New LP Design
Recently we announced our plan for creating a fantasy reward system using our native token MAGIC. LPs and stakers will be able to earn specific types of items, like treasures or one-time use consumables. We discussed the example of staking a diamond and MAGIC to produce a magical drilling tool that could be used to mine more MAGIC.
This consumable could be used to either immediately drill for more MAGIC, or the owner of this treasure could sell it on the secondary market like an actual BTC mining rig. Because of this, an entire world of fictional derivatives become possible, perhaps even futures!
The Treasure economy utilizes Proof of Imagination, a sub-class of Proof of Work by which the rarest fictional assets are acquired by the users who perform the most work to find them.
In the long-term, this implementation of LP rewards will be much more sustainable than previous DeFi iterations. The incentive to continue providing liquidity will actually increase as the emissions of MAGIC begin to decrease because MAGIC and LP tokens are themselves treasures that allow the user to partake in the game.
The game will become increasingly more complex and entertaining over time. Therefore, MAGIC becomes increasingly scarce and in-demand, since a fixed amount of LP shares will be needed to partake in future quests. Users are incentivized to provide long-term liquidity and not remove it, or else they will have to pay a much higher price to continue on the adventure and have a chance to acquire the treasures before the land is plundered by more steadfast adventurers.
Monomyth
Treasure started as a simple derivative of Loot and is now quickly expanding into a full-fledged universe of its own. Treasure itself functions as a game. MAGIC and Treasure holders will have the opportunity to take their own Hero’s Journey… and formulate new ones of their own!
There will be various quests that one can choose. These will lead in different directions. The ability to play these quests and gain the items on the other side will require certain “gatekeeping” items. Here we will incorporate specific treasures, MAGIC, even MAGIC-WETH LP tokens. (We welcome cross-protocol collaborations! We are looking for ways to incorporate other tokens as keys or checkpoints into our universe, in order for us to diversify our project treasury beyond MAGIC.)
Providing liquidity to MAGIC-WETH isn’t merely a way to mine more MAGIC. It functions as a key to the next part of the universe.
As the universe expands, so will the complexity of the Monomyth. Users will have different preferences about which journeys they prefer. Perhaps they become lords within their own sub-domain. Maybe these realms form their own DAOs and go to battle.
Like Loot, Treasure is a fictional universe on which anyone can build. Treasure (and now MAGIC) are the building blocks for anyone’s imaginative economy.
We have designed the emission curve to allow for a steady increase in the amount of MAGIC being produced by these quests, while also reserving 30% of all future emissions for ecosystem development like cross-game collaborations and funding developers who want to build on top of our creation.
After the initial MAGIC farm ends, the quests will begin soon after. Current LPs will have an opportunity to be the first to travel through a particular Door to Adventure. Through it is a world full of exotic creatures, great peril, and untold treasures.
We believe this will have a significantly positive impact on LP design going forward. If you don’t see the value in this universe, we are not designing our reward program around you. We fully expect to attract many people who see the joy in this vision and help us build it. Those who do show up to build are the least likely to leave, because their enjoyment of the adventure will continue to compound, as all good LP reward programs should.
Another interesting avenue we plan to explore: tranched quests. Take the case of an extremely good-faith community participant who is not nearly as wealthy as the community’s whales. This participant gets priced out of governance and eventually loses faith in the ecosystem. Whales are often agnostic towards the protocol’s long-term future in a way these good-faith participants are not. Over time, wealth-distortion in governance undermines the community and renders the protocol nearly useless.
It is possible to build quests (or LP rewards) based around the size of the user’s contributions. This should be the goal of DeFi governance. The widow who puts two small copper coins into the church offering makes a bigger a contribution than the rich men who throw heaps.
NFT-DeFi gives us an opportunity to craft better governance systems than the ones that came out of DeFi and distribute rewards to users unrelated to their net worth.
