- We are proposing an upgrade to the PGFK reward mechanism via the introduction of Polyient Games Unity Token (PGU), or “Unity Token”
- PGU has been designed as the standard unit of liquidity for the NFT market and will enable the launch of NFT trading on the Polyient DEX
- PGU will be released in two phases. Phase 1 will include 2M in supply and will be claimable at an 80:20 ratio by PGFK and PGLP holders while Phase 2 will have a 500K annual issuance with a 95:5 PGFK:PGLP ratio. This ratio will be controlled by the PGT governance body
- Phase 1 launches shortly following the approval of the PGT governance body on 12/8/20 with an undisclosed number of claimable redemptions planned. PGU will also be listed on the Polyient DEX with a PGU-ETH trading pair and unclaimed rewards will seed the PG DAO Treasury
- Phase 2 will launch following the full distribution of the 2M supply and will enable users to boost PGFK staking weight with PG Rewards Badges
Since we set out to build Polyient Games over a year ago, we had a single goal in mind: bring liquidity and access to the non-fungible token (NFT) market.
Towards this goal, we have introduced a number of industry-firsts, including the first decentralized exchange dedicated to NFT-adjacent fungible tokens (Polyient DEX) and the dual-state token, an NFT collection that can simultaneously exist in both a non-fungible and fungible fractional state. The latter is made possible via the upcoming Particle Bridge, a smart contract system for NFT fractionalization within the Polyient Games Ecosystem.
Today, we are proposing a new mechanism as an update to the PGFK reward system: Polyient Games Unity Token (PGU), or “Unity Token”, a unique fungible token we’ve designed to become the standard unit of liquidity for the NFT market.
Before I dive into the specifics of PGU, I want to touch on the glaring problem within the NFT market that has yet to be addressed.
Problem to Solve
We are bullish on the NFT asset class (obviously). Between the consumer, cultural and financial applications, NFT-driven token economies stand to replace a majority of the utility token market to become the true alternative digital asset system to cryptocurrencies.
However, despite the massive potential of NFTs, the entire asset class is limited by an incredibly siloed infrastructure and a lack of true interoperability. A large part of this issue stems from the very nature of non-fungibility, meaning it’s difficult for large sums of capital to flow into and within the market that has few liquid avenues.
That is why Polyient has been at the forefront in advocating for the inclusion of fungible tokens into their NFT projects. This two-token approach enables liquid access for traditional cryptocurrency users while maintaining the value-first approach of an NFT economy.
While we’ve seen a strong uptick in the adoption of this model for which we’ve been advocating, it has become clear that there still needs to be an additional unification layer to accelerate the growth of the NFT market.
Polyient is taking a unique approach to building out a blockchain-based ecosystem that plays to our strengths as an investment firm.
To date, we’ve been focused on building out two major layers to the PG Ecosystem:
- Coordination layer: Collaborative environment that brings together third-parties to promote interoperability of protocols and applications.
- Liquidity layer: Active participation by Polyient and other institutions to facilitate liquidity for supported decentralized protocols, including the Polyient DEX, in addition to the introduction of the dual-state token model.
For the coordination layer, we are currently onboarding a number of new and promising NFT/DeFi projects that can leverage our established infrastructure and support to build out their token economies. The long-term vision is that Polyient Games can facilitate the interactions between applications and technical leaders to drive forward NFT asset interoperability and ultimately, mainstream adoption.
For the liquidity layer, we are investing heavily into the Polyient DEX via both direct development and significant liquidity injection. This DEX ultimately will function as the relay point between NFT economies, enabling users to quickly move their adjacent fungible and derivative tokens between their favorite applications.
Additionally, we have been actively developing the upcoming Particle Bridge, which will unlock the creation of PGFK Particles, the 1:1000 fractional version of PGFK and the main utility token for the Polyient Games Ecosystem. Notably, the PGFK Particle token will also function as the main base pair for the Polyient DEX and ultimately, the industry-standard unit of conversion between NFT-adjacent fungible tokens.
