Welcome to the fourth post in our Secret of Praetoria - Phase 2 whitepaper reveal series. This one will be focused on some of the broader mechanics of plot and resource management. In case you missed it, the first post in the series revealed the overall economy flowchart which provides a visual overview of how the entire system will work, the second post in the series covered the details of all of the resources that make up the Praetorian economy, and the third post in the series described all of the different building options available for players to construct on their land plots.
Be sure to stay tuned for the final post in the series later this week which will focus on the Ancient Ruins reconstruction project, which, when completed, will unlock the Secret of Praetoria along with great riches and rewards for those who participated!
Desalinization Process
Each Region on the continent of Praetoria contains critical infrastructure that aids with the production, storage, and movement of resources within that Region. The taxes and fees that are collected from resource production and other activities that take place within each Region go towards maintaining that infrastructure; however, maintaining the infrastructure is particularly difficult due to the extremely high Salt content present in the soil and waters of the continent.
Luckily, scholars have recently discovered a way to harness Dark Energy into a new type of crystal with a unique chemical structure that can extract Salt from whatever is around it. Players will be able to create or otherwise acquire these new Desalinization Crystals and contribute them to their Region to remove the excess Salt content from the soil and water. This makes the infrastructure less costly to maintain which allows players with land plots within the Region to pay lower taxes and fees as well as to enjoy increased production from their land.
Desalinization Crystals
Desalinization Crystals (DC) are a special resource that will be able to be purchased using a fixed amount of DEC or VOUCHER tokens and they will also be available to be earned through various activities within the broader Splinterlands universe, such as in loot chests from ranked battles or from Guild participation, for example. They will be transferrable and available within the Internal Market just like most other land resources. The exact details around the cost of DC and the methods for earning them in the game are still TBD.
Desalinization Crystals can be used to reduce the Salinization Rate (SR) in a particular Region. Each Region will start at a 100% SR and, each day, a fixed amount of DC will be deducted from the pool of DC contributed by players to that Region in order to reduce the SR by up to 2%. If there is no more DC in the pool then the SR will increase at a rate of 5% per day until it reaches 100% or until players contribute more DC to the Region. Once the SR in a Region hits 0%, it cannot drop any lower, however the same amount of DC will need to be expended from the pool each day in order to maintain the 0% SR.
Benefits
In order to contribute DC to a Region's infrastructure projects, a player must own or be renting at least one plot in that Region. All players owning or renting land in a particular Region will receive the following benefits which will be inversely proportional to the Salinization Rate (SR) in the Region:
- Reduced Tax Rate (from 15% down to 7.5% at 0% SR - 50% reduction)
- Reduced Market Swap Fees (from 10% down to 5% at 0% SR - 50% reduction)
- Reduced Storage Rental Costs (up to 50% reduction at 0% SR)
- Production Boost (up to 50% boost at 0% SR)
The boost or reduction percentages are linear based on the SR in the Region, so, for example, a Region that is at 50% SR will have a tax rate of 11.25% (50% of the way between 15% and 7.5%), a market swap fee of 7.5% (50% of the way between 10% and 5%), a 25% reduction in storage rental costs, and a 25% production boost to all plots. Note that the production boost benefit will work similarly to other production boosts such as those from Titles, Totems, and Runi.
Salt
The desalinization process produces Salt as a byproduct, which will be represented in-game as Salt tokens. There will be a maximum, fixed amount of Salt tokens available to be extracted from each Region every day, and the amount that is actually extracted will be determined by whether or not there are enough Desalinization Crystals available in that Region. If the maximum daily amount of DC are available in the Region for a day (allowing the SR to drop by 2% or be maintained at 0%) then the maximum amount of Salt will be extracted from that Region that day. Otherwise, proportionally less Salt will be extracted, or none if there is no DC available for the Region.
The Salt tokens will be distributed to all players who have contributed DC to the Region over the past 30 days, in proportion to the amount they have contributed compared to the total amount contributed by all players in that Region over that time period.
Internal Markets
One of the most vital parts of the Secret of Praetoria economy is the internal market. The internal market will allow players to buy any of the 50+ resources that are part of the Secret of Praetoria expansion for DEC, sell them for DEC, or swap them for any other resource using Automated Market Making (AMM) liquidity pools. Players will also be the ones who will provide the liquidity to these pools, and have the ability to earn both the special Elixir resource as well as DEC tokens from trading fees in return. One interesting thing to note is that providing liquidity on the internal markets will be one of the only ways that players will be able to directly earn DEC tokens in the entire game.
