$VPP Utility Update Part I + Roadmap

In this post, we will give an overview of our roadmap in upgrading $VPP and at a high level, our general product roadmap. In our second post, we will dive into details regarding tokenomics with an update on supply breakdown, and provide more granularity in the product roadmap.

To start - we established the following goals for $VPP and it’s integration into the Virtue Poker ecosystem:

Goals:

Make $VPP more accessible by making it cheaper to buy/sell/stake and use for purchases inside Virtue
Improve the utility of $VPP by integrating several key upgrades
Establish $VPP burning mechanism or “sinks” to create deflationary total supply

1. Make $VPP more Accessible

Currently, $VPP is available on Uniswap (Ethereum), MEXC and PancakeSwap (BSC Chain). With the majority of activity happening on Ethereum. There are several problems with this:

>>Ethereum is too Expensive

Ethereum currently is positioning itself as the global settlement chain. Almost every single major network (excluding Solana and BTC) are “EVM-compatible” - which essentially means that most of the tooling (architecture, contract code, etc) are the same. This is why chains can easily launch with a “uniswap” equivalent, a block explorer and other critical components of Ethereum. Most importantly, users' wallet addresses stay the same.

However - gas fees remain way too high for any type of low-value use. Gas fees can be upwards of $5 for a simple wallet-to-wallet transfer, and DEX (Decentralized Exchange) fees can be upwards of $30-$50. In addition, and most critically to DApps, Ethereum is designed so that the cost of a “transaction” (or call to a smart contract) goes up the more computational resources it uses (e.g. that’s why a DEX trade is more than a wallet transfer). For DApps, this generally means Ethereum can’t be used outside of projects like DEX’s, DEFI or marketplaces trading high value NFTs.

This single issue, leads to other issues:

>>Buying/selling $VPP on Uniswap is too expensive

For new players who want to buy $VPP to participate in our weekly games, they are faced with steep fee’s to buy through Uniswap → where the majority of our liquidity is. This effectively forces players to have to jump through hoops to get $VPP so they can play. There options are:

Purchase on PancakeSwap: The issue with this is that not everyone has funds readily available on BSC network, and if you don’t natively have funds there, buying USDT on a CEX to then withdraw to BSC makes no sense, you might as well buy on MEXC.
Buy on MEXC: If a user doesn’t have an MEXC account, they need to first create and then fund their account. Even if they do, they need to buy VPP then withdraw it since our tournaments require players to hold $VPP in a self-custody wallet.
Bridge to BSC: Alternatively users can bridge funds to BSC - however that also is costly (and cumbersome) to do.

>>Deploying any type of utility (e.g. Stake to Play etc) on Ethereum is too costly

As we will detail more below, Virtue will add several key $VPP utility upgrades in the next few weeks. However, the issue is that having this utility on Ethereum, where the majority of our liquidity is - is too expensive for most users. While there are definitely a good number of our largest holders who don’t mind $5-$50 transaction fees, we need to make accessibility cheaper to bring in the masses to the Virtue Poker ecosystem.

New users aren’t going to go to MEXC, buy $VPP, and withdraw it to a chain they either don’t frequently use or to a chain that’s super expensive to use - just to play poker.

>>$VPP on BSC is segregated from Ethereum

$VPP on BSC is effectively “cut-off” from moving to Ethereum (and more recently MEXC). This is because our bridge using Multichain went offline last year. Several projects were impacted by this, but Virtue wasn’t impacted until MEXC ceased working for the BSC network. Don’t worry, for those holding $VPP on BSC, your $VPP is safe - it just can’t currently be bridged. However, this just isn’t ideal for our $VPP and Virtue Poker ecosystem, and it is why we stopped providing prizes on BSC network, but there is good news to come from this (more on that later).

>>$VPP and USDC Prizes have become segregated

Because $VPP on BSC is cut off from Ethereum, Virtue began paying all $VPP prizes on Ethereum and all USDC prizes on Polygon. However to be honest, this truly doesn’t make sense:

Paying $VPP prizes on Ethereum is costly ($3-5 per transaction)
Paying USDC prizes on Polygon doesn’t allow winners to use their USDC to buy $VPP

The Solution: $VPP on Base Chain

To address these issues, Virtue Poker is pleased to announce that we will be launching $VPP on Base Chain this Sunday March 31st.

Why Base? And why did this take so long?

First off - we know that we had originally hinted at a $VPP update previously, however choosing a new home for $VPP is a more strategic move. The “Layer 2” or L2 market has been heating up for a long time, and we’ve been carefully reviewing researching various networks and tradeoffs. The main contenders were:

Optimism
Arbitrum
Polygon
Blast and
Base

From our perspective - the “Decentralization” component was a part but not the main factor for the decision. The blockchain “Trilema”(speed, security, decentralization) is a tough problem to crack, however sacrificing decentralization for speed (and lower cost) is just the right strategic move for us.

