The Grey Verse Economic Strategy

By: The Finessor

Foreword:
Outlined below is the economic strategy we at The Grey Verse have designed to deploy our
NFT-geared distributed animation studio.

Before we begin, let’s not sugarcoat things: most token based economic models leveraging NFTs
and DAOs will fail.

Some will use clever tactics to hide their ponzi nature and outlast a couple bearish winters. But
unless productivity and underlying demand for the tokens are generated, we’re looking at a hype
cycle where the early “influencers” run off rich while the Grandmas are left holding bags.

At The Grey Verse we like our Grandmas. We would prefer they not get their resistance training
from the leftovers of vocal degenerate gamblers. But let’s also recognize that these speculators are
a valuable part of the ecosystem and necessary to its growth.

Many projects want speculators as they are both a financing and marketing arm that seemingly
validates their ecosystem. The challenge is that a high degree of speculators actually diminishes
accessibility to the underlying market the system was intended for (and ironically, who’s arrival the
speculators are speculating on).

In other words: a bunch of whales playing a game doesn’t inherently make the game more fun and
often it makes it less accessible.

But what if we were to leverage market conditions to give speculators the return outcome while
generating value by allowing them to do what they do best? And what if we made it… fun?

Perhaps it’s too good to be true. In this paper we showcase our bold attempt to do just that. If you
receive this it is because word has it you can aid our rambunctious attempt with your insights.

– With Love,
The Finessor
The Exposition:
Let’s begin with the objective of the Grey Verse:
To create a distributed animation studio powered by NFTs.

To our credit, it certainly sounds cutting edge. But what does this mean and how does it happen?

Normally in animation everything is done in house. This leads to high overhead ( millions of
dollars to start operating) and high risk – you must either find contracts with high playing clients
or put out content and hope it gets attention. And then find you must find a way to capture value
from this attention. Note: many who get the attention often don’t succeed in the value capture part.

The NFT market has developed in such a way that not only have new avenues of monetization
opened up for animation, but due to the nature of this market content creation itself has the
potential to be much cheaper and lower risk.

By designing our animation studio from a distributed angle we aim to reduce cost and risk,
initially for ourselves but with the vision to integrate other groups into this model.

Our approach to this is pretty simple:

We create an animated world, with various characters.

(Luckily, we have the talent to pull this part off. )

We then have other people contribute their NFTs and storylines to this world in a manner that’s
mutually beneficial economically and driven by community engagement. This not only gives us
subsidized content generation, but a marketing and financing arm on top of it.

Furthermore, the economic incentive created by involving other NFT markets/collections and
their tangential value accuration from the success of these arms is what would allow for the model
to sustain.
Initiating Events:
The story begins with two key parts: Grey Verse Crystals (NFTs) and a DAO (generates $GV
tokens).

Grey Verse Crystals are NFTs that operate like membership passes.

Crystal holders will have the most decision making power in both deciding which NFT
collections, characters & stories are accepted into The Grey Verse.

This means Crystal holders not only hold influence over The Grey Verse, but other NFT markets as
well.

Initially 777 Crystals will be sold. They come in three tiers generated on mint:
Agent (444), Producer (222), and Director (100)
- Note: 11 pre-generated Director Tier Crystals will be held for partnerships

Crystals are staked to generate charges. Each tier generates the following number of charges:
Agent: 2 charges per submission round
Producer: 3 charges per submission round
Director: 5 charges per submission round

Note: A submission round is a casting period for a collection & character.

Staked passes are locked (unable to be sold) until the round completes.

Charges allow a crystal holder to back a specific submission in our system. The earlier they back a
submission, the greater their $GV token payout depending on the submissions performance.
- Similar to investing where the earlier investor on a deal gets higher return.

There are a few Key Aspects in this system to highlight so far:

1. Payouts are based on both which content ultimately gets voted into the Grey Verse
and how voted content relatively performs when fully produced, through
engagement metrics (youtube/twitter).
a. This allows charge spenders/backers to be incentivized to promote content
 2. A sum of payouts are also divided amongst the pool of stakers. This means that
staking gives greater $GV payout if there are less stakers, thereby incentivizing
more to stake as a reduction in stakers creates greater payouts.

3. Submissions are generated by collection owners (they don’t have to be crystal

holders as long as their wallet holds the collection piece).

4. Submitted who get accepted get payouts in tokens as well – meaning non crystal
holders have an entry mechanism into the ecosystem.

The DAO gets created after our crystal sale with roughly ⅓ of the funds and will be collateralized
with blue chip NFTs (Apes, Kongz, Punks, Cats) who will also be used as characters in content.

This is a useful maneuver for a few reasons, listed below:

1. By collateralizing the DAO with value holding assets, we set a floor on value that allows us
to buy back tokens and liquidate the case of tail risk market events (token dumping).
2. By owning blue chips and putting them into our content, we increase the likelihood of great
valuation to the NFT. (Brand recognition)
3. It allows the DAO to partake in activities such as lending and IP leasing in the future.

The DAO will generate 1,000,000,000 tokens. Of which a percentage will be given to initial pass
holders who stake their passes within a select period (likely 1-2 weeks). The remaining tokens will
be locked, and released on reward conditions being met.

