YGG Token Sale: Tokenomics
Yield Guild Games will conduct an IDO via MISO on SushiSwap, running for a duration of 24 hours (from July 27, 2021 at 10:00am EST / 10:00pm SGT to July 28, 2021 at 10:00am EST / 10:00pm SGT). This auction will be a Dutch Auction despite originally being announced as a Batch Auction.
*This post was updated at 1:30pm SGT on 21 July 2021.
With a total supply of one billion YGG tokens, 25 million tokens (2.5%) will be made available for purchase in the public sale.
All sales will be in USDC so please ensure you have USDC available in your wallet ahead of time as well as sufficient ethereum (ETH) to cover gas fees.
For more information, the Yield Guild Games whitepaper was released on 23 June 2021 outlining the use case for the YGG token.
Auction Details
The following outlines the key details for the YGG token sale.
Starting Bid: $0.50/YGG ($12.5M)
Minimum Bid: $0.20/YGG ($5.0M)
Auction Supply: 25M YGG
Currency: USDC
Min. Circulating Market Cap: $17.6M ($0.20 x 88M YGG)
Whitelist Needed: No
Duration: 24hrs
Website: miso.sushi.com
Auction Method: Dutch Auction
Dutch Auction on MISO by SushiSwap
The original plan was to use a Batch Auction for price discovery. After much discussion with the team at SushiSwap, and due to the high level of interest that has already been shown in this token sale, the decision has been made to run the auction as a Dutch Auction instead. The YGG token sale could be the most hotly contested auction to be run on the MISO platform thus far, so in the interest of stability and access for all, we have moved to MISO’s most popular (and pressure tested) auction format to date.
In a Dutch Auction, the price starts at the maximum token price of US$0.50 and will steadily decrease over the course of 24 hours to US$0.20. Each user will be able to see the price of the token decreasing, as well as the current number of participants in the sale and the number of tokens remaining for purchase — all of which are useful data points in price discovery.
Given the high interest in this public sale, the move to a Dutch Auction represents a fair and transparent method of price discovery as users have the option to hold out until the price of the token decreases, but in doing so, they also increase the risk of the token selling out before they commit to purchase. This puts the power in the hands of the auction participants to determine what price they are comfortable paying in relation to demand for the token. The dollar value of each participant’s commitment is not a determining factor, so this supports participation for all community members with all budgets (not just crypto whales).
The starting price of the auction is $0.50 cents (reflective of a $12.5 million public sale) with a floor price of $0.20 cents (reflective of a $5.0 million public sale). The sale ends when all 25M tokens have been allocated, with the final token price being the same price as the 25 millionth token sold. As such, all bidders pay the same token price in the end. Through this mechanism, the final total value of the public sale will not be known until the sale is complete.
For those who act quickly once the sale begins, as soon as their commitment goes through, they will see their share of tokens begin to grow. Thus, buying early ensures the purchaser receives the greatest possible number of tokens for the budget that they are willing and able to commit.
For the participants who choose to wait for the price to drop, they may be able to purchase tokens at a lower price than the starting bid. But they also risk missing out altogether, if the full token supply is allocated before they move to make a purchase commitment.
Scenario 1: Aggressive Acquisition
Expecting that there will be huge demand for the YGG token, an auction participant commits to acquiring 10,000 YGG tokens at a price of US$0.50 (5000 USDC) as soon as the auction opens at 10:00pm SGT on July 27th. If all 25M tokens sell out within the first few minutes, the user will successfully secure at least 10,000 YGG tokens.
Scenario 2: Early Action
A participant is comfortable purchasing YGG at US$0.50 per token, so they place a bid early for 10,000 YGG at a price of US$0.50 (5,000 USDC). The live auction price proceeds, with the token price decreasing over time. Eventually, the auction ends, arriving at a final price of US$0.40 per token. As such, the participant receives a total 12,500 YGG for their 5,000 USDC commitment. They are awarded additional tokens at the lower price, because of their initial commitment to the higher price.
Scenario 3: Sniping
Some participants will watch a Dutch Auction and attempt to place a bid toward the final stages of the auction in the hope of lowering the token price. Whilst holding out until a later stage may lower the final price per token, it also increases the likelihood that someone else will snap up the remaining tokens before the participant makes their commitment. In the latter case, the participant would miss out on purchasing tokens altogether.
The Dutch Auction encourages users to commit early at the highest price that they would be willing to pay. Upon doing this, they are rewarded by receiving extra tokens than they would have anticipated at the higher price, as their budget stretches further as the token price progressively decreases.
At the successful conclusion of the public sale (assuming it is fully subscribed), and after Yield Guild’s members have received their allocated tokens as reward for their community participation to date, there will be a maximum of 87,906,250 tokens in circulating supply representing a fully diluted market cap between $200 million and $500 million, depending on the final token price.
The higher the valuation of the YGG token as a result of the public sale, the higher the value of the community rewards to be distributed to the YGG community over the coming weeks and months.
To know more about Yield Guild, join the YGG Discord or follow us on Twitter.
