Establish Pre-Set Player Yields to Control ICE Token Emissions

Background

Play and Earn reward schemes generally, and ICE Pokers' specifically, are unsustainable. The protocol needs to tackle these challenges head-on. The DG team has introduced a slew of proposals to mitigate ICE emissions. Their latest, the "ICE Bank", is the most dramatic. While each proposal helps at the margin, they are ad hoc and reactionary. This proposal presents a framework for determining ICE emissions. If adopted, ICE Poker will be uniquely positioned in the Play and Earn segment as gameplay volatility is substantially reduced.

Link to Detailed Proposal: https://drive.google.com/file/d/1XK8uA3w386cZqODSE_Yqa1t92_GH8oy4/view?usp=sharing

A detailed proposal is provided above. The first step is recognizing that player earnings are a protocol level expense. The notion that rewards can be sustained long term through an ever-inflating token relying on a growing user base is misplaced. The DG team and community have rightfully introduced proposals to reduce ICE emissions and improve burn to earn ratios. This proposal takes the logical next step by setting emissions to a level supported by regular token burns.

Proposal Summary

• Task the Decentral Games team with determining a sustainable annualized yield based on net deflationary revenue sources allocated to ICE stabilization activities
• Adjust ICE Bonus multipliers by metaverse wearable to target an annualized yield
• Cap ICE emissions to X% of current supply on a yearly / weekly / daily basis, to be periodically reduced based on market conditions
• Set up an "ICE Stabilization Fund" to capture speculative excess if the price of ICE increases
• Replace the ICE Bank proposal with the points contained herein for more sustainable gameplay economics

Implementation Steps

1. Decentral Games team to determine an ICE Stabilization Expense budget based on pro-forma revenue from non-inflationary revenue sources.
   • Example: Suppose revenue from Activations, Secondary Sales, Advertising, and Polygon Node fees is budgeted at $20K equivalent per day or $20K * 3 months = $1.825M for Q3 2022. This is the expected burn (ICE Stabilization Expense budget in dollars) for the quarter. This will be updated regularly based on the protocol’s projections. Because upgrades are paid in ICE, they may supplement the ICE Stabilization Expense budget initially.
2. Determine L1 → L5 yields based on ICE Stabilization Expense budget using seven-day average ICE price.
   • Example: $20K / day @ $0.02 average ICE price = 1M ICE Emission Budget. Based on number of L1 → L5 wearables and the relative cost of each, one can back into yields for each wearable resulting, on average, in daily emission equal to the ICE Emission Budget (i.e., burn to earn of 1x).
3. Achieve targeted yields by adjusting ICE Bonus payouts. The multiplier will adjust dynamically (say, weekly) based on the trailing seven-day average ICE price, targeted yield, and changes in Metaverse Wearable present value.
4. Set a daily / weekly ICE Emission Cap less than or equal to the ICE Emission Budget. This prevents the protocol from hyperinflating the token if ICE trades down since the ICE Bonus multiplier from #3 will calculate an ever-increasing amount of ICE to emit to achieve desired yields.
5. Set up an ICE Stabilization Fund wallet to receive ICE from the iceKeeper contract for the difference between actual ICE emissions and the ICE Emission Cap (perhaps best done on a weekly basis to adjust for gameplay habits).
6. Keep ICE Stabilization Funds in USDC. Funds can subsidize yield by supplementing ICE Stabilization Expense budgets.

Summary

This proposal sets ICE emissions to a level yielding a burn to earn ratio of 1x. Yields are derived from non-inflationary revenue dedicated towards ICE Stabilization activities. This yield may increase as protocol revenue increases. An ICE Emission Cap protects the protocol from ICE hyperinflation on the downside and allows for revenue capture on the upside through the ICE Stabilization Fund. This Fund can be used to support SNG tournament prizes or subsidize yield in times of protocol revenue decline. Though a significant lift, these changes will set the protocol apart from Play and Earn peers while stabilizing gameplay.

A robust discussion is welcomed considering the proposal's scope.

This Proposal Will...

• Explicitly tie protocol level earnings to revenue allocated towards ICE Stabilization activities
• Task the team with establishing yields for each wearable, which, on average, emit no more ICE than is allocated towards burn activities
• Cap ICE emissions as determined by the protocol's ICE Stabilization budget
• Create an "ICE Stabilization Fund" to allow the protocol to capture any upside in ICE appreciation