3.3 Dynamic Token Economy
In order to form a vibrant BORA 2.2 ecosystem, we need to secure high-quality projects with various partners for the BORA environment in the early stages. With the current global Defi, NFT and GameFi fever, blockchain platforms internationally have been expanding on their individual ecosystem by competitively receiving large-scale investments and actively forming partnerships. In actuality, in the case of Solana, they managed to form a game fund of almost 200 billion by the end of 2021 and showed ambitions to onboard better projects in this market environment.
In addition, for better projects to participate in BORA, the expected value to be generated through BORA would need to be quickly increased. In the end, for better projects to actively mobilise, the outcome of the project has to prove its value.
In the current blockchain market, in order to grow the ecosystem with good projects, large-scale investment is essential. In order for the projects that work with BORA to generate greater value through BORA, the BORA Team acknowledges that the introduction of a dynamic token economy is necessary and is reviewing the application of Inflation. There are concerns about the short-term effects BORA’s Inflation would have on the current BORA ecosystem. Still, if we respond conservatively in the current competition due to these concerns, then it would not be possible to increase value through the expansion of BORA and may pose a threat to BORA’s existence in as little time as five years. We are considering the application of the Inflation as well as BORA’s automatic permanent lock-up logic. As the need for the introduction of BORA’s dynamic token economy was due to the fierce competition in the market that is anticipated in the 2 -3 years, after the service stabilises and the Platform expands, then for the continued growth of BORA’s value then we would need to absorb the BORA in the market and gradually reduce the BORA that is in distribution.
The dynamic token economy, as described above, ultimately operate following the below formula.
The inflation adjustment coefficient and the permanent lock-up coefficient were defined at the 1st GC General Meeting on April 8, 2022. The formula based on the specific numbers decided are elaborated in Section 5.2 Token Inflation under 5. Tokenomics of BORA2.0.
In addition, the coefficient of permanent lock-up is coupled with service fees. The rate of service fees and the coefficient of permanent lock-up by service, which are required to decide the lock-up coefficient, were also decided at the 1st GC General Meeting held on April 8, 2022. The formula based on the specific numbers decided are elaborated in Section 5.3. Permanent Token Lock-up under 5. Tokenomics of BORA2.0.
Since such changes have great implications for the value of BORA, there is no doubt that it must be decided by vote and the agreement of the GCs. Decisions on such significant changes of BORA in the future will also follow the same process. Its transparency and majority rule being the greatest strength points, the GC will pursue such principles in executing policies and vote to decide whether such tasks are imperative to maximising the value of BORA and, if so, how each variable shall be set for the most efficient operation possible.
Cases that may be represented in the above formula can be expressed as a graph, as seen below.
As such, if the project operating in the platform increases and each project successfully receives support from the users, then accordingly, the volume of BORA permanently locked would increase, the total BORA quantity volume would decrease over time, as shown on graph B. In contrast, if there are not many projects active on BORA and user participation is slow, it would follow the trend shown on graph A.
Ultimately, regarding the introduction of the dynamic economy, as shown on the formula and graph, if there is an increase in successful projects that have onboarded BORA and each project have active participation of its users, it reduces the total volume of BORA. Hence, even if the total volume increases due to Inflation in the early stage, with time, it will have the effect of increasing BORA’s value.
Even so, BORA Team will not independently set the various transactions fees and rates needed to define the rate of increase of Inflation and BORAs to be permanently locked up for the application of the dynamic ecosystem as mentioned above. As much as this would influence the entire value of BORA, this would be determined in the BORA GC’s 1st General Meeting to be held on the 2Q of 2022 through the agreement and vote of the GC. It would need to be decided whether this is essential to maximise the value of BORA through the enforcement of the policy based on GC’s structure’s biggest advantages of transparency and majority vote. If this is a necessary take, then it would need to be determined how to define each variable for the most efficient operation.
From a macro perspective, the dynamic economy has to be introduced to the supply of Tokens, as stated above. From a micro perspective, we would need to improve the technology related to the sub-utility token to create a fluid and creative token economy for the projects that will work with BORA.
Instead of only issuing tokens according to the fixed ratio of 1:1K as we have done so far, we will provide support so that the project teams can develop and freely define the value of the token and issue tokens so that it is most efficient and suitable to the purposes of their own project that they are making.
For this, BORA’s Tech Team have finalised the structural change of BORA Shell, and we will release the BAS by the mid of 2Q of 2022.
Last modified 7mo ago