💵Economics

Economics is responsible for developing a stable economic system, primarily based on its currency, DM2P, and for providing versatile and sustainable economics to accommodate diverse Applications.

Token Basic Ideas

As we designed our token economics, we decided to organize the "tokens" created via blockchain technology into the following three categories.

• Commodity Token Types

• Security Token Types

• Payment Token Types

Commodity tokens are defined as a generic term for tokens that have a use value in themselves. Utility tokens used to obtain specific services and NFTs representing game items and digital art are also classified here for token design purposes.

Security tokens are "digitized security" in which rights are transferred and recorded using blockchain technology. This category includes legal security tokens, which are subject to the same laws and regulations as securities, as well as physical redemption NFTs and tokens.

Payment tokens are so-called "payment" tokens used to redeem goods. The difference with commodity tokens is that payment tokens only serve as a means of exchange, and in itself, don’t hold value. This term is not limited to stablecoins pegged to fiat currency, but also includes a wide range of tokens used as "payment instruments".

Properties of DM2P Tokens

DM2P is a unique token issued by SMP. The ultimate purpose of issuing these crypto assets is to create a unique ecosystem that is not dependent on fiat currencies such as the Dollar, Yen, Euro, or Yuan. Thus, the ultimate goal is for it to be widely used as a payment token as a medium of exchange, and as an alternative to fiat currency.

However, it is difficult to use crypto assets that have just been issued and are not trusted as payment tokens from the beginning. Therefore, in the early stages of DM2P issuance, the utility will be designed with an emphasis on commodity use value to increase the credibility and liquidity of the tokens. The token will then gradually start to function as a payment token through a series of stages and be distributed to the public.

DM2P can not only be used on SMP but can also be traded on certain exchanges. However, it is not a security token or a governance token with voting capabilities.

The reasons for not using DM2P as a governance token include: there is no orthodox method established for governance using tokens; the management entity, led by DM2C Studio, is responsible for providing and maintaining the service in the initial phase of service release. We believe that the complexity of adding a governance function to DM2P as a utility token is to be avoided.

In terms of governance/transparency and democratization, we are separately considering alternative methods such as granting NFTs to DM2P holders that can be used for individual voting.

Expansion Concept of the DM2P Ecosystem

For DM2P to function as a payment token, we must create a situation where many people want it. Thereby we have used "gold" and "Dollar" as our model case, referring to history.

Three-phase concept for expansion of DM2P ecosystem

Phase 1	Years 1-3	A phase of high volatility and increasing value while the price fluctuates violently
Phase 2	Years 3-10	A phase in which volatility moderates and the rate of price appreciation is also reduced
Phase 3	After 10 years	A phase in which the price stabilizes and the token can function widely as a payment token

Historically, "gold" was chosen as the universal currency because of its finiteness and ease of processing, and increased its utility by being processed into coins in various countries and used as decorations and gifts.

Later, a fixed exchange rate system was introduced to maintain a fixed exchange ratio between the dollar pegged to gold and each country's currency to rebuild the economy that had deteriorated during World War II.

DM2P will refer to these past examples and widely distribute DM2P as a commodity token for an initial period of about three years to increase its value.

Thereafter, measures will be developed to gradually expand DM2P’s use cases as payment tokens, thereby increasing its stability as a currency.

Subsequent strategies will be determined with reference to the history of the Dollar during the era of floating exchange rates when it was unpegged from gold, but also with reference to the state of the global economy and cryptocurrencies at that time.

Regarding the time frame for DM2P value enhancement, we envision expanding this ecosystem over a period of 10 years or more. The reason for this is that as mentioned earlier, there are few examples of sustainable businesses in the web3 industry, and we believe it is useful to set a relatively long time frame as a goal compared to other projects. The target timeframe was calculated by taking into account the actual performance of the DMM Group's pre-existing businesses. DM2P looks to increase its value in a span of 3 years in the short term, followed by 7 years in the medium term, and 10 years or more in the long term.

For reference, a time-series graph of bitcoin market capitalization on a logarithmic scale can be compared with the above model to confirm that a similar trend line can be drawn.

Coinmarketcap: Created from a logarithmic graph of BTC market capitalization

In addition, based on the hypothesis derived from past history that "there is no perfect single currency that satisfies all properties," we aim to build an ecosystem that covers the "international financial trilemma.

Building an Ecosystem Overcoming the Trilemma of International Finance

The international financial trilemma is a principle of international finance that states, as issuers of currencies, can achieve only two of the three goals of monetary policy simultaneously: exchange rate stability, independent monetary policy, and free capital movement.

If we replace this with the simple terms "value stability," "freedom of issuance," and "free exchange," and consider the construction of an ecosystem, we can say that the following three cannot be achieved simultaneously.

1. Value Stability: Stabilizing the value of one's currency and the rate of exchange with other currencies.

2. Freedom of Issuance: controlling the money supply and properly managing inflation and deflation

3. Free Exchange: free exchange with other currencies and easy movement of capital

This principle would hold true not only in international finance but also in the monetary policy of crypto assets.

Also, according to this principle, foreign currency (yen or dollar) and in-game currency alone would be "stable but difficult to expand," while in-game currency and crypto assets alone would be "easy to expand but difficult to stabilize”.

Therefore, SMP hopes to cover the three elements of the trilemma by circulating three currencies in the ecosystem: DM2P (crypto assets), in-service currency, and non-DMP2 currencies including fiat currencies (foreign currencies), thereby simultaneously achieving development and stability in the ecosystem.

By utilizing multiple types of currency in this way, SMP will build an ecosystem that realizes the vision of "Multipliable, Earnable, and Enjoyable" which could not be made possible by simply combining fiat currencies and point-based ecosystems.