Tokenomics of our in-game Cryptocurrency HEX!

The tokenomics for our in-game currency have been designed to increase its value over time. Unlike other projects, where the token is sold to directly support the development or developers with no other income source, HEX is the utility token of the game-economy. The game itself generates income from several sources which don’t affect the economy negatively and will be partially used to support the price for HEX. Due to several ‘gold sinks’ in the game, players will also burn HEX during game play, effectively reducing the issued supply.

Annual Percentage Yield (APY) for HEX

Due to how we set up the market for HEX and the trading window for players and speculators (further explained below), every HEX sold by us will yield at least 25% profit (before tax) for the CityStatesDAO (CSM holders).

To encourage holding of HEX, we decided to pay 9% APY to all tokenholders of 1,000+ HEX (only $3 at release price) on a daily basis. This includes accounts of Players holding HEX in the game account on CityStatesM.com.
D̶u̶r̶i̶n̶g̶ ̶t̶h̶e̶ ̶S̶e̶e̶d̶ ̶s̶a̶l̶e̶,̶ ̶H̶E̶X̶ ̶i̶s̶ ̶a̶v̶a̶i̶l̶a̶b̶l̶e̶ ̶a̶t̶ ̶a̶ ̶1̶0̶%̶ ̶d̶i̶s̶c̶o̶u̶n̶t̶e̶d̶ ̶p̶r̶i̶c̶e̶ ̶(̶$̶0̶.̶0̶0̶2̶7̶/̶H̶E̶X̶)̶ (this offer has ended!)

9% APY is subject to change depending on market conditions. Interest is compounded daily, so you get interest on top of the previously collected interest resulting in a compounded interest of ~9.42%/year.

Buy Back Orders for HEX covering all issued supply

Revenue distribution and buy back scheme is designed to let the value of the coin grow over time while simultaneously creating a floor for all HEX in circulation.

The in-game currency will be sold by us at a starting base price of $0.003 each. Depending on the platform or payment processor you use, the base price can vary a lot. Steam, Google, and Apple take a 30% cut on every FIAT purchase. These will be the most expensive options since we will have to add those fees on top of the actual price. The cheapest will be to buy directly on the various SDEX interfaces using XLM or via our web interface also accepting other major cryptocurrencies.

When a player buys 1,000 HEX from us, we receive $3 (after fees and deductions). We then use 75% of the revenue ($2.25) and open a buy order for the same amount (1,000 HEX) on the SDEX. This creates a trading range for players by placing buy and sell orders to find the current real in-game value. This set up also guarantees that if literally everyone decides to sell at the same time, they will all get at least 75% of the value that was previously paid back out of the game.

Heroes, weapons, skins and other NFTs as well as quality of life upgrades that are not paid for with in-game currency give additional support to the price with 25% of its value.

Example:

We sold $30,000 worth of in-game currency (10,000,000) at $0.003 and opened a buy back order for 10,000,000 at $0.00225 (75% value $22,500).

Sold: 10,000,000 HEX at $0.003
Revenue: $30,000
Buy back: 10,000,000 HEX at $0.00225

We then sell $5,000 worth of other items (NFT and QoL upgrades). 25% of the proceeds ($1,250) will be used to support the in-game currency.
The buy back still needs to be 10,000,000 but now we have $23,750 in remaining funds. The buy back order will be adjusted to 10,000,000 at $0.002375. Since the buy back order needs to be just 75% of the sale price, the new sale price will be adjusted to $0.00316667 each. This will continuously raise the value of HEX over time.

Sold: 10,000,000 HEX at $0.003
Revenue: $35,000
Buy back: 10,000,000 HEX at $0.002375

As outlined above, we take 25% of in-game currency sales and 75% of other items that don’t directly affect the game economy. These funds will be used to finance further development, payments to holders of our governance token, artists royalties, salaries, competitions, marketing etc.

Why HEX needs unlimited supply

HEX is issued on ‘as-needed basis’ to support demand of in-game purchases and purchases off the market. There always needs to be enough supply to lock the current upper ceiling and new HEX are issued whenever a player buys HEX in the game via traditional IAPs (Google, Apple, Steam).

HEX is not used to sell into the market! The trading range of 25% spread between current ceiling (sales price) and bottom (buy orders) are preserved for price finding of users and players only.

Current markets for HEX

The market maintained by CityStates is the HEX/USDC pair. If you are not familiar with the SDEX, make sure not to buy on the HEX/XLM pair because of price differences negative for the buyer.

Also read:
How and where to buy HEX!

Pre-registration open!

Visit https://citystatesm.com to register. Receive 250 HEX for free +50 HEX for active referrals and 8% affiliate reward on sales.

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