Cereal Club Thoughts and Ideas
Will adjust and add more to this document before each meeting based on what we discuss.
What I would like to see:
Cost structure and determined runway (Including percentage of $ETH vs. $USDC
Needed to determine the speed at which new revenue streams are needed
Current team and their roles for Cereal Club
Nick suggested a Senior Operator with Web3 experience. I want to see if I can validate this suggestion with current team information
Chris Brown x Cereal Club:
- UI update to split choice, user can claim x and donate y to Charity
- Simple leaderboard showcasing how many they gave to charity in the $ amount:
Boxes donated * Whole sale cost = Score in $
- Possible POAP for bragging rights on how much they donated. If too complex, go with a simple certificate with their amount donated. If time, maybe add a share this widget that has a pre-typed out tweet for them to share with their certificate or their POAP.
(As discussed, without these additions the drop is of value to holders, but at the expense of losing free marketing and excitement. Use the leaderboard to add extra value to those who chose to donate. At the end, having a graphic that shows how much money the cereal community chose to giveaway is going to be big as well. Anything we can do here to add extra value towards the brand on top of benefiting holders makes each dollar spent on these physical airdrops more valuable)
Introduction to “Shake the Box” rewards and ranking:
Moonbirds & Nesting
We want to find an optimized balance between holder count, whale happiness, NFTs listed, and incentive to buy and hold for rewards.
Idea 1: Algorithm for a similar staking/nesting for cereal. Build onto the marketing strategy of cereal for breakfast and build similar to the nesting style of no lock up.
“X Days of enjoying cereal for breakfast” = “X days nested”
Remove gas interaction as a way to earn more rewards but rather base “nesting” on days the NFT has not been listed. Use this as a way to build onto Nick’s gamification.
Days not listedTierHolder RankCombined Tier<15Cereal Enthusiast1-3 CCsMinnow15-59Cereal Lover4-9 CCsDolphin60-120Cereal Addict10+ CCsWhale 120+Absolutely Insane for Cereal
Example: I hold 10 CCs for 60 days, I am a Whale Cereal Addict. Titles are arbitrary to set an example for combination of tiers. The idea for rewards with this structure allows for an easy to implement multiplier effect.
Cereal Enthusiast1 point per dayMinnow1x BonusCereal Lover5 points per dayDolphin2x BonusCereal Addict10 points per dayWhale3x BonusAbsolutely Insane for Cereal25 points per day
Understanding the Numbers: These numbers and titles are currently arbitrary to showcase a simple model that can be used. The big thing with an economic model like this is to build a proper optimization between incentive and the introduction of gaming the system.
Goals with this:
Holder count to get closer to 50% (5k/10k) whether this means new users or whales simply splitting up their wallets. This ratio is simply better perception for new users to see long-term upside. Ratios below 50% creates the perception that whales will start listing their excess CCs and damper price action.
Optimize the compounding of holding, gamify holding, and create ample incentive to reach the top tier across multiple wallets for whales or for new users to buy up to these ranks.
Create a reward system where users find utility in gaining rewards. The final model for points can represent the number of shakes, tokens in the future, or really anything.
Issues that can arise:
Improper balance between tiers and actual rewards. Is it worth it for users to get to an Absolutely Insane for Cereal Whale and how do we make rewards worth it. Without incentive, holders will see more value in listing compared to playing the metagame. We want to appeal to many different utility levels to ensure the dominant strategy for the majority of users is to earn these titles. This can be achieved with a public leaderboard for bragging rights, sustainable yet valuable rewards they can earn, the changing of discord titles and requirements from the current to making people “nest” instead of just hold to participate in the cereal club bowls, and the eventual introduction of the token which can replace the wanting of $USD as they will have a token that has some sort of $USD value.
