change, because the allocations depend on how much unlocked/locked Jewel is minted at the time of the snapshot because what is definitely set in stone is that there will only be 125M Jewel if this passes. The reason this matters is because if months pass before this proposal is put into effect, then several million more Jewel will be minted and convert from locked to unlocked.
Generally speaking though, all of your Locked Jewel will be allocated as follows:
The attached graphic should help add clarity. What it boils down to is about 1.56% of each wallet’s locked balance will be converted into liquid KPT and airdropped at the launch of Serendale 2.0. Across all wallets that would amount to 5MM KPTs being airdropped. About 5.04% of your balance will be converted into locked KPT which unlocks linearly over a year, starting at the estimated starting point of the current locked JEWEL unlocking schedule. About 5.4% of your balance will continue to be locked JEWEL which will be moved to Crystalvale and also unlock as I just described in the last sentence. The remainder of your balance will be split 50/50 between locked CRYSTAL and locked KPT following their respective unlock schedules. — Hubert
44% converted 1:1 into Locked Crystal (unlocks starting in April 2023)
44% converted 1:1 into Locked KPT (unlocks starting 1 year from when KPT token launches — depending on Klatyn block speeds )
12% remaining as Locked Jewel, which is then further split into other categories:
- 45% of the 12% (or 5.4% of your total locked balance) remains as Locked Jewel on Crystalvale, unlocking when it normally would have on Harmony (mid-late September)
- 42% of the 12% (5.04% of your total locked balance) converts into Locked KPT but unlocks starting when Jewel would unlock
- 13% of the 12% (or 1.56% of your total locked balance) would be converted to UNLOCKED KPT
What happens if this doesn’t happen before the Locked Jewel unlocking starts?
The exact timeframe for when this is all accomplished is difficult to predict, but it will become our priority to work through setting everything up if the proposal passes. If the JEWEL unlocking date is in the past by the time the locked tokens that are tied to that schedule are airdropped, then you will be able to claim up to what would have been unlocked by that point. — Hubert
When will my locked tokens unlock?
As noted in the table above, essentially you’ll get 1.56% of your balance immediately as KPT. Some of its (5.4% remains locked Jewel and starts to unlock over the next year starting this month), 5.04% converts in the Locked KPT but starts unlocking with the locked Jewel. Finally, the remainder is split between Locked Crystal and Locked KPT (yes more Locked KPT). Locked Crystal will follow the same unlock schedule as current Locked Crystal (so contemplated for April 2023) and then Locked KPT (yes this one is different than the 5.04% noted above) will start to unlock approximately 1 year from the time the KPT token launches.
What's the benefit of holding Jewel (xJewel once staked at the Jeweler)?
They mentioned on the AMA several benefits that Jewel will have since its no longer the game token:
The jewels there will be used to power the DFK chain, used for xJewels for sharing rewards and fees, used for holding all of the votes that we’ll have for the protocols. It’s still the flagship coin there — Frisky Fox (August 25, 2022 AMA)
We will likely rename xJEWEL to be realm specific, though the names have not been decided upon at this point. Fees that contribute to the Jeweler today will be converted into JEWEL rather than CRYSTAL or KPT, and JEWEL will be the only token that can be deposited into the Jeweler in any realm. We will then be adding features which allow players to stake xJEWEL for a set period of time to receive in-game rewards such as access to airdrops and raffles, bonuses while questing, reduced/waived fees, and other premium features. — Hubert Cumberdale (talk.defikingdoms.com link)
The one-pager from DFK also notes that:
In-game benefits for holding certain amounts of xJEWEL (reduced/exempt fees, increased rewards, snapshots and airdrops, etc.) subject to timelock
From the August 25, 2022 AMA we also learn some of what they intend for xJewel
- It will be the only Governance Token across the realms
- xJewel is the fee sharing token and will be the only token that does so
- Jewel still used for gas on DFK Chain
- Airdrops to xJewel holders
- Incentives for staking xJewel in game, such as certain features in the game.
- Potentially reduced fees for staking more Jewel as xJewel.
