POZ — ‘Stake-to-Impact’
In Pozzle Planet, Staking POZ = Impact². Every transaction occurs when planet positive value is created, and is rewarded with auto-staked impact tokens. This ensures value creation always follows impact, and not extraction.
Staking in the DeFi world is like the Marshmallow Test on steroids. For those unfamiliar, the Marshmallow Test was an experiment that measured whether children could prevent themselves from eating a marshmallow if it was placed in front of them for 20 minutes. Those who held off were given a second marshmallow as a reward. If they ate it before the 20 minutes were up that would be the only one they got.
Interestingly, there was a strong correlation with one’s ability to exhibit self-control and their long term success in life. Children who didn’t eat their marshmallows tended to do better at school, work, and their relationships in the long run relative to the classmates who did. Similarly with staking and more importantly the planet, the more we can stray away from short term-ism, the more benefits we can reap in the future.
Generally speaking how staking works is that you take an asset, lock it up in a vault/pool, and then accrue some form of APY or rewards over time. There have been many projects in the DeFi space that have attempted to create new models of value creation and accrual. Most have been copy cats of one project or another. One particular model that became hot at a blistering pace was the rebasing model introduced by Olympus DAO. In a nutshell, how it works is that one could take their OHM tokens and stake them to earn rewards every 8 hours or so. The reason they were able to pay out so often was because on the other end, they were conducting discounted bond sales that allowed them to own their liquidity. This cycle generated rapid amounts of wealth for people, however as with all things that were too good to be true, the project rapidly lost a lot of its value after people lost trust in what they considered the “Ponzinomics” of the model. Now if this was limited to just one project, it would have been fine, however given the copycat nature of the crypto ecosystem, many projects and wallet holders suffered. Another great example of how chasing the short term can end up burning us in the long run. We watched this from the sidelines and decided to create our own galactic twist to the staking models of today. One that isn’t just focused on insane value creation, but also on living in harmony with the planet. But wait, what does this even mean?
We’re very focused on impact. So focused, that the primary currency of our economy, POZ, is only generated when there is some form of planet positive action in the world. While we acknowledge the function of hyper-growth value extractive economics, we seek to create a new model that enables the world to live in peace as value is being created and distributed. In a nutshell, staking POZ = Impact². Each transaction starts with someone creating positive value in the world. That positive value is represented in our token POZ and over time, this basket is converted into “Pozzles”. Pozzles represent ownership of land from planets in our Pozzleverse that people receive for their positive contributions to that planet. Pozzles also contain impact tokens (Impact²) embedded within them which represent impact units from the real world (read more about it here). This conversion from POZ to Pozzles along with the rewards it generates is called IPY, or more colloquially known as “stake-to-impact”. This is important because it ensures that the stakers are automatically diversifying their $POZ exposure by transitioning to a basket of impact-token assets. Thus, every positive action from participants in our ecosystem contains a rewards cycle that benefits people and the planet today and in the future.
Another important thing to note is that IPY is paid from revenue that is generated by the Treasury and not through bonding. Learning from our friends over at Olympus DAO, we recognise that while bonding enables rapid ecosystem growth, it just as easily can unwind and cause massive runs on protocols which have second order effects on the crypto ecosystem in general. In addition, the reward rate of POZ is based on our “POZITIVITY” coefficient, which represents the engagement of the Pozzle community over a given time horizon. This ensures that we’re never over stimulating nor depressing our economy, and that we have levers in place to remain near equilibrium as often as possible.
As mentioned, we know that in order for us to become a growing onramp for people into cryptocurrency and sustainability, the value generated from our economy has to be alluring to people. That’s why we’ve engineered Pozzles to always programmatically increase in value via scarcity. Because there’s only so much land available on each Pozzle Planet and a growing number of participants who mine POZ, land parcels will naturally become more scarce as our communities continue to populate and explore the Pozzleverse. In addition, different land parcels and planets will have different attributes embedded within them, creating a combination of natural supply & demand, along with rarity traits which will make sure that the value of Pozzles will always increase in the long run.
To wrap it all up, staking at Pozzle Planet is like taking the impact you generate in the Pozzleverse and pumping it with steroids to create an impact and value generating machine. This machine has natural levers (auto-staking, supply & demand, and rarity) to ensure sustainable and exponential growth. Finally, this is all wrapped together in a mobile app UI which makes it very easy to access and trade the Pozzles that you own, thus making it seamless and liquid to transition from impact to yield. We hope this gives you a solid birds eye view of what staking looks like at Pozzle Planet. If you have any questions, feel free to reach out on Twitter or hop in our Discord and fire away!