Neural Frens: New Tokenomics

The Great Republic of Kekistan is on the verge of a serious economic crisis as the $AI token is risking to suffer the destiny of Zimbabwean Dollar! The good news is that we have a plan! It’s a new tokenomics plan initiated by the famous leader of basic proletariat Raul aka Neuraul! Finally, we’re ready to present it.

But let’s begin with explaining what’s wrong with the current $AI tokenomics first.

What’s wrong with the current tokenomics?

1) $AI token is inflationary

Each NP is generating 2.3 $AI per day. It means that 7,777 NPs are generating 17,887.1 $AI daily. It will take less than a year to double the current circulating supply of 4M+ $AI, if there is no counterweight for the inflation

2) Lack of stable $AI burning mechanisms

Currently, $AI is being burned for NP renaming only. It’s also supposed to be accepted as payment for usage of AI Tools and minting future NFT collections, but both options are more likely to work as an efficient but temporary $AI incineration machine rather than a stable mechanism.

3) Low liquidity

Current liquidity of $10k hinders the $AI price growth as it’s hard to purchase a decent amount in a single transaction.

4) Unchangeable $AI generation rate

The currently rate of 2.3 $AI per day is hard-coded and it’s impossible to change it even if community wishes so

Right now NPs generate AI$ by inflating it but AI$ does not really bring any value back to NPs. If $AI keeps declining over time and may actually drag NP floor down with it as well (as AI$ farming bonus is losing value)

Solution

The goal is to create a synergetic relationship between $AI and NPs so they prop and push forward one another. The plan is to replace $AI v.1 with $AI v.2 token (at 1:1 rate) which will be more customizable and have taxation functionality and create a new ecosystem with moderate taxes on $AI and NP trading which will be used to compensate theinflation, provide $AI liquidity and reward NP holders and $AI LPs.

5% tax on all $AI trades

The tax will be collected from any $AI buy/sell made on ApeSwap or any other DEX. A part of the collected $AI will be automatically reflected in BNB. It’s going to created a certain sell pressure, however it will be evenly distributed and countered by $AI buybacks and $AI burning.

Distribution:

50% — Automated Liquidity (if liquidity exceeds 30% of the market cap, everything is converted into BNB and transferred to Reward Pool)

20% — Reward Pool (converted to BNB)

20% — $AI Treasury (for further burning or redistribution)

10% — Dev Fund (converted to BNB)

4–5% fee on all $NP trades

The total fee size will depend on the marketplace’s fee size. For instance, NFTKEY service fee is 1%, so NP fee will be 4% to total it to 5%.

Distribution:

20% — Automated Liquidity (if liquidity exceeds 30% of the market cap, all BNB is transferred to to Reward Pool)

40% — Reward Pool

30% — $AI buybacks (to compensate sell pressure from $AI tax reflection)

10% — Dev Fund

Automated Liquidity

One of the main goals of $AI and $NP taxes is to generate enough liquidity for AI/BNB trading pair and use it as a foundation for sustainable $AI growth. If current liquidity exceeds 30% of the total market cap, funds get automatically forwarded to the Reward Pool. Sticking to the 30% watermark will let us keep liquidity high enough for big players to enter, but not too high so $AI price doesn’t get stuck at a certain level.

Reward System

The major purpose of the Reward System will be to incentivize LPs, stimulate NP trading and make NP holding more lucrative

Reward Pool

The Reward Pool’s goal is to source Neural Farms and Dynamic Challenge Factories. The pool will dynamically receive $BNB reflected from $AI taxes and $BNB earned from NP trading fees. Of course, $AI reflection will be creating a certain sell pressure for $AI, however it will be evenly spread over time, so it won’t affect the price dramatically. Plus, there will be $AI buybacks to compensate for it. The Reward Pool will function as a router and all $BNB will be distributed across farms and factories dynamically as it arrives.

Farms and Factories

LP Farm

Share: 30% of the Reward Pool

The LP farm is conceived to stimulate liquidity providers. LPs will be able to stake their LP tokens to earn $BNB.

NP Farm

Share: 15% of the Reward Pool

As NPs are already getting rewards in aform of daily generated $AI, we decided to turn NP Farm into a game of trade-offs. Each NP staked in the NP Farm will be earning an equal share of $BNB pool rewards. However, all $AI earned by the NP during the staking period will be transferred to the $AI Treasury (and then burnt or distributed for other rewards). So, you’ll always need to choose whether you want to earn more $AI from your NP or $BNB from the staking pool.

