Pluton Rewards Scaling Strategy: Difficulty Adjustment
In June, our customers stacked an additional 191,716 PLU (57.8% on-chain), showing a noticeable steepening of the curve from February to the first Difficulty Adjustment on July 1st, 2023.
We have experienced a significant upward trend starting from February leading up to the first Difficulty Adjustment. This highlights the growing interest from our customers in PLU on a monthly basis.
Consistency is key!
3,089,154 is stacked in total:
- 2,154,887 out of 3,089,154 stacked on-chain.
- 934,267 out of the 3,089,154 stacked internally
67.6% (2,085,178) of the total amount (3.08m) is by customers who are grandfathered in to earn higher rewards.
Currently, 3,154,285 tokens are in circulation. Of this, 2,154,887 is stacked on-chain, while 999,398 remains non-stacked (personal/exchange wallets, liquidity providers, etc.). Additionally, 934,267 is stacked off-chain by Plutus customers in internal balances within the app, which will enter into circulation (from Rewards Pool to Pluton Rewards Payout Vault) during the next reconciliation.
Note: The off-chain stacking represents rewards earned by customers both before and after the last reconciliation, which occurred 5 months ago. As a result, the amount coming into circulation in the next reconciliation may vary. Background context can be found here >
Some more key metrics:
- 4.9% of our customers stack 3,089,154
- 162k PLU is awarded on average per month
- 199k PLU is stacked on average per month
We closely monitor a key metric — the rate of PLU stacking (i.e., demand) versus the rate of PLU emission (i.e., supply) — and observe that demand consistently exceeds new supply since Reward Levels began last year.
It is worth noting that only a fraction of our user base (4.9%) is currently on a Reward Level. With the upcoming releases of bank-like features, we expect this number to increase significantly as the app becomes more user-friendly, bringing web3 features to everyday customers.
Our live roadmap can be found here >
Long-Term Tokenomics:
Since the 2015 white paper, Pluton’s tokenomics has been meticulously designed and upgraded to ensure long-term sustainability, drawing inspiration from Bitcoin halving and difficulty adjustment. We have incorporated these principles into our own Difficulty Adjustment, which progressively raises the PLU amount required to unlock each Reward Level in line with customers earning higher reward. This adjustment effectively slows PLU emission as demand for rewards rises and acquiring PLU becomes more challenging due to low circulating supply.
While this approach may pose obstacles in achieving higher reward levels in the short-term, it is integral to our long-term plan as we aim to onboard the next 1 million customers by 2025.
Our primary goal is to organically reduce the emission rate by fostering increased demand for Reward Levels. To achieve this, we have planned to enhance token utility, provide better benefits, and improve subscription plans in the coming months. This strategy will not only enhance desirability for rewards but is also essential for the long-lasting sustainability through Difficulty Adjustments.
Supply Squeeze Prospect:
Currently, only a small percentage of our total user base (4.9%) stacks 3,089,154 out of 3,154,285 PLU supply to unlock higher reward levels. However, the stacked figure is expected to increase significantly as the Plutus development team completes its Q3/4 targets to deliver PlutusSwap, combined with a bank-like app for mass-market appeal.
The upcoming releases will not only increase our customer base in the UK and Europe but also enable us to successfully launch in the US next year and market Plutus to 300+ million consumers.
Key Metrics for Assessment:
- 999k held by customers (non-stacked) on-chain.
- 199k PLU stacked on average per month.
- 95.1% of our customers have yet to join a reward level.
These metrics are crucial for assessing how a marginal increase can lead to a supply squeeze and when it might occur, given the ongoing growth in demand for both the Plutus Card and Reward Levels each month.
Sub-Tier Planning:
We recognise that some customers may struggle to earn enough PLU to unlock a Reward Level in time for the Difficulty Adjustments. To address these concerns, we are developing static sub-tiers that cater to stackers across all ranges. These sub-tiers will be released incrementally and offer benefits, including bonus perks and rewards, lower fee, and metal cards.
More information on this will be released in the coming months.
