Base-level pricing protocol

Certain most valued gaming assets become claimable as Loyalty Badges tokens and by default are classified to 7 rarity levels depending on their in-game utilities and scarcity. Their scarcity and default relative value are defined in the following proportions:

  • level 1 - 50% of Loyalty Badges are valued at 1X

  • level 2 - 20% of Loyalty Badges are valued at 1.5X

  • level 3 - 15% of Loyalty Badges are valued at 3X

  • level 4 - 10% of Loyalty Badges are valued at 10X

  • level 5 - 4% of Loyalty Badges are valued at 50X

  • level 6 - 0.9% of Loyalty Badges are valued at 200X

  • level 7 - 0.1% of Loyalty Badges are valued at 1000X

The scarcity rules are set algorithmically and can be facilitated with artificial intelligence on more mature stages.

At the beginning of each Epoch the protocol makes the bid offers on the internal marketplace for all Loyalty Badges outside the Repository, based on the valuation of Backing pool (70% for base-level pricing) to all Loyalty Badges (already claimed and circulating outside the Repository and those becoming available for claiming in this particular Epoch) taking into account their relative value coefficients. The offers are updated each Epoch.

If a bid is accepted, funds are transferred to a Loyalty Badges’ owner, and the Loyalty Badges itself goes to the Repository. Loyalty Badges from the Repository are not subject to the base-level pricing procedures any more, even if they are sold from the Repository and freely circulated on the market.

If a bid is not accepted, the new bid orders will be placed by the protocol based on the updated conditions of the Backing pool and availability of new Loyalty Badges to be claimed.

As the deposits into Backing pool are not regulated, to make the pricing model more stable, the protocol regulates claiming of new Loyalty Badges in a way that the new volume of Loyalty Badges does not change the existent not realized bid offers for more than 30% from the average bid offer for the last 4 Epochs.

Claiming of more scarce Loyalty Badges (with high rarity) takes priority over less scarce ones. It means that the protocol applies new replenishments to the Backing pool first toward gaming assets with higher levels and makes it possible to claim them as Loyalty Badges.

Epoch is set to one week by default and is subject to change by voting (after the voting procedures launch). Loyalty Badges' scarcity levels with their relative value coefficients and the allocations of the Backing pool are also subject to the votings.

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