Crypto Raiders Tokenomics 2.0: Protocol Owned Liquidity with Olympus Pro

Tyrael -

We’re incredibly excited to launch the next phase of Crypto Raiders Tokenomics: transitioning to Protocol Owned Liquidity as the first Olympus Pro partner on Polygon!

If you navigate to Olympus Pro and connect to the Polygon network, you’ll be able to redeem your RAIDER/MATIC Sushi Liquidity Tokens for bonus RAIDER.

So if you have $1,000 of RAIDER/MATIC LP, you can redeem it for RAIDER with a discount. Say the discount is at 5%. That means you’ll get $1,050 of RAIDER for your $1,000 of LP, vested over 7 days. Basically free RAIDER.

This discount rate is constantly changing based on demand, so be sure to check it regularly to see if there’s a good deal.

We plan to move all of our liquidity rewards to bonds over the next few months, and then reduce them in favor of in-game rewards. This change will significantly reduce the sell-pressure on RAIDER, and shift the majority of RAIDER rewards from DeFi farmers to people playing the game and engaging with the community.

To take advantage of this new program, you can:

  1. Unstake your RAIDER/MATIC LP, or create new RAIDER/MATIC LP on Sushi
  2. Bond that RAIDER/MATIC LP on Olympus Pro for bonus RAIDER
  3. Watch for when we launch additional pools in the coming weeks!

Alright, now let’s dive into why we’re doing this, why it’s such a good change for you as RAIDER holders, and what it means for the future of the Crypto Raiders Tokenomics.

Where We Are

The Crypto Raiders economy launched 6 months ago at an initial RAIDER price of $0.10, an AURUM price of $0.01, and $200,000 in liquidity.

Since then, we’ve seen a healthy growth in our tokens and liquidity. RAIDER is sitting around $5.40 at the time of writing, and AURUM is sitting around $0.04 despite our best efforts to keep it lower.

More impressive to me though, we’ve grown the liquidity for our tokens from $200,000 to approximately $16,000,000, with $3,000,000+ in volume being traded every day.

This is a massive accomplishment. $16m of liquidity means people can trade much larger volumes of RAIDER and AURUM than they could at launch, and it means you can expect more stable prices that aren’t getting bounced around by large trades.

It also makes Crypto Raiders one of the biggest tokens native to Polygon. There are only a few Polygon-first projects larger than us, the most notable being Quikswap and KlimaDao. As tokens on SushiSwap go, we’re the second largest polygon-native one.

The way we’ve achieved that liquidity is through the staking incentives we’ve been offering for the last six months. If you stake your RAIDER/MATIC, RAIDER/ETH, AURUM/MATIC, or AURUM/USDC tokens on our economy site, you can get a share of the 27,396 RAIDER tokens that are released every day.

This is great for anyone providing liquidity, but it’s not that great for RAIDER holders. At current prices, we’re giving away $150,000 worth of RAIDER per day, with a good chunk of it going to DeFi investors more interested in selling the liquidity rewards than holding the token.

It’s also not great for us. We’re giving away $150,000 of our tokens per day just to maintain the current amount of liquidity in the pools. It’s possible that this amount of liquidity could stay constant for a year, and we’d end up paying out $54,750,000 of tokens just to maintain $16m of liquidity!

So while liquidity incentives were a great way to bootstrap our initial liquidity, they’re not the future. The future is for us to transition to “protocol owned liquidity,” and put more RAIDER in the hands of investors who believe in the long-term value of the token.

The Switch to Protocol Owned Liquidity

What we’re doing right now, paying people RAIDER tokens to keep their liquidity staked, is akin to “renting” liquidity.

The main benefit of this model is that it’s great for getting started. But as you grow, and reach the size we’ve reached, it stops making as much sense.

So instead of renting our liquidity, we’re going to own it. This concept of “Protocol Owned Liquidity” was pioneered by Olympus, so we’re excited to be the first Olympus Pro partner on Polygon.

The concept is fairly simple. Instead of staking your LP tokens for rewards, you can “Bond” them on Olympus Pro to receive RAIDER tokens in excess of the value of your liquidity.

So if you have $1,000 of liquidity, you may be able to trade it in for $1,050 or $1,100 worth of RAIDER tokens, vested over 7 days. The amount you receive, aka the “bond discount” fluctuates based on how many people are buying bonds. So it’s worth keeping an eye on it to get the best deal.

Depending on when you bond your liquidity, this is actually a higher annualized APR than you can get from staking right now. Instead of getting ~175% APR over a year, you could get 5% APR over 7 days, approximately 260% APR if you did it for a year.

Or if you just want to buy RAIDER tokens, you have two options:

  1. Buy RAIDER for the market price.
  2. Buy RAIDER via bonds, and get bonus RAIDER for free.

For example, instead of going to SushiSwap and trading $1000 of ETH for $1000 of RAIDER, you could turn $1000 of ETH into $1000 of MATIC/RAIDER LP, then bond it, and end up with $1,050 of RAIDER.

So if we’re giving away some bonus RAIDER for free, and you can get a higher APR from bonding than staking, why would we do this?

Because over the long term, this works out to be a better deal for Crypto Raiders and RAIDER holders.

Let’s say we turned off all our staking rewards and switched 100% to bonds today. Then we could offer $150,000 of bonds each day, in which we’d still be giving away that much RAIDER, but we’d be receiving a similar amount of LP in return. Maybe $142,500 of LP when the discount is factored in.

Since we have $16,000,000 in outstanding liquidity, in 112 days we would have bought all of our outstanding liquidity and be holding it in the treasury. Now instead of continuing to pay $150,000 per day for the same $16,000,000 of liquidity, we’re paying $150,000 per day to increase the liquidity of RAIDER. If everything ran perfectly for a year, we’d have $50m of liquidity and it would be in the treasury, instead of having the same $16m of liquidity being held by DeFi investors.

So this change can dramatically increase the liquidity for RAIDER and AURUM, while also giving us the option to reduce how much RAIDER is allocated to liquidity rewards without that reduction causing a loss of liquidity.

As an extreme example, after those 112 days we could theoretically completely turn off bonds and just maintain the $16m of liquidity in the treasury. Then we could switch to giving RAIDER away as in-game rewards, tournament winnings, and other activities that rely on being part of the community, instead of giving all our tokens to DeFi investors with deep pockets.

If you’re holding a bunch of RAIDER and AURUM liquidity, this is great for you. You can convert it to more RAIDER than you could before, and keep doing that as much as you want.

If you’re staking or holding a bunch of RAIDER, this is great for you too. You can rest assured that we’re changing our tokenomics structure to put more of the future RAIDER tokens in the hands of people who believe in the long-term success of the game, instead of people trying to milk it for short-term profits.

And if you’re just discovering Crypto Raiders and want to dive in, this is great for you too. You now have a way to get tokens at a discounted price!

We’re grateful to everyone who’s been with us the last six months, and can’t wait to see what this next chapter brings. The transition to protocol owned liquidity means Crypto Raiders will be in an even stronger position than before to keep building a game that’s already loved by many in the crypto space.

And it means we’re one step closer to achieving our ultimate goal: making Crypto Raiders the ultimate crypto-native MMORPG we’ve all been dreaming of.

See you in Airium,

Nat

P.S. The bonds do sell out based on a weekly limit, so if you want to take advantage of them, go check out Olympus Pro on Polygon!