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Attic DAO Litepaper

Version 0.1 by Attic DAO member

Introduction

Blockchain gaming is going to be the largest top of funnel opportunity for onboarding new users into crypto, and the gaming guild model will play a huge role in shaping these new communities.

YGG Raised $22M

Polemos Raised $10M for a game that’s not even live.

This asset class pays anywhere from 20% - 100%+ APY.

Attic DAO achieved a 30% return to NFT price in Axie infinity showing the importance of DCA into these games as well as diversifying across multiple games.

Problem

Investing in GameFi requires knowing the NFTs for each game and their quality in order to invest smartly. This process takes research and Furthermore, there is a market for the game pieces so an NFT could be worth $1000 one month and $100 the next month. Because of this volatility owning the NFTs has significant risk. Furthermore, the act of investing is cumbersome, requiring wallet creation and multi-chain asset transfers just to be able to buy. Finally, diversification and scaling across multiple games requires repeating the effort across multiple games.

While the asset class can pay great returns, getting these returns has many barriers to entry and significant risks, among which include:

NFT market knowledge

NFT viability knowledge

Individual game knowledge

Find trustworthy scholars

Need to scale to get returns

Managing scholars

Managing payouts

Owning NFTs exposes to NFT market risk

Exposure to in-game currency volatility

Diversification across games

In-game currency inflation

Because of this high barrier to entry the GameFi asset class is highly impractical for retail and institutional investors. It’s only available to those knowledgeable about the games and willing to surmount the significant barriers and risks.

Solution

Attic DAO allows investors to earn consistent APY across multiple games with less exposure to in-game currency and NFT market volatility.

NFT Bonds are offered which automatically distribute GameFi earnings from a portfolio of NFTs and Games, to Scholars and Bond holders.

Easy access to asset class

Uses institutional

Dollar Cost Average into NFTs

Removes the investor's money from the individual NFTs and averages them over the entire portfolio. The revenue earned from gaming is distributed evenly based on investment size, not value of NFTs. So as more people invest, the DAO is effectively dollar-cost averaging into the various NFT markets.

Even if an investor invests at the top of the market, they still benefit from the next investor buying at the bottom. Figure: DCA example

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Limiting Exposure to in-game currency

Investors will earn in $DUST an ERC-20 token that they can then hold or easily swap for a more mainstream coin. This will be a deflationary asset with governance utility and virtuous mechanisms to maintain the value of the token

System Components

Smart Contract Protocols

Investor payment

A smart contract will automatically payout investors who own Attic Bond NFTs. Whatever wallet is holding the NFT will receive the payout. An equal amount will be paid for each NFT. The more NFTs each wallet holds the more the holder will earn.

Currency Exchange

Volatile, inflationary, in-game currency will be exchanged for deflationary governance token $DUST before paying out investors.

NFT Trading

A trading reserve of NFTs will be maintained. NFTs will automatically be bought and sold based on the price of $DUST vs the NFT.

Scholar Payout

Scholars will automatically be paid out using scripts and smart contracts.

Scholarship Creation

Automatically generate scholarships for scholars with purchased NFTs

Scholar Ranking

Database of scholars will algorithmically be ranked based on certain criteria.

New Game Infrastructure

As new games emerge, Attic Dao will inevitably find games that warrant heavier investment and thus require automation. Attic DAO will invest in building autonomous systems for the financial infrastructure around new games by working with partners, developing new technology, or acquiring smaller companies.

Speculative GameFi NFT portfolio

Attic DAO will continuously invest in emerging games by minting/buying playable NFTs early. The new games that the DAO invests in will be decided through voting, and proposals. During this process, new games will be manually assessed and analyzed to decide which new games to build infrastructure around.

Tokens

Attic Bonds

Attic Bonds are NFTs that give the holder the right to a fraction of the returns from Attic DAO’s GameFi activities. The amount paid out to investors will be determined by the number of NFTs in circulation and weighted by the number of NFTs held.

