Snook: Economy Upgrade — Light Paper. December 2021
This one matters. We know that we’ve been “feeding” you with Medium pieces for a while now, and that some of you, just like Mr. Creosote, are “absolutely stuffed”. But this one is special and we need your input. We’re opening a dedicated channel to discuss this on our Discord and you’re all invited (link somewhere below in the article).
This is also why there’s no TL;DR this time. Buckle up. Here we go.
[If you prefer reading this in PDF — you can find it here]
The vision behind Snook was clear from the onset: A game that rewards performance achieved through hard work, commitment, skill, and talent.
That vision led us when we designed the economy of Snook, including, but not exclusive to, the different ways we put in place to reward the above-mentioned performance.
This vision did not change.
However, since launching Snook in September, it became clear that there were players that were looking for ways (and were able to find and exploit them) of qualifying for rewards without demonstrating skill. It also became clear that even if these exploitations were not very widespread, they had a destructive effect on the economy. If obtaining Special Skins was not directly related to talent, the motivation for getting them based on merit, or at all was severely affected. We were able to identify several deficiencies in the first economy we designed:
- Snookers are “too far from the money”. Snook users (henceforth: “Snookers”), especially new Snookers are “too far from the money”. In too far we mean both in terms of performance and in terms of time. The way the economy is set up today, even if a Snooker is able to perform, and qualify for a reward, he would only be able to claim it at the end of the season. We are all used to and expect a faster win/lose cycle. With the reward catharsis positioned “over the horizon”, playing Snook was not pumping enough dopamine (to take the edge of the adrenaline that is definitely there).
- Chasing Feeders. As mentioned above, people exploiting ways of qualifying for rewards that do not reflect merit (henceforth “feeders”) are a problem. We are currently finding ourselves in an endless cat-mouse chase with these Feeders. As long as they are active there’s a flow of “tainted” Special Skins* that are eligible for the Special Skin Rewards (SSR).
[* As described in the White Paper, Special Skins are supposed to reflect the snookers’ aptitude, and derive their value from that. Without aptitude, and with no way of discerning between Special Skins obtained based on skills and those that are tainted, the NFT skill-based Valuation Metric (SVM) becomes ineffectual.]
- Feeders and Freakonomics. In retrospect, the Feeders existence makes sense. Just like Steven Levitt and Stephen Dubner describe in their awesome 2005 book, Freakonomics, the existence of Feeders is predicated on a mathematical equilibrium. As long as the cost/effort associated with getting a Special Skin by feeding, i.e., the number of snooks they had to Mint and sacrifice, is lower than the reward it offers, they had a “reason to be”.
- The SSR Contract. In trying to mitigate this problem we were forced to fairly frequently maintain, tweak and fix the SSR contract. This has been consuming a lot of time and effort.
- Rewards Mechanisms Exposure. The Current rewards mechanisms would work fine in a future stable-state where there’s a large number of Snookers and heterogeneity in the ecosystem. At the current growth stage, there are too many situations in which a single, or very few Snookers get the “pot”. Distribution of large amounts of $SNK to a small number of users at this early stage exposes the economy to “local dumps” that can easily cause a price crash.
All of those, and a few other minor drivers, convinced us to go back to the drawing table and revisit the fundamentals of the Snook Economy.
There’s one other special driver for this upgrade that we should focus on — the reliance of the current economy and reward system on a single Treasury on a single chain (Polygon).
As mentioned, the motivation for the upgrade stemmed from multiple issues that mostly revolved around a disconnect between our vision for Snook and the way some players were exploiting Snook’s economy. However, the current economy is also sub-optimal in its mono-chain architecture and although this pain-point may not have been manifested as a “pathology”, it has been encumbering on Snook’s expansion plans.
Snook launched on Polygon and we currently manage our economy solely on that chain. The way the current economy is set up makes it impractical to expand to other chains. Specifically, the current reward system is based on a single Treasury to allocate rewards. For the economy to work across multiple chains we need to be able to propagate/synchronize data (e.g., game state) in real time and that’s just not possible.
Snooks Economy upgrade
The following new design of the Snook economy is the result of the labor of the Snook Core Team and the Snook community. We considered community feedback, both as was expressed in the weekly “Happy hour” and in other media. The result, we are sure you will see, is an elegant and promising solution.
In the current economy (henceforth: “E-Ver1”) Minting cost is $0.25 USD, paid in $SNK, of which 100% is allocated to be (and is) burned.
In the upgraded economy (E-Ver2) Minting cost and pay is unchanged. However, the allocation of the $0.25 USD in $SNK Minting fee is different:
- Burned — $0.05 USD (20%)
- Ecosystem — $0.01 USD (4%) to help pay the on-going infrastructure and gas fees of the project
- Treasury — $0.19 USD (76%).
