Houdini Swap Magic Monday #47 — Recap

Greetings, Wizards,

This week at Houdini Swap has been nothing short of magical. We’ve had record-breaking achievements and significant strategic advancements. We’re thrilled to detail the following exciting developments with you:

• Record Volume: A new all-time high of $6.7 million in volume and also swaps of 2,649 for the week.
• Token Migration Strategy: Our comprehensive plan for migrating to a new token, improving token utility and brand professionalism.
• Innovative Tokenomics: Our introduction of a unique staking program with a dynamic reward system to benefit long-term supporters.

And without further ado, let’s begin.

Record-Breaking Performance (Again)

• Volume & Swaps: An incredible $6.7 million in volume and 2,649 swaps.
• Growing Community: Record swaps shows our user base continues to expand, reflecting the ever growing trust in our platform.

The numbers speak volumes about our growing community and the trust you place in us. It is your active participation and support that drives Houdini Swap forward.

Token Migration Plan Rationale

We will be migrating the POOF token to a New Token, a decision which is pivotal for our future. It marks a transition into a phase of professional growth and enhanced user experience, ensuring our platform remains competitive and innovative.

Here is a recap of the rationale behind the migration:

1. Rebranding: Moving away from ‘POOF’ to a name that reflects our growing professionalism. ‘$POOF’ no longer fits for a project with $350 million in annualized volume and growing.
2. New Features: A new smart contract will be deployed to facilitate the new tokenomics and features.
3. User Alignment: Addressing the misalignment between our large user base (~60,000) and the comparatively smaller number of token holders (~1,200).
4. Sensitive Naming: Changing the name from ‘POOF’ due to unintended derogatory connotations.

Tokenomics Change Rationale

1. Rewarding Long-term Supporters: A change is required to focus on benefiting those who believe in the vision, rather than short-term speculators. Our ethos is to build a community of Wizards invested in the journey and growth of Houdini Swap and xBlock. We recognize the success of our platform is not measured in short-term gains but in the sustained growth and continued commitment of our users. As a result, we are restructuring our tokenomics and reward systems to benefit most our long-term supporters and creating a stable foundation for our loyal community.
2. Token Buyback Strategy: We have repurchased over $2m worth of tokens to-date. However, buybacks by themselves have not had the impact we anticipated. The new strategy aligns more effectively with long-term goals, market dynamics, and community benefits.

THE PLAN

Token Migration Details

There are four steps to the token migration:

1. Pull Liquidity: In mid-January, Uniswap V2 liquidity will be pulled at a pre-set time. A snapshot will be taken milliseconds before this happens.
2. Marketing: There will be a ~3 day period before we add liquidity to the new contract to build awareness of the migration. The token will not be traded during this window.
3. Token Airdrop: Within 24 hours of pulling liquidity, everyone will receive a 1:1 airdrop of the New Token based on their wallet balance at the time of the snapshot.
   For anyone with staked tokens, they will be airdropped their staked amount plus rewards accumulated up to the snapshot date/time.
4. Staking Open: During the three day waiting period, Wizards can choose to enter into the new staking program, which is detailed below. We are seeking to get a huge buy-in as a bullish signal of Houdini Swap’s prospects even before migrating the token.

We have over one month to communicate this to the community. It is important that everyone understands these four steps so that nobody falls victim to scammers. Remember, there is nothing for Wizards to do. It will all happen automatically.

Oh, and as promised, all bought back tokens accumulated to-date (~14% of circulating supply) will be burned. This will be done gradually on each Magic Monday, beginning after the migration.

New Staking Program Details

The new staking program will be highly rewarding for the long-term believers, our Wizards.