Dynamic Challenge Factories

Share: 55% of the Reward Pool

Dynamic challenges are the most interesting part of the reward system. As you probably know, we currently have regular challenges where you need to collect a set of NPs with certain traits in order to win an NFT from a special collection. Challenges are usually good at stimulating secondary market sales and special collections are quite entertaining, however the value of each extra collection is likely to decline, if it doesn’t give any perks in the future. That’s why we came up with a concept of dynamic challenges, where you’ll be able to stake NPs with certain traits in order to earn a share of the Reward Pool.

We’re going to make a special script which will be calculating all possible variations of NPs sharing certain sets of traits and assign each set to a difficulty group. There will be 3 difficulties based on the variation frequency: Easy, Medium and Hard. For instance, Easy can be Cyclops (1 Eye) with white background NP (761), Medium — Dirty NPs (455) and Hard — Turquoise color NP (22).

Each eligible NP staked in the factory will be earning a share of the pool. The set of required traits will be randomly changing every 2 weeks. As the challenge is dynamic, the earlier you stake the eligible NP, the more rewards you earn. In the same manner as NP Farm, you’ll be losing $AI farmed during the DCF staking.

Difficulties:

Easy (from 1000 to 500 NPs) — 15% of the Reward Pool
Medium (from 500 to 200 NPs) — 15% of the Reward Pool
Hard (from 200 to 1 NP) — 15% of the Reward Pool

Extra Pools:

Neural Challenge NFT factory (AE, Swayzes, Puzzles and etc) — 10% of the Reward Pool

$AI Treasury

$AI Treasury is a kind of purgatory where all collected $AI is going to end up before getting burned. The reason why we want to keep some $AI instead of burning it right away is that there is a chance we’ll be able to contain the $AI inflation. So instead of further deflation we’ll be able to use some of the $AI for extra rewards. For instance, some of the collected $AI may become rewards for owners of the future seasons’ NFTs.

It will be up to the community to decide what to do with the collected $AI. We’re going to have a governance vote on that issue on a monthly or bi-monthly basis.

$AI Treasury Sources:

Dev Fund

Same way as Reward Pool dev fund will be getting reflected $BNB from $AI trade taxes and NP trade fees. These funds will be used to finance further development, marketing and promotional activities.

Implementation and Customization

The whole ecosystem is quite experimental and the only way to find out how viable it is is to test it on practice. That’s why we’re trying to build it in a modular way making every smart contract as customizable as possible. This way we’ll be able to unfold the system in several stages and then replace single modules instead of the whole system, if something stops working properly or requires an improvement.

Here is the list of things the community will be able to change through the governance process:

  1. $AI generation rate (lower the $AI emission or even fix the $AI supply by setting the rate to 0)
  2. $AI trade tax size
  3. $AI trade tax allocation rates
  4. NP trading fee size
  5. NP fees allocation
  6. Reward Pool allocation rates
  7. $AI Treasury spending

As such level of customization would entail quite a lot of power concentrated in the hands of our dev team, we’re intending to transfer ownership of all the important smart contracts in the system to a multisignature wallet signed by reputable and public members of the NP community as soon as the system is fully unfolded.

As some of the tokenomics elements such as Dynamic Challenge Factories will require a bit more complicated interfaces on our website, we’re going to launch the new tokenomics in stages.

The first stage will include:

  1. $AI v.2 token
  2. Automated Liquidity
  3. LP and NP farms (50/50 Reward Pool share until Challenge Factories are live)
  4. Neural Jail

Will be added later:

  1. Dynamic Challenge Factories
  2. Automated $AI buybacks (from NP trading fees)
  3. $AI Farms (if community votes in favor of $AI redistribution)
  4. Lotteries

Timeline and Governance

Although new tokenomics smart contracts are already in development, we’re not going to implement the plan unless the majority of our community supports it. That’s why we’re going to have a community discussion in Neural Pepe chat and even a voice chat on September 29th at 21:00 UTC (17:00 EST). The governance vote will be launched on the same day right after the voice chat and last for a week.

That will be the estimated timeline, if the plan is approved:

1) IPO 2 week countdown
2) End of IPO. All NPs put inside Neural Jail
3) AI v.2 snapshot and airdrop. We’ll snapshot all actual and unclaimed $AI balances for every wallet and drop the same amount of $AI v.2 to every wallet.
4) Launch of Neural Frens website and new tokenomics

AI v.2 and NP v.2 dilemma

Back in March/April when we were developing the Neural Pepe collection the Hashmasks and Waifusion were the most popular NFT projects and the way we designed Neural Pepe was influenced by the mechanics and smart contract architecture they used. Both Hashmasks and Waifusion have an irregularity in their smart contracts — they don’t have tokenURI. tokenURI is a unique token identifier which provides you with an API call or IPFS hash leading to a JSON-file which stores NFT’s metadata and image link. Instead, the Hashmasks decided to put all the metadata on the blockchain and created a system of 2 contracts: Datastore contract and Registry contract. Basically, they hashed metadata of each NFT so it takes less space and recorded it in the Datastore contract. The Registry contract is an interface which can interact with the Datastore contract and show the metadata in a readable format. However, both Hashmasks and Waifusion are still providing OpenSea with a centralized API in order to display NFT metadata on the market. So, we followed the same scenario and didn’t include tokenURI in the NP contract.

