Proposing improved Tokenomics

SUMMARY

Rework the tokenomics to make $MGH more sustainable and decentralized.

BACKGROUND

The MGH DAO is seriously committed to fostering the development of the metaverse. During the last year, MGH has evolved to become a first class metaverse developer and tool provider, being able to acquire multiple assets across metaverses, receiving multiple grants from the Ocean Protocol and Decentraland, setting up the first metaverse price oracle, developing the first Decentraland SDK and creating a top of the line valuation interface that simplifies the metaverse investment and building journey of users and developers.

What lays ahead is utterly motivating for the core team. Having the infrastructure set in place, it is time to start experimenting and developing innovative DeFi, MetaFi and GambleFi solutions that will propel the metaverse space to the next step. To achieve this, it is necessary to have solid tokenomics that incentivize users, generate long term buying pressure and a deflation.

This proposal is aimed towards spicing up the tokenomics and ensuring our beloved MGH token will be around for a while.

MOTIVATION

In the coming months, the core team will release multiple products that will give the MGH token diverse utilities. Firstly, MGH will be the entry token for the P2E experiences currently in development. Holding MGH will grant access to all the DAO owned LANDs and spaces being created. Moreover, staking MGH will let the users participate in the revenue generated from all the upcoming tools (valuation algorithm, DCL edit, metaverse staking, metaverse index, etc.) Finally, MGH will be the fuel of the metaverse agnostic valuation interface that will be launching soon, as well as for the MGH NFT merch store.

All in all, MGH is the fuel of the MGH ecosystem and therefore a well structured tokenomics framework is needed. When the project was launched, the focus was towards collaborative investing in metaverse LANDs and the development of DeFi tools for the metaverse. Taking into account the highly dynamic character of the niche we are in, and the wide pallet of services and products that the DAO offers, it is necessary to remodel the tokenomics and ensure that all the different products and initiatives are covered by them.

SPECIFICATION

Below is an overview of the updated tokenomics:

To start closing the gap between the circulating- and total supply, we propose to lower the total supply to ca. 500,000,000. These tokens will be burnt from the treasury and will not affect any current MGH holdings. This makes the token less inflationary and more attractive for mid- and long-term investors.

Initiators: The allocation for initiators will increase from ca. 6% to ca. 10% with the same vesting type (quadratic) and duration (6 years). The new vesting contract will be deployed on Polygon. Moreover, the vested tokens will be eligible to earn staking rewards.

Core Team, Advisors & Supporters: The core contributors and supporters that take care of the main operations and overall business as usual, together with our advisors will also get a higher allocation from ca. 6% to ca. 10%. There will be two vesting schedules depending on the amount and commitment of the contributor, advisor or supporter (3 and 6-year quadratic vesting with eligibility to earn staking rewards).

Strategic Sale Allocation: For the ongoing fundraising campaign, we propose to allocate 100,000,000 tokens (20% of the new total supply) which can be acquired OTC from angel investors and VCs.

Working Groups: For the working groups, we propose to allocate 60,000,000 tokens (12% of the new total supply). The release of these tokens will be decided via DAO governance but a maximum of 1,500,000 tokens can be distributed per month. Moreover, there will be a 60 days lock-up period for 70% of the tokens after distribution.

Ecosystem Grants: For the ecosystem grants, we propose to allocate 33,500,000 tokens (6,70% of the new total supply). The release of these tokens will be decided via DAO governance.

The main difference between the working group and ecosystem grant allocation is that working groups are closely working together with the core team and are committed over a longer time period. Ecosystem grants are for external teams building on top of MGH’s infrastructure by themselves.

Treasury: 75,000,000 tokens (15% of the new total supply) will be allocated to the DAO’s treasury. In good market conditions, tokens of this allocation can be used to grow the DAO’s portfolio (e.g. with Metaverse LANDs) or to finance the daily operations. The release of these tokens will be decided via DAO governance.

Staking Rewards Booster: With the launch of the valuation interface 2.0, the MGH DAO will start receiving recurring revenues due to its subscription model. A part of the generated revenue (60%), will be distributed to MGH stakers on the Polygon network. Since these revenues have to scale up over time and therefore an APR under market average in the beginning is expected, we will make staking more attractive by allocating 80,000,000 tokens (16% of the new total supply) to increase the staking rewards. Every 2 years after deploying the new staking contract, the allocation will be halved. Meaning, in the first 2 years, 40,000,000 tokens will be distributed to MGH stakers, in the following 2 years, 20,000,000 tokens, etc.

Additionally, we developed the DAO revenue portal, an automated, DAO controlled revenue splitter that will make the APY of the staking pools sustainable, increase the size of the treasury and add a deflationary dynamic to the token supply. In this sense, 60% of the generated revenue will be allocated to stakers in the form of polygon-pegged MGH tokens, 30% will go to the DAO treasury and 10% will be allocated to a buy-back and burn program. Burn baby burn!

VOTING PERIOD

7 days

Voting Type

Basic Voting (Yes, No, Abstain)

CONCLUSION

The current development of the MGH DAO makes it necessary to update the tokenomics in order to ensure its longevity. The new allocations will allow us to better tackle the upcoming challenges and properly reward contributors, early adopters and developers helping to improve the protocol. At this point we would like to thank everyone that has contributed to the amazing and inspiring mission of becoming the homebase of the Open metaverse. The MGH core team will strive to keep delivering top of the line investment, data and building products to simplify the metaverse journey of all the people coming to the space in the coming years.

Through hardship to the stars!

Find more details to the Tokenomics specifications here: https://docs.google.com/document/d/1kIWTj8PMWbwi2pAYAqKQAgX_rNXzDSXnLem0xzeYGBg/edit?usp=sharing