I run a company (CoinBusters LLC) and a website, Coinbusters.io. We publish educational content of sorts for a variety of audiences on the site. Most of our company work is done through consulting to financial advisors and high networth investors through economic analyses, tokenomics modeling, and similar.
This is done to assess current ecocystem performance and identify weaknesses in market changes (etc.). I have consulted for several cryptocurrency projects in ecosystem and tokenomics changes that have been successful. My work publicly available work, written with technical data consumable by non-expert financial professionals and investors is featured on etfTrends and VettaFi regularly. I am not able to directly share work from consulting projects due to agreements with those, although I can describe some of the solutions developed. I have been an invited speaker on numerous cryptocurrency panels and events.
My work involves a form of ecosystem analyses known as decision tree models. These analyses look at the structure of token emissions and how the different breeds of users within the game use economics to dictate buying, selling and other price-influencing behaviors. By altering incentives, distribution of emissions and utility options it becomes possible for DFK to stabilize token prices and thrive during market recoveries without large relief sells by LP and token holders.
At the moment, JEWEL is in a supply inflation in-spiral. There is decreasing demand and increased selling because of the significant price changes in recent months due to macro headwinds and some well-documented internal challenges within DFK. As such, there is now a shifting division between value of time spent playing the game and possible earnings, all while passive income investors continue to sell higher percentages of their tokens. If left unchecked n its current state the value of JEWEL will continue to decrease unless a significant and rapid market recovery occurs, and even this will be tempered by the current game architecture.
This grant proposes to do a full decision tree model of the DFK ecosystem and recommend, using quantitative data, game critical changes to token emission and internal game use. These changes require close collaboration with members of the development team to ensure that recommendations (there are often multiple ways to implement things) are most palatable for the team. This grant should be in the $25-$50k range for this work, although I am open to other creative avenues. I want DFK to succeed.
These ideas are high level because they require data unavailable at the time of this grant proposal. However, they illustrate some of the ecosystem decomposition work.
JEWEL income is currently skewed heavily towards LP emissions versus gameplay earnings. Larger networth investors are less likely to play DFK rather than provide liquidity than smaller investors. While macro-scale (market-level) dynamics are at play and have contributed to some of the value decrease across the DFK world, most of it is due to the lack of JEWEL utility within the game compared to incentives to sell. Changes to the ecosystem that incentivize reinvestment or use, rather than selling are imperative. Some of the recommendations below may be nullified by data provided through this work (data requests are included at the bottom).
All JEWEL within the game, save for selling heroes, is emitted by DFK. Emissions are skewed heavily to LP rewards but are divided between gameplay rewards and those LPs. Most users of the gardens within the game are not reinvesting those JEWEL into the game. This creates a one-sided buy/sell silo. Users can either recompound or cash out rewards. A subset of users may choose to stake JEWEL although that is not advantageous pricewise in this market.
There are limited internal use cases for JEWEL within the game. Given that DFK, at its core (right now) is a p2E model - the earned JEWEL will either be staked in the jeweler, placed into LPs, or sold. Some subset of users may reinvest the JEWEL through hero purchases. With the market (BTC, mainly as a driving factor) hanging relatively flat, JEWEL continues to see fairly significant price drops weekly. This paints a clear picture that the weight of reinvestment and staking versus selling is off, by a lot.
For situations like this it becomes important to identify the emission inflection point versus demand. To do so, emissions need to be curbed, quickly within the LPs. They are too high even with the recent halving. Within the Harmony ecosystem there are few other locations for on-chain tokens covered by the DFK LP options to be placed.
However, we cannot incentivize the development of new locations to hold tokens, making the LP reduction percentage strategic. We also know that users of the game are psychologically more likely to re-invest in-game acquired tokens than LP farmers who use this platform. There is an intersection of players and LP providers that strategic reductions would move over to playing, and there is likely to (in the current design) be a loss of TVL without additional changes from further emission reductions.
As a result, the analysis here shows that we are increasing supply into the LPs and ecosystem faster than the game can consume it (inflation), and users are not holding on to acquired JEWEL in a healthy manner. A game like DFK can survive with one of these, not both. Without changes, particularly with the unlock schedule, DFK stands to become unviable as a P2E option and may not be recoverable if left unattended into this bear market after that.