The economy is intended to be set up in such a way that most players - even those with significant land holdings - will not be able to produce all of the different resources that they need by themselves and will need to trade for them on the internal market. This should lead to high trading volumes which will provide significant fees to liquidity providers and encourage lots of resources and DEC to be allocated to the liquidity pools.
Each of the resources will have a single pool paired with DEC in the internal market. When players want to swap one resource for another, they can submit a single, seamless blockchain transaction which will swap the first resource for DEC, and then swap the DEC for the second resource. They can also sell a resource for DEC, or buy a specific resource with DEC.
Swap Fees
There is initially planned to be a 10% fee for all internal market swaps which, like everything, is subject to change before the final release. Half of this fee will be burned, and can be reduced by contributing to the Desalinization Process in a particular Region. The other half of the fee will be split up among all of the players who have provided liquidity to the pool being used in proportion to the amount of liquidity they have provided compared to the total liquidity in the pool. The fee will always be burned and/or paid out in DEC tokens, so if a player is swapping DEC for a resource then the fee will be taken out of the input amount of the transaction and if a player is swapping a resource for DEC then the fee will be taken out of the output amount of the transaction.
When making a swap that goes between two separate liquidity pools (swapping one resource for another), half of the fee will go to the first pool and the other half will go to the second pool. When selling a resource for DEC, the full fee will still need to be paid even though only one pool is being utilized, and the entire fee will go to that pool. When purchasing a resource for DEC, only half of the normal fee for the Region will need to be paid which will also go to the pool being utilized. This will help encourage players to put DEC into land rather than taking it out.
Some players may note that 10% is quite high for a swap fee as compared to other AMM platforms, however this is very different than a typical DeFi token swap protocol. As we are trying to model the Secret of Praetoria expansion loosely off of what a real-life, physical economy might look like in Praetoria, swapping resources involves things like labor, transportation costs, etc. which are all part of the fee. As mentioned above, these costs can be reduced by as much as 50% by improving the Infrastructure in the Region.
Providing Liquidity
Players will be able to provide liquidity to a particular pool from a particular Region by staking an equal dollar amount of a specific resource and DEC tokens into the pool. Please keep in mind that the player will need to have enough storage space in the Region for that resource for the entire time that they have it staked in the liquidity pool. Please see the Storage section for more details on that.
Players can remove liquidity from the pools at any time, in full or partial amounts, at which point both the resource and the DEC tokens will become unlocked and be able to be transferred, sold, or otherwise used as normal. Please keep in mind that the amount of resources and DEC that you will have in the pool will vary over time as players trade back and forth between them. This means that when you withdraw liquidity from a pool you will likely receive different amounts of resources and DEC than you put in. This is typically referred to as "Impermanent Loss" and is something that we recommend players be familiar with before providing liquidity to the internal markets.
Elixir
As mentioned in the Special Resources section of the document, Elixir is a special resource that can only be earned by providing liquidity to one of the pools on the internal market. This provides additional incentive for players to provide liquidity on top of the DEC fees they will receive. Elixir is expected to be an essential resource within the land economy since it is required in order to combine Essences with Magical Resources in a Laboratory to produce Elemental Essences which are in turn required for many essential processes including producing Elemental Foods.
The amount of Elixir earned by liquidity providers will be based on the total amount of DEC tokens they have locked up in liquidity pools at the time that liquidity was last added or removed by the current player from a particular pool. For example, if a player provides 1000 DEC tokens of liquidity to a pool (paired with the same value worth of another resource), then they will earn a specified amount of Elixir tokens periodically in proportion to the 1000 DEC they have added.
That amount will stay the same even if the DEC portion of their liquidity position increases or decreases as a result of swaps happening in the pool. If the player either adds or removes any amount of liquidity from that pool, then the DEC token amount used to calculate the player's Elixir earnings will be updated at that time and apply going forward. Elixir earnings from liquidity positions can be claimed at any time and will need to claimed at least once every 7 days or else any Elixir earned from beyond 7 days will be lost. Players will also need to own or rent storage space for the Elixir in the Region in which the liquidity was provided or else it will be lost (burned) as well. Please see the Storage section for more details on that.