Given that all options have lower costs and faster speed, the main factors were:

Size of the community
Growth trajectory
Reputation
Grant/Reward possibility

There are lots of various metrics / data sources for these metrics, however generally speaking Polygon was earliest, largest, has a strong reputation and provides grants.

Optimism/Abritrum both are smaller, with Abritrum being known as the “defi-chain” - and Arbitrum currently has a 400 million ARB proposal for grant funding - however Optimism responded with announcing 850 million in OP retro-funding

Blast has their “point” and “gold" system currently running with the promise of a future airdrop. In addition, they provide “native yield” - however - there have been several major hacks, including one as recently as this week, and they are unproven in our opinion in terms of reputation so we’re uncertain their ability to be a lasting L2.

With no rewards or future token promised, then why choose Base? Well - several reasons:

Size of Community: The Base community started later, but has growth rapidly to be one of the top communities in size
Growth trajectory: There has been an explosion of activity on Base, with projects, NFTs, memecoins and others going over to Base
Reputation: Obviously Base chain is from Coinbase, and Jesse Pollak has proven to be a strong leader who will continue to promote and improve Base
Grant Possibility: building on Base is effectively building on Optimism since Base is built on the OP stack, so we’ll be eligible (potentially) for receiving part of the 850 million OP provided we contribute to demand for block space (more on that later)

Finally - and we think it's fairly obvious: Base is supported by Coinbase, making it extremely easy for “new” users to come directly into the Base ecosystem via Coinbase without having to bridge tokens. We believe Base will grow similar to the way BSC grew due to its relation to Binance from 2020-2021.

What does launching on Base mean for $VPP and Virtue Poker? And how will it work? And what’s the timeline?

Here are the following steps we are taking to complete this migration:

March 26: Solidify the bridge solution to enable $VPP two-way bridging between Ethereum and Base
March 31: Launch the bridge
March 31: Create the liquidity pool on Uniswap between $VPP <> USDC
April 1: Begin paying all future prizes of both $VPP and USDC on Base
April 20th (eta): Launch $VPP staking pools on both Ethereum and Base
End of April: Integrate Uniswap iFrame into Virtue Poker app + iFrame for staking - allowing users to buy/sell/stake without having to leave the app
May 1st (eta): Build additional smart contract functionality and integrate into Virtue Poker gameplay (more on that later)

Why is this important, and what are the benefits?

Launching $VPP on Base chain, allows Virtue to be able to:

Distribute all prizes on Base, which allows players who earn USDC to swap it for VPP (and visa versa)
Launch Staking Pools on Base (and ETH) to give players a cheaper option to stake-to-play
Begin promoting Virtue more heavily to the global Base community
Begin building additional smart contract integrations into Virtue

The Base community has already proven itself to be highly interested in poker:

Virtue’s first tournament had 8 different Base communities participate
Virtue’s second tournament this Sunday, will have 13 different base communities

And we will be launching a dedicated poker club for Base. This club will serve as the foundation for all organized cross-community base events.

2. Improve $VPP Utility

Problems with Current $VPP model

Currently, we require players to hold a minimum amount of $VPP to access tournaments. The larger amount of tokens that players hold, the more events they can access.

The problems with this model:

It doesn’t create long term hold incentives - players can just purchase the token, play a few games, then leave.
It doesn’t truly create a “poker experience” - namely bankroll management - the joys of winning, the pains of losses
It doesn’t allow for cash games to be integrated into the club experience
It leads to a net increase in $VPP supply with no sink or lock ups

Stake-to-Play

Virtue Poker will update the requirements to enter games, by introducing a “Stake-to-play” pilot program.

The current way this will work is the following:

Players will stake VPP and in return receive the equivalent amount (1:1) in chips
All tournament buy-ins (and cash tables) gameplay will require chips to enter
All VPP and USDC prizes will be distributed via tournaments
Cash tables will be added so players can try to build their chips bankroll
Both cash tables + tournaments will have fees
Chips will not get reset, if players run out of chips, they will need to add tokens to their stake to receive more chips
Unstaking resets a players chip balance to 0

Players who stake longer will receive rewards, players who stake for shorter periods of time won’t receive any awards, and those who unstake early will pay a penalty that will be burned.

We are going to pilot this program to get player feedback. There are a few key pieces to make this work:

Create staking contracts
Integrate staking contracts with Virtue (e.g. we need to automatically have in-club chips balances be updated when player stake, add to stake or unstake)

We’ve already solidified our partner for the staking program and the Virtue team is actively working on the integration. We expect to launch this in April.

