DIP: Duck Improvement Proposal
Just over a month has passed since the launch of the Duck Hunters game. Over 5,000 active community members have joined the game, and feedback has been collected, which is especially valuable on the run-up to the release of an incubator that will enable swapping EGG tokens for duck NFT images.
The concept, described in the Duck Paper, has proven viable. But a weak spot has been discovered in it, which is the EGG tokenomics. As previously announced, out of 1 million issued tokens, only 200,000 have been allocated for distribution in the project’s first year. Given that only 50,000 tokens have been unlocked so far and the current market price is $20 (as of May 17, 2021), the project’s capitalization is $1 million with the target capitalization set at $1 billion. The Duck Improvement Proposal (DIP) aims to ensure sufficient growth potential for the EGG token.
Updated formula of swapping EGG for NFT ducks
The Duck Paper stipulates swapping 10 EGG tokens for 1 NFT duck. However, with the token’s potentially high price, a digital duck turns out to be too expensive for a regular user, while the project aims to keep the entry threshold low.
Therefore, this proposal contains an updated formula of swapping EGG tokens for NFT ducks, based on the number of genesis ducks in the game (T), a total number of issued ducks (N) and a discount coefficient determined by community governance (G). The NFT price (P) for duck number N+1 will be calculated as follows:
P(N+1) = (1 + G*N*0.01 / T) ** 0.5
At the initial stages, two types of genesis ducks will be released, Elon Duck and Satoshi Duck, with T=2, G=1 and no duck population (N=0).
Based on this formula, the first duck NFT will cost 1 EGG, and each subsequent NFT will be more expensive. For instance, if the number of duck types and G remain unchanged, the 1000th duck’s price will be:
P(1000) = (1 + 1*999*0.01 / 2) ** 0.5 = 2.45 EGG.
This formula makes duck NFTs more affordable for early adopters who will swap their EGG tokens for ducks at the initial stages. Moreover, with the release of new types of genesis ducks, the price will also slightly decline, making the entry of new genotypes easier.
The main outcome of this improvement is an increase in the value of the EGG tokens, as the first NFT ducks will cost 1 EGG as opposed to 10 EGGs.
Voting by EGG holders
A key factor in forming a digital duck’s price is the discount coefficient (G). Its value (0 to 1) had a substantial impact on the number of EGG tokens that a user needs to pay to get a duck NFT.
The discount coefficient is needed to facilitate regulation of the game’s entry threshold by a governance group consisting of EGG holders. If necessary, votes could be run, in which EGG holders will be able to vote for or against changing the value of G, based on their weight that’s proportionate to the number of tokens held by them. Thus, a governance functionality will be added to EGG.
This DAO model will allow for combining the community members’ expertise to determine NFT ducks’ optimal prices at the project’s current stage, while keeping the entry threshold low for new collectors.
The future of EGG tokens
To date, about 50,000 tokens have been distributed. With the launch of the incubator, the Waves team expects that the majority of tokens will return to the project’s budget as a result of swaps for duck NFTs. Therefore, it would make sense to run an initial DEX offering (IDO) for those tokens in a bid to broaden the project’s audience. The first IDO is expected to be held on the service swop.fi. The pool voting is already live on the Swop.fi governance page.
The Waves team is confident about the future of Duck Hunters, about its possible mass adoption and hype around this NFT game. The early stages of the game have shown that crypto enthusiasts also believe in the project and are therefore holding on to its tokens. To meet their expectations, DIP aims to ensure sufficient growth potential for EGG tokens, while making digital ducks affordable for regular users and providing extra privileges for EGG holders.
Thank you Duck Hunters for helping us to move Web 3.0 forward!