TIP-42: Reallocating Bridgeworld Emissions to Treasure Chain EigenLayer Staking and Transition to Bridgeworld v2

[treasure]

Update (Aug 6 as of 12:12am ET)

The following parameters have changed from the original proposal to Snapshot (edited to be reflected in the proposal and summarized below):

• Moved the target date to tentatively cease Bridgeworld v1 operations and take the snapshot of Bridgeworld assets to be Monday, August 26 instead of on Saturday, August 24. This change will allow the team to be online and active during the week and able to provide support.
  • The date remains tentative and a final date will be announced closer in the coming weeks as this is highly subject to the readiness and coordination of external partners with respect to EigenLayer and EigenDA (eg. launch of their custom quorum feature into production, whitelisting of the MAGIC token and underlying strategy) as well as mainnet readiness. With the transition from one staking solution (Harvesters) to another (EigenLayer), it is important that the window of time between the two options is as short as possible.
  • Given the tentative timeline, in the event there are further unforeseen delays outside of Treasure’s control, there may be a need for a subsequent DAO proposal to be considered to maintain Bridgeworld emissions for slightly longer as a stop gap measure. At this time, the Treasure core contributors do not believe this is necessary.

Summary

Reallocate Bridgeworld emissions to support Treasure mainnet staking through EigenLayer and EigenDA.

• Reallocate Bridgeworld emissions towards Treasure Chain DA emissions totalling 1.55mil MAGIC per year, with 3 mil MAGIC retained for Bridgeworld v2 (out of approximately 10 mil remaining emissions) and the excess going to the DAO treasury for future infrastructure emissions.
• Scrap the yearly halving schedule and institute terminal inflation beginning in Y8 (in four years).
• Sunset TIP-08 emissions.
• Tentatively cease Bridgeworld v1 operations on August 24 August 26
• Update gMAGIC calculation to account for the future Treasure L2.

This proposal will briefly describe the planned system for Bridgeworld NFTs and the next iteration of Bridgeworld. However, for the purposes of governance clarity, this TIP strictly concerns the emissions policy regarding MAGIC. This proposal is not a referendum on Bridgeworld v2.

Rationale

MAGIC as collateral for web3 gaming infrastructure

Treasure succeeds by providing decentralized infrastructure and cooperative foundations for building and playing games. This approach requires an emissions structure that does not incentivize competitive zero-sum behaviors like we have seen in Bridgeworld of late. Instead, Treasure Chain serves as a collaborative foundation for creating the open metaverse. Emissions are therefore better used to support Treasure Chain staking that will use EigenDA for data availability (DA). A networking staking function establishes MAGIC as yield bearing collateral.

To date, MAGIC value accrual has relied on medium-of-exchange and utility coin narratives that have weak value accrual properties compared to collateral-like tokens. The valuation premiums that L1 chains and restaking infrastructure projects command relative to utility tokens attest to the importance of reorienting Treasure’s vision. Repositioning MAGIC as collateral addresses the principal source of community attrition in the last two years (“what is MAGIC anymore?”) and expands Treasure’s opportunities beyond our current niche:

• Riding the restaking wave
  • Positive sum games with other protocols and infrastructure projects on EigenLayer.
  • Being a consumer platform in a space dominated by infrastructure projects means improved access and more support from partner infrastructure projects
    • Access to top tier engineering teams from the likes of EigenLayer, Espresso, Everclear, etc. Great tech, looking for their first few major customers.
  • Gaming infrastructure and services are largely offchain due to performance requirements. EigenLayer presents opportunities to turn some of these services into Actively Validated Services (AVS) and offer them to gaming partners.
• Opening up opportunities towards an ecosystem of web3 gaming services
  • Offering a better platform and network for game developers opposed to forcing MAGIC integrations into games where it doesn’t make sense.
• MAGIC as collateral opens up opportunities in DeFi and infrastructure; capturing stronger value accrual narratives amongst web3 investors who are infrastructure token biased on top of superior fundamentals.

