TIP23 Atlas Mine Cataclysm (Sunset)

Summary

Deprecate Atlas Mine by first disabling deposits, then sunsetting Atlas Mine emissions altogether as part of a broader shift to a gaming first sustainable growth model. Background

To date the Treasure ecosystem has been able to become the premier gaming destination on Arbitrum with >$270M processed volume across 20+ games and >80k MAGIC holders.

What stands out is that we have achieved this completely organically with a grassroots web3 community, creating the foundations of a “decentralized Nintendo” – a game publishing platform supporting an ecosystem of games driven by a deeply passionate community of players and builders. None of this would have been possible without the initial bootstrapping efforts of the Genesis Mine, the predecessor of the Atlas Mine. We began with humble beginnings as a Loot derivative, fairly distributed through DeFi mechanisms and the tokenomics reflected that. The “decentralized Nintendo” vision materialized some time after.

We attracted many talented people and the initial ecosystem of game developers which formed the origins of our “decentralized Nintendo thesis” This has blossomed into an ecosystem of gaming studios and game developer partners today, many of which use MAGIC and Treasures as shared game building resource primitives in building a network of interconnected games. As we have built out the network, we have begun attracting even more high quality games. Slowly at first, then all at once.

Rationale for Change

Since launch, we’ve endured many ups and downs, including a brutal bear market that has extinguished narratives like play-to-earn games and “gamefi.” We’ve come out more resilient and wiser. In order to become a premier gaming ecosystem, we must build on solid and sustainable foundations. Through our experiences and discussions with dozens of partner games in both web3 and web2, we’ve learnt that: • Speculator-driven games that involve passive staking have short lifespans and are rarely sustainable, hurting players and causing collateral damage to the ecosystem. • Over-financialized staking games attract the wrong audience, and financialized game loops inadvertently turn players into speculators • Developers must resolve conflicts of interest between early speculators and future players. They end up spending more time “fixing” and “balancing” the game to solve political stakeholder issues, rather than building a fun game. • Passive staking often results in value extraction and creates misaligned incentives between passive stakers and enjoyment-seeking gamers. • Removing passive staking enables the ecosystem to flourish on sustainable grounds, where MAGIC can be used to drive user growth, build more enjoyable gaming experiences, and improve ecosystem fundamentals.

Legitimate game developers see games as an art form and don’t want to build pseudo casinos for gamblers. We must move rapidly beyond speculator-centric mechanisms such as passive staking if we are to become a leader and pioneer in web3 gaming–one that can attract reputable game studios and AAA studio game development talent.

Therefore we must transition to a sustainable growth model. While the Atlas Mine served the purposes of bootstrapping our community, it is a relic of our DeFi origins–a redundant vestigial tail–no longer appropriate if Treasure wishes to elevate the next level and secure higher quality games and developers.

Proposal: What does the transition look like?

We propose to sunset the Atlas Mine (passive staking) in the following phases: • Phase 1: disable new deposits in Atlas Mine • Phase 1 (cont): Remove vesting for unlocks (“rip the bandaid off”) and unlock all deposits when the 12 month stakers begin unlocking on the 26th Jan • Phase 2: remove emissions entirely from Atlas Mine (excludes Harvesters) • Phase 3 (long term): reworking emission schedules to be more sustainable and better align with network growth which we will address in a later TIP as it deserves a separate discussion and needs to be designed in conjunction with governance.

Phase 1: Disable deposits in Atlas Mine

Disable any further deposits to the Atlas Mine effective immediately if the proposal is ratified. This will require an upgrade to the Atlas Mine contract.

What happens to Governance after Atlas Mine deposits are paused?

In the long term we look to evolve governance towards a reputation based system: • The reputation system (currently being formulated) may involve TreasureXP with light touches of social identity to improve transparency and robustness of governance • Sunsetting the Atlas Mine means that our governance model needs to change.

In the interim we propose the following: • MAGIC remains the governance token • A two-week lock is required for voting • A lock-up period mitigates short-term attempts to manipulate voting • Harvester deposits and Sushi MAGIC/ETH LP remain on a 1:1 MAGIC to governance vote basis.

Phase 1 (cont.): Remove vesting on Atlas Mine unlocks

Approximately 50 million MAGIC from 12 month stakers in the Atlas Mine will unlock and begin vesting on 25th January. Each unlocked deposit undergoes 45 day linear vesting. Two options for the DAO to consider: • Remove vesting (“rip the bandaid off”) and unlock all deposits when the 12 month stakers begin unlocking on the 26th Jan. • Keep vesting and locks.

Pros of removing vesting

• Allows the ecosystem to move forward and focus on what’s most important, creating amazing shared gaming experiences together. • Removes negative catalysts and distractions in one fell swoop and avoids 45 days of potential and hypothesized selling pressure, during which negative sentiment may hinder ecosystem project launches and momentum. • Avoid the following potential implications from persistent negative price action: • Dominate topics of discussion in the community and overshadow any game feature launches through this period (undermining marketing efforts) • Encourage long-term oriented stakeholders to capitulate and sell (negative sentiment and market psychology implications).

Cons of removing vesting

• Expect sharper price action and volatility surrounding the day of the unlock. • Some depositors may strategically time their sales over a number of days and sell into any rallies, creating market uncertainty and volatility. • Vesting allows for would-be sellers to sell in an orderly and predictable fashion.

Phase 2: Sunset Atlas Mine emissions swiftly and completely

Disable emissions to the Atlas Mine with a deadline for ‘Cataclysm’, e.g. 1 month after unlock. • We can achieve this manually by setting utilizationOverride in the Atlas Mine contract • No code migration is required This will happen naturally after disabling deposits as users gradually unstake (as the percentage of circulating supply staked drops below 30%, Atlas Mine emissions naturally turn off). • Note that emissions from the Atlas Mine are not automatically redistributed to existing Harvesters. This is a net reduction in MAGIC emissions overall (returned to the mining pool to be redistributed via active play).