Successfully making this work leading to higher prices is a creation of new issues. As the floor price of the NFT increases the incentive to sell becomes increasingly more appealing per dollar compared to playing the metagame. We won’t know the price at which this causes the majority's dominant strategy to flip to selling, but usually it is some sort of cascade where a few whales realize they find more utility in selling and then normal users panic exit and buying slows down. This is not necessarily a bad thing, but when it happens, we will have a general price range where something similar will happen and there either needs to be a catalyst around this range to showcase higher ROI in holding for the long-term or a small change in the current system. This issue is less of a short-term priority, but something to watch out for and be ready to adjust.
Point System:
The biggest optimization to perfect prior to a token is points going back into the ecosystem. This can be achieved through a few results, the most prominent is the amount of products available for people to spend points on.
Cereal.com Data:
At the moment, the amount of NFTs gives you direct access to data, however I think points play a better role as it is directly correlated and forces points to be spent. This can be the cheapest of the few as we want people to have access, but we also want a slow burn of points attributed. For example, if we did a daily yield of 5 points per 1 NFT, spending 1 point would provide 12 hours of access to the data. For the more premium data, you could spend 3 points and then 5 points. Something so miniscule that it is basically just someone using the NFT to access the data, but still providing a slow burn overtime.
Cereal.com Marketplace:
Last meeting we discussed the introduction of a secondary market where people could sell their rewards from Shake the box such as a chain or glasses to customize the Metadata of their CC. This would be sold in $ETH with small royalties, but then have a flat point fee attached to it. This allows for the $ETH to be transferred to your holders as they choose to use or sell their rewards and the flat fee points will be directly burned.
The alternative is to allow for points to be transferred from user to user as a form of payment, but I think it is far better to use it as a form of access. Our direct goal is to create as much burn as possible for the points and make sure people get comfortable doing this prior to a token. An overinflated token that no one can use means it gets sold as people will value USD over utility. We want to provide as much incentive as possible to make people feel access is more valuable than the USD and to do this you must create burn avenues with every release.
The moment you do P2P sales with the token is the moment people view it as a streamline to get more USD. We want the option to be there, but to create value outside of token to money.
Shake the Box:
Shake the box will be the biggest burn of points. We want to make sure no gaming laws are broken thus figuring out a good system is important here. The main thing here is you want people to use their points daily to shake the box. Whether there are different boxes that cost a different number of points or points can be used to vote on which CC gets to be on the box for that month, anything here can be used.
The points leaderboard:
This is a huge feature that introduces speculative ROI with a mystery reward. You introduce a leaderboard that features wallet addresses / .ENS of said wallet based on the amount of points spent daily. This leaderboard will be used to do a random airdrop of a small % of tokens later on to reward your active participants in the ecosystem. Though they won’t know this exactly, it’s important to hint at it. “The most active participants on the leaderboard will be rewarded down the road, though we don’t have exactly details, this leaderboard should not be discounted.”
Points spent should be the only criteria thus creating a simple leaderboard. The wallets with the most NFTs will be incentivized to be the most active. This prevents whales from getting a random $CC token airdrop without actually being active in the ecosystem. In addition, this allows them to game the system once again with multiple wallets if they choose which can help with the holders to items ratio we discussed earlier.
In addition to rewarding your active holders, this leaderboard gets them in the habit of spending their points. Thus, when the token does replace it, your most active userbase is still set on spending them hoping for another reward down the line.
Way To Spend Points
Limited Quantity Merch Drops
Blue Chip NFT Raffles
Cereal Club NFT
Whitelist Opportunities /+ can be a raffle for very hyped ones
Custom Discord Titles → #Channel-Creation
Customization/Parts → Update Metadata
Transcendence/Burning NFTs for Tokens
‘Shake the Box’ weekly
Transact to take out the coin, stays on the cereal.com until they choose to withdraw into their wallet. (Saves money on Gas, makes it more difficult for easier to withdraw, limits use for them, withdrawing to sell, need to redeposit)
Shelving Yield (Staking/Nesting)
X - amount of coins per day
Power-up
Gold Attribute (1.25x)
Rainbow Attribute (1.25x)
Transcendence
Supply Decreases, Rarity Increases
Burn 4 NFTS
Magic Milk New Art
Utility PRO Version of everything
Collect X more coins
Burn 2 NFTS
Increase token collection
Burn 1 NFTS
Increase token collection
Spill Your NFT
Burn your NFT based on X traits/rarity Get X Amount of Coins or reward
Decreases supply
Shake The Box
X amount of coins or X amount of days shelved (not listed for sale on a marketplace)
Can claim coins or just shake after 7 days
What algo?