However, despite all of the industry-shaping developments, it’s clear that additional innovations are required to fully address the liquidity crisis that is plaguing the NFT market.
Enter: Polyient Games Unity Token
Whereas PGFK Particles will function as the base pair on the Polyient DEX for adjacent fungible tokens, Polyient Games Unity Token (PGU), or just “Unity Token”, has been designed as the unit of conversion between NFTs themselves.
PGU is an ERC-20 token that is primarily emitted from Polyient Games Founder’s Keys (PGFKs) and will function to standardize liquidity for the entire NFT asset class across all blockchain networks. This will be made possible via a special section of the Polyient DEX where whitelisted NFT collections will be able to be converted into PGU and vice versa via a unique PGU-NFT pooling mechanism.
NFT valuation is a major area of focus for Polyient and the pooling function will first be available for NFT assets that have yield-generating utility within the Polyient Games Ecosystem. Long term, the PGU conversion system will work for all forms of NFTs, including art, collectibles, and in-game items.
We are especially interested in extending this unified liquidity layer to finance NFTs, including derivatives, DeFi insurance products, and more, as we deem this category to be the highest potential use case for the NFT asset class.
Upgrading PGFK Rewards
We are proposing PGU as a major upgrade to the system of PGFK rewards, which currently leverages a snapshot-driven mechanism to reward holders with NFT and fungible tokens. However, as we scale the Polyient Games and push towards full decentralization, it’s important to have a fully self-sufficient system in place.
Given the novelty and scope of this new token mechanism, we are planning a segmented-release approach to enable immediate adoption with long-tail growth milestones:
- Step 0 — Launch PGFK & PGLP-PGU rewards and trading on the Polyient DEX
- Step 1 — Open Polyient NFT DEX one-way for PGU reward redemption
- Step 2 — Open Polyient NFT DEX two-ways to include NFT liquidity swap for PG-related NFTs
- Step 3 — Expand NFT liquidity swap to non-PG related NFTs
To start, PGU distribution will be randomly occurring and will require users to simply retain their PGFKs in a wallet connected to the Polyient Games Dashboard to receive the rewards, similar to the current snapshot system. This will not be a passive reward system and will require users to claim the PGU that they have accrued via a portal within the Polyient Games Dashboard. This is a time-sensitive activity and all unclaimed PGU rewards during this period will be deposited to function as the seed funding for the PG DAO Treasury.
With the launch of Step 1, we will introduce reward pop-up shops that enable users to swap their PGU for a pre-selected menu of fungible and non-fungible rewards. These rewards will include a combination of PG and partner tokens, and will heavily feature art, in-game items, and finance NFTs.
As we progress into Step 1, we will also introduce PGFK staking for PGU where a user’s stake weight is a function of total PGFKs held and the generation status of those PGFKs. This means Gen0 will have the highest yield, with a reduction in returns occurring with each subsequent generation.
With this model, users will be competing for yield returns across the entire network of PGFK holders. With the launch of PG Vaults in 2021, we will also introduce yield boosts via PG Reward Badges (ie, Wendex, PolyAnt Queen, etc.), giving users who actively participate in the PG Ecosystem a distinct advantage to capture PGU yield. This is just one component of the upcoming Vault system.
Notably, in addition to the PGFK rewards, we are also proposing that a percentage of PGU is allocated to liquidity providers on the Polyient DEX. The purpose behind this proposal is that the Polyient DEX is the main hub of liquidity for the Polyient Games Ecosystem and we believe it is in the best interest of all participants, including PGFK holders, to incentivize liquidity adoption.
The PGU reward mechanism will be just one reward outcome for Polyient DEX liquidity providers, but it will function as a baseline incentive that will fuel the adoption of both v1 and v2 of the protocol. Additionally, the utility of PGFK as a reward vehicle will be substantially expanded with the launch of the PG Vaults in 2021, making PGU rewards just one piece of the larger system.
