How the Poppy token works
Economics, rewards program, and the Poppy Market Maker
Poppy as a TRC10 Token
With the passage of TRON Super Representative proposals 14 and 15 it was decided Poppy will be created as a TRON TRC10 token. As discussed in a previous Medium article, the changes to TRC10 tokens allow for a more efficient use of the Poppy token. Under the new protocols, TRC10 tokens will be able to achieve precision (split into 6 decimal places) and interact with smart contracts.
The Poppy token created for SEEDGerminator will be the only token used and distributed in the Poppy ecosystem for the rewards programs. Based on the number of TRX and SEED contributed to SEEDGerminator, there will be a total of 11,306,344 Poppy tokens created. This will be the total number of Poppy tokens distributed. No additional Poppy tokens will be created.
Fees — The economics of Poppy processing payments
Poppy charges two fees for every TRON (TRX) transaction. Each is 1% of the total transaction, for a total fee of 2% per transaction.
The first 1% fee is the payment processing fee for all TRX transactions. This 1% will be Poppy’s revenue. This revenue will be split with approximately 72% going to the Poppy organization itself, and approximately 28% distributed to Poppy token holders in the form of Poppy. This is described in greater detail in the Poppy Rewards to Holders section.
The second 1% fee will be rewarded back to the purchaser in the form of Poppy token(s). This is described in greater detail in the Poppy Rewards to Users section.
The retailer’s fee to Clover is handled through their agreement with Clover for payment processing.
The described fee structure may be modified in the future as market conditions change. Reasons for this modification could include inflation, added features, or other reasons deemed necessary by Poppy.
Poppy Rewards to Holders
As described in the Fees section, a 1% fee is charged by Poppy per TRX transaction as Poppy’s revenue. Approximately 28% of this fee will be put into an account to be distributed to Poppy token holders. The funds in this account will accumulate throughout the monthly rewards period. All assets in this rewards account will be used to purchase Poppy tokens at the end of the reward period. Those Poppy tokens will be purchased through the Poppy Market Maker as described in the Poppy Market Maker section.
The reward period will end on the first of each month at 00:00:01 UTC. Poppy Rewards to Holders will be distributed monthly within seven days of the end of the rewards period.
Poppy rewards for each period will depend on market conditions. Poppy tokens will have a precision of six decimal places. If a wallet earns less than 0.000001 Poppy in a rewards period, that wallet will not be eligible for Poppy Reward to Holders during that rewards period.
Poppy Rewards to Users (Customer Loyalty Program)
The second 1% fee per transaction charged is put into an account to purchase Poppy tokens for the Poppy Rewards to Users program.
Poppy Rewards to Users will be distributed to wallets that make purchases using Poppy. The users will receive their rewards in the form of Poppy tokens. There will be no set amount of Poppy token to be rewarded. The amount of Poppy token rewarded will be based on the value of Poppy at the time and will be determined by the Poppy Market Maker as described in the Poppy Market Maker section.
The reward period will end on the first of each month at 00:00:01 UTC. Poppy Rewards to Users will be distributed monthly within seven days of the end of the rewards period.
The Poppy Rewards to Users program will distribute the earned Poppy tokens to the TRON wallet address that was used to make the purchase. No membership or personally identifiable information is required to participate in the rewards program.
Poppy rewards for each period will depend on market conditions. Poppy tokens will have precision to six decimal places. Any time a wallet earns less than 0.000001 Poppy, that wallet will not be eligible for Poppy Reward to Users during that rewards period.
The Poppy Market Maker
To provide Poppy tokens for the Poppy Rewards to Users and Poppy Rewards to Holders, the Poppy rewards system will purchase Poppy tokens on the resale market. This purchase will happen between the close of the monthly rewards period and the 7-day limit for distribution of Poppy to rewards earners. This purchasing process will be controlled by smart contracts in the Poppy Market Maker system.
