Mavia Tokenomics Assessed

Is Tokenomics important?

Tokenomics is one of the most important areas to evaluate when analysing a Crypto project but strangely this is one area that many investors often overlook when deciding whether to invest.

If the maths behind a project’s token don’t stack up properly, these bad tokenomics will most likely be reflected down the line with a continuous decline and then collapse in value of that token. Good tokenomics will always put the investor’s interests first.

In this article I will evaluate the tokenomics of the upcoming NFT Crypto game ‘Heroes of Mavia’. The Mavia economy will consist of two tokens but in this article I will be focused on the governance token ‘Mavia’ which has fixed supply rather than the in-game token currency ‘Ruby’.

After reading this, you should understand to what makes good tokenomics on a project and whether Mavia offers this to investors.

So what is tokenomics?

The word tokenomics is short form for ‘Token economics’

Crypto tokens are units of value that blockchain-based organizations or projects develop on top of existing blockchain networks.

A Crypto currency is slightly different from Crypto token, the main difference as follows. A currency exists on its own native blockchain and can be used to pay fees in gas on that blockchain (e.g Ethereum exists on the Etherium blockchain). As the Mavia governance token will be existing on a separate Layer 2 blockchain ‘Arbitrum’ it is classed as a Crypto token not a Crypto currency.

Tokenomics are formed very early in a project and the most important aspect to ask is what utility does this token have?

Mavia token utility:

· Governance

· Currency used for buying and selling

· Staking rewards and staking NFT prizes

The goal of the project should be for holders of the Mavia token to be incentivised to hold the token beyond the point when a price action spike causes the holders to dump them on the market.

Tokenomics comprise metric information across five areas:

· Supply

· Allocation

· Distribution

· Emission

· Utility

Below are the publicly released Mavia tokenomics taken from the Mavia pitch deck document:

Figure 1

Now we have these metrics what do they really tell us about the project?

Team Token Allocation

The first metric we will check is the percentage of the total token supply that the team have allocated to themselves. We will also evaluate the emission schedule of the Mavia team’s tokens in the form of their vesting schedule.

Some very important things can be judged from these metrics which will help you determine the team’s intent, confidence in the longevity of the project and their character.

From the chart above, the Mavia team allocation from total supply is 22%

Take this a step further…

Here is the team’s percentage allocation displayed against other team percentage allocations from a sample batch of notable games in the space: Figure 2

What does this chart show?

The first thing that stands out is an anomaly shown by the Derace allocation being by far the lowest at 10%. To understand this more clearly you cannot just take the allocation at face value as it doesn’t paint the whole picture. For example, Derace has another allocation pool named ‘development’ and this is 11%. My interpretation is the project founders have split their allocation pool so they can release a portion of their tokens earlier as the development pool allocation has a more aggressive emission schedule. Metagods is similarly anomalous.

If you take out the anomalies you can now see there is a general industry range of where the team allocation sits, and this shows Mavia central within this range.

Private sale Allocation

The next chart illustrates the percentage of the total token supply allocated to private investors of the Mavia project as well as percentage allocations for private investors in other notable gaming projects in the space:

Figure 3

This chart shows there to be a range from Crabada at 6% up to Derace at 28% with Mavia sitting at 15%. As Crabada is a very simple game it makes sense that it would not necessarily need a big investment to develop. If you remove Crabada from the range, you can see Mavia sits slightly below the average of 17.44%. This is very healthy as they have not gone heavy allocating too much of the token supply to private sale investors which in turn means there is a lesser number of tokens that VCs would potentially drop into the market earlier. This also means more tokens are available to go into a community pot.

Community Pool allocation

The chart below depicts the percentage of the total token supply allocated to the community through various initiatives in Mavia against the same metric from a sample batch of other notable games in the space. The Mavia pot is made up of their Play-to-earn, ecosystem fund and staking rewards allocations.