Unlike the swap fees, the amount of Elixir earned is NOT proportional to the amount of liquidity in the system in total, so a player's Elixir earnings will not be reduced if more liquidity is added or vice versa. Instead, the amount of Elixir earned per DEC worth of liquidity provided will automatically adjust on a periodic basis based on the price of Elixir vs DEC in its own internal liquidity pool. This will allow the supply of Elixir within the game to naturally adjust based on demand and avoid a situation where the resource is either too abundant and therefore worthless, or that it is too scarce and becomes a bottleneck for the entire economy.
Elixir is planned to also be able to be purchased for a fixed amount of DEC and/or VOUCHER tokens. This will provide an upper bound to the market price and therefore to the amount that is distributed to liquidity providers. This is necessary to help prevent price manipulation exploits.
Resource Storage
Players will need to ensure that they have adequate storage space for any resources they hold in their inventory in each Region. As mentioned in the Buildings section, most buildings by default contain a relatively small amount of storage space for food consumed by the worker cards and any relevant input and output resources. This is intended to provide players with enough storage space for the typical operation of their building without needing to build or purchase more.
It is important to note that both storage space and resource inventory is handled per Region for each player. This means that if one player has multiple Mine buildings in a single region, then the Ore storage available for that player in that Region will be the sum of the storage space provided by each of that player's Mines in the Region. When Harvesting from the Mines, the Ore the player receives will go into that player's inventory pool for that Region.
Additionally, storage space is always allocated for a minimum period of 24 hours. This means that if a player harvests 100 Grain from a Farm building, then 100 Granary storage units will be taken up to store that grain for 24 hours, even if the player transfers, sells, or otherwise uses the Grain immediately afterwards. This is intended to prevent players from being able to get by with only a very small amount of storage by moving resources in and out very quickly in small amounts, and also somewhat represents the real-world scenario where it takes a lot of time and effort to load and unload large quantities of resources into and out of storage.
Storage Rental
If a player acquires resources within a Region in which they do not have enough storage, they will have the option to automatically purchase storage space using local infrastructure in the Region using DEC. Storage space from the local infrastructure is available in unlimited quantity, and, like all storage, it must be rented for a minimum of 24 hours, even if the resources are moved or used immediately afterwards. The cost of storage rental will vary based on the type of resources being stored and the Salinization Rate in the Region.
Since most buildings provide enough built-in storage for typical operation, storage rentals should usually only need to occur in special circumstances, such as when a player is gathering resources to be able to construct or upgrade a building. In those cases typically players will need a wider array of resources for which they may not have storage available within the Region, so that is one example of where the unlimited storage rental option will be needed.
If a player Harvests, purchases, or otherwise acquires resources in a Region for which they do not have enough storage space available, and they choose not to purchase additional temporary storage, then the resources will be lost (burned).
Storage Buildings & Providing Liquidity
If a player would like to have additional storage space for certain resources within a particular Region, they can build a storage building on a vacant land plot within that Region. Please see the Resource Storage Buildings section for more details on the specific storage buildings available and what resource(s) they are able to store. The most common reason that players would require additional resource storage within a Region is so that they can use those stored resources to provide liquidity to the local resource marketplace. Please see the Internal Markets section for more details on how the local resource marketplace works.
Players must maintain enough storage space in each Region for any resources being used to provide liquidity in the marketplace for that Region. The amount of storage space required will be based on the amount of resources initially put in to the liquidity pool, and will be updated only when any amount of that resource is withdrawn from the liquidity pool in that same Region.
For example, if a player provides 1000 Sparkstone into a liquidity pool, then 1000 units of Sparkstone storage space will be used and no longer available in that Region until the player removes some or all of their liquidity and then moves or uses the Sparkstone. The amount of Sparkstone in the liquidity pool may change as trading happens in the pool after the player initially provides liquidity, but as long as the player does not withdraw any liquidity, the amount of storage space used will not change.
If the player withdraws Sparkstone liquidity in that region in any amount, then the amount of storage space used will be updated based on how much they now have in the liquidity pool. For example, if the player provided 1000 Sparkstone initially to the pool, and after some trading they end up with 1500 Sparkstone in the pool, then if they go to remove even 1 Sparkstone worth of liquidity from the pool the storage requirements will update and they will either need to have an additional 500 Sparkstone storage available in the region, or they will need to rent it temporarily, or they will lose 1/3 (500 / 1500) of their liquidity position in the pool due to inadequate storage.
On the other hand, if the initial 1000 Sparkstone in the liquidity pool drops to 600 at the time the player does a withdrawal, then 400 Sparkstone storage units will be freed up and become available within that region for that player.
Stay tuned for more updates from the Splinterlands!
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