Alignment and fit with partner assets

Treasure promoted MAGIC integrations across an ecosystem of games in the hopes that success of game partners would translate into some form of value accrual to MAGIC stakeholders. Integrations with Bridgeworld and MAGIC have however been difficult to justify for game partners who have their own immediate roadmaps, assets, and stakeholders (often tied to fundraises and runway). Developers were hesitant to integrate with Bridgeworld even with grant incentives, partly because of the volatility of MAGIC, partly because of game design reasons, and also because it crowds out future plans to launch their own token and drive value to it.

In order to improve MAGIC value accrual and to serve game partners better, MAGIC can function as collateral for securing web3 gaming infrastructure:

• MAGIC would no longer compete with game partner tokens as game currencies.
• MAGIC having deeper liquidity, greater circulating supply, held in more hands (more decentralized), older and weathered extreme bear markets (stronger Lindy effects), means that it’s more appropriate as a collateral than other new gaming tokens with a low float, low liquidity, and largely unemitted token supply schedules.
• MAGIC would secure web3 gaming infrastructure and tooling that game partners do not have time and resources to build.
• Unlike game currencies, collateral is not expected to be spent. It’s allowed to be volatile and functions better when it appreciates in value (something that impinges on its usefulness as a spendable game currency as users don’t like spending coins that they expect to go up).

Establishing MAGIC as useful collateral requires an emissions scheme for DA rewards to be allocated. We propose (i) a reallocation of Bridgeworld emissions to Treasure Chain DA staking, (ii) sunsetting Bridgeworld v1 in its current state as the game does not work without heavy MAGIC subsidies.

These changes will allow Treasure to broaden its horizons beyond easily imitated, non-unique playbooks as a “game publisher” and move MAGIC to become much more than a universal metaverse currency. Treasure is not like Ronin, Immutable, or other projects. Our aims are fundamentally different. We have always been visionaries who have leaned into concepts that have never been attempted before, and this proposal will take us one step closer.

Why target Bridgeworld emissions?

It is clear that Bridgeworld in its current form does not meaningfully contribute to Treasure’s broader ecosystem goals:

1. Providing sinks and utility for MAGIC and NFTs (Treasures and Legions)
2. MAGIC emissions, as currently structured, become counterproductive if partners are unable or unwilling to integrate MAGIC into their game as a key input loop. Early attempts to promote such integrations were largely unsuccessful due to catching games too late in their development cycle to architect meaningful integrations, time constraints on the side of partner developers, and so on. The outcome was that MAGIC’s function for other games became a UA incentive, creating constant sell pressure on the token. MAGIC was reduced to a prize pool token, an instrument for grants, etc. Neither the DAO, partners, nor holders benefit from MAGIC having to play such a role.
3. As for value accrual to NFTs, much of value accrual was priced in preceding the initial launch of Bridgeworld and consumed by short term speculators.
   1. Since then, over 30 mil MAGIC has been distributed in support of these NFTs to help players recoup sunk costs, with no long term contribution to ecosystem growth.
   2. Halving emissions guarantees that the NFTs will continue trending downwards, and any value accrual benefits to NFTs will be negligible. Detaching them from declining yields gives them a shot at being revalued as veblen goods (luxury symbols, memetic valuations).
4. Driving user growth and engagement across Treasure ecosystem games.
5. Lack of user growth: Bridgworld player counts are small (<1,000 players, lower if we assume multi-homing wallets), with many wallets acting as guild recruiters and yield managers who often do not play partner games. Bridgeworld serves only a minority of all MAGIC holders. Similar points have been echoed in a past Treasure Improvement Proposal authored by the community.
6. Entry barriers are prohibitively high: Easing entry costs into the Treasure ecosystem to introduce new users often meant diluting existing Bridgeworld NFT collections.
7. Establish an “economic base” for Treasure, integrate partner games, and foster value accrual narratives around network effects between games.
8. Bridgeworld’s usefulness in driving ecosystem goals has declined over time.
   1. Tech debt and economic imbalances compound as the system ages.
   2. Inherently negative-sum as the DeFi staking mechanics on which Bridgeworld was built upon means that every interop event is guaranteed to dilute existing players and create resentment. Onboarding partner games to combative audiences sets them up for failure, which harms Treasure’s reputation as a developer-friendly ecosystem to launch in.
9. Toxicity in mixing money and competitive gameplay
   1. Competitive play with high monetary stakes turns fun into work and creates compensation expectations, further reducing enjoyment.

