$MGH Tokenomics V2

7 min readMay 20, 2022

The MGH DAO is seriously committed to fostering the development of the metaverse. During its first year of operations, 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 in the market, 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 needed 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 add a deflationary character to the MGH token.

The current web3 landscape is focused on a hold-to-earn model. Projects reward their investors with high APYs just by holding their governance or utility token. The only way for the APY to be sustainable is if it is backed by real cash flows. The main issue is that in most cases, projects are far away from making real revenue. This ponzinomics structure can work for some time and attract many investors, but the highly inflationary token dynamic, induced by the high network rewards, leads to increased selling pressure throughout the lifecycle of the project. Add the selling pressure from early investors and VCs coming out of their vesting schedules and the result is the token price falling to oblivion.

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 and in-game assets store.

The initiator team wants to ensure that all revenue generated from the use of the aforementioned tools and experiences, as well as all revenue generated from the DAO’s Metaverse development projects, is translated into sustained buying pressure on the MGH token.

All in all, MGH is the fuel of the MGH ecosystem and therefore a well-structured tokenomics framework is needed. When the project launched, the focus was towards collaborative investing in metaverse LANDs and the development of DeFi tools for the whole ecosystem. 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.

Token Model and Utilities

MGH’s token model is designed to be deflationary, meaning that the circulating supply will decrease over time through continuous token buy-backs and burns on the secondary market. The required capital for the token buy-backs will come from the multiple revenue sources MGH is currently building, such as the premium version of the Valuation Interface 2.0, paid game experiences on MGH’s Metaverse LANDs, GambleFi and more.

To avoid generating additional hurdles in accessing these tools, the DAO will accept various tokens and coins on the Polygon network besides $MGH.

User paying in $MGH

When a user pays for services in $MGH, 40% of it will be burned, 60% will be distributed to the Staking rewards pools. The fees are collected over 262.956 Polygon blocks (approx. 1 week) and are then pro-rata distributed to the stakers in the next 262.956 blocks.

Since $MGH was deployed on the Ethereum Mainnet, it is impossible to burn the bridged tokens on Polygon. Therefore, the tokens will be collected in a multi-sig wallet and transferred to the MGH treasury on Ethereum where they will be subsequently burned.

User paying in other currencies than $MGH

When a user pays for services in other currencies than $MGH, meaning, USDC, USDT, MATIC, MANA, SAND, etc, 30% of the generated fees will be distributed to the MGH DAO treasury, 70% will be used to buy back MGH tokens from the secondary market. Subsequently, 85.71% of the bought-back MGH tokens (=60% in total) will be distributed to MGH stakers, the remaining 14.29% (=10% in total) will be burned as described above.

Here is an example on how the revenue would be distributed when subscirbing to one of MGHs services:

Tokenomics Breakdown

Token Release Schedule

Initiators and Core Team: For the token release schedule of Initiators and core-team members, it is necessary to differentiate between tradable and stakeable tokens.

Stakeable tokens are vested MGH tokens that cannot be sold or transferred but are eligible to earn staking rewards. The release schedule of stakeable tokens is linear over the vesting period (see below).
Tradable tokens are “normal” MGH tokens. The release schedule of tradable tokens follows a 65 months quadratic vesting period. For core team members, the quadratic vesting duration is either 35 or 65 months, depending on the initial deposit amount and level of commitment.

Working Groups: Every month, 1,602,083.33 (2.78% of remaining WG allocation) will be unlocked, meaning that these tokens can be distributed as Working Group rewards. But the distribution follows only after successful DAO governance. Once WG rewards are paid to the respective WG members, 70% of the tokens have a lock-up period of 60 days.

Ecosystem Grants: Every month, 930,555.56 (2.78% of Ecosystem Grants allocation) will be unlocked, meaning that these tokens can be distributed as ecosystem grants. Also here, the final distribution requires successful DAO governance. Comparable to the unlock schedule of WG rewards, once ecosystem grants are distributed, the tokens are locked up for 3 months.

Treasury: The treasury allocation is fully unlocked BUT the distribution requires successful DAO governance.

Network Rewards Booster: The distribution of the network rewards will be halved every 2 years, resulting in the following distribution schedule:

CEX Liquidity, Market Makers: This token allocation is strongly event-dependent. If there is a CEX listing or another liquidity pool is to be opened at a DEX, the liquidity must be available. Accordingly, this allocation is fully unlocked but the token deployment can only be don through the acceptance of a DAO proposal.

Strategic Sale: After successfully closing a deal with strategic investors, the token release comes with a 6-month lock-up period and 18 months linear vesting afterwards. In case a strategic investor proposes a deal with a shorter lock-up and vesting period, a DAO voting will follow.

Roadmap

01.07.22- Launch of Valuation Tool V2 with heatmap and analytics dashboard

01.08.22 Launch of two new valuation models for blue-chip metaverses (Otherside and Somnium Space)

01.09.22- Valuations API for B2B clients

30.09.22- Launch of metaverse staking protocol (LAND flipping bot)

31.10.22- Launch of LAND index

15.11.22- Launch of two additional valuation models (Crypto Voxels and Fluf World)

15.12.22 Launch of LAND prediction markets.

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 the team to better tackle the upcoming challenges of the bear market 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!

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About MetaGameHub DAO

At MGH DAO, it is all about building bridges within the open metaverse and building a holistic, user-focused ecosystem to foster the most intuitive path for the users.

Apart from providing innovative infrastructure to support the financialization of the NFT world, MGH is structured as a DAO which allows it to be governed by the community, for the community.

MGH DAO will provide a sophisticated AI-based oracle that allows the analysis of the respective NFT’s fair value and seamless, transparent integration into the NFT Pool.

Community members can stake their NFTs and MGH Tokens to earn network rewards while participating in the governance of the ecosystem.