Token Usage:

The token will act as a payment tool in the ecosystem, their initial payments being the ability to
mint a tier 1 (Agent) crystal.

Future plans leverage tokens for purchase of crystal charges from pass holders, GV character
mints, and story interactions (names of buildings, posters in background, catchphrases, etc.).
By tying the tokens to the agent crystals, token valuation will follow the demand and floor price
for crystal valuations. The cost/difficulty of obtaining passes over time will also increase.
- Although crystal minting could risk supply overflow, this can be limited and counteracted by other
forces such as limiting purchases every round based on participation growth and creating
randomized purchase periods or “drops”.

The only way for more Producer and Director crystals to be achieved is through a success in charge
use. This will be judged by how many tokens that particular crystal generated. Meaning one cannot
purchase their way to a pass upgrade.

Payout Pools
- Every round a pool of tokens will be allocated to the payouts, this will give participants a
rough idea of how much payout they’ll receive based on performance. It also incentivizes
more to partake. However anyone can add their tokens to this pool, allowing for greater
reward payouts, this will incentivize even more participants. Example uses of this would
be a project leveraging this as a marketing strategy or a collection group looking to
incentivize more players to hop in.

Concept being explored: Promoter pools

- Think an episode is particularly good? Finance a promoter pool, where promoters are paid
to distribute a video. The bigger the pool the greater the promotion. Tokens are rewarded
back to video backers based on views.
Rising Action:
Okay so a lot of theory has been thrown out, by now many of you are probably wondering about
the user experience and how this actually gets executed. So let’s attempt to do what the Federal
Reserve never could and convert economic theory to reality.

We’ll start by outlining our approach as many of our economic design elements had to fit our
content production process.

1. To begin we created an Animated Saga, known as the Capital City Chronicles that
highlights various character storylines in a city of “schemers and dreamers”. This theme
of financial satire is one our initial markets resonate with and one which yours truly has a
host of material to tell authentic & engaging tales.

2. We’ve created seed NFT story arc trailers utilizing NFTs we own that represent character
storylines. These initial characters will be added to our DAO on creation.

3. These story arc trailers allow the audience to contextualize a story and theme to add a
character into, as well set a standard of quality to the content. We took the time to focus
on quality in both animation and sound for these trailers on the notion that higher quality
has a stronger likelihood for greater associative valuation. After some trial and error,
they’ve received strong reception in private showings.

4. Our intention is to run periodic “castings” for characters onto these trailers, the casting
process will involve a community selection process of both collection and NFT character
which will then get added “Entered into the Grey Verse” and in our Character Library.
a. Characters in our Character Library will ultimately appear in episodes, whose
performance will reward the backers $GV.
b. This also allows us to create a system in which members can finance via $GV the
trailers for certain characters they are particularly fond of as well as other
measures (like creating merch, minting NFTs, etc.)
Climax:
Alright, enough groundwork. It’s time to see how this can go down like a bridge in London.

The User Perspective:

- Assume the following events occur after we announce (via twitter) that a submission
round has begun for a trailer.

Part 1 (Collection Selection)

The user enters our web page which shows the current casting archetype and requests a
collection suggestion:
- Example: 3 brothers (one collection) or 4 geeky friends (4 different collections)
- We may add whatever constraints we want and pass holders must suggest
collections from those constraints (ex: must be wearing a suit.)

Collection Selection is broken down into 2 parts:

The Crystal Backing Phase and the Crowd Backing Phase.
I. The Crystal Backing Phase:
Collections are submitted by crystal holders (for 2 charges) and backed (for a
charge) by crystal holders. Crystal holders are incentivized in receiving the highest
token reward on collection submission if their collection gets accepted.

Pass holders can back any collection that’s been originated by submitting charges.
More charges allow for more backing.
- Earlier backing = greater reward (like investing)
- A collection must cross a threshold of passholder backing within
the time period after submission. If a collection doesn’t get enough
passholder backing within a period it’s dropped and backers are
given their charge back to spend again.
- If a holder backs a collection that gets dropped they may reuse their
charge on another collection but they will likely be a later (lower
reward) candidate.
 The phase ends after the time period ends or 7 collections have been chosen
through the threshold crossing system.
- Charges can be spent to back collections that have crossed
the threshold for the next round, they just have a lower
return.

II. The Crowd Backing Phase

In the crowd backing phase anyone who owns an item from the 7 collections in
their wallet can vote (just a quick wallet check from us). This means both crystal
holders & non-crystal holders.

In this phase the collection which receives the most votes within a period of time
will end up getting selected as the submission collection. Allowing owners of that
collection can submit their characters for casting into The Grey Verse.

Token rewards are distributed on a curve to all voters based on how early they
voted, including those who are non-crystal holders who voted in the crowd backing
phase.

Part 2 (Character Selection)

I. Crystal Phase
In this phase anyone who owns a character in the chosen collection can submit
their bio/backstory/relevance to the arc (the submission period will likely last a
period of a few days).

As submissions come in, crystal holders spend charges to back characters.

