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This post is not financial advice.
I will be talking about the basics of the game in this post. There will be several other posts coming that go deeper into these aspects. I will be discussing how am settting the account up in a separate post.
What is the Debt Game?
It's a gamified token where hodlers /players make the choices to get the account out of "debt" and raise the token buyback price.
Debt in this context is the difference between tokens in circulation and Hive, HP and swap.hive and other assets that are backing the tokens. The base price is 1 Hive per token.
The debt ratio affects things like buyback value and frequency. The object of the game is to reduce the debt until all tokens are backed by 100% or more by HIVE holdings.
How is debt created?
Tokens will be sold for 1 HIVE each, to create debt , though this debt is backed and somewhat "secured", folks who purchase during the pre sale will get a 50% HSBI bonus. For every 2 HIVE/swap.hive spent they will receive 1 HSBI unit.
This creates debt because half the income from the presale will be spend on HSBI units. However, those units can be converted into HSBIDAO tokens at a later date if folks vote on it. That will reduce the debt. But...it's a good way to start the game.
30 days after the pre sale begins will be the first voting decision. Hodlers will vote on how many tokens to mint based on a multiplier. Once that has been decided any excess tokens will be minted and burned leaving only the remaining tokens people voted for.
In addition to this 15% of the amount of tokens sold during the pre sale will be minted for marketing and other purposes. This is regardless of how people vote.
Example- 1000 tokens are sold during the pre sale. 150 will be minted outside /in addition to the vote. Keep that in mind when making your choice.
There will not be any tokens directly paid to me that I do not purchase, but some of these tokens will go into the rewards of the UNICOIN: SWAP.HIVE LP as well as the HSBIDAO:PIXYDUST LP. Tokens will be added to other LP rewards , sparingly, not connected to this account as a marketing/promotion strategy. (also possibly a distribution method that folks vote on in addition to this)
All other additional mints will be decided by the hodlers based in the multiplier they choose.
Since more tokens will be minted than sold after folks vote, hodlers will also vote on the distribution method. For example setting up staking is the most expensive option as it costs thousands of BEE to implement. That will create more debt.
There are other less expensive options people will be able to vote on including free options. But...all choices have pros and cons and all choices have consequences. That's the game in a nutshell.
How debt is reduced
Increasing the holdings on this account via posting, curation, sales and other methods. This reduces the debt ratio and allows for more frequent buyback at higher prices, eventually. That will take time.
Token burns. Most tokens bought back will be burned. This decreases the debt ratio because it decreases the supply.
An important note about buybacks. The buyback price after the pre sale will initially be set at 0.5 swap.hive. Though there is a loss in price, there is no loss in value for people who bought during the pre sale because they receive HSBI bonuses which are equivalent to the reduced buyback price.
As the account grows and the debt gets smaller the buyback price will increase over time. The first few months buybacks will be very small in terms of quantity until the account has time to grow.
Throughout the game token holders will make choices about , well everything, including where to delegate HP out to if at all. Do we just power down to fund the buybacks or leverage high profit delegations like delegating to HSBI for the HSBIDAO tokens, then selling those tokens to fund the buybacks? What about delegating out to EDS and other places? These are all choices the hodelrs will make . These choices shape how quickly the debt ratio evens out and the buyback price increases.
I will be making some small decisions before the pre launch just for setting up the account in will go over all of this in the next post. But after the set up choices moving forward will be voted on and decided by the hodlers.
The post earnings exception
Post earnings are mine to do with as I please and will not be voted on (usually). I figure this is fair as posts do take time and effort. I will however only make decisions that will benefit this account. I will not for example directly share post earnings with any of my other accounts but I may purchase HSBI units with them for those accounts and others. This exception also applies to funds earned playing games, etc. Basically the things that take me time and effort I decide what to do with those funds. At least for now.
For the most part I won't be doing much with post earnings. Some will be used for buybacks, some of the HP may be added to delegations . Sometimes I may just power up everything. Small stuff. If I did a vote for everything that would drive myself and likely the hodlers mad. There will be times where I do nothing with the earnings until it's time for buybacks or voting or other things.
The hodlers decide the direction of the game and what is done with funds in general. I am essentially the game master.
**Minimum tokens held needed to vote **
The first few voting rounds there will be a minimum of one token held to cast a vote.
As the game progresses the amount of tokens held to cast a vote will increase. The increased amount will be voted on. However, I am capping the first token increase amount vote to 10 tokens held max to allow everyone time to accumulate tokens when that time comes. After that there may be more rapid increases depending on how the players vote.
The first few months after the pre sale begins will be when the most voting occurs/most frequently. These votes set the starting foudation of the game. However every so often votes will be repeated allowing folks to make different choices if they choose to and some new things to vote on will be added. Players will have 7 days to respond to a post and cast their vote.
Every choice ripples out.
Choose wisely.
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