Here’s a breakdown of the details:

• Welcome, Wizards: To join the staking program, Wizards will stake their tokens indefinitely, until they trigger a withdrawal. Unlike most pools, it is not time-based; it is “trigger-based”. We’ll discuss the trigger mechanism later.
• Funding The Reward Pool: Each week, a fee is earned from each transaction on xBlock and Houdini. Last week, for example, it was ~$32,000. Those fees will still be used as buybacks directly on the chart, as usual. The new innovation, however, is that instead of vaulting the bought-back tokens, these tokens will be sent into the Rewards Pool.
• Fully Funded APY: These rewards will be distributed to our believers, our staked Wizards, based on their share of staked tokens. With $30,000 in buybacks per week, we estimate the APY will be hugely rewarding, fully funded by fees earned from Houdini Swap and xBlock. The yield will be dynamic, so it will change depending on how much is bought back that week. As swap volumes grow, so will fees and the buyback, which then increases the value of rewards. And, it’s a 100% deflationary system. No emissions from anywhere but the rewards pool. That’s real real yield.
• Exit Trigger Mechanism: If you wish to leave the pool, you will initiate a “trigger” to exit. You will then have two options:
  → 1. Strong Wizard: You will enter a 90-day “purgatory” period, where you will wait until your tokens unlock. During the 90-day purgatory, you will stop accruing rewards. After the wait is over, you then claim your deposited and reward tokens.
  → 2. Weak Wizards: Some weak Wizards will want to leave right away. Those feeble wizards will be subject to a 25% “Fallen Wizard Tax” on their emissions and principal.
• Redistributing Fallen Wizard Tax: The sacrifice of these weak Wizards will help strengthen the brave and strong Wizards. The Fallen Wizard Tax will be redistributed as follows:
  → 60% Back into the yield pool.
  → 20% Burned.
  → 20% Treasury.
• Enchanting APY: he Fallen Wizard Tax, grows rewards for our Wizards even further, and again all of it is fully funded.
• Additional Incentives: In addition to this staking program, there will be an additional gaming strategy to incentivize both swaps and staking. By the end of Q1, we plan to release Season 1 of the game. Think interactive ways to earn streaks and multipliers, leaderboards, lotteries, and much more. For active users of Houdini Swap and participants in the game, rewards will be higher still, and once again all of it will be fully funded.

xBlock Rewards

As for xBlock, it’s much simpler. For every swap that comes from an xBlock end-user, the client (i.e. the user of the API) has two options:

• Option 1 — Earn a commission of ~0.45% in the form of [New Token] and have that be deposited directly into the staking program, subject to the program above.
• Option 2 — Accept a 50% “Penalty” and earn ~0.225% in any token i.e. ETH or USDT paid weekly. Partners are also able top up fees for their users. For example, a wallet could add a 2% markup to help them monetize their users.

This 50% Penalty with Option 2 will also be sent to the staking rewards pool, driving yields higher still for all Wizards.

Token Tax

When the token migration waiting period or ~3 days completes, liquidity will be added to Uniswap V2 and will still have a token tax. However, token tax will drop in a linear fashion over the course of the first week until liquidity is moved to Uniswap V3 and it becomes zero tax forever.

Points to Emphasize

• Pays To Be Early: Early stakers are rewarded hugely because with less in the pool, rewards will be shared with fewer stakers, so the APY could be truly magical.
• Built in Pressure Release: This new system has a built in “pressure release”. If lots of stakers suddenly exit the pool immediately to sell their tokens, say due to a falling market, they will incur the Fallen Wizard Tax. When they do, the Fallen Wizard Tax paid into the rewards pool will cause the APY to go up. This higher APY will then attract new Wizards to stake, offsetting those who have left. StakingWizards could benefit from such sell pressure as the mechanism causes higher yields. Reward the Wizards, punish the goblins.
• Aligning Houdini Swap Performance: As Houdini Swap usage grows, so do rewards. It is a much clearer alignment. Plus, there will be a lot more to celebrate as we continue to hit new records in swap volume each week.
• Deflationary System: This is a 100% deflationary system, with rewards fully funded from the platform’s fee earnings.

Closing Remarks

This is the next evolution of the project. Rewarding the long term Wizards exponentially more than the short-term mindset Goblins. Converting speculators into long-term holders, and increasing the usage of Houdini Swap.

As we embark on this transformative journey with token migration and innovative tokenomics, your involvement remains our guiding star. These changes are designed to fortify our community and platform, ensuring long-term growth and sustainability. We’re not just building a platform; we’re nurturing a community where every member plays a crucial role.

These are the key details of the new direction but we will be making further announcements regarding it in the leadup. Plus, we have a lot more lined up for our Wizards after we do, so stay tuned.

Until next time, wizards.🧙‍♂️

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