To control the supply, DFK must allocate (via reduction) LP emissions to recursive gameplay transactions (unless it has protocol owned liquidity already). The order in which these are implemented is important related to the onset of an LP reduction. This requires the following:
- A way for users to spend JEWEL in game without selling it to increase their capacity to earn at a strategic rate
- A way for passive income users to receive worthwhile rewards through participating in the game and investing in JEWEL rather than fully selling rewards at a constant rate through farm emissions. The analysis is clear in that more jewel is being sold than reinvested.
- The difference in current emission versus proposed reduction emissions (JEWEL difference) needs to be split into a permanent decrease in supply inflation and the remainder used to incentivize game play much more heavily.
To achieve these, JEWEL must:
- Be capable of being spent by gameplay users to provide unique functionality to their heroes, boost future earnings (delay sells) through gameplay
- Incentivize idle players/passive income earners to leave LP farms (but not all of the farms) with a way to make a different type of income (discussed below) or accept delayed rewards different than locked JEWEL
*The specifics of the below example of implementation are not complete and are one part of the focus of this grant.
To accomplish this:
- Create unique traits, performance bonuses, receivable by spending JEWEL on questing (incentivizes game players to spend v save) - portions of the (JEWEL difference, from above) would be applied here
- Create a unique quest capability that leverages rented heroes. This requires the creation of a user/market controlled rental marketplace/tavern. Unique options available to players that use rented heroes. Portions of the (JEWEL difference, from above) would be applied here.
- Passive income players would now be required to purchase heroes to make high APRs and rent them. This will attract some LP users away but it cannot be so high as to remove a detrimental amount of LP.
The above case serves many purposes. If the emission reduction discussed above were 25%, for example - 12.5% of the emission reduction is removed entirely (not emitted). The remaining 12.5% Is used to incentivize team (rented) questing and “boosted” questing from invested JEWEL.
Passive income users would make viable income without requiring additional emissions through the team quest gameplay users having to “rent” the heroes (through payment via the market place to the owners of the rented heroes). DFK would charge a tariff on this for fee income for other uses. This creates a JEWEL sink within the game - we have a net reduction in total emissions, an influx of JEWEL into the ecosystem through hero purchases to rent, and more JEWEL spending in two different avenues.
This is not meant to be exhaustive, rather, just an example of the types of analyses I perform. There are many more steps to the above implementations that I would work through and analyze for the team, particularly in consideration of framework limitations and others. The funds here would be used as compensation for all of the analyses, data consumption and ongoing participation for 6 months with additional advising after completion/submittal. These types of things require back and forth with the team and are not a “do it once and be done” type thing, either. I am a significant investor (for me, anyways) in DFK.
Payments can be split into 4 installments, with the first being after the deliverable of the high level ecosystem decomposition. I will need game data related to emissions, gameplay specifics, fee usage within the DFK game, and regular interaction with the developers to create optimal conditions.
A complete analysis takes about 2 months of total man-hour effort. The first order analysis (pain point identification and ecosystem decomposition) takes approximately 2-2.5 weeks. There is typically discussion and refinement before solution proposals begin, and that process is a collaborative arrangement between myself and the DFK team. Once the team has agreed that the changes identified through the solution proposals (full task order described below) I will remain available for advising at no additional cost to DFK (in a limited capacity - not a full time employee!). I would ask that DFK publicly acknowledge working with me and my company at some point during the project in return, likely after seeing the outputs. There is likely to be development time (etc.) for some features which is fine.
The task list and deliverables are:
- Ecosystem economic decision tree development
2, Game usage data analyses
- Pain point identification
- Collaborative solution proposal (conceptual)
- 1st order quantitative solution values and analysis leading to testing/concept evaluation by developers (how it is implemented in game)
- Solution refinement and implementation observation/review
- Future advising and ecosystem monitoring for tweaks and updates.
I have shared thoughts and participated in the Discord community. My team, for this effort, includes myself and our other senior researcher/analyst.