The Talk About TOWN: Part 2 - TOWN Tokenomics

Listen up Townies! The New Dynamic Star Challenge has been implemented and we’re well on our way to many Season 2 introductions. We’ll be seeing a lot of fun twists with the upcoming play-2-earn ecosystem such as the Advanced Storage NFTs, The NFT Rental & Market Board, Boundaries – Counties & Mayors, and The Introduction to Guilds. Whoa – we just dropped a huge news that you heard here first. But first, let’s get into part 2 of the Town Economy Talk: TOWN Tokenomics. If you missed the Part 1: TOWN Power – you can catchup here.

Talking TOWN Tokenomics

While TOWN Power and Gala Power are being revisited and the current model staying the same while a new model is being evaluated by community feedback – both whales and fish. Here’s some thoughts below we’ve gathered while talking to some community whales (🐋) , power users (🌟), tuna (🐟 ), and the guppies (🐠) on how TOWN can be saved.

The utility function of the token is a major aspect in the success of models that wish to utilize its capabilities. We’re seeing a lot more clarity on how crypto assets are being utilized with the introduction of utility tokens. They’re multi-purpose instruments, and we’re starting to see interoperability patterns emerge in how they’re used. TOWN is a utility token and we need to first explain the difference in the two. There are two primary types of tokens:

Utility tokens
Security tokens

Utility tokens and security tokens are sometimes confused, although they are not the same. Even though they may appear difficult at first, they are actually quite simple to comprehend as you’ll see in later sections.

What is a Utility Token?

Utility tokens are simply app coins or user tokens. The term “pass-through” refers to a legal entity that, by the terms of its creation, gives future access to the goods or services provided by a firm. As a result, utility tokens are not designed to be a financial investment.

Just like an electronics dealer might accept orders for a video game that will be released several months later, a startup can create utility tokens and sell digital coupons for the services or products it is developing.

This approach has been used in previous years, such as Filecoin’s $257 million worth of tokens. These coins will entitle users access to its decentralized cloud storage system.

What is a Security Token?

A security token is a digital asset that derives its value from an external asset that may be sold. As a result, these tokens are covered by federal law regulating securities.Failure to comply with these rules may have severe consequences, including fines and the halting of a project’s progress.

On the other hand, if a firm follows all of the regulatory conditions, security tokens may provide a wide range of possibilities. The most appealing feature is the capacity to offer securities as a digital replica of stock in a company.

Consider Overstock’s recent decision to develop a licensed security token trading platform, which is being funded by tZERO, one of its portfolio companies. The tZERO coins will be created in accordance with SEC regulations.

Ok, now that we covered the basics it’s back to now TOWN and how its Utility Token can be saved.

The framework after speaking with the [$yNdicate] – the large group of Gala and TOWN token holders – what they are proposing has 3 tenets for the token utility:

Role — Features — Purpose

Each role has a key purpose and features that TOWN can use.

The Right of TOWN

Owning or HODLing TOWN confers the right to use or take part in a governance action, vote, or simply have access to the product or market. This should be a key factor for TOWN nodes that are running and operational as they’re a key foundation to the ecosystem.

The TOWN Toll

Just like paying a toll to use a freeway, the token can be the pay-per-use rail for getting on the future GalaChain infrastructure or for using TOWN in the upcoming Rental and Marketplace system. This also ensures that users have skin in the game. It can include running smart contracts to perform a specific function, paying for a security deposit, or plain usage fees in the form of transaction fees or other metered metric. For examples: Renting NFTs (there will have to be some type of smart contract agreement for this loaning process), NFT Earnings (the splitting of the earnings), Increase Power Bonuses* (Thought of being able to increase your Power Level for a XYZ Amount of TOWN that is consumed), TOWN Faucets – that allow for the conversion of Gala or other future Gala Utility Tokens to be swapped for a exchange fee and toll fee.

The TOWN Function

The TOWN token can also be used as a lever to enrich the user experience, including basic actions like joining a special Discord Channel for HODLing XYZ amount of TOWN Tokens. It can also be used as an incentive, if it is given in return to begin usage or for on-boarding or referring users who have played Town Star with TOWN and giving them a weekly boost of TOWN for joining from that referral user. Being able to spend TOWN beyond Season passes is going to be vital way that the function of TOWN gets utilized to it’s fullest extent.

The TOWN Currency

The TOWN token needs to be the efficient payment method and transaction engine of choice for buying Town Star NFTs. This is key for enabling frictionless transactions inside these closed environments and the future of the GalaChain and low-cost Gas Fees. With the launch of GalaChain, Gala can be their own payment processor without the cumbersome or costly aspects of traditional ETH blockchain settlement gas fees. The TOWN Token should offer a much lower barrier of costs instead of being pegged to USD given transactions will be within the GalaChain ecosystem.

The Value Exchange of TOWN

The TOWN token needs to also be an atomic unit of value exchange inside the Town Star game, resulting in the creation of a transactional economy between buyers and sellers of TOWN. This consists of features that allow users to earn value and to spend it on services that are internal to the inherent TOWN ecosystem. They can earn it by doing active work (play-2-earn), or passive work (running a node). The creation of such an internal economy is arguably one of the most important outcomes, and one that must be sustained over time for TOWN to survive.

The TOWN Earnings

As a result of the inflation and dumping of TOWN – its earnings have been adjusted but still, it’s not a full blown solution to saving TOWN. An equitable redistribution of the resulting increased value is part of what blockchain-based models like TOWN should enable. The Town Star Economists should be focusing on the links between rising inequality, crisis risk, and sustainable growth of TOWN.

TOWN Tokenomics Takeaways

Four lessons stand out that we’ve watched with TOWN over the years the we the [$yNdicate] have been playing.

The first issue is that certain NFTs’ TOWN earn values are way off the mark. The net (post-TOWN) inequality that affects incentives as well as chances for TOWN stability is, for example, the analytical foundation for inequality’s impact on growth.

Another lesson is to be aware that the many variables of interest—growth, inequality, and redistribution—have complex interconnections, implying the need for a comprehensive empirical study.

A third lesson is to be open-minded about what the empirical analysis may reveal: numerous alternative channels are conceivable with TOWN. This is especially true for various proxies of TOWN redistribution and their influence on the TOWN economic development (with either favorable or unfavorable outcomes being ex ante feasible).

And the final lesson is the need to be aware of the scarcity of TOWN. There is no ending to the circulating supply of TOWN and there is much TOWN right now floating around. The analysis of the duration of growth spells, in particular, requires looking back far enough to observe the beginning of the spell and thus to consider the inclusion of some data from earlier and possibly less-comparable surveys in developing future TOWN plans.

We want to thank all of our readers, supporters at Gala Games, we know a lot of you used our guides to get up and running before working at Gala – And yes, some of our info is wrong at not entirely up to date, but this is not a job for us – yet! We do this out of passion for the community and players for their continued support. We cannot express enough how much we appreciate your enthusiasm and feedback. Please keep an eye out for our upcoming AMA, which will go into these changes in much greater detail. We hope to see you there!