Over IBCO
Last updated
Last updated
Traditional ICOs reached their peak of adoption in late 2017 and during the bear market lost most of their value creating huge damage to token holders and the cryptocurrency ecosystem in general. The new paradigm combined with the liquidity provided by immediate access to secondary markets during the bull run created the perfect storm of hyper-valued tokens ready to explode. The bigger problem with ICOs is that the Utility Tokens that have been sold, in 99% of the projects, had no real utility, at least not in the near future… those were only used as a means for raising funds. Since there was no way to use them they became a purely speculative asset blindly replicating Bitcoin and Ethereum market swings with a very high Beta. The only tokens that were able to maintain their value were the ones that actually had a utility, real use cases to be spent, BAT and BNB are examples of such tokens. Despite the last two years' price dynamics, we strongly believe that utility tokens are a true revolution creating a new form of financing for crypto projects, a hybrid between equity and sales that opens up a world of new opportunities both in finance and governance.
Another strong limitation of ICOs was implied market cap and lack of liquidity on exchanges: what usually happened was that the project aggressively marketed their token at a fixed price than later on quoted the token onto a centralized market providing a small percentage of what was raised as liquidity and using market makers to create fake liquidity. This process made the token very sensitive to even the smallest sale pressure and created the classic price dump chart that could be observed on 99% of ICOs.
In order to avoid this situation, Over will raise funds with a new fundraising primitive: Initial Bonding Curve Offering (IBCO). There will be no pre-determined price for the OVR token, token price will be determined by its demand following a Bonding Curve, if there is no demand the price will stay low, if there’s demand the price will grow and tokens will be minted, in this way price discovery is immediately entrusted to the market. But that’s not all, tokens will be distributed through the Bancor Protocol the majority of the funds raised will stay on the curve ensuring liquidity for sellers and collateral (funds raised) withdrawal will be regulated by a smart contract from Aragon’s DAO framework. Contributors and subscribers will continuously be able to both buy and sell from the bonding curve avoiding the illiquidity problem that traditionally afflicted ICOs and centralized exchanges for long-tail assets.
Besides this, in order to sustain the price of the OVR Token other three strategies - described in the following chapters - will be used: the double purchasing power of the token over other means of payment for OVRLand auction; cashback policy on the first 9 months since the start of the auction; rewards for staking to the IPFS Nodes and liquidity mining.
OVRLand emission will run until the last one of the 1.6 trillion hexagons (OVRLands) covering the planet will be minted.
The assignment of OVRLand is based on a bidding war where every bid extends the period of closing of 24h. The first minimum value is fixed at 10$ (Base price of OVRLand shall be modified after the project gained traction) with a 100% increment on the last bid value for every following bid. This method will allow for fast and reliable price discovery.
Considered the centrality of OVRLand in Over ecosystem we engineered OVRLand acquisition in order to minimize friction and to incentivize OVRLand acquisition by OVR Token holders.
To minimize friction it will be possible to buy the OVRLand with a wide range of means of exchange including Fiat (USD, EUR, RMB with an in app purchase), ETH, DAI, USDC, and OVR Tokens.
Buyers using OVR Tokens instead of other means of payment will be incentivized by two distinct policies:
Double purchasing power over Fiat, ETH, DAI, USDC; the smart contract minting the NFT representing OVRLands will always assign double purchasing power OVR Tokens over all the other means of payment, so for example in order to equal a 10$ OVR bid the ETH payer will need to use 20$ worth of ETH. For the first 9 months, the smart contract minting OVRLand NFTs will consider the value of the OVR Token with a floor of 0.1 USD such a price will only be applied if the market price for OVR is less than 0.1 USD. This will also protect the value of the token in his infancy since in case the OVR Token gets devalued on the market, - assuming demand for OVRLands - the fixed and double purchasing power of the token over the other means of payment will create an arbitrage pressure that will drive the value of the token up again.
Cashback Policy: During the first 9 months from the start date of the public sale, OVRLand acquisition will be incentivized by a decreasing cash back policy. For every OVRLand purchase, after a 30 days lockup period, OVR Tokens will be returned to the buying address with a decreasing ratio. Cashback does not include Gas Fees paid in OVR. Cashback will be applied to the first N lands sold in that month, please refer to the top banner on the land auction page.
Cash Back Coefficients: Month 1: 95% Month 2: 85% Month 3: 75% Month 4: 65% Month 5: 55% Month 6: 45% Month 7: 35% Month 8: 25% Month 9: 15%
Cashback policy will create a very strong incentive to utilize the OVR Token for the OVRLand acquisition subtracting liquidity from the market and avoiding the risk of price dumps. The 9 months window of the cash back policy will also allow for the token economics ecosystem to develop thus further supporting the OVR Token value with its increased utility.
OVR Tokens not redistributed to OVRLand acquirers will be invested in customer acquisition campaigns. Such a redistribution policy will guarantee a gradual shift from sustaining OVRLand purchase to sustaining Over ecosystem and user adoption.
A user can buy an OVRLand owned by another user through the decentralized marketplace following the dynamic of demand and supply. In this case, there will be only a fee (5%) applied on the transaction and not redistribution activities.
The OVR Token will also be the way to stimulate the growth of the OVR platform, rewarding users based on their interaction and value added to the platform. Token rewards will also decrease over time as the OVR platform grows.
The OVR Token will also be used in bounty programs and campaigns aimed to acquire new users and stimulate their engagement with the platform:
Bounty (App download): OVR Token given as a reward to users for downloading the OVR app at launch;
Bounty (OVR engagement): OVR Token given as a reward to users who [create experiences] and [interact with experiences].