Those 76% will then be further allocated:
- Pay Per Kill Rewards — $0.15 USD to be paid to every Snooker for every Kill [See below]
- Tournaments: — $0.03 USD to fund Tournaments’ prize-pools
- LP staking: — $0.01 USD to fund stakers’ rewards
The calculation of Resurrection fees will remain unchanged for now. The allocation of these fees will change and will be similar to the allocation described for Minting:
Pay Per Kill (PPK)
If you’ve made it this far you already understand this part. Killing is not a huge skill, but it is still a skill and on a very basic level it separates Snookers the Killers from the Killed. Providing a quick reward for Killing brings a larger part of the Snookers community to skill-based reward.
Definition of PPK
The “Pay Per Kill” mechanism rewards Snookers who Kill other snooks. Reward is paid out once the Snooker’s snook either dies or is safely extracted. As mentioned, the E-Ver2 economy allocates 60% of the Minting cost for PPK Rewards. That means there’s a perpetual source of funds to cover the PPK Rewards. Effectively the PPK Reward is a 60% subsidy on the Minting cost.
Calculation of PPK Rewards Payout
The payout of the rewards, although seemingly straight forward, presented us with a problem. The intuitive way was to pay the reward in SNK. The same SNKs that were used for Minting or resurrecting and that were allocated for PPK Rewards. However, this meant that if a Snooker Killed a snook that was Minted when the value of SNK was lower than it is at the time that he claimed the reward, he would get more SNK which would be worth more. An example would illustrate:
Say that a snook was Killed. Now, let’s say that at the time of its Minting, 1 $SNK was worth $1 USD.
That means that its PPK allocation and reward should be 0.15 $SNK (which at the time of Minting were worth $ 0.15 USD).
Now imagine a scenario in which at the time the Snooker who Killed that snook claims the PPK Reward 1 $SNK is worth $10 USD. Those 0.15 $SNK would then be worth $1.5 USD.
Although this may be confusing to some, this is not necessarily a problem. The value of SNK could go up or down and being paid in SNK, based on the amount of SNKs that were allocated at the time of the Minting, would reflect those changes.
Nevertheless, this approach is less practical for two reasons. The first is that it brings up complicated implementation issues. We would need to track every Mint and be able to match the exact amount of SNKs allocated for that Mint as the claimable reward. It would make the Treasury very complex and we try to avoid complexity, especially in reward systems. It would be a lot simpler to mix all the PPK allocations in one pot. The second problem is, as we briefly mentioned and exemplified above, that the payout could be quite widely spread, depending on the SNK to USD exchange rate. We suspect it would be confusing to explain, especially to new Snookers, why one Kill yielded a reward worth 5 cents while another yielded a reward worth 5 dollars.
We could theoretically pay the PPK Rewards in USDC, but that would expose the Treasury to a potential deficit and that’s not happening (we’re not a hedge fund, we just wanna play).
We came up with a solution that is simple to implement, does not incur potentially high gas costs when interacting with the Mint contract, and ensures the Treasury doesn’t run a deficit:
- All the PPK allocations in the Treasury — mixed.
- A local average is calculated every time there’s a PPK Reward claim
Here’s how the local average calculation is done:
- The PPK contract keeps track of two numbers:
— The number of Mints with a snook Population Counter (sPC)
— The total amount allocated for PPK rewards with a Pot Counter (PC)
- Every time a snook is Minted, or resurrected the PPK contract adds 1 to the sPC and adds the $SNK amount allocated to the PC
- When a snooker makes a claim, after it is verified as valid, the contract:
— Calculates the PPK Reward per snook Killed, by dividing the amount kept in the PC by the snook population kept in the sPC (that’s the local average).
— It then multiplies that amount by the number of snooks the snooker is claiming for.
— It then subtracts the number of snooks the Snooker is claiming for from the sPC.
— And finally, it subtracts the paid amount from the PC.
That way the PPK rewards’ Pot has an amount that is always proportional to the (Killable) snook population size captured in the sPC.
We also address two other cases:
- Dying at the wall. In this case the sPC will subtract 1 because a snook is out of circulation. The PC will remain unchanged. Effectively it means that dying without a Killer will slightly increase the rewards for whomever claims (posthumously).
- Resurrection. It’s a rebirth and there’s a Killable snook back in circulation, which is why that snook will be recounted in the sPC. Also, there’s an allocation from the Resurrection fees toward the PPK Rewards and so that amount will be added to the PC.
