TEP-1: Strategic Tokenomics Adjustment

We are proposing a revision to the $TOPIA token allocation to accelerate the development of TOPIA, align current and future team members, open up opportunities for strategic VC funding, and strengthen TOPIA’s treasury to operate from an even more well capitalized position moving forward. We propose increasing the Team Treasury allocation from 5% of total $TOPIA tokens to 20%. This 15% increase would come out of the Faucet and CEX listing token allocations, which upon re-evaluation we feel were set too aggressively.

This additional token allocation in summary will be used for:

1. Provisioning for token warrants with variable lockups (Typically > 1 year) for VC’s and investors involved in TOPIA’s future. See details below. Capital raised this way will allow us to scale up our engineering teams moreso and get our full release to market sooner, beating potential competitors like Hytale to market.
2. Gas subsidies to cover player transactions in-game on the TOPIA chain through our rate-limited and bot protected systems. This is critical for removing player friction.
3. A larger treasury to enable future team incentives, allowing TOPIA to strategically give employees cash compensation as well as $TOPIA game tokens, or a combination.
4. A reduction of future token circulatory inflation due to changes in CEX and Faucet allocations.
5. Additional token to leverage for marketing & incentive efforts that don’t qualify for disbursements from other allocations.

Proposal Allocation Changes

Strategic Funding

The proposed reallocation of team treasury tokens will improve TOPIA’s position in securing funding from strategic venture capitalist and angel investors. Raising capital and getting the right partners on-board is an option we are currently investigating to accelerate the development of the TOPIA platform.

More specifically, we believe that we’re at a point where strategic funding can accelerate our progress dramatically, enabling us to fully release TOPIA sooner through a scale up in the team size and expertise. This accelerated development comes with an increase in expenditure, but this method of capital raising will allow TOPIA to grow its engineering and internal teams without any additional dilution of the TOPIA ecosystem, such as more collections and mints.

Our team, given its prior experience with venture firms, sees the potential in leveraging partnerships formed from fundraising to rapidly accelerate growth and development. The potential can be categorized into three key areas that strategic VCs and Angels can contribute to:

1. Access to best in class resources and mechanism design help in tokenomics, game economy design, and collaboration on design decisions related to the player economy and ecosystem.
2. Opportunities to leverage crucial networks in gaming, marketing and corporate partnerships.
3. Capitalizing on our potential angel and venture partner’s established record of successfully launching companies and games in the market.

Controlling Inflation

We propose reducing the CEX listing allocation from 13% to 7% and the Faucet allocation from 26% to 16% respectively. This way we can strengthen the treasury in a non-dilutive manner to current holders and help curb future $TOPIA inflation.

We want users to be on-boarding into TOPIA due to the great content and fun games our community will be creating. We do not want to encourage players to join TOPIA strictly in attempt to farm and extract $TOPIA from the faucet allocations of worlds. Behavior like this could potentially harm TOPIA’s long term economy and does not attract the long term players we are targeting. Additionally, the TOPIA team reserves will additionally be used to subsidize gas fees of the majority of player transaction fees on the TOPIA Chain to make experiences frictionless. Given this we feel it is appropriate to suggest a reduction of 10% in the Faucet allocation.

In terms of our CEX allocation, after speaking with exchanges and other teams we realize that our allocation of 13% is quite large for CEX listings. We realize the primary driver that will get $TOPIA listed on exchanges is based on the demand to trade $TOPIA rather than the supply we dedicate to listings. After a number of these conversations, we are confident that if we continue building, this demand will continue to grow and listings will happen in an organic manner.

Incentive Structure

Several community members have privately brought up the unusually low 5% team token allocation. The suggested reallocation would provide the team with a more standard structure over the token supply that removes the need for any potential downstream dilutive actions. With an increase in team tokens it will ensure incentivization and alignment between current and future team members with community members in their collective ownership over TOPIA.

Closing

By approving this proposal, you will be supporting a stronger, quicker to launch and more future-ready $TOPIA ecosystem. Your approval will guide us towards sustainability and improved growth.