Poppy will periodically determine the most effective system to accomplish purchasing the Poppy tokens required by the rewards programs. Details of the Poppy Market Maker such as choice of exchange may be modified in the future based on this determination. All Poppy tokens purchased for a monthly reward period will be purchased through the selected method in sequential buys by the execution of a smart contract. This means all Poppy tokens will be bought from the same place at the available market rate. The exchange used or method of purchase will be announced publicly in advance of the purchase.
Within the Poppy Market Maker, Poppy Rewards will typically purchase Poppy tokens from a Bancor style exchange. This means the rewards programs will buy the required Poppy tokens at the available market rate. Using a Bancor style exchange means there will always be Poppy tokens for sale as one side of the listed pairing can never be completely bought out. This will cause the rewards programs to purchase fractions of a Poppy token at whatever price is available at the time the rewards program makes its purchase.
Within the Poppy Market Maker, the Poppy token will be paired on a Bancor style exchange only with SEED. The Poppy Rewards system will use the funds in the Poppy Rewards accounts to purchase SEED at market rate from the exchange. This SEED will then be exchanged for Poppy.
Both the SEED/Poppy and the SEED/TRX Bancor style pairings will be available to the public. In this way Poppy and SEED token holders may sell their tokens to the Exchange at the market rate. The public will be able to access the Bancor style exchange and trade using the SEED/TRX and SEED/Poppy pairings.
The Poppy Market Maker system requires approximately 1.28% of every purchase made using Poppy to be allocated through the rewards programs to purchase Poppy tokens at the market rate.
All transactions within the Poppy Market Maker system are subject to minimum transactions amounts based on the involved currency. For example, Poppy can not be transacted in amounts smaller than 0.000001 Poppy. This means after distributions are made, accounts within the Poppy Market Maker may have small amounts of left over funds. These funds will be retained by the Poppy Market Maker until the next rewards period.
This is the flow of Poppy Market Maker fund:
Funds in the rewards accounts → purchase SEED → SEED is used to purchase Poppy
SEEDGerminator’s role in the Poppy token
In order to establish the Poppy Market Maker system, Poppy will be partnering with SEEDGerminator. They will create a Bancor style exchange where Poppy will purchase the required SEED and Poppy tokens.
Bancor style exchanges require a pairing be listed between two coins. In a Bancor style exchange, the maximum amount which can be purchased in a single trade is limited by the liquidity in the listing pair.
All Poppy tokens that will be created have been privately purchased, or purchased by the SEEDGerminator fund. To provide liquidity to this initial pairing, SEEDGerminator will be providing both SEED tokens and Poppy tokens to create a SEED:Poppy pairing. This pairing will be used by Poppy to purchase the required amount of Poppy tokens. Poppy will provide SEEDGerminator with the Poppy rewards due to the Poppy tokens which are locked in the Bancor style pairing.
SEEDGerminator also plays another role with the Poppy token. SEEDGerminator currently owns approximately 8.84% of Poppy tokens. SEEDGerminator will receive its share of Poppy Rewards for Holders in Poppy tokens. SEEDGerminator distributes its rewards to SEED holders using the 80–10–10 model. SEEDGerminator will distribute 80% of the Poppy tokens it earns to SEED holders in the form of Poppy.
10% of the Poppy received by SEEDGerminator each rewards period will be kept by the SEEDGerminator fund. This will cause the total amount of Poppy owned by SEEDGerminator to grow each rewards period, making less Poppy available on the resale market for purchase by the Poppy Market Maker. This increasing supply of Poppy held also means SEEDGerminator’s share of the Poppy Rewards for Holders will steadily increase.
Poppy rewards for each period will depend on market conditions. SEEDGerminator will not distribute Poppy rewards to SEED holders that would receive less than 0.000001 Poppy in a rewards period. Poppy rewards each period will depend on market conditions. It is not possible to predict how many SEED would be required to earn 0.000001 Poppy as it will vary with each reward period. It will vary as the value of SEED and Poppy vary, as well as the circulating supply of SEED tokens.
Economics of a Poppy transaction
This is an example of how TRX from a Poppy transaction would be distributed.
