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Atocha Protocol Tokenomics and Economy Model

Intro about Atocha Protocol

Atocha Protocol is a specific usage blockchain that is built on Substrate and hosted on Octopus Network (a sidechain on Near Protocol). In short, Atocha is a puzzle game blockchain that is built for creating, solving, and sponsoring puzzle games. The protocol is aiming to become a global puzzle game hub that can host multiple great puzzle game Dapps that we are familiar with like Word Puzzles, Number Games, Treasure Hunting, and Social Deduction Game. Started by a team of puzzle game enthusiasts, the project has gained recognition by winning the Octopus Star Prize with $50,000 grant and is also a proud recipient of Near Foundation grant worth $50,000.

Atocha Coin Details:

Ticker Symbol: ATO (Atocha Coin)

ATO Token Address (NEAR): atocha-token.near

ATO Token Address (Aurora): 0x2ab98d9ea81af20037af1a4f43cc3e6977545840

Genesis Total Supply: 100,000,000 ATO

Maximum Capped Inflation: 10% per annum (will be reduced linearly based on total ATO holders, circulating supply and Total Value Locked)

ATO Token Allocation and Vesting Terms

ATO token distribution (the 100,000,000 ATO genesis supply) will be allocated in such a ratio:

35% — Community

Under community, the token will be unlocked throughout the spend of 3 years for purposes like:

  • Sponsoring Puzzle Game
  • Remuneration for the Ambassadors
  • Creator Grant
  • Liquidity for DEX/CEX

Initially, this part of the token will be decided and distributed by the core team. Eventually, we would like to move a part of the tokens to DAO and to be decided and distributed by the community. This will largely incentivize the active participants of Atocha Protocol to build great puzzle game and get rewarded. Essentially, the annual unlocking rate will be 11.67%.

8% — Marketing

Under marketing, the token will essentially be used for marketing with the intention to increase the community awareness of Atocha Protocol. The channel of distribution can be:

  • Airdrop to collaborative partners (B2B partners, so that they can try out our product)
  • Airdrop to events’ participants
  • Airdrop to other Near Guild members that Atocha Protocol partnered with
  • Airdrop to Game Guilds like YGG

10% — Seed Investors + 6% — Strategic Investors

Under these two segments, it will be distributed directly to the investors’ Near Wallet. The vesting terms are similar with 25% unlocked after IDO (which was distributed during the Airdrop period, which is the first week after IDO). The remaining 75% will be linearly vested and unlocked throughout the 1-year span.

6% — IDO Participants

For the IDO participants from NearPad and Skyward Finance, there will be no vesting terms for the ATO. That means all of them can claim the ATO after the IDO ended on 25 May 2022, 0000 UTC.

15% — Team

Under Team, it will be distributed to the core team members as an incentive and reward for building the protocol and community. The team will receive the ATO every year after the mainnet launch until the end of the third year with a 5% unlock rate yearly.

20% — Validators

This is 4 years of total supply token reserves to be rewarded to the validators with a 5% unlock rate per annum. OCT token validators and delegators for Atocha Protocol mainnet will be receiving an era reward of 13,699 ATO.

ATO Token Unlock and Vesting

The chart shows the different categories of token unlock rate and the total unlock rate of ATO (yellow). In 4 years' time, the 100,000,000 ATO will be fully unlocked.

ATO Token Utility

The Native Token of Atocha Protocol is $ATO (Registered Symbol: ATO). $ATO will be a NEP141 token minted on NearProtocol.

$ATO has 4 utility functions:

1. Interaction with the Protocol — Every interaction with the protocol like creating a puzzle, submitting an answer, trigger a challenge will have a gas fee charged based on the action taken. The gas fee will be contributed to the Treasury which will then be rewarded to the Validators.

2. Puzzle Rewards — Every puzzle can be sponsored with any amount of $ATO as Reward. The Sponsor can be Creators, Solvers, or Users that are not participating in the puzzle. $ATO will be the only form of Reward that is being accepted in the Protocol.

3. The Incentive for Good Behaviour — By participating in an Effective Puzzle, the creators and solvers will have the opportunity to redeem their Atocha Points to ATO which can be interpreted as a reward through Create to Earn and Play to Earn.

4. Governance Token — By holding ATO, you will be able to participate in the governance of Atocha Protocol as it becomes more decentralized from the core team. This transition will take place over the course of 3 years time.

Atocha Points (AP) Utility

Atocha Points (AP) is an internal point system that aims to become a credit score for reputation within Atocha Protocol.

Atocha Points has 2 utility functions:

1. Reference of Reputable Users — in a decentralized protocol, it is hard to know the character of every user. Atocha Points will become a reference for everyone as to which users are users with good behaviour and pro-actively participate in the puzzle game. Users that create malicious puzzles or behave badly will have AP decreased.