Restructuring emissions will contribute towards building a better base for driving Treasure’s ecosystem goals, building culture and IP, and a more positive and optimistic community.

For the outlined reasons above, restructuring emissions will contribute towards building a better base for driving Treasure’s ecosystem goals, building culture and IP, and building a more positive and optimistic MAGIC community inside and outside of Bridgeworld.

In a later section, we discuss the future plans for Bridgeworld and our belief why Bridgeworld as a concept will be powerful divorced from MAGIC emissions.

Proposal

Emissions Reallocations

Treasure Chain will offer dual staking (MAGIC and ETH LRT restaking) through EigenLayer with a possibility of adding experimental quorums such as MAGIC/ETH LP restaking. A total of 1.56 mil MAGIC per year (0.45% yearly inflation) will be allocated to Treasure Chain DA staking, with approximately 1.16 mil MAGIC allocated towards MAGIC stakers and 400k MAGIC for ETH LRT restakers. These emissions will be drawn from existing Bridgeworld emissions.

We propose the following:

• Retain 3 mil MAGIC for Bridgeworld to be allocated at a future date when Bridgeworld v2 achieves market fit and is ready for UA incentives so as to not waste emissions on products that have no retention potential.
  • MAGIC will be held in a new Bridgeworld Rewards multisig managed by the council on a 3 / 5 owner policy, initially deployed on Arbitrum One before later being bridged and redeployed on the Treasure chain.
• Sunset the yearly halving schedule
• Sunset TIP-08 emissions and reallocate towards Treasure Chain DA emissions
• Reallocate Bridgeworld emissions (minus the 3 mil MAGIC for Bridgeworld v2) towards Treasure Chain DA emissions for years Y4 to Y7 with surplus amounts going to the ecosystem fund.
• At Year 8 (four years from now), MAGIC will begin perpetual inflation at a rate of 0.45%.
  • Reallocating Bridgeworld emissions to DA rewards works out to the ideal rewards structure for the first four years. Beyond this point, MAGIC will require terminal inflation to sustain the network infrastructure game partners and other builders will rely on.
  • Sub-1% inflation makes MAGIC more competitive as “money” than fiat and compares favorably to network tokens with money-like properties (e.g., ETH).
  • The community initially bonded over the notion of a metaverse currency that became increasingly difficult to acquire, practically scarce, and so on. We want to retain the original community vision here while also ensuring that Treasure can continue to incentivize decentralized validation.
  • The crypto market has matured to a point where investors of all kinds – “degens” and institutions – are opting for tokens that are late into their emission cycle or even fully emitted, as is the case with memecoins. The attractiveness of high-inflation tokens will likely never return post-ETF for several reasons. Crypto has moved beyond its early ideation phase. Today’s investors look for applications and infrastructure with real traction as they have been burned too many times in past years on high-inflation “ponzis” to entertain these kinds of projects again.

Proposed emissions allocations are outlined in Table B below, with net changes from the original tokenomics in Table A highlighted in red and green text.

Table A: Current MAGIC Tokenomics

Table B: Proposed MAGIC Emission Changes

Security budgets and target yields for chain staking

Protocol emissions for chain staking typically range from 3% to 8% for infrastructure protocols and staking ratios around 30% supply staked for high security chains like Ethereum. There’s often a tradeoff between inflation rates and staking rates, with newer chains with less well established liquidity demanding a higher yield.

For rollups that are only partially reliant on staking for security (securing only the DA layer, for example), inflation rates can be lower. We can be more efficient with emissions budgets. In the event malicious DA nodes attempt to collude and withhold data, EigenLayer offers social slashing mechanics. The effects on end users are somewhat less severe (liveness issues, temporary TX censoring) than traditional attacks on L1 consensus (safety issues, double spends). For these reasons Treasure Chain opts for a more conservative 0.45% inflation rate split between MAGIC stakers and ETH LRT restakers.

Figure 1 outlines potential yields for various amounts of TVL restaked on Treasure Chain across MAGIC and ETH LRT staking quorums.