Weighted vs. Multiplier vs. Combo
Multiplyer:
Each specific part of the algo provides some sort of multiplier towards a baseline yield.
1 CC provides 1 token per day would be a baseline
Weighter:
Each specific part of the algo has a weight that adds up to 100%
Length of time held: 25%
CCs held: 25%
Specific traits (yes or no): .5% each
Traits:
Zombie
Ninja
Rainbow
Golden
Shiny
Space
1/1 (yes or no): 5%
Not listed: 10%
These weights are just an example and a final version will be made which adds them up to 100%. Within each weight there are different ranking systems like 1 CC held is .25% thus if you hold 20 you have 5% of the 25%, but you can give bonuses outside of the ranking systems to combine the multiplier with the weighted system.
I think the weighted system is the best way to handle this to make sure yield doesnt get crazy and you can create a maximum threshold of tokens per day. This make sure the people holding 100+ CCs arent getting unsustainable yield.
Building the algo
Length of time held:
Proportion: 20%
Maximum: 60 days
Calculation: Average time of holding of all CC NFTs
This number must be recalculated every 24 hours due to sales effecting time held
CCs Held:
Proportion: 40%
Maximum: 20 NFTs
Calculation: Fraction analysis, each CC held is 2% points out of the 40 maximum
Specific Traits:
Proportion: 14%
Maximum: Owning all traits (7)
Calculation: 7 traits, 2% each
1/1 Ownership:
Proportion: 6%
Maximum: one 1/1
Calculation: Binary own one 1/1, get 6%
Not listed:
Proportion: 20%
Maximum: 20 not listed
Calculation: Fraction analysis, each CC not listed is 1%, maximum is 20.
Baseline Maximum Yield: 20 points
This number depends on the point system and how we set up spending. At the moment, it will be something arbitrary. As we discussed above, we want a number that creates a non-excess for those who reach 100% but not low enough to where they feel the points don’t provide enough.
Example: If a user can spend 15 points a day through integrations built, we would want our baseline maximum to be somewhere between 20-25 points. Thus, users who are below are not de-incentivized to keep collecting due to too high of yield, but also promotes people to keep their collections.
Understanding The Algo:
User owns:
16 CCs
Average time held: 35 days
A Zombie, Ninja, Golden, and 1/1
They have all 16 unlisted
((16 * 2)/40) * 40) + (35/60 * 20) + (3 * 2) + (6) + ((16/20) * 20)) =
(.9 * 40%) + (.583 * 20%) + (6%) + (6%) + (.8 * 20%) =
36% + 11.67% + 6% + 6% + 16% =
75.67%
If our baseline maximum is 20 points, their yield would be 15.134 points.
Notes:
The reason we use more complex math like 16*2 / 40 instead of just 16 * 2 is to create a maximum of 1. Thus, if you have 42/40, you add in code that prevents that fraction from being greater than 1 to cap out your weighted points.
Anything highlighted in yellow is changeable depending on weight
Baseline maximum yield can be made and changed depending on how many avenues of spending we have for users to spend their points
We can add a nesting portion to the weight under the not listed segment. This can just be adjusted based on the tiers we created earlier in the document. Just need clarity we are 100% going with the pantry idea/if the notes above will be used or if there is a separate way you are going about it and I will adjust it based on that.
Tangibility is based on finalization. The more that is changed, the less tangible numbers can be since they have to be adjusted.
Comments