Sögur Has Smart Incentives for Investors
Saga Genesis (SGN) is the reward token issued to early investors in Sögur (SGR). Investors brought the liquidity which now backs SGR in the reserve. Investors also help facilitate Sögur business operations until the SGR economy generates the administrative funding sustainably. Sögur designed the investor reward with these five important considerations:
- The value of SGN should correlate to the value and success of SGR.
- High risk should be met with high reward.
- SGN should not adversely affect the SGR economy.
- The influence of SGN holders should be limited.
- The SGN token should have an end of life resulting in a merge with the SGR economy.
Saga Genesis is a token that can be converted to SGR by the holder. Each SGN token has the potential to be redeemed for up to seven SGR tokens. The number of SGR tokens that one SGN can be redeemed for increases over time as the market cap of SGR increases. This is known as the SGN-SGR conversion ratio.
The table below shows the SGN-SGR conversion ratio at given market cap levels. This vesting method creates a higher reward for those investors that stay invested and expose themselves to risk the longest. The figure below is a sample of the start of SGN vesting, for the entire vesting schedule, refer to Sögurs official monetary model.
SGN tokens can only be redeemed one time. This creates a high incentive to stay in longer and gives a reward commensurate to the overall risk being taken. Let’s work through an example of what might happen with 100 SGN tokens over time:
At a market cap of 946 million, the SGN-SGR ratio is 0.59. 100 multiplied by 0.59 equals 59. An investor who redeems 100 SGN for SGR at this point in the Sögur economic growth would only receive 59 SGR tokens.
At a market cap of 1.67 trillion, the SGN-SGR ratio is 7.06. 100 multiplied by 7.06 equals 706. An investor who redeems 100 SGN for SGR at this point in the Sögur economic growth would receive a whopping 706 SGR tokens.
It is nearly impossible to make a meaningful SGR price prediction at these milestones, so determining an actual fiat value is not practical. Suffice it to say, one can expect that the price of SGR will have increased dramatically with such a market cap increase.
A limited number of SGN tokens have been created, maxing out at 107 million. This limits the effect that SGN can have on SGR prices. Also, at the point that the SGN to SGR ratio reaches 7, an SGN token essentially becomes just a 7 SGR bill. There is no more growth for SGN beyond these points, thus SGN will be integrated into the SGR economy regardless of whether or not all SGN has been redeemed.
Here is an example of Sally and Bob, to illustrate the fairness of this reward model overall. Sally was awarded 200 SGN tokens based on the amount she invested. Bob invested half of what Sally invested, so he was rewarded with 100 SGN tokens.
Sally decided to redeem her SGN for SGR when the market cap had reached 63.2 billion SGR. The SGN-SGR ratio at this market cap is 3.56 per the official monetary model. Multiply 200 by 3.56 and that equals 712. Sally receives 712 SGR at the time of her exchange, and this is her overall reward for her investment.
Bob stayed invested with his 100 SGN all the way until the market cap allowed them to be redeemable at an SGN-SGR ratio of 7.06. This is when the market cap is 1.67 trillion Sögur. Multiply 100 by 7.06 and that equals 706. Bob receives 706 SGR at the time of his exchange, and this is his overall reward for his investment.
Both Sally and Bob will have received an almost identical amount of SGR for their investment. Since Sally invested more upfront and stayed in a shorter length of time, her larger upfront investment elevated her reward. Bob invested a smaller amount but stayed exposed to risk for a longer time. The time he stayed in elevated his reward.
As you can see, Sögur found its beginning very fairly. An opportunity exists in multiple ways for everyone. There will also be a finite point when investors will have been fully paid off, at the level of maximum vesting, and SGN will have no effect anymore on SGR value. The perfect set of training wheels for a fractional reserve cryptocurrency to achieve mass adoption.
Learn more about the Sögur cryptocurrency at https://sogur.com