#Tokenomics

To compare, Illuvium, a solid web3 game dedicated 100% of their profit as a game studio to buyback their token from the market, and their token still underperformed BTC as an investment in the past year (screenshot below). Meanwhile, Artyfact dedicate only 20% to buyback and burn. They seem to think that's enough to create a sustainable economic model... It is not based on the results of Illuvium.

Attached is a screenshot of the allocation table and vesting:

  • private sale: 4.8% of supply with very short vesting, price of $0.25 (raised $3M based on these calculations)
  • pre-sale 1: 11.2% of supply with very short vesting, and 10% unlock at TGE itself which is likely to be sold entirely, price of $0.28, raised $7.84M
  • pre-sale 2: 8.8% of supply with very short vesting, and 10% unlock at TGE which is also likely to be sold entirely. Price is at $0.30 and this phase is underway. If complete, it should raise $6.6M

So, the increase between each sales is not crazy, that's a good thing.

Tokens received for free:

  • Team & advisors: 5.5% with 36 months vesting. Will they still be working for this project after the first 3 years? Not sure the game studio will last longer than the 3 years.
  • Staking and Farming: 30%, that's a big bulk of tokens that are released in a fixed manner without consideration of the market trend (if the token happen to be moving in a downward slope, those extra tokens added to the circulating supply will just make things worst within the first 3 years.
  • liquidities and listing: 20%, but only 4% at TGE. Assuming they use that 4% to finance the liquidity pool that means they require at least $3M to finance the liquidity pool, which leaves them $14.44M to operate until they start selling tokens. That doesn't enables them to build AAA games, but at least it's a good chunk of cash to operate.

Given the Pre-sale 1 and 2 (10% unlock at TGE), that's 1.2% and 0.88% of the total supply that is potentially going to get sold. That's $1.56M of selling volume. Assuming again there is $4M in the liquidity pool, the price at worst case would go from $0.30 to $0.06912 (using the bounding curve formula x*y=k), assuming no buying volume which probably won't happen, but either way it shows how risky it is.

While the games appear great, as an investment I am not feeling it at all. If I would make a bet is that there will be a decent crash on the price at TGE. If the games are really good, maybe it will do well, but consider that they are starting with a fully diluted market cap of $75M, comparatively Illuvium is at $436M, so not impossible to grow but not sure it's worth the potential loss for a 4x or 5x upside. Show Less

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