Below is an example using random simulated data:
The graph on the left is based on synthetic data (various Rand functions) and simulated analysis. It was not designed to replicate real value., only to show the relationship between the Killable snook population and the average PPK Reward.
The horizontal (X) axis is in days. The right vertical (Y) axis is in currency, and the left vertical (Y) axis is an integer counter. The yellow line (orange data points) shows the growth in the Killable snook population according to the sPC over time. The purple line (dark purple data points) shows the fairly stable PPK Reward allocation per snook Killed.
Below is the synthetic data and simulated analysis we used:
In the proposed E-Ver2, since the rewards are derived from the Mints/Resurrections by the Snookers and since it is reasonable to assume the average Snooker in chain A is similar in skill to the average Snooker in chain B, there’s no reason to stop us from managing multiple, self-sustaining, Rewards-Treasuries in multiple chains.
In addition we will launch an inter-chain, load-balancing service, to ensure that none of the chains and their Treasuries over/under-accrue funds . Adjustments if they occur will be logged and documented as part of the protocol.
This means that Snook will become a multichain blockchain game, where Snookers from different chains meet in the game and compete for rewards in real time. The chain doesn’t have to be EVM compatible, which allows Snook to expand to any relevant chains and where it makes sense to establish a presence. This will increase the potential user-base of Snook to a whole different level and will open other transactional and monetary paths.
Special Skin Rewards
Moving forward, the Special Skin Rewards will be discontinued.
All remaining balances will be returned to the Treasury and the contract will be burned.
The Role of Special Skins in E-Ver2
Special Skins will have a different role in E-Ver2 — in the Tournaments. They will still play a central role in demonstrating skill with their rarity representing the labor needed in unlocking them. More about this below.
Tournaments will take place every two weeks in 3 regions simultaneously. That totals 6 Tournaments per month. The regions will be selected by vote only available to Special Skin Owners. Voting will close a day before the Tournament takes place.
Tournament gameplay will be based on “last man standing” in a battle-royal-type of map (i.e., the map will shrink over time). Any Special Skins that die during the Tournament will be immediately burned without the possibility of Resurrection.
Special Skins’ Role in Tournaments
Special Skins will be a requirement for tournament participation. Snookers will have to deposit a Special Skin to the Tournament’s contract for Tournament access.
Each Tournament will allocate the same number of available spots as that of unique Special Skins available in the game at that point in time. That means that Snookers holding the same kind of Special Skin will all compete on a single spot. The implication is that some Special Skins that are more common than others would be worth less, while others more rare, and therefore easier to use to get into the Tournaments, would be worth more. We are also expecting that it would drive the community to be more proactive in deciphering the “recipes” of the less common Special Skins and play more strategically. But these are speculations — we’ll let Adam Smith show us the way.
Stars will be great when you’re [in] Tournaments
Special Skins Star ranking will be used for priority. For example, if Snooker A registered to the Tournament with a Dragon God Special Skin (0 stars) and later Snooker B used the same Dragon God Special Skin only with 1, 2 or 3 stars to register, Snooker B will take Snooker A’s place.
Ok…there are quite a few types of prize-pools in this section so we will delineate them carefully in a glossary-like list:
- Tournament Maximum Prize-pool (TMP). Derived from the Mint/Resurrection-fees allocations as stated above and defining the upper limit of the sums of all of the other prize-pools.
- Tournament Actual Prize-pool (TAP). Derived from the TMPl and the participation rate. If at the time of the Tournament there are X possible spots (because that’s the number of unique Special Skins at that time), but only half the spots are actually filled by Special Skins owners, the TAP will be half of the Maximum Prize-pool.
For example, say there are 81 unique Special Skins and the TMP is worth $ 27,000 USD, if all 81 spots are filled, that would be the TAP. If only two thirds of the spots are filled (54 spots), the TAP would be worth $ 18,000 USD.
- Tournament PPK Prize-pool (TPP). 50% of the TAP allocated for paying for Kills during the Tournaments. At the beginning of the Tournament we will divide the TPP by the number of registered participants. That number will be the reward given per Kill.
Note that this may leave a surplus in the TPP in the case that snooks die by hitting the wall, and are therefore rendered unclaimable. Because the Tournaments are played on a Battle Royale type of map, we expect “death by wall” to be more common than usual. Muhaha…
Don’t worry, that surplus, if it exists, will be distributed as we explain in the next bullet point.
- Tournament Winners Prize-pool (TWP). 50% of the TAP, plus any surplus that may have been left from unclaimable dead snooks, allocated as prizes for the Tournament winners, i.e., the top 5 Snookers (last 5 standing). Prizes will be divided in geometric progression with r=0.5.
Here’s a dizzying example to stratify all of the definitions we laid out above:
— TMP is worth $21,700 USD [the amount accumulated].
