Token strategy¶
A strategy that sweeps another token instead of a collection. It buys that token by the bag, relists each bag above cost, and burns itself with every sale.
Every second since the last purchase, the machine offers more for 1 bag.
They hand over exactly 1 bag and are paid the bid in ETH, at once.
It goes on the shelf at 1.2 times what the machine paid.
What the bag sells for buys the strategy token back and burns it.
A token strategy is the same machine as an NFT strategy, with a bag in place of a piece. The bid, the shelf, the markup and the burn follow the same rules, and like every strategy it starts on its own curve and runs the machine only once it graduates into its pool at 4.2 ETH (The curve). This page covers what is different.
The bag¶
A bag is a fixed amount of the target token: 1/1000 of its supply, set at launch and never changed. On a token with a supply of 1,000,000,000, a bag is 1,000,000.
The size is not a choice. A bag too small would sell for the whole treasury at the first second of the bid; a bag too large could never be brought. 1/1000 is what the machine uses for every token.
Selling a bag to the machine¶
There is no marketplace to read and no listing to find. Anyone holding at least 1 full bag can sell it straight to the machine at the current bid:
- they approve the bag to the strategy, then sell
- the machine takes exactly 1 bag and checks that exactly 1 bag arrived
- it pays the current bid in ETH to the seller, in the same transaction
A seller who cannot receive ETH keeps their bag: the sale is refused rather than paid into a wallet that cannot use it.
Tokens that shrink in transit cannot be sold. A token that takes a fee on every transfer, or rebases, delivers less than a full bag, and the machine refuses it. A strategy on such a token never buys anything.
The shelf¶
Each bag gets a number, from 1 upward, and goes on the shelf at 1.2 times what the machine paid. Anyone can buy a bag at exactly that price and receives the whole bag at once.
The app lists every bag on the shelf. A bag is worth buying from the shelf when the target token has climbed enough that 1 bag costs more on the market than it does on the shelf.
What burns¶
Only the strategy token. The target token is never burnt: it is what sits on the shelf, and it leaves with whoever buys the bag. What the bag sells for joins the burn queue and drains exactly as on an NFT strategy: passes of at most 1 ETH, 12 seconds apart, 0.5% to whoever runs each one.
Example¶
With made-up figures
- $DOG has a supply of 1,000,000,000, so every bag of the $DOGSTR strategy is 1,000,000 $DOG.
- The treasury holds 3 ETH. The bid grows 0.5 ETH an hour. On the market, 1,000,000 $DOG is worth about 1 ETH, and 2 hours after the last purchase the bid reaches 1 ETH.
- A holder sells 1 bag to the machine: 1,000,000 $DOG out of their wallet, 1 ETH in, in 1 transaction. The treasury drops to 2 ETH.
- Bag #1 goes on the shelf at 1.2 ETH.
- $DOG climbs 50%. 1,000,000 $DOG now costs about 1.5 ETH on the market, so bag #1 is the cheaper way to buy it. A buyer pays exactly 1.2 ETH and receives the 1,000,000 $DOG.
- The 1.2 ETH burn in 2 passes, 1 ETH then 0.2 ETH. The callers keep 0.006 ETH, and 1.194 ETH buy $DOGSTR for the dead address.
Launching one¶
Anyone can launch a token strategy, on any token, and a token can carry any number of them. Each is its own token, treasury and shelf.
The royalty — 2% of every trade on the curve, 1% in the pool — goes to the target token's owner when its contract names one, and to Sweep when it does not. The launcher never receives it: otherwise the first person to launch on a popular token would collect its royalty forever, and launching would become a race.
When it goes quiet¶
The target falls under the shelf price. Bags wait on the shelf and nothing burns. Sweep can lower the markup so they sell again.
A bag is worth more than the ceiling. Nobody sells a bag for less than the market pays, so the treasury fills and never buys. Sweep can raise the ceiling.
Nobody holds a full bag. Holders with less than 1/1000 of the supply cannot sell to the machine. The bid waits for someone who does.
It never graduates. A strategy whose curve never reaches 4.2 ETH never has a treasury, and never buys a bag.