For MAGIC stakers (assuming $0.5 per MAGIC):

• 1/10 MAGIC supply staked (34.7 mil MAGIC) = 6.57% APR
• 1/8 MAGIC supply staked (43.4 mil MAGIC) = 5.35% APR
• 1/6 MAGIC supply staked (58 mil MAGIC) = 3.97% APR

For ETH stakers (assuming $3,400 ETH):

• $5mil ETH staked (1,470 ETH) = 4% APR
• $8mil ETH staked (2,353 ETH) = 2.5% APR

Figure 1. Yield curves for MAGIC and ETH LRT restakers on Treasure Chain

While we don’t want to overpay for chain security, we also don’t want MAGIC staking to be underwhelming as one of the goals is to establish MAGIC as collateral and a healthy staking ratio. Hence we allocate the majority of emissions to MAGIC staking, even though it is more efficient to allocate emissions to ETH LRT restaking as the required returns on restaked ETH LRTs are expected to be lower:

• Operators are able to restake and secure multiple EigenDA networks using the same collateral (with minimal overheads), as a result we aren’t competing against other yield farms in securing stETH collateral.
• Since ETH LRT restakers are able to restake on multiple EigenLayer AVS networks (and access layers on layers of yields), we can offer less rewards.
• Incentives would just need to be high enough to offset re-staking risks (opting into additional slashing conditions and smart contract risks).

What does staking MAGIC look like for users?

Users will have two paths to be able to stake MAGIC:

1. (Recommended) Via L2 on Treasure Chain, which will seamlessly bridge xMAGIC to L1 Ethereum and stake in the EigenDA Magic staking contracts. There will be a default 7-day withdrawal period, along with L1 <> L2 bridging periods (TDB as we are currently working with various parties on a MAGIC bridging solution).
2. Via L1 directly through the EigenLayer front-end once custom quorum is supported. MAGIC is expected to be one of the initial ERC-20 tokens to be supported upon its launch, allowing for broader awareness and token discovery.

As for associated risks, while slashing is not live yet, users should be aware that collateral slashing may be enabled in future EigenDA updates. This means that if you stake your funds on an Operator that misbehaves and is activating maliciously consistently, you may see part of these funds slashed. The exact conditions for slashing is yet to be determined by the EigenLayer team. We urge users to research these slashing risks associated with EigenDA Operators, along with the usual diligence on smart contract and bridging risks.

The core service provider to Treasure intends to serve as an Operator to run a node in order to secure EigenDA and other AVS over time, including new AVS that may be developed for the benefit of the Treasure ecosystem with broader use cases. Users who stake directly via the Treasure L2 will be staked with this Operator.

Future Governance

This proposal establishes a new framework for MAGIC emissions that will require further calibration as perpetual inflation draws closer. It is very important that the DAO use this proposal as a way to turn the page and embrace a future for MAGIC that elevates the central vision of the decentralized game console above dogmatic token models. The proposal here offers the minimum amount of inflation necessary to incentivize network upkeep while keeping the possibility of increasing the emissions rate, if coupled with more sinks and burning opportunities open for discussion. Since Treasure is a DAO, we have an opportunity to engage in decentralized evolution of the token design. We are highlighting now some areas for future governance proposals:

1. The tentative date for closing Bridgeworld v1 is August 24 August 26. In the lead-up to this, the DAO will need to vote on an additional proposal finalizing this decision. We are saying “tentative” here in case of unforeseen tech setbacks, given the number of moving pieces many of which involve external stakeholders.
2. The DAO will need to carve out perpetual inflation to the ecosystem fund.
3. Treasure is not an immutable protocol that can be deployed then never maintained again. Even protocols like Bitcoin that derive value from their inertness require ongoing development. Treasure’s growth, at least for the foreseeable future, is contingent on grants, maintenance and improvement of existing infrastructure, new infrastructure, marketing, and funding new contributors.
4. Terminal inflation to the stakers but not to the DAO itself will result in MAGIC becoming a “zombie token” that maintains value, if any, simply through inertia.
5. This conversation is non-urgent given the current health of the treasury and can be delayed until a later date.
6. DAO governance will likely need to recalibrate the division of emissions to the MAGIC and ETH quora, particularly if the amount of capital delegated to the ETH quorum is too low for security reasons.
7. The partnership with EigenLayer will lead to even more opportunities to fold Treasure-native technologies into Actively Validated Services. Certain AVS designs might lend themselves nicely to burning mechanics that enable a higher max staking rate without requiring additional inflation.
8. For instance if Treasure develops AVS products with burning mechanisms similar to EIP-1559 that create practical rather than artificial scarcity, then the DAO could increase emissions to support these infrastructure services if they see significant adoption and demonstrable value accrual to stakeholders.
9. Again, we are not recommending or suggesting that such changes would need to occur hastily. Instead, the community should adopt this frame of mind (as early Ethereum contributors did) that evolving token models can improve the organization’s effectiveness.