— There are 50 potential spots to fill.
— Only 80% of the 50 available spots (40) are actually taken (i.e., Special Skin Owners registered and deposited their Special Skins).TMP is worth $21,700 USD [the amount accumulated].
— During the Tournament, 10 snooks out of the 40 died by hitting the wall. The rest were killed.
— TAP is worth $17,360 USD (80% of the TMP).
— TPP is worth $8,680 USD (50% of the TAP).
—PPK is worth $ 217 USD (8,680/40).
— TPP payout is worth: 30x217=6,510 USD (30 Kills, 10 deaths by wall)
— TPP surplus is worth: $2,170 USD (8,680-6,510).
— TWP is worth: $10,850 USD [8,680 (50% TAP)+2,170 (TPP surplus)].
— TWP is divided between the Tournament’s top 5 Snookers according to the following calculation:
The present staking contract will be discontinued and burned.
A new LP staking contract will be introduced.
The new contract will offer rewards for liquidity in different decentralized exchanges. It will be possible to replicate this contract in different chains as soon as multi-chain support is deployed and available. There will also be an option for Snookers to sacrifice Special Skins to amplify their staking rewards.
Secret Shop In a Nutshell
The Secret Shop is a pop-up marketplace for Snookers to convert their Kills and game-scores for Traits!
Motivation for Secret Shop
We want to “give a leg up” every now and then to Snookers that struggle unlocking Special Skins, and allow them to trade their toil for coveted Traits that allude them. Another reason is the “busy restaurant” paradox. People prefer to eat in a restaurant that has many patrons…but when a new restaurant opens, getting these patrons in is difficult…because people prefer to eat in a busy restaurant… This (pseudo-) paradox has many versions. Getting a job requires experience that one gets by getting a job. All of these “paradoxes” are in fact a real-life manifestation of a well-studied social and mathematical phenomenon canonized in the seminal work of Everett Rogers on Diffusion of Innovations (1962). One of the key elements described in this theory is the exponential nature of the diffusion of innovation process. Being exponential, it tends to start off at a very slow linear pace before it reaches the inflection point and explodes. The reason for this is that at first only a small proportion of the population is willing to try something that no one has tried before. Rogers named that group the Innovators (~2.5% of the population). The next group are the early adopters (~13.5%). They too are not very sensitive about the number of people in the restaurant…but they do need some of the tables to be occupied. Together they constitute 16% of the population and as it turns out, once they are “in”, the rate of adoption accelerates. In our case the linear phase tends to be even flatter than usual. That’s because for the game of Snook to work, you need other players. In the restaurant example it would be a restaurant in which the time it takes to prepare the food and its quality is inversely proportional to the number of patrons. The busier the restaurant, the better the food and the faster you get it [there’s actually some truth in that, but that’s for another time]. So, it is not surprising that during the early days of a game like Snook, getting enough Traits can be difficult because of under-populated servers that are less attractive for Trait hunting and so forth. Since the rate of “hardcore” Innovators in the general public is low, it makes sense to offer the Snookers a a way to convert their effort into game assets, which is why we came up with the Secret Shop.
Secret Shop Tariff’s Mechanics
- Kills and game-scores are per wallet, not per snook.
- The trade can be completed using one of the following “currency/ies” options:
— Game-score points only, i.e., 103,000 points
— Game-score points and Kills, i.e., 61,000 points + 5 Kills (this is just an example. We’re not suggesting that this is the exchange rate.)
—Kills only, i.e., 15 Kills
— SNKs only, i.e., $SNKs worth 37 USD
— USDC only, i.e. $37 USDC
- With each of these “currency” selection options a Snooker can only buy one Trait. If she wants to buy another, for another Snook, she’ll have to use a different “currency” option.
Secret Shop Constraints and Limitations — LBZ
There are some limitations:
- The Secret Shop will be open for 3 days at a time, probably once a month and also around special events. The precise schedule will be published as soon as we have it. Or not. We might publish close to the time we pop it open. We haven’t decided yet.
- Every time the Secret Shop opens it will select 5 Traits at random and these Traits will be the only Traits available for purchase.
- Each wallet address can trade up to 5 traits during those 3 days and assign no more than one Trait per snook. [Even if that snook was transferred to a different wallet during the Shop’s opening time, capisce?]
- Over a snook’s lifetime it can use the Secret Shop to acquire Traits no more than 5 times.
That’s enough for now.
Let us know what you think. What you like. What you love :D. Challenge us with scenarios we didn’t think about.
Use this link for our dedicated Discord channel.
Remember Snook is LBZ.
At your service,
The Snook Core Team