The issue is that despite having these Datastore + Registry contracts, both Hashmasks and Waifusion are still providing OpenSea with a centralized API in order to display images and metadata as OpenSea can’t automatically fetch data from non-standard contracts devoid of tokenURI. Although absence of tokenURI is not a catastrophe, it creates certain inconveniences. For instance, NFT images and metadate are not visible on wallets with NFT gallery support such as SafePal. Same for NFT marketplaces with automated listing, you need to ask the service to add everything in a custom format. In other words, an NFT without the standard tokenURI becomes less inter-compatible.

As we’re going to replace $AI v.1 token with a new $AI v.2 token which will be another smart contract, it creates another complication. Currently, all NP names are recorded in the NP contract. The rule is you need to burn 420 $AI in order to rename your NP. The rule is hard-coded in the NP contract and neither token address nor token amount can be replaced. So, if we replace $AI with a new token, we won’t be able to record new names in the same NP contract by burning 420 $AI v.2.

We see 4 possible solutions to this issue:

  1. Abandon NP renaming as $AI v.2 burning mechanism and keep renaming available for $AI v.1 only.
  2. Create a special NP name storage contract and record all names in it. However, the original NP contract will still have old names recorded in it.
  3. Swap NP NFTs along with $AI token. Basically, we’ll be creating a new NP contract which will have tokenURI and accept $AI v.2 for renaming. In this case, all NP v.1 holders will just need to claim NP v.2 by freezing NP v.1 in the contract forever. Also, the contract will be checking original names in the NP v.1 contract and recording them in the NP v.2 upon claiming so every name from the original contract will be preserved.
  4. Same as 3., but just drop v.2 NPs without a snapshot claiming and freezing, based on a snapshot made along with $AI v.2 one.

We personally favor the 3rd option. However, all 3 options are quite viable and it’s up to the community to choose the path.

As the 3rd option is the most complicated we’ve made a list of pros and cons.

Pros:

  • NP v.2 will be easier to list on new marketplaces (incl. OpenSea, if they ever decide to add BSC)
  • NP v.2 will be automatically visible inside NFT galleries
  • We’ll keep renaming as $AI burning mechanism and all names will stay in the actual contract

Cons:

  • We’ll need to ask each current NFT marketplace to relist us
  • NP v.1 sales history may not be visible on NP v.2 profiles on NFTKEY (unless NFTKEY provides a custom solution for us)
  • Swapping NFTs is not as ordinary as fungible token swap, so it may look not so OG (although, as we’ll be freezing v.1 NFTs there won’t be the case of parallel v.1 and v.2 trading)

LINKS 🔗

Website: https://neuralpepe.com

Telegram Chat: https://t.me/neuralpepechat

Telegram Announcements: https://t.me/neuralpepe

Twitter: https://twitter.com/NeuralPepe

Discord: https://discord.gg/6TzD5tta

Challenges: https://neuralpepe.com/challenges

Docs and FAQ: https://docs.neuralpepe.com/ — everythin you need to know about NP is here

--

--

--

The first AI-(de)generated art project on Binance Smart Chain

Love podcasts or audiobooks? Learn on the go with our new app.

Recommended from Medium

The Spring League So Far…

Get Started With Conversational Ads For Google

What is Fuzzy Logic in AI and What are its Applications? Fuzzy Logic in Python.

AI Hasn’t Found Its Isaac Newton: Gary Marcus on Deep Learning Defects & ‘Frenemy’ Yann LeCun

DeepMind’s One Pass ImageNet: A New Benchmark for Resource Efficiency in Deep Learning

CMU & Google XLNet Tops BERT; Achieves SOTA Results on 18 NLP Tasks

When Users Combine Multiple Intents In One Utterance Chatbots Struggle

Offline Multiplayer Game Bot using the NEAT algorithm

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Neural Frens

Neural Frens

The first AI-(de)generated art project on Binance Smart Chain

More from Medium

Introducing PETZLAB.IO — The Best Entry Point to Crypto

Setting up Metamask for Polygon (Matic Network)

DogeVille Integrates Chainlink VRF to Help Power In-game Mutations

The overview of My Crypto Heroes and our long history.