A customer buys an item at a retail establishment. The cost of the item is 1000 TRX. The purchaser provides payment using Troncard or any QR code enabled payment wallet.
2% of this transaction (20TRX) is withheld by Poppy as fees during the transaction. That 20 TRX is then divided into two parts.
1% (10 TRX) of the withheld TRX is placed in the Poppy Rewards to Users program. This 10 TRX will be used at the end of the rewards period to buy SEED tokens through the Poppy Market Maker system. The SEED will then be used to buy Poppy tokens through the Poppy Market Maker system. Those Poppy tokens will then be distributed back to the purchaser in the TRX wallet used to make the purchase.
1% (10TRX) of the withheld TRX is used by Poppy as its revenue. Of those 10 TRX, about 28% (or 2.8 TRX) will be put into the Rewards for Poppy Holders program. The 2.8TRX would be used to purchase SEED through the Poppy Market Maker system. The SEED is exchanged for Poppy tokens through the Poppy Market Maker system. The purchased Poppy tokens will be distributed to Poppy holders in proportion to the percentage of Poppy they hold.
SEEDGerminator currently owns 8.84% of Poppy tokens. Out of the above 1000 TRX purchase, SEEDGerminator would receive just under .25 TRX equivalent of Poppy token from Poppy Rewards for Holders. SEEDGerminator distributes its profits to SEED holders using the 80–10–10 model. SEEDGerminator will distribute 80% of the Poppy tokens it earns to SEED holders in the form of Poppy. SEEDGerminator will not distribute any Poppy to SEED wallet addresses that would get less than 0.000001 Poppy. For this example, approximately .2TRX equivalent of Poppy token will be distributed to SEED holders, 0.025trx equivalent in Poppy will be distributed to Sesameseed, and 0.025TRX equivalent in Poppy will be retained by the SEEDGerminator fund.
Summary of an example 1000 TRX purchase:
10 TRX equivalent of SEED will be purchased. That SEED will then purchase Poppy to be distributed by Poppy Rewards to Users
2.8 TRX equivalent of SEED will be purchased. That SEED will then purchase Poppy to be distributed by Poppy Rewards for Holders
Approximately .2 TRX equivalent value in Poppy tokens will be distributed to SEED holders, in proportion the percentage of circulating SEED they hold
Deflation of the circulating supply of Poppy
It is anticipated the use of Poppy will increase over time, forcing the Market Maker system to invest more and more funds into purchasing Poppy tokens. It is also anticipated the supply of Poppy available for purchase through the Poppy Market Maker will decrease over time through several processes. This decrease in supply will positively impact the value of Poppy token as the Market Maker system will be required to purchase Poppy tokens for the rewards programs each month at market rate. Two primary systems are expected to reduce the available supply of Poppy for sale over time.
SEEDGerminator will keep 10% of the Poppy tokens it earns through the Poppy Rewards for Holders program. This will cause the total amount of Poppy owned by SEEDGerminator to grow each rewards period, making less Poppy available on the resale market for purchase by the Poppy Market Maker.
Poppy rewards are distributed to wallets that utilize Poppy for payment. In the likely event a user does not claim or redeem their Poppy, or if the private key to their wallet is lost or destroyed, the Poppy in that wallet will be considered unrecoverable. The unrecoverable Poppy will continue to earn additional Poppy through the Poppy Rewards for Holders program thus reducing the available supply of Poppy even further.
Poppy — A point of sale system made for the future https://medium.com/sesameseedorg/Poppy-a-pos-system-built-for-the-future-7d43b14f6e58
Poppy token distribution update https://medium.com/sesameseedorg/poppy-devlog-3-ff52b64b0732
Poppy as a TRC10 vs. TRC20 token https://medium.com/sesameseedorg/poppy-token-distribution-update-fbb8e3fe5e31
Payment Solutions by Troncard https://medium.com/sesameseedorg/payment-solutions-by-troncard-78aa0e5d3ac7
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