Update | Limited Time Extension
The first Difficulty Adjustment will now take effect on 1st July 2023 (previously 1st June). Please see the image below to view the latest Difficulty Adjustment calendar.Edit: 24/05/23
This year, Plutus exceeded all expectations. Whilst the rest of the market suffered one of the harshest bear markets to date, Plutus tripled its user base and PLU grew +80% in comparison to mega-cap tokens due to its utility.
The tokenomics have performed well over the last 12 months and the following update will enhance this further, ensuring the long-term sustainability of PLU Rewards.
More details on the current tokenomics >
The Goal
- To further increase the longevity of the Pluton Rewards Pool
- To add value to Plutus Card holders
The Update
Adjust the difficulty of Plutus’ Reward Levels over time.
The PLU requirements for each Reward Level will increase incrementally. This is similar to how the Bitcoin Halving is used to manage supply and demand.
Once you have unlocked a Reward Level, it is grandfathered in and will no longer be subjected to future difficulty adjustments.
Important Note: Your PLU balance must still remain above the grandfathered requirements to keep that Reward Level. See FAQ at the end for more details.
The Rationale
- Reward Levels become more challenging to attain over time — fewer users reaching higher Reward Levels will decrease the rate at which PLU is emitted over time.
- Demand for PLU rises as Plutus’ user base grows and additional utility is added. This results in more users trying to reach higher reward levels — any positive impact on PLU’s value results in less PLU emitted.
The Difficulty Adjustment Calendar
Note: The calendar has since been updated (please refer to the image at the top of this blog.
Starting in Q2 2023, the adjustments to the PLU requirements will occur frequently initially and become less frequent as time goes on.
- Year 1 = Quarterly
- Year 2 = Bi-Yearly
- Year 3 = Yearly
Whilst adjustments become less frequent over time, the increment sizes will increase over time. Based on internal data, this combination ensures the Reward Levels remain competitive and desirable throughout the growth stages of Plutus’ product lifecycle.
Additional Utility & Demand for PLU
The above amendments will be supplemented with additional utility for PLU including more Perks options, PLU redeemable for paid features, metal cards, and more. Full details for this will be revealed in due course.
Plutus is integrating more bank-like features in 2023, which will provide users more opportunities to earn PLU; as well as launching in the US which will accelerate customer growth and demand.
Terminology
Reward Level
Reward Levels are a way of rewarding cardholders who own PLU. If you own sufficient PLU, then you unlock a Reward Level and additional benefits.
PLU Requirement
This is the quantity of PLU you must earn to unlock a Reward Level.
Difficulty Adjustment
This is an event whereby the PLU Requirements of Plutus’ Reward Levels increases.
Grandfathered Requirement
This is the amount of PLU you earned previously to unlock a Reward Level.
FAQ
How do I unlock a Reward Level?
If your total PLU balance meets the PLU requirements of a higher Reward Level, it is automatically unlocked. Your total PLU balance is calculated by taking the sum of your internal earned balance and any connected external wallet balances. Read our Helpdesk article below for more details.
How to unlock a Reward Level >
What happens once I reach a Reward Level?
As soon as you reach a Reward Level, it becomes “grandfathered” and is no longer subject to future difficulty adjustments.
See our grandfathered question further down for more details.
What happens if I want to upgrade Reward Levels?
You must reach the PLU requirements in time to unlock a Reward Level. Until a Reward Level is unlocked, you will be subjected to future difficulty adjustments.
Example 1 — Achieved
The PLU Requirement for Hero is 250 PLU in Q1
You earn 250 PLU before Q1
In Q2, the new PLU Requirement for Hero is 275 PLU
You already unlocked Hero, therefore, you do not need to earn more PLU to remain on Hero
Note: Whilst Hero is grandfathered in, Veteran, Legend, and GOAT will all continue to experience difficulty adjustments.
Example 2 — Failed
The PLU Requirement for Hero is 250 PLU by Q1
You did not earn 250 PLU by Q1
You will be subject to the difficulty adjustment and must now earn 275 PLU before Q2 to unlock Hero.
What happens if I accidentally disconnect or transfer PLU out of my personal wallet and fall below the grandfathered requirements?
The team will implement multiple safety measures to minimise the chances of this accidentally happening. However, as a non-custodial service, the users are responsible for handling their assets and remaining above the grandfathered requirements.
Example
You met the 2,000 PLU requirement to unlock GOAT
In Q2, GOAT now requires 2,200 PLU
You are grandfathered in and therefore remain a GOAT
At some point, you fall below the grandfathered requirements (2,000 PLU) to just 1,999 PLU
Your Reward Level is downgraded to Legend which requires 1,100 PLU
To re-attain GOAT, you must meet the new more difficult 2,200 PLU requirement.
I live in the USA, will I be subject to the difficulty adjustments?
Yes. The same tokenomics and time-frames apply worldwide.
What happens if due to the supply shock and token value of PLU, the Reward Levels become unattainable and undesirable?
Extensive research has gone into the new Reward Level requirements and the team is confident in the difficulty adjustment calendar’s increments.
We will continue to review the data and, if necessary, improve the model by amending the requirements. Plutus reserves the right to amend the Reward Levels to ensure that they remain competitive and desirable worldwide.
What are the exact dates of the difficulty adjustments?
The difficulty adjustment calendar will start on the 1st June (Q2 2023), however, all future difficulty adjustments (i.e. Q3 onwards) will start on the first day of the quarter. The scheduled adjustments will end in 2025.
Example — Hero
- 1st June 2023 = 275 PLU
- 1st July 2023 = 325 PLU
- 1st October 2023 = 400 PLU
- 1st January 2024 = 500 PLU
- 1st July 2024 = 625 PLU
- 1st January 2025 = 1,000 PLU
What if I can’t earn enough PLU in time to unlock a Reward Level?
Customers can upgrade their subscriptions to maximise the amount of PLU they can earn. PLU can also be obtained from other users who earn them via rewards and swap them on the PlutusDEX.
What is the logic behind the model increments?
The difficulty adjustment increments and their frequency were designed to ensure the Reward Levels are desirable throughout the growth stages of Plutus’ product lifecycle, as well as remaining competitive whilst ensuring the longevity of the Pluton Rewards Pool.
Extensive research has gone into determining the optimal increments for increasing the longevity of the Pluton Rewards Programme.
The Reward Level increases are all proportional to one another (e.g. the requirements in the year 2025 are 4x the current requirements). This figure suits the projected user base and token supply in 2025.
