Value Flow Model

UP Tokens represent a piece of the underlying game economy that players can play and compete against each other over, they represent governance on key economic decisions over the game economy and are designed to capture the growth of the economy itself through various token sinks and burn mechanisms from revenues and fees.

Value Flows within the UP Economy

Value Capture Mechanisms

Surplus revenue buy-backs

As TallyUP generates more revenue than its players redeem for a given time period, the surplus revenue is used to buy UP, which are deposited into the Treasury and held for future Tournament Prize Reserves.

On the contrary, when there is a deficit in redemption by players in a given time period - for example, a user wins a large tournament or a big player cashes out from a tournament - prize payouts may be withdrawn from the reserves to meet liquidity needs.

In effect, as long as the revenue remains positive over time, the treasury balance of UP Tokens should increase and more tokens should be taken out of circulating supply into the community treasury.

The Tournament economy remains solvent as long as value of assets held by the community treasury is larger than the value of liabilities (or monies / value staked in the system to players). So long as this holds true, and TallyUP's innovative engine maintains lower outflows than inflows, the Tournament Protocol can sustainably pay out prizes and continue to function. The treasury value thus can also be seen as a verifiable onchain pool of all of the prizes that can be won by participants over the life of its economy. Redistributing this growing pool of value via the tournament is the express aim of the system.

Token Sinks and burns

Token sinks that incur from the various in-game utility of UP Tokens within the TallyUP game economy are taken out of circulation either via token burns or placing them into the community treasury for future use and distribution.