Submissions are blind. Earlier charge spenders receive greater rewards.

After the time interval, the 7 most backed submissions will remain.
 II. Crowd Phase
At this point we re-enter a crowd backing phase where anyone who owns the
collection can vote for which character they choose, with the same token curve
reward as prior. The time interval for this period will be fairly short.

At the end of the crowd backing phase in character selection, the chosen character
“Enters the Grey Verse” and joins our Character Library. Meaning it’s converted
into a Grey Verse Animated Character and joins our catalogue of usable characters
in storylines.

Tokens are rewarded in a similar manner as the previous round. The originator
getting the most payout and every backer/voter getting their cut on a curve.

- Note: During these phases, we at The Grey Verse cannot directly select an option, but are able to
remove/veto options due to not meeting certain criteria. This will be done with discretion as it’s
against our incentives to inhibit the user experience.

Once a Character is in the Character Library it will eventually be used in content, the
performance of that content should provide token rewards for those involved.

Characters will also be able to open up their own story arcs/trailers if financing is raised via
tokens and be able to generate IP/licensing deals through merch and contracts.
- Details of this have to be further fleshed out and is beyond the scope of this paper.
Falling Action:
I know, this ecosystem has more players than a Miami boardwalk. Can we get them on the same
agenda? Thankfully there’s a lot of overlap. Let's do a brief overview:

Crystal holders :
- Incentivized to stake due to token rewards along with influence over the direction
of other NFT assets they have holdings in.
- The more heavy investment one has in a particular NFT collection the more
valuable higher tier crystals are as they can produce more influence & cross asset
ROI.

Collection owners and evangelists

- Incentive to increase the value of the collections they are holding and interact
with the Grey Verse to give their collection more attention, along with their
particular character. Due to the nature of NFTs this allows holders to give their
NFT a way to stand out from the crowd.
- Also incentivized by the token rewards and most likely the fandom based items the
tokens can purchase.

Writers & Creatives

- As the system is currently designed, the NFT Owner & Writing submitter
receives the most token rewards in this ecosystem. Setting writers up to be the
most likely to mint agent passes.
- One consideration is to reward well received writers' agent passes. Although the
current system is imperfect on isolating the best writers, it is currently being
designed with their incentives being recognized.
- Currently NFT owners and writers are being treated as one, but we believe that the
economics should work in a way that even if we don’t provide a direct way for
writers to team up with NFT owners on our platform initially, it will transpire on
its own.
The audience members and content consumers
- Incentivized to watch good content, engage more, buy merch/NFTs/ etc. if the
content resonates.
- This group is not only those involved in NFTs but a greater market of individuals
who are into trading, finance, business, and satire of modern day society.
- The current zeitgeist favors us on the size of this market. Obviously one of the
boldest assumptions we are making here is that the content will be received well.
Despite this being an unknown until it happens, we are in a favorable position as
the content's initial target audience will already be incentivized to engage and
spread it as they were part of its creation.
- The system is also designed to leverage and exacerbate existing fandoms and
factions which tend to create a “power” consumers.

Project Leadership
- Incentives of the project leadership are pretty in line with that of the collection
holders. The main point of contestation being around IP ownership and brand
usage.
- Our mitigation strategy here is to both focus on collections with open IP but also
to create partnerships immediately and generate form a standardization on this
front. The marketing, financing, and animation arm this model has generated
should prove beneficial for numerous projects in the NFT space..
- Royalties for character licensing for non-open IP projects will require
communication with the project.

Grey Verse LLC

- Incentivized to make great content as we get our core value from brand building
through this ecosystem. After initial sales, crystal sales provide some royalties
(10%) that gets split between our entity and the DAO.
- Due to our design focusing on the holding of crystals, and the low number of
crystal supply, volume will only come over time. We also do have plans of releasing
 a generative character drop with characters of our own that act in content. This
should generate more revenue but will only really be sustainable if the brand value
is being generated. Economics around this engagement will be released soon.

Conclusion:
Congrats, you’ve gotten through the first schematics of this system. Perhaps you don’t see the
beauty yet, but it takes an eye to see the beauty in a fetus.

There’s still a need to flesh out the details and numbers, but this plan covered has a few aspects of
intrigue such as:

- Stake locking for rounds to keep secondary supply low

- Reward pooling per round giving stakers incentives to stay locked. And the ability to
increase those reward pools.
- Collateralizing the DAO with NFTs in content to give a base value
- Passes being mintable but slow release as to maintain a token priced with the secondary
market
- Making greater tiers of passes only accessible through successful system contributory
actions
- The charge system allowing for game theory decisions that not only affect token rewards
but portfolio assets held
- Collection involvement in a manner that creates fandom, keeps gas fees to none, and
limits voter manipulation.
- A real world metric tie in that produces monetizable value on participant “work”

In a space currently getting more and more saturated with projects issuing profile pictures, NFTs
are not the item of scarcity, attention is.

Generally, attention is a factor of mental relations. By entangling nfts in our content, we can
capture that attention via relations and ideally sustain it using our dare I say….fun!...system.

I appreciate your reading and look forward to you joining the co-creation.
– The Finessor