Bridgeworld Transition

This proposal concerns changing the emissions policy of MAGIC into a more sustainable form. We wanted to bracket this issue specifically from Bridgeworld v2 as a game. The issue is understandably complex given that this proposal would involve reallocation of Bridgeworld rewards. However, nuanced governance requires us to separate issues concerning MAGIC as a network of chains from Harvesters, the NFTs, and anything else currently involved with Bridgeworld. The new framework for MAGIC emissions must be clear, precise, and offer a decadal blueprint on how to proceed. The framework becomes weaker and more muddied by mixing in game design questions, which have shorter shelf-lives and later become ‘debt’ that must be reckoned with.

We are excited to talk about the Bridgeworld transition and explain the direction forward and why we view Bridgeworld as more promising with the proposed direction. For transparency’s sake, over the last year we have focused on art, narrative, and preliminary game design to find a version of Bridgeworld that was compatible with the vision for the chain. Our Year 1 struggles were caused by the incongruent incentive structures between the original Bridgeworld and the Treasure chain.

The new version of Bridgeworld is being developed as a variant on a game called Ingress. The Treasure chain will act as the map for this competition. Instead of physical locations that must be cornered, it will be chainspace. Here we arrive at the true dream of Bridgeworld: the Treasure chain becomes Bridgeworld itself and enables new participants to join without crowding out the old.

Regarding existing NFTs, the operative plan will “melt down” existing NFTs into Conversion Points. Genesis and Auxiliary Legions will transition into a new character called Seekers, forming the foundation for the creative rework for Bridgeworld that will set the tone for a decentralized, interconnected, multi-IP universe that has been constructed over the past few years. Seekers are planned to leverage the ERC-6551 standard for Token Bound Accounts, unlocking a new frontier and design space. Legion metadata (specifically questing levels, crafting levels, and constellations) as well as game assets and NFTs accumulated through the history of Bridgeworld will carry over as Conversion Points. This includes Treasures, Treasure Fragments, Bridgeworld Consumables, Universal Keys, Bridgeworld Balancer Crystals, Corruption ERC-20, and Recruits. A snapshot will tentatively be taken on August 24 August 26, approximately 1 week before the next halving and around the time of the planned launch of Treasure mainnet. Users who wish to be eligible for the snapshot do not need to do anything other than hold Bridgeworld NFTs at the time of the snapshot. All Bridgeworld collections will be delisted from the Treasure marketplace shortly before the snapshot date to limit strategic trading behavior. L1 Treasures will be treated as if they already migrated as a revision to the ratified TIP-31. After the migration to Seekers, there will be no updates or financial entitlements in support of the legacy collections.

What happens to Bridgeworld contracts, the frontend, and partner integrations?

For Legacy Bridgeworld V1, wind-down of various gameplay loops will tentatively occur on August 24 August 26. This includes Questing, Crafting, Corruption, Corruption Crypts, and Harvesters. Each of these features will freeze, preventing new quests, crafts, or staking activities. Players will still be able to withdraw their items and NFT characters.

As for ecosystem integrations, Bridgeworld contracts and the frontend will remain live (although this may be relocated to a new URL subdomain, such as v1.bridgeworld.treasure.lol) for some time afterwards to allow partner NFT collections such as The Beacon Moonfae Pets, Zeeverse Zee, and Knights of the Ether Squires to withdraw at any time.

TIP-08 emissions to the LifeDAO and SMOL treasuries will stop at this time. Treasure Fragments will also stop being dropped from ecosystem games such as Knights of the Ether, Tales of Elleria, and Realm.

