For those who don't frequent the Gala Games discord:

Here is the CEO of Gala Games, Eric Schiermeyer aka Benefactor, explaining the current thinking around the Burn-To-Buy initiative (verbatim)

I have an update on the Burn-to-buy program we’ve been experimenting with this past month. 

First let me explain why Burn-to-buy…

When we started the Gala network we had this idea that we could have the community could provide the server infrastructure and effectively power the ecosystem. We always thought that in order to reward the time and effort to maintain a Gala node we would award a daily allocation of the $GALA token. But we are a few years into this experiment and the daily award is scheduled to get smaller and smaller. Out of a concern that the node operators might not feel incentivised to continue operating we came up with this idea.

I’m coining a new acronym for web3 gaming. Many of you may have heard of “arpdau” average revenue per daily active user. Now we have BPDAU which, obviously, is Burn per Daily active user. Honestly, I pronounce it BurpDau in my head…  But here is the key piece of information we want to share today…our BPDAU is on average 51 GALA per day.

This number can be achieved by looking at the awesome user-created burn dashboard (thanks to Riskyfish!) available here: https://dune.com/riskyfish/gala-burn

In the broader gaming world, this would equal (at current prices - markets do what markets do) an ARPDAU of $2.41. This number is very good…if not downright mind blowing. What is interesting about this is that we don’t get this - it is burnt, pushing back the halving and making it so the Founder’s Node Operators rewards remain stable for a longer period of time. 

This includes only the people playing Town Star and Spider Tanks on our Layer1 Blockchain, which depending on the day, hovers around 7,500 Daily Active Users. Admittedly this is a tiny number but the good news is that there is a lot of room to grow. And so far it's been pretty consistent over time. It does not include anybody playing Meow Match, Superior or Dragon Strike at the moment. 

The most important question here in my opinion is how the burn is impacting the daily distribution? What does this mean for user growth in the future? What do more users mean for the Founder’s Nodes? For the sake of discussion, let's consider we are at a point where the full token supply has been reached (obviously, we aren’t there, but it makes the numbers easier for people to grasp). 

This is a projection of what this could look like for different sizes of user base starting at a single user and continuing up to 10m users.

There are a couple things to explain.

The first is that this is an extremely obvious oversimplification and is pure back-of-envelope math. I want to make sure this isn’t taken out of context, because the whole point of this is to show what this means for the Founder’s Node owners - this isn’t important in any other context. And at scale it's very likely that other factors will come into play to achieve a kind of equilibrium. In some of our modeling we’ve seen a burn that exceeds 4 times the total supply of $GALA. Obviously this would require an avalanche of $GALA tokens distributed to the founder nodes and given the current plan for distributions it wouldn't happen. We’ve always thought that 50b tokens would be more than enough for all the games we could think of operating on the network. But clearly some additional thought may be required to ensure the smooth operation of the network and node distributions. 

The second is to go into the methodology a little bit. This assumes several things: 

Roughly 50% of everything that is burned will not enter the supply as the Founder’s Node distribution doesn’t exceed 50%, even in the highest halving. 

A % of the tokens that enter the ecosystem through the Founder’s Nodes get “stuck” or are held and don’t immediately enter the ecosystem.

The BRPDAU remains 51 $GALA.

What we see here is a deflationary token supply with consistent rewards going to Founder’s Node operators. My sense is that we want to target the 1m dau scenario...going much higher than that might destabilize things or result in some unexpected outcomes. Though we would likely see a form of equilibrium established. There are MANY things that could keep this from happening - ARPDAU could drop, technology could change, the regulatory environment could change - all sorts of things could happen and we aren’t using this to make decisions (and neither should you). That said, it is interesting to think about the potential way this can go and what it means for people supporting the network. Our commitment won’t change in any scenario…and our focus will be to attract as many users to the Gala ecosystem as possible.

To that end what we have not factored into this plan is the impact Gala Music, Gala Film and any other partners we bring onto the Layer 1 blockchain. One question I ask myself is what will the impact of a relatively popular movie be on the Founder Node distribution via burn-to-buy? It's hard to say but we will be constantly updating our projections as we further develop our Games, Music and Film ecosystems. 

We have a lot more information and data we will continue to release going forward into the future. Thank you for being a part of the community and working alongside us to build Gala into a force for good and the leading figure in web3 entertainment across all verticals. The good news is that so far I would say this is a very positive direction for the Founder Node operators. And in the spirit of full disclosure and if you don’t already know I personally run Nodes.