The OneCan Approach to Tokenomics
Hey Canners, we’re gonna keep this one a bit more serious, just to get our opinions out effectively. This page is gonna cover our findings after months of thinking through tokenomics, researching other project’s approaches, and how that ultimately affected their project
Tokenomics describes the field of token economies, covering topics such as a token’s creation, distribution/management, and ultimately the use-cases that said token has.
In the web3 space, we see tokens pop up left and right. Tokens can be a very effective way to raise hype, capital, and a community when deployed responsibly, but when these tokens are released before any true use-cases, this can be disastrous for the early investors and believers. If you’ve been in the space for a bit, I’m sure you’ve seen tokens that rocket at launch, due to people “hype” on the project wanting to buy in, only to get dumped on by snipers and speculators that used the token to extract funds from true believers.
We’ve been stuck on this dilemma for months: We do believe that a token is incredibly useful for a game, it allows players to have some central form of in-game liquidity so that bartering isn’t the only way to exchange items (we saw that before NFTKey came around), but the traditional “fair-launch” style of token launch leaves the true believers in the hands of those speculators just looking to make a bag.
After months of researching other projects, we’ve come up with what we believe solves a lot of these issues, while letting the project weather this “crypto winter” storm and initial development stage.
We will be releasing two types of tokens, the resources, and the $CAN token
OneCans Initial Economy Flow Chart
We have told you guys we’ll be having a more complicated economy than a single token, so here we starts: The resources produced by the land plots in-game will be tokens, with liquidity added in $CAN token (which will be described below). There will be multiple resources produced, depending on the production type(s) of your land plot, all of which can be exchanged for $CAN
The $CAN token will work similar to a lot of your favorite economy-based video games. $CAN will be crucial to collecting all the resources needed to construct your in-game items. For example, if your land plots only produce stone and gold, but you really want to build something that requires diamond, you can sell some of your excess stone for the $CAN to buy the diamonds needed to build the item.
Initial Token Liquidity The Island’s economy will begin as self-withheld. This means that no $ONE will be provided as liquidity for the $CAN token in our first steps. You might ask “No $ONE liquidity, what the hell is that?!?!”, well, let us explain our thinking here:
Why no $ONE liquidity in the beginning? This goes back to what we mentioned in the beginning. Many project will release a token before any real utility is implemented, use a portion of the minting funds to add liquidity, and allow some mechanism for people to earn said token (usually passively), which generates hype while bringing new people into the project. This sounds great, free money, right? We don’t think so, so let us continue.
This liquidity up-front allows trading of the token, but as sales come in they eat into the liquidity, and drop the token price. Many projects experience a golden age in the first few months, people buy into the project and token, increasing the price, but after a while the sell pressure overwhelms the buy pressure, and the token has an incredibly hard time recovering to those highs. This leaves true believers who entered near those tops helplessly stranded by the people constantly dumping their earned tokens. We like to think of the majority of the initial liquidity as an airdrop to the first exiters, which is the last thing a project looks to do.
How will I make money? The resources can be used to construct NFT’s that will represent the in-game items. These NFT’s will be tradable, and the only way to craft them is to amass enough in-game resources to create them. Do you see where were going Canner? We’re letting you drive the ship of the economy!
Fundamental Breakdown of Island Economy
By not providing $ONE liquidity initially, we don’t allow speculators to throw their big bags by simply swapping for $CAN on a DEX, if they want to get in on $CAN early, they will have to enter the ecosystem, buy and sell their resources, and simply become members of the OneCan Fam. This gives Canners, and Land Plot holders the first go at amassing $CAN token, as you will only be able to get it by selling resources, which will be earned by holding land plots (This will be the first of many use-cases of these land plots). Whales cant come in and dump on you to take your money. This is part of our central message of making The Island the most accessible game in web3
$ONE liquidity will be added once we believe the economy and game are robust enough to withstand active speculation on the token. This means we must implement a plethora of use-cases, and expand our world first. You guys will be the first people to get your hands on $CAN token.
So, to conclude the article, we are looking to release a series of tokens that belong to two categories: Resources, and $CAN (The Island Dollar). The main source of resources will be Land Plots, allowing true canners to control the economy without the intervention of speculators and whales. The Island’s economy will be self-withheld in the beginning stages as the team develops the game. Once the community has decided the game is mature enough to be released into the wild world of web3, liquidity can be added.
All in all, by not immediately adding liquidity to the token, we allow the true OneCan Fam to accumulate their $CAN and Resource tokens, so that when the markets open up to the public, they’ll have to buy directly from you. More will be announced in the coming weeks as we weather this market.