How BUST holders and partners benefit from partners adding their tokens to our ecosystem
As we've touched on in the Partnership Portal section, the BUSTA platform is designed to attract partners to add their tokens to our games and ecosystem. The partner benefits with additional utility and automatic burning of their token, and the BUST ecosystem benefits from reaching more audiences and with certain fees taken in the form of the partner token.
The listing/revenue structure of partner tokens is as follows:
- Initial Bankroll liquidity - The partner will choose a certain amount of their tokens to initially fund the Bankroll that will be available as winnings for the games played with their token. The BUSTA platform doesn't derive any revenue directly from this deposit.
- Farming rewards - The partner will also choose a certain amount of their tokens to stake in a farming contract with a specified emission rate to reward people who stake additional tokens in the partner's Bankroll pool. A small percentage (5% by default) of these farming rewards go directly to the DAO Treasury, essentially as a rental/subscription fee for listing their token on our platform.
- Listing fee - This is a direct, one-time fee that a partner will pay to list their token on our platform. This fee goes directly to the DAO Treasury.
- House Edge - As with the core House Edge Fee management for BNB used with the game(s), a small percentage of the House Edge is sent via the Automated House Edge Manager to the DAO Treasury.
Initially, any partner wanting to list their token with us will go through a manual negotiation and decision making process around how much to deposit for the Bankroll and farming rewards, what the listing fee will be, and the percentage of farming rewards and House Edge that goes to the DAO Treasury. The decision will revolve around the benefits to the BUST community, the partner, and their community.
After the DAO, Governance and Voting are fully implemented, we plan to build the partner application process into the Governance platform so that potential partners can submit a proposal to get their token listed on our platform. The community will then be able to vote to approve or reject a partner's proposal via the DAO.
Everyone loves CAKE so let's just say hypothetically that PancakeSwap want to add their CAKE token to the BUSTA games to take advantage of the automated BURN mechanism and additional utility that we provide.
Summary Initially, PancakeSwap stakes $500,000 worth of CAKE and supplies $100,000 worth of CAKE as staking rewards for 100 days.
After 100 days:
- $500,000 worth of CAKE has been burned
- $500,000 worth of CAKE has been permanently added to the Bankroll pool from the House Edge split
- CAKE stakers have earned a 20% return on their staked CAKE (73% APR)
- Affiliates have earned $100,000 worth of CAKE collectively
- The BUSTA DAO has earned $500,000 worth of CAKE
Please note that these proposed numbers are hypothetical but are derived primarily using the daily play volume of Bustabit.com as a guide. At time of writing, Bustabit.com has an average daily betting volume of around $6,000,000 which you can see here: dicesites.com/bustabit. We are using the figure of $1,000,000 of daily betting volume for this example which is less than 17% of Bustabit's current volume.
How do we achieve this? Read on...
Seeding the Bankroll First, PancakeSwap choose to add $500,000 worth of CAKE tokens to the CAKE Bankroll pool and our development team push a few buttons in the back-end to make CAKE a playable token in our games.
As soon as there's CAKE in the Bankroll and the token is activated in the game, users can start playing our games with CAKE. Meaning they're betting with CAKE and potentially winning CAKE from the CAKE Bankroll pool.
The maximum amount they can win is determined by the size of the Bankroll and the amount of users betting each round. To throw some rough (not set in stone) numbers out there - with $500,000 worth of CAKE in the Bankroll, a single user could win up to $5,000 in a single bet. Therefor, PancakeSwap are incentivised to provide a large Bankroll if they want to make the game more exciting for users to play.
The $500,000 Bankroll would fluctuate up and down as rounds have more winners than losers or more losers than winners, but statistically speaking it would stay around $500,000 if nothing more is added to it.
There are however three ways a partner can increase the Bankroll after it is initially seeded, both directly and indirectly.
1 - Bankroll staking rewards The BUSTA Bankroll pools are built to allow users to stake additional funds in them to increase the Bankroll size and therefor the maximum available winnings for the users - higher potential winnings will attract more players and play volume. In this example, PancakeSwap can choose to offer staking rewards to incentivise users to stake CAKE tokens in the Bankroll pool.
Here they choose to offer $100,000 worth of CAKE as staking rewards over a 100 day period at a consistent rate of $1,000 worth of CAKE per day. This would mean that if CAKE holders collectively staked $500,000 in the Bankroll pool, they would each receive a base ROI of 0.2% daily, which equates to an APR of 73% - assuming no compounding is done. FYI - that ROI is the same as what CAKE stakers are receiving in the single token CAKE pool on PancakeSwap at time of writing, and I've stated "base ROI" as this will increase with the additional staking rewards derived from the House Edge split, we'll get to that later.
