Investor FAQs
What is the role of an investor?
An investor is a user who deposits capital into an aggregate pool , and in return mints a warrant token which is used to receive dividends. The capital provided is converted into in-game NFTs by guilds who lend these out to players to earn income from playing the game.
This means capital deposited cannot readily be removed from a pool, as is the case for typical liquidity providers. In order to get liquidity, an investor must sell their warrant token on the secondary market.
What is the expected yield for being an investor?
The yield is variable and fairly volatile, but could exceed 800% (a figure based on our calculations for Pegaxy given March 2022 prices and average in-game earnings).
Actual yield will probably be lower given transaction costs and currency volatility. However, even in the case where average price of the currency at the time of payout falls by 90%, investors can expect high double-digit USDT-denominated yields.
What are the risks of investing in a pool on OpenGuild Finance?
There are many risks involved in investing in the crypto gaming pools that could result in lower yield than expected or even the loss of your investment. The list of risks below is not exhaustive and you should do you own research and thoroughly understand how play-to-earn games and our product works before investing.
  1. 1.
    The value of utility tokens that are earned in play-to-earn games are extremely volatile. For example, Pegaxy's utility token $VIS started 2022 at around $0.03, increased to over $0.25 at the start of February and is currently down to around $0.005 in mid April. Decreases in the value of the utility tokens decrease potential earnings and the value of the gaming NFTs as well as the yield of the P2E Yield Pool. Reasons for the volatility include 2 and 3 below
  2. 2.
    The tokens are inherently inflationary and have no maximum supply. The increasing supply creates a downward pressure on the price if demand for the tokens cannot keep up.
  3. 3.
    The demand for the tokens are ultimately driven by the growth of new players. If user growth slows, the value decreases along with demand.
  4. 4.
    Games may make changes that decrease the rate at which the utility tokens can be earned. This is commonly done by games to decrease the supply of tokens minted to balance the economy.
  5. 5.
    The guilds that manage the deposited capital may not make optimal investment decisions.
  6. 6.
    The guilds that manage the deposited capital may attempt to extract value for themselves instead of maximizing yield for investors. Although the guilds go through a KYC process and sign legal contracts, the arrangement with the guilds is highly trust based and there is no guarantee that they will always act in good faith. While we will audit the guilds' wallets, attempt to prevent exploits and pursue legal action if necessary, we may not be able to recover losses from adverse actions including but not limited to 7-9 below
  7. 7.
    Guilds may fail to return the agreed upon share of income back to investors.
  8. 8.
    Guilds may transfer all of the assets to their personal wallet and run off.
  9. 9.
    Guilds may exploit the arrangement in other ways including but not limited to buying assets from themselves at an inflated price or overpaying their players and receiving a kickback.
  10. 10.
    There is liquidity risk in holding the warrant tokens. As an investor, the only way to exit your investment is by selling the warrant tokens that you hold on the secondary market. If there is low demand for the tokens, you may have to sell them at a significantly lower value than they are worth.
  11. 11.
    Smart contract risk. Even though our smart contracts have been audited by Certik, there is no guarantee that they are completely safe from exploits.
What happens to investor funds when they deposit into an OpenGuild pool?
Once investor funds are deposited, guilds associated with a specific OpenGuild pool withdraw investor funds and convert them to gaming NFT assets such as Axies or Pegas according to the nature of the pool (i.e. it may be game specific or diversified) and their individual buying/breeding strategies with the aim of achieving the highest yield for investors.
What does an investor receive when they deposit into an OpenGuild pool?
When an investor deposits capital into an OpenGuild pool, they mint warrant tokens which represents the investor’s proportionate ownership of the pool. The warrant tokens also gives them the right to claim USDT distributions that are periodically made by guilds to token holders which come from the earnings of gaming NFT assets bought with investor funds.
Is there a minimum investment amount?
Nope!
Where is the USDT contract?
The address of the USDT contract is 0xc2132d05d31c914a87c6611c10748aeb04b58e8f. You can swap for USDT on any exchange, such as QuickSwap.
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