OTOCO Tokenomics: FAQs and Future Funding

OTOCO Tokenomics: FAQs and Future Funding

Back in March, OtoCo minted an initial 8 million OTOCO tokens of which just over 2MM were reserved by users and the wider community using a smart contract launchpool with algorithmic price-setting: the earlier one reserved OTOCO tokens, the lower the price.

A total US$ 1,100,143 was raised at an average price of US$ 0.54 per OTOCO token.

Recently, following a community vote, a first (small) OTOCO/USDC liquidity pool was created and the Foundation was given the green light to raise up to US$ 4 MM from a private token sale out of its community chest.

This post focuses on when and how further tokens will be minted and how they will be allocated.

When will new tokens be minted?

New tokens will be minted as soon as the OtoCo dAppstore launches and smart contract plug-ins are purchasable on otoco.io. This is not expected until later next year.

How will new tokens be minted?

One new OTOCO token will be minted for every US$ 10 (equivalent) that is spent by users in the OtoCo platform. Note that this ratio can be changed by a community vote.

The above slide models how the issuance rate drops as the ratio of new token issuance vs. spend in the platform is lowered. This gives the community a powerful vote in the inflation rate of the OTOCO token.

How will the newly minted tokens be allocated?

Newly minted tokens will be distributed evenly among:

  • The user who made the purchase resulting in the latest mint
  • Developers of the plug-in that earned the revenue related to purchase
  • All existing holders of the OtoCo token when the mint occured
  • The OtoCo Foundation

This four-way split too can be changed by special community vote.

So OTOCO works a but like an airline reward scheme?

It does however it does more: not only is spend in the platform rewarded, developers who monetize their plug-in solutions receive an equivalent number of tokens to incentivize them to build and “stock the shelves” of the dAppstore, and so do existing token holders and the community chest.

This means new token issuance is linked to the overall growth of the OtoCo platform.

Can OTOCO tokens be used in the platform?

We shied away from forcing users to buy OTOCO tokens in order to access the services on the OtoCo platform.

However, OTOCO tokens can be exchanged for mainstream crypto used as payment method in the platform.

What will the OtoCo Foundation do with its share of the newly-minted tokens?

The Foundation will grant these out for the further growth of the OtoCo ecosystem, subject to a community vote on each individual grant.

Will anybody be able to write dApps for the OtoCo dAppstore?

Yes. Think about OtoCo’s dAppstore as an open plug-in store similar to Wordpress plugins or the Apple store (without the 30% revenue capture by the platform!).

However there will be a vetting mechanism to make sure that no malicious code is being injected by plug-in providers. This mechanism is still being worked on but will at the very least include a GitHub code authentication.

Will OtoCo take fees from dApps sold on its platform?

Initially no and perhaps never, subject to a community vote. Remember that for every dApp sold, the OtoCo Foundation shares in the new token mint (see above).

Can devs offer dApps for free on the OtoCo platform?

In principle yes but they will then not receive new OTOCO minted.

Could OtoCo do without a native token?

Arguably yes if it were to operate like a traditional linear growth business in a Web2-type funding paradigm in which centralized capital pushes for maximum rent extraction from OtoCo’s users and the business as a whole is set to exit at some point.

However, OtoCo has radically chosen for a more circular model of growth in which users and its community as a whole benefit from its success rather than VC, with the new token mint linked to the success and growth of OtoCo as a community tool, which in turn is likely to feed in the value of its token.

Could OtoCo sell more tokens out of its community chest?

At the end of September, the Foundation received a mandate from the OtoCo token holders to raise up to US$ 4MM to fund its roadmap for 18 months out, using the balance of tokens it holds in its chest, at a minimum price of US$ 5.00 per OTOCO token.

OtoCo will be using the remaining weeks of 2022 to seek to complete this private sale.

> Everybody can participate in this sale provided they can accredit themselves under a token sale agreement. Please DM @OtoCoDAO in Telegram before the sale closes.

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