PGU Tokenomics and Distribution Model
Similar to ETH on the Ethereum network, PGU will function as the native token for the NFT asset class across all networks with NFT conversion as the primary use case. This utility-first approach assures the necessity of the token for the growth of the NFT asset class while leaving the door open for tertiary use cases as a payment option and as a form of collateral for decentralized finance applications.
Also similar to ETH, PGU will not have a capped supply. However, unlike ETH, there will be no ICO or pre-mining of PGU, as it will be fully decentralized in its distribution and access.
The inflation schedule will be constant, with 2,000,000 PGU released during Phase 1 with 80% claimable by PGFK holders and 20% claimable by Polyient DEX liquidity providers. Following Phase 1, 500,000 PGU will be released annually and distributed with each Ethereum block mined (Phase 2).
In order for the full PGU to enter circulation, it will require all eligible holders to actively claim their rewards. Given the previous trends with similar systems, it’s a good possibility that the total circulating PGU following Phase 1 will be less than 2,000,000 due to missed claims as the amount will be locked up in the PG DAO Treasury.
For Phase 2, we will scale back the rewards to Polyient DEX liquidity providers to a maximum of 5%. This percentage will be controlled by the fully decentralized Polyient Games DAO via holders of the Polyient Games Governance Token (PGT) and PGLP tokens for PGT liquidity pools on the Polyient DEX. The parameters will be limited to 0–5%.
In Phase 1, PGU rewards for providing liquidity on the Polyient DEX will be a function of both the amount of liquidity provided and the duration that liquidity was locked-up. This includes retroactive liquidity dating back to the launch of the Polyient DEX on October 31, 2020.
Supported pairs for this liquidity reward include:
- PGU-ETH (if approved)
In Phase 2, we will introduce a full PGLP staking mechanism that requires users to lock their liquidity tokens in a contract to earn the PGU yield. The list of supported pairs for this reward mechanism will be managed by the PG DAO.
Also to note, we are mapping out deflationary mechanisms to actively remove PGU from circulation, which will be based on its utility within the Polyient Games Ecosystem. These deflationary mechanisms will be the subject of future PG DAO voting and will involve the PG DAO Treasury.
- Total Supply: Uncapped
- Phase 1 Supply: 2,000,000 PGU, randomly released and claimable
- Phase 2 Supply: 500,000 PGU per year, mined with each Ethereum block
PGT Voter Approval
To assure community consensus on this upgrade to the PGFK reward mechanism and launch of PGU, we are opening a core proposal for approval by PGT holders. Voting on the proposal will begin 12/2/2020 at 5PM PST and run through 12/8/2020 at 5PM PST.
While we are clearly in favor of this PGFK reward upgrade and will be voting to approve the proposal, it is important that the PGT governance body has the final say as Polyient Games is a minor stakeholder of PGT. This system of decision making will become more and more robust with the launch of the full PG DAO.
If passed, we will plan to begin releasing PGU to PGFK and PGLP holders shortly thereafter, in addition to adding a PGU-ETH swap market to the Polyient DEX. If rejected, we will remain on the same course for reward incentives and look to engage the community on a new iteration for a follow-up proposal.
Please note, if the proposal passes, we will be removing the snapshot reward announced here. Instead, this major partner reward will be the first menu item for PGU redemption.
We see the introduction of PGU as the single largest shift in the positioning of the NFT asset class, providing it a real path towards becoming the true alternative to cryptocurrencies. However, this is a substantial undertaking and Polyient will be investing heavily into the underlying infrastructure to see it reach its full potential.
As PGU grows, we look forward to fully decentralizing all mechanisms to create a self-sustaining system that will fuel the development of the NFT market for years to come.
In the coming weeks, we will be releasing a series of documentation that will further outline the important elements of PGU, the NFT trading on the Polyient DEX, and the role that PGT holders will play long-term.
About Polyient Games
Polyient Games, a subsidiary of investment group Polyient, is a unique investment ecosystem focused on the NFT and decentralized finance (DeFi) markets. Polyient’s portfolio includes leading NFT startups such as Nonfungible.com, Blockade Games, and Cargo.