Supply and distribution

The total supply of the PURE token is capped at 500,000,000 (500M).

Total supply is divided among several categories, with some categories being pre-mined while others are mined by the community over time. Dividing the supply in this manner allows for the transparent establishment of different pools from which stakeholders can be incentivized for various forms of participation, engagement, and success. PURE will be distributed according to the following allocation:

Category	Share	# PURE	Notes
Play & Earn Rewards	36%	180,000,000	Mined by the community via gameplay. Earned over time.
Ecosystem Fund	14%	70,000,000	Incentivize game development, reward co-creation and build public utilities. Allocated over time.
Strategic Reserves	12%	60,000,000	Partnerships, marketing efforts, incentives for bug bounties and product development. Allocated over time.
Team	10%	50,000,000	Incentives for core team. Vest over a 3-year period.
DeFi Incentives	22%	110,000,000	Staking rewards, incentives for liquidity providers. Earned over time.
Token Sale	5%	25,000,000	Private & public sale(s). Unlocked over time.
Airdrop	1%	5,000,000	Free drop to Gen-1 TroveMate owners via Treasure Troves. Dropped over time.

The ‘Play and Earn’ category will be further divided into sub-buckets to enable community members to mine PURE across games developed by PurpleSeed, by community developers and by our third-party partners. While the mining of each category kicks-off at different times, each sub-bucket mines over a period of 2-5 years depending on the development schedule of each respective game. Mining for the first game starts in Q3, 2022 and those for community, developer and partner games are expected to kick-off in Q4, 2022. This will depend on the rate of onboarding and partnership development.

Our team is intentionally taking a relatively low share of the PURE pool, compared to Sky Mavis’ 21% share of the $AXS pool for example, to ensure we can incentivize and reward our gamers, scale our two-sided platform and have the flexibility to adapt to continue to be the blockchain gaming platform of choice.

We have built our tokenomics and incentive structure to reflect that we are player-centric and put the community first

To provide additional opportunities for value creation over the medium to long term, we are working on a ‘view and earn’ model of mining rewards. Here partner brands and game publishers can advertise products to community members and directly distribute PURE (along with branded NFTs and other incentives) based on player engagement, attention time and contest or other activity wins.

PURE Circulating Supply

Given the distribution of PURE and the various earning, unlocking, and burning mechanisms, the overall circulating supply of PURE will increase over time but at a decreasing rate, eventually leveling off as it approaches the 500M cap. Graphing the supply over time results in an upward sloping, concave downward supply curve (without impact of burned tokens) with small steps or “kinks” in the generally smooth curve from the varying unlock and vesting schedules across the different categories. This general shape is driven by the projected PURE burn rate, which is proportional to the total transaction volume on the platform and the modest general increase in overall PURE supply over the initial unlock and player reward earning periods.

PURE follows a burn-on-transaction framework – at least 50% of the PURE spent during gameplay is burned at the time of transaction. This can be done through minting new characters, composing skins and unlocking Treasure Troves. Burning is therefore correlated with total transaction volume on the platform and puts a downward pressure on the circulating supply curve. The remaining 50% or less of PURE will be added back in the PurpleSeed PURE strategic reserve and will be utilized as outlined in the PURE distribution table.

Proceeds from the sale of Gen-1 TroveMates will be retained by PurpleSeed, but are unlikely to impact the PURE price directly given they are likely to occur in other currencies (i.e. WAX). Royalties on secondary sales of NFTs created by PurpleSeed, typically in the 2-5% range, are collected by PurpleSeed. All PURE-based royalties will be subject to the minimum 50% burn mechanism.

Net Impact on Circulating Supply

The circulating supply of PURE is subject to both inflationary and deflationary pressures as our ecosystem grows, ensuring that it is healthy and stable and that users can continue to earn PURE without worrying about inflation eroding away their reward’s value. The PURE circulating supply is likely to grow at a modest rate over time due to the continual “mining” of rewards (up to the 500M cap) by our gamers, as well as the continued release of DeFi incentives such as staking rewards and liquidity provider incentives. The circulating supply is subject to the deflationary impact of our burning mechanics, removing at least half of the PURE used in on-platform transactions from circulation as gamers acquire additional assets and transact in our ecosystem.

The net impact is extremely difficult to predict given how sensitive it is to transaction volume and the speed at which new TroveMates are minted, among other factors. However, we believe that a modest, gradual increase in the total circulating supply is a potential outcome that would ensure our gamers are consistently rewarded, that PurpleSeed is able to grow the overall ecosystem as our user base expands and to keep the economy on a healthy trajectory over the long term.

The impact of the circulating supply on our gamers and community members varies over time, based on the size of our user base. Early adopters (such as Genesis TroveMate owners) have the benefit of earning gaming rewards shared across a smaller pool of gamers and will likely have the opportunity to earn more PURE per win or interaction than subsequent users will. This is to be mitigated by the appreciation of PURE over time, ensuring that even Gen-2 and Gen-3 TroveMate owners still receive material rewards in fiat terms for their efforts. This allows us to reward early gamers, grow the total number of gamers over time and ensure that all gamers and community members are fairly rewarded for their exploits.