2. Create $VPP Sinks

The first, and most critical (and game changing feature) for Virtue Poker is what we are calling “Add token-pairing with chips.” This feature will be a main driver of revenue and will create a token-burning mechanism for $VPP.

Those who are familiar with how applications like ClubGG, PokerBros and PPPoker operate will see the immediate value of this system. And this system will be available to anyone.

Add token-pairing with Chips

This is a totally different, and totally separate feature than “stake-to-play” that can be used by any other club. And the feature is quite simple: any club will be able to “pair” any token on any EVM chain with a chip balance in the club.

For example - Decentral Games could create a 1:1 pairing with their $BAG token with chips inside their club on Virtue Poker.

This would be done by the club admin, and chip balances would be automatically updated as players send tokens to a specified address. An admin then could deploy chips, cash games and tournaments inside the club where players could compete. A player could then remove chips from their balance and claim back the equivalent amount of tokens.

And most critically - Virtue does not take custody or have any ownership over the smart contracts or the tokens held inside.

This system is managed by the club admins, and then can select to either utilize a multi-sig, an individual wallet or another smart contract.

Effectively, Virtue will run smart contracts that communicate with our API where the API provides the smart contract with information regarding chip balances to the contract, and the smart contract provides information to the API about on-chain data. The smart contract with approval from club admins, grants permissions/approvals to the club-owner address/smart contract/multisig that stores tokens.

Virtue Poker will charge for API calls and on-chain transactions required for communication with our smart contracts as a fee in whatever token the club owner has selected as their pairing with chips.

This feature is expected to be released before the end of May.

Poker Dog NFTs

The launch of our PokerDog NFTs aims to be a $VPP “sink”. Players can purchase Poker Dog NFTs using $VPP - and the $VPP will be immediately burned. PokerDogs will be priced at a flat rate in USDC equivalent for the initial sale.

The utility of Poker Dog NFTs will be:

Chips Bonus: Stake PokerDog NFT → receive chips: Those who purchase and stake their PokerDog NFT will be awarded with a massive chips bankroll that will effectively allow them to participate in all Virtue Poker competitions. For those following us, they know we’ve been providing approximately $15,000 a week in prize money, with > 1/3 of that money coming in our Sunday $5k Championship which requires 25,000 VPP to hold. However, each month PokerDog NFT holders will be required to pay a small fee in VPP to keep their PokerDog staked.
Exclusive PokerDog Owner Events: Virtue will run token-gated events exclusively for holders/stakers of PokerDogs
Play Partner Events: PokerDog NFT holders also will be eligible to participate in partner events. In addition, there have been > $10,000 a week on average in partner promotions across NeoTokyo, Pudgy Penguins, Decontrol Games, ETHDenver, Rug Radio, Base events and other partner clubs

Having the ability to access most of these events using the PokerDog NFT will be a huge perk on top of the ability to access our events. Obviously we can’t have NFT owners take all available slots in a particular event for a partner, so there will be a number of slots for each tournament that will be open to NFT owners on a rotational basis.

As we continue to add more communities and host more events - the number of slots per week in partner tournaments will increase relative to the number of NFT owners. This is definitely a critical piece to ensure NFT owners get that added value and aren’t only able to play a few bonus events each month.

Virtue Poker is targeting June for launching our PokerDog NFTs. We want to get user feedback on the stake-to-play program, continue to add new partners, and improve the product offering before asking people to spend money on effectively a monthly membership pass.

Club Badge Minting

This feature will be available to those who wish to set-up a token-gated club, but aren’t coming from an existing community centered around a particular NFT or token. This feature will allow a club admin during the club set-up to create, and mint a “club badge” NFT and airdrop it, sell it, or have players claim it to join their club. This tool will have a USDC fee, but a portion of that will go to buy and burn $VPP. We already solidified a partnership to accomplish this - and we aim to launch this by early summer.

Conclusion

Virtue Poker was relaunched only 5 short months ago in beta. With mostly just running community freerolls, and with no marketing budget outside of prizes, we’ve been able to scale to over 20,000 unique players, 10,000 accounts, 500 daily active players and 6000 monthly active users.

We’ve partnered with Pudgy Penguins, NeoTokyo, Rug Radio, ETHDenver, Decentral Games, and Base Chain communities with a simple promise of being able to host token-gated clubs and tournaments.

As we move into this next phase, we will expand our offering to include:

Stake to play
Add token pairing with chips
PokerDog NFTs as monthly membership passes
Club Badge (as an NFT) minting tool

We also will be adding several key features, and product improvements over the next few months including:

Application UI/UX redesign
Streaming functionality
Leaderboard integration
Native wallet integration (sign-up with email, have a wallet created in background)
PWA (Progressive-web app)

Despite our long history - we are just getting started. Thank you to those who read this long-winded post!

The Virtue Poker Team