In summary, the net effects to external game integrations are as follows:

• LifeDAO will no longer receive 5% of Bridgeworld MAGIC emissions
• SMOL will no longer receive 5% of Bridgeworld MAGIC emissions
• Knights of the Ether will no longer receive T1, T2, T3, T4, T5 Treasure Fragment emissions. Thundermane Harvester emissions will also cease. Players may unstake from the Thundermane page.
• Realm will no longer receive T5 Treasure Fragment emissions.
• Tales of Elleria will no longer receive T5 Treasure Fragment emissions
• The Beacon Nullstone Questing will be retired (as they will no longer have utility outside of Harvesters) and will be delisted from the marketplace. Emissions to the Beacon Harvester will also cease. Players will be able to unstake from the Emerion page.
• Zeeverse’s Emberwing Harvester will have staking and emissions disabled. Players may unstake via the game.
• Corruption Crypts will no longer be playable, but the app will exist to allow players to disband their armies and unstake Beacon Pets, Zeeverse Zee, Bridgeworld Legions, and Knights of the Ether Squires.

What progress towards Bridgeworld v2 has been made since TIP-24?

• Bridgeworld’s art and narrative team has been recruited
  • Gina, Art Director - ex. Zynga (Mafia Wars, Cityville, Hidden Chronicles, and FarmVille 2), PennyPop, Jam City, Gala, and Mythical Games
  • Peter, Narrative Director - ex. 555 Comic (Conspiracy Research Club) and Nickelodeon (Teenage Mutant Ninja Turtles, Super Dinosaur, Transformers: Cyberverse, and Weird Waters) =
  • Andy, Principal Artist - ex. Warner Brothers Animation and DreamWorks TV (TrollHunters, Gremlins: Secrets of the Mogwai, and Batwheels), Turbine Inc. (now WB Games Boston), Tencent Boston, Big Huge Games, Zynga, DeNA West, and Rumble Games
  • Yen, Senior Artist - ex. PikPok and Freelance Artist
• The foundations for art, lore, and broader creative has been laid, and the transition to the future state of Bridgeworld has begun, coinciding with the indicative timeline laid out in this TIP.
• Concepting and ongoing work on the new game design for Bridgeworld v2 is progressing to leverage the Treasure chainspace as an expansion of the autonomous world vision, originally established through Bridgeworld v1 and the Harvesters framework. This is intermingled with
• Existing budget used for Bridgeworld team salaries (put aside and ring fenced through to December 31, 2024), game development advisory with Strider (previously engaged to support on standing up Smolbound), outsourced art and creative production, and early game design concepting. 60% of budget remains.

New Art Style Tests

gMAGIC Adjustment

What happens to gMAGIC and governance?

gMAGIC voting power derived from Harvesters will be retired after Harvesters are paused. We will replace this with EigenLayer staked MAGIC (“stMAGIC”) voting. Each stMAGIC will be equal to 1 gMAGIC vote. A default 7-day lock for EigenLayer withdrawals helps prevent governance attacks and strategic voting.

Outside of Harvesters, gMAGIC support granted in TIP-34 for Magicswap LP tokens, Beefy’s mooSushiMAGIC-ETH, and Balancer/Aura’s 50% MAGIC / 50% USDC weighted pool will be maintained at a 0.5:1 ratio to MAGIC.

The governance staking contract on Arbitrum One will be retired, in favor of the EigenLayer staked MAGIC.

In summary, gMAGIC will be calculated as follows:

• (A) stMAGIC in EigenLayer and holders of MAGIC-ETH SLP on Arbitrum One.
• (B) Holders of all listed Magicswap LP tokens on both Treasure Chain or Arbitrum One and stakers in Beefy’s mooSushiMAGIC-ETH vault or Balancer’s 50% MAGIC / 50% USDC weighted pool on Arbitrum One.
• gMAGIC will be calculated on a 1:1 basis in (A) and 0.5 ratio in (B) (50% of MAGIC amount)

Future Infinity Chain L3s that may be launched on the Treasure L2 will be accounted for in a future TIP at a later date.

Next Steps

The temperature check and community discussion period begins now and will end on August 5, 2024 at 10:34pm UTC (unix timestamp: 1722897240).

If quorum and sufficient engagement is reached, a formal Snapshot vote will be put up shortly after.