So with the initial seed CAKE, and the additional user-staked CAKE, we now have a Bankroll of $1,000,000 worth of CAKE, which only cost the PancakeSwap team $100,000 in staking rewards. The bigger Bankroll means that each player can now win up to $10,000 in a single bet, making the game much more exciting to play, which will result in more play volume, which in turn burns more CAKE because of the House Edge split.
2 - House Edge Bankroll split 25% of the CAKE that's taken by the House from the games is sent directly into the Bankroll pool to be permanently locked, constantly increasing it as long as there's a House Edge in CAKE being generated (meaning as long as the game is being played with CAKE).
So with a 2% House Edge, and a hypothetical daily play volume of $1,000,000 worth of CAKE, $5,000 would be added to the CAKE Bankroll each day (2% of $1,000,000 is $20,000 as House Edge, 25% of $20,000 is $5,000 as the Bankroll split).
Over 100 days of an average play volume of $1,000,000 per day, the Bankroll would have grown by $500,000 worth of CAKE (100 days x $5,000 per day). We now have a Bankroll of $1,500,000 worth of CAKE total ($500,000 seeded by PancakeSwap, $500,000 from user staked CAKE, and $500,000 from the House Edge Bankroll split).
3 - Manual Bankroll and staking rewards top up If at any point the PancakeSwap team want to increase the Bankroll to entice more people to play with their token, they can either stake more CAKE themselves into the Bankroll directly, or increase the staking rewards to provide higher APR for CAKE holders, which will incentivise CAKE holders to buy and/or stake more CAKE.
Additional staking rewards via House Edge split On top of the base staking rewards that are provided by the PancakeSwap team, the daily rewards are also being constantly topped up by a split from the House Edge.
Using the above example again, with $1,000,000 of daily play volume, another $5,000 each day will go into the additional staking/affiliate rewards bucket. This then gets split between additional rewards for the BUSTA affiliates, and additional staking rewards for the stakers in the CAKE Bankroll. The split will depend on the amount of users that have joined via affiliate links or not, for this example let's just assume that it's an 80/20 split so $4,000 goes the additional staking rewards, and $1,000 goes to the affiliates.
This means that the total daily staking rewards for the CAKE stakers actually increases from $1,000 per day to $5,000 per day, increasing the ROI from 0.2% to 1%, which is 500% more compared to the native CAKE pool on PancakeSwap. Obviously that will most likely fill up and the ROI will decrease to be on par with PancakeSwap's pool but if that happens it would mean that the CAKE Bankroll will have increased by another $2,000,000 to total $2,500,000 of CAKE staked by users (500% increase from $500,000).
Benefits for the Partner So with all that considered, we've now got a $3,500,000 Bankroll of CAKE, meaning a maximum possible single user win of $35,000 worth of CAKE. The total cost to PancakeSwap is $100,000 worth of CAKE for staking rewards, and a temporary staking of $500,000 worth of CAKE which they'll get back if they choose to exit the platform - in this case, we'd still be left with a CAKE Bankroll of $3,000,000.
The first obvious benefit to PancakeSwap is that their CAKE token has a new and exciting use case and increased utility. Other than just holding, trading or staking, CAKE token holders can now play iGames with their CAKE on our platform.
Secondly (and most importantly), our built in burn mechanism will automatically burn 25% of the 2% House Edge generated from the games played with CAKE. Using the above example of $1,000,000 daily play volume, $5,000 worth of CAKE would be burned every day and over a period of 100 days that's $500,000 worth of CAKE burned. Alternatively, PancakeSwap could provide a developer/company wallet for this CAKE to be sent to instead of a burn address if they prefer to earn CAKE instead of burn CAKE.
Lastly, most projects like PancakeSwap have a treasury full of their native token just sitting there doing nothing. They can't stake it in their own pools without diluting the staking rewards for their holders, and they can't sell it without dropping their token price and potentially creating FUD around "the devs are selling!" etc. Listing with BUSTA is an opportunity to get some utility out of a partner's native tokens and create a perpetual burn instead of leaving those tokens just sitting there.
Benefits for BUSTA As with any partnership, this would draw a lot of attention to the BUSTA ecosystem. The bigger the partner, the more new users BUSTA would get being introduced to what we offer. In the case of a big player like PancakeSwap, BUSTA would suddenly be in front of 962,200 Twitter followers (at time of writing), and that surely can't hurt :)
On the financial side of things, small percentages of the House Edge and Staking Rewards can be programmed to go to the DAO Treasury. A listing fee can also be charged to the partner, much like listing on an exchange. The percentages and listing fee amounts would be agreed on depending on the value of the partnership to both the partner and BUSTA.
Flow Chart Please see the below flow chart for a more visual breakdown of how adding a partner token to the BUSTA games works. Keep in mind it is still a work in progress and the final version may vary slightly.