- xJewel could potentially be used as a pass like you see in other games.
What does this mean for Crystal?
Crystal and KPT would have mirrored prices since their utility will be the exact same, however there’s a lot of Crystal thats going to come into supply eventually because it will go from a 125M supply token to a 250M supply token, with that majority of that coming from Locked Jewel being converted into it.
What about your vesting xCrystal from the launch snapshots?
The ability to convert xCRYSTAL to CRYSTAL will not be disabled. Only the ability to make new xCRYSTAL will be disabled. We will also redirect any fees that contribute to the growth of the xCRYSTAL:CRYSTAL ratio to the new Jeweler which will support xJEWEL. So vested xCRYSTAL will still be able to be converted to CRYSTAL at the ratio it ends at after these changes are implemented.
Will gardens in CV continue as usual?
Yes — but the rewards you get from it will now just represent a smaller slice of the Crystal pie, but remember Crystal doesn’t share in fees or anything, its strictly gameplay.
What happens to Unclaimed Serendale Garden Rewards?
What will happen to the rewards that are unclaimed? Will 100% of the rewards be unlocked before migration or will all of it be counted as locked JEWEL for the snapshot?
Great question. Assuming the Proposal passes, garden incentives will be turned off at a specific point, after which no new JEWELs will be minted to the MasterGardener contract. Unclaimed jewels from before that point would have already been minted to the MasterGardener contract, waiting for people to come claim them.
So people would still be able to claim their unclaimed rewards even after incentives are turned off, but no new ones will be created from that point forward.
For the purposes of the snapshot, players will still have until the bridge is closed to claim and bridge their Jewels. Once that bridge is closed, we would then snapshot all of the JEWEL and locked JEWEL balances and earmark those for airdrops in Serendale 2.0 and Crystalvale according to the proposal.
There will likely still be some unclaimed rewards that are sitting in the MasterGardener contract. We’ll have to discuss the best way to snapshot and distribute those, but my thoughts right now are that we could run an analysis to see who holds what allocations there, and set up a claim contract on DFK Chain that lets users claim their unclaimed JEWELs from Serendale in the future. — Frisky Fox [Source]
3. Hero Changes in Connection with Serendale 2.0
New Heroes
There will be a new set of 2 basic classes on Klaytn (in addition to the 8 already on Serendale. This will bring the total basic classes up to 12 (8 in Serendale already, 2 from Crystalvale and 2 more for Serendale 2.0). This will also introduce one new advanced class mutation, which when paired with the shapeshifter will also include a new elite class (current elites are Sages and Dragoons).
Hero Rerolls
DFK Genese are complex, but a lot of fun. However, to keep genes properly allocated and spread out when doing a phased roll out, you have to make it possible to allow the older ones to have some of the new genes every time a new class comes out, so, what they did with the 2 new Crystalvale heroes and what they will 2 with the 2 new Serendale 2.0 basic heroes is allow all Gen0’s to reroll their genes.
Here is an entire article on how that worked back with the Crystalvale Gen0’s, but here is a quick and dirty summary.
- You can reroll just appearance genes
- You an reroll just gameplay related genes
- You can reroll both
Each option has increasingly better rewards for doing it. There’s some pretty sweet benefits to doing it, and unless you have a D/R1 aligned Gen0, I think its worth doing it.
4. My Thoughts
Alright so that brings us to where we are now, we have the vote opening today for 48 hours. Here are my thoughts on all of this.
First — My thoughts on the move to Klaytn
TLDR: I like it. I think the alternative of just staying on Harmony is much worse off. I feel like we were at a rock bottom type scenario so there’s really only up from here if changes are made.
I’m not going to turn this into a Harmony rag fest, but I do think moving chains was necessary. Being the flagship project for the entire Harmony chain, I don’t feel that Harmony ever really cared. As an L1, transaction volume is everything and Harmony’s focuses and priorities seemed a bit off. That being said I loved Harmony a lot, an amazing chain and an even better community for DFK I think the move to Klaytn is good. The Harmony bridge hack wiped out DeFi on Harmony, like badly. DFK is DEFI Kingdoms. DeFi plays a huge role in the entire game, if you don’t have DeFi then it breaks a lot of the core game economics. With Klaytn being a top 10 TVL Chain I think that is positive.