2. Claim $ATO token — the weekly Rewards in $ATO will be distributed to the top L(numbers to be determined) Users with the highest AP count. Once claimed, the AP will be reduced and that will allow other users to have an equal opportunity to earn Rewards.

Ways to Earn Atocha Points

In the 1st version of Atocha Protocol, the users can earn Atocha Points through:

  1. Creating an Effective Puzzle
  2. Solving an Effective Puzzle

In the upcoming upgrades for Atocha Protocol, we are looking into more methods to enable users to earn Atocha Points through:

  1. Friends inviting
  2. Sharing puzzle games on social media
  3. Contributing as judge
  4. Active daily login
  5. Active usage for a period of time per day

Why Create Atocha Points?

Atocha Points mechanism is essentially an internal scoring system where it rewards active participation and positive behaviours that the project will benefit from in the long term. With more users actively participating in the ecosystem, the protocol will eventually become sustainable as ATO’s demand will be increased due to the inflow of users (including players, creators and sponsors).

Atocha Points will be redeemable to ATO that will be minted from the inflationary mechanism. The reason for creating such a mechanism that dilutes the value of ATO for non-participating holders is to ultimately encourage all ATO holders to be actively involved in the ecosystem. You will realise that staking of ATO is not available in 1st version of Atocha Protocol as just by staking, it may not equivalent to holders actively participating in the puzzle game but just participating passively in order to gain financial rewards.

To note, Atocha Points cannot be transferred nor purchased. Therefore, it is uniquely earned by each of the users through real participation in the ecosystem. Hence the earning mechanism of Create to Earn and Play to Earn comes into place, this will be partly the earning mechanism that will benefit the active users.

The Self Sustain Economy Flywheel of ATO

Atocha Protocol is a project that is born during a bear market period, the team is well aware that the project will need to be self-sustaining as quickly as possible so that the project can survive through the winter. Thus, keeping that in mind, we have designed a self-sustaining economy flywheel for ATO which can perpetually buy back the token and create increasing demand for the token.

First, let us break down the how the flywheel can work:

  1. Onboard Sponsors that are interested to engage Atocha Creator team to customize puzzle game for their brands/companies with a fee charged monthly (depending on the request).
  2. Part of the fee will be used to buy back ATO from the market and locked in the puzzle game created for the Sponsors. While the remainder will be distributed as the commission for Creator Team and an earning for the treasury.
  3. Puzzle game launched with ATO prize to be won by the Players. The more puzzle games created, technically the more Players can be attracted due to the different nature/genre of puzzle games that the brands represent. Players are required to have a minimum ATO to activate the wallet, hence creating a demand for ATO indirectly as well.
  4. More Players onboard, the more incentives for Sponsors to put in more funds to create more hype for the puzzle games which they intend to attract more attention to. That will create a perpetual demand for buying more ATO to be locked as puzzle game prize as the community size grows.

Of course, we would need to take into account that ATO will be sold for different reasons like:

  • Puzzle game prize won by the Players, cashing out to celebrate
  • Ambassadors are remunerated and cash out for daily expenses
  • Community members earned airdrop and swap to take profits
  • Users sold ATO to completely exit Atocha Protocol
  • Validators and Delegators sold ATO to recoup the cost for validating
  • Investors from Seed, Strategic and IDO to take profit at different price points

These are the selling pressures that we are aware of and the rule of thumb for the flywheel to work is quite straightforward. Here are some criteria that we need to create so that the flywheel can run positively:

  1. To consistently create challenging puzzle games that can lock the prize for a longer period of time
  2. To consistently create simpler and fun versions of puzzle games that can lock smaller size prizes but in a larger volume at any point in time
  3. To consistently onboard Sponsors which can spend a marketing budget ranging from $1,000 to $5,000 per month
  4. To consistently recruit Creators which can take the role of creating a complex or simplistic puzzle game for the two categories mentioned above
  5. To consistently expand the Players base through partnerships with Players Guild, institutions (education) and local communities

In a nutshell, we are providing values on different levels:

  1. Atocha provides recreational fun puzzle games with rewards for the Players, instead of choosing puzzle games that have no rewards, why not try Atocha?
  2. Atocha provides a marketing channel for brands and companies to create community awareness, generate leads or even convert leads.
  3. Atocha provides opportunities for Creators to earn by optimizing their creativity to help Sponsors or themselves to engage the community via puzzle games

With that in mind, we are looking to revolutionize how puzzle games can become part of the tool that could connect people and enable the Creator Economy to thrive. Looking forward to having you join us, to become part of the Atocha gang!

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