$DUST

$DUST is an ERC-20 governance token, that gives members of the DAO voting rights. Investors are paid out in $DUST to eliminate complexity and reduce exposure to the volatility of in-game currency.

Tokenomics

Tokenomics Model Explained

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Results

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Tokenomics experiment model

Intro

It’s common for protocols to have flowcharts showing the movement of transactions through the protocol. We wanted to model this to in an effort to predict token inflation as well as investor returns based on specific market behavior.

Procedure

We created a model to show the flow of money during the course of time as investors purchase Attic Bonds, Scholarships are paid out, Central Banking is executed, and investors and scholars are paid out.

In this model we can adjust the price of NFTs and the price of the in game currency over time. The model gives us the percent return per annum on average for the investors, as well as the total value of the DAO treasury.

Market Parameters

Past market conditions of StepN as of 05/31/22 were used to model the experiment.

NFT price started at $500 then went up to $1000, then back down to $750 in an effort to mimic StepN’s NFT floor cost over time (Figure 3).

The in-game currency price started at $0.5 increasing to a ATH of $4.0 and settling at $1.5. This was an effort to mimc the $STEPN price action (Figure 4).

There were 3 trials completed, mimicking different market conditions.

View of Table 1

View of Table 1

Column 1

Treasury Size

NFT Price

Starting Total Payout Rate

Trial 1

$20,000.00

$500.00

100%

Trial 2

$20,000.00

$500.00

50%

Trial 3

$20,000.00

$1,000.00

100%

There are no rows in this table

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Payout assumptions

Using historical data from 8 months of running Axie scholarships, a total payout of 100% per year relative to the NFT price was assumed as a starting point. As the NFT and in-game currency prices fluctuate, this changes.

Central Banking assumption

The DAO is able to print money by buying NFTs, and buy back tokens by selling NFTs thus influencing the price of $DUST. In the tokenomics model, NFTs are assumed to always sell at a 1.3:1 NFT / $DUST price ratio and bought at a 1:1 ratio to mimics automated trading at a given thresholds. The assumption is that we’re able to trade at will, which is highly unlikely in a real world scenario.

Figure 2 - Tokenomics Model

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Figure 3 - Floor price of StepN NFTs

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Figure 4 - Price of StepN in-game currency

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Results

In-Game Currency Price Action

Trial 1:

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Trial 2:

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Trial 3:

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NFT Price

Trial 1:

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Trial 2:

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Trial 3:

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Investor Earnings

Trial 1:

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Trial 2:

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Trial 3:

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Analysis

Table 1

Table 1

Column 1

Total Invested

Investor Earning

Percent Per investor

Ending Treasury

Incerase Market Cap

Trial 1

$10,000.00

$89,000.00

35.6%

Trial 2

$10,000.00

$128,460.00

51.4%

$15,600.00

28%

Trial 3

$10,000.00

$28,200.00

11.3%

$23,500.00

67.5%

There are no rows in this table

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Future Development

In the future we could offer NFTs for exposure to DeFi and other markets.

We also intend to offer fixed rate NFTs as well, effectively having tranches. This would allow priority and stability for fixed rate holders on down months, but also higher returns for non-fixed holders on up months.

Own-to-earn

The rise in popularity of StepN showed that the Axie Infinity play-to-earn model is not limited to gaming. In the future, NFTs will be issued to represent ownership over the means of production throughout the world. As machines and automation continue to replace people, this will be an opportunity to provide those workers with ownership. Imagine, a massive layoff at a 1k person factory due to new automation technology. NFTs could be issued that give owners the right to capture some of the value created by the machine.

Attic DAO will be a lead creator and investor in this type of infrastructure.

Requirements

Industry being disrupted by automation

The means of production is expensive to purchase

The means of production creates significant future value.

Example

An uber-like company with automated vehicles. Riders pay the vehicle, and the revenue is distributed to the owners of NFTs via smart contract. The NFT owners receive automated income.

Attic DAO will invest heavily in these NFTs on the side of investors to allow diversification.

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