Is Klaytn Polygon, Binance Smart Chain or some other GIANT player? No, but its still very big.
Also I’m going out on a limb and going to speculate that they partnered with Wisdom Gaming (an esports company) to help build a PVP model that will really cater to the e-sports crowd, which is the main constituent of South Korea, where Klaytn chain was founded. Essentially I think they are trying to make a play into the competitive esports scene and leveraging the South Korea player base. IMO, you don’t need to be a game developer to make a game that attracts people you just need to know what the demographic you are targeting likes, and since Wisdom understands esports I think they offer an interesting opportunity.
A lot of people have asked why not just move it to AVAX, but they fail to realize that there’s so much opportunity lost if they do that. Like what would DFK do? you just travel between two art maps all on DFK Chain? You wouldn’t access any new markets or playerbases and the game would remain as it is. The move to Klaytn brings a LOT of interesting opportunities. These have been covered ad nauseum in this August 25, 2022 AMA and this August 18, 2022 AMA and then there’s some great detail in this article from DFK.
If you are looking for more material on Klaytn here is an independent video not produced by DFK that I found really interesting:
https://www.youtube.com/watch?v=HK64ecRSlpg
Second — My thoughts on the Tokenomics Changes
TLDR: Its a bit of a hard pill to swallow and a ripping off of the band-aid but I definitely think it's better than the alternative, compared to having 780K Jewel unlock every single day over the course of the year (face it, your locked Jewel are drops in a bucket to the big boys, its them who are really losing their Jewel, not you).
So the initial knee jerk reaction is:
- Wow Jewel is now pretty valueable — I like
- But all my locked jewel isn’t going to be jewel anymore, 90+% of it is converting into Crystal and KPT, that sucks.
- Not only is it converting into Crystal and KPT, its going to unlock much later than Jewel would have unlocked.
- Love the Jewel changes, it helps to solve the problem with the game becoming too expensive when the price of Jewel went too high. See below what Fox said that aligns with how I see this:
- Initial thought is that Crystal and KPT will just be a SLP from Axie and go to zero. I don’t think that will happen, but it will definitely keep the price lower, but with all of the utility that’s already baked in for Jewel, which now shifts to Crystal and KPT as part of the change, I’m not too concerned with that.
- Crystal supply is getting DUNKED now, so if you have locked crystal I feel like you kind of lose on that front, but you’ve also had the chance to swap Crystal into Jewel for a very long time now at a premium and I don’t know why you wouldn’t have done that when the utility between Crystal and Jewel has always been the same (I mentioned this on an inner grove podcast way back when, like why would the price of these two tokens be different? Just because they have different supplies doesn’t matter). This one definitely isn’t ideal for me as a relatively large locked crystal holder.
- I like the xJewel and Jewel changes.
Overall, it’s hard not to feel like anyone with a large locked balance is getting hosed. Trust me, I have over 400k locked Jewel between my personal wallet and another wallet held with a group of friends so this change impacts me deeply. That being said, you juxtapose that with what will happen if this change doesn’t happen (i.e. 780k locked Jewel converting into unlocked Jewel every day starting later in September and continuing for an entire year) and you will come to see what downward sell pressure means. You think the guys with 10’s of millions of locked Jewel are going to hold that as it unlocks? Hell no. My ~400k locked jewel is chump change drops in a very very big bucket in comparison.
So I view this as a painful ripping off of the bandaid, fixing broken yield farm tokenomics in support of the larger gameplay vision. I do not think that keeping locked jewel how it was would be a better play, but this is hard to swallow in some senses. Overall I think its better for the project and all of the non-whale players and will foster more adoption by the masses.
Lastly — for those saying that the team is doing this for their own bags, I think that’s a bit closed-minded. They probably have one of the largest locked jewel bags and I’m also pretty sure most team members are being paid in locked jewel (I wouldn’t know, I am a mod but I am voluntary for the past several months now).