Figure 4

Viewing this chart shows that Mavia is at the top alongside Crabada in terms of the size of their community token allocation pot. This is very positive for the Mavia project as it a clear sign the team is truly valuing its community by committing to them a larger slice of the overall token supply compared to other projects.

Consider the fact some other projects have chosen to allocate much higher percentages of their token supply to private investors rather than their community. (see figure 3)

With Mavia’s commitment in allocating a lower percentage to private investors compared to that of other projects, which has in turn freed up more of a pot for the community, this has become a clear signal of intent to prioritise their community.

Emission Schedule- The Team

A token emission schedule is the rate at which tokens are released into the market. Each project will have bespoke vesting periods for the different allocation pots.

At present Mavia have released the most important information on their vesting periods (the length of time) but more in-depth information such as locked period hasn’t been disclosed yet. In figure 5 I have made an assumption of a 1-year lock for this example.

The chart below illustrates the emission schedule of the Mavia team’s token allocation against other team allocations in a sample batch of notable games in the space:

Figure 5

One thing stands out on this chart… the Mavia team’s long-term commitment to the project is undeniable. Their commitment to releasing their token allocation over 6 years shows strength and conviction in their long-term vision for where this project is going.

When you compare other project teams token allocations emission schedules such as one with tokens being released between 12–24 months after token generation event, to that of Mavia’s 6-year emission schedule, which project out of the two looks as if it has long term ambitions?

Emission schedule- The Private investors

Viewing private investor token release time scales will tell you a lot about a project and is especially insightful when you evaluate it in the context of a Crypto Gaming project.

The chart below illustrates the emission schedule of private investor token allocations in Mavia against the emission schedules of private investor token allocations in a sample batch of notable games in the space:

The first insight to take from this chart is the Mavia private investors are clearly aligned with the Mavia team’s long-term vision of the project. This is highlighted with their 4-year vesting period extending much further than private investor vesting periods in other games in this sample batch.

The vesting schedules of private investors is an important metric to view and understand when gauging the mindset of private investors and their belief in a project. In a basic separation of private investor type, they can be broken down into two camps; opportunistic capital looking to get in and out of a project in the quickest feasible manner and then ‘blue chip’ investors who invest long-term in projects that show commitment to longevity.

If a project has private investor vesting schedules that are short and aggressive this most likely shows these private investors are either looking to get in and out quickly or they may not have as much confidence in the project and are looking to protect themselves with ability to sell tokens earlier. If a project is relying on investors who aren’t willing to show a high degree of confidence, or the project has to rely on lesser known ‘opportunistic investors’ then the project is being seen as more speculative in the industry.

Seeing Mavia’s private investor vesting schedules it is clear that these investors have conviction in what the Mavia team can deliver over a sustained time period and it is clear Mavia have not had to scrape the barrel to find investment to support their vision.

It is no surprise to then find out the names of the Mavia’s private investors:

· Delphi Digital

· Alameda Research

· Animoca Brands

· BitKraft

· Binance Labs

· Yield Guild Games

These investors are among the most established and trusted entities in the space and as such represent a ‘dream team’ any serious Crypto project would want to back their project.

Final Thoughts

After evaluating all available information on the Heroes of Mavia’s tokenomics, I am very comfortable to say they are extremely strong and bullish for the project.

Some projects like to split their allocation pools into multiple pots which could be said to be intended to confuse the person viewing it or to try and hide the true intent of the project’s allocation agenda. A high allocation in a ‘marketing’ pool but then a low team allocation is one example. This is certainly not the case with Mavia’s tokenomics.

The Mavia tokenomics are simple, transparent and the allocation pools are clear.

The overarching sense of the Mavia tokenomics is that the team are putting their community first, that they have the highest conviction in the success and longevity of their project and that their investors feel the same.

The strongest projects have the strongest and most legitimate backers and Mavia has achieved this with their ‘dream team of investors’.

A big tick for Mavia on their tokenomics!

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