Tokenomics
A deep dive into AceSteps token economics.
Overview
AceSteps uses a per-song tokenization model - each song can have its own ERC-20 token for fractional ownership.
No Platform Token
AceSteps does not have a platform-wide token. Each song has its own independent token economy.
Per-Song Token Distribution
When a creator enables trading:
| Recipient | Tokens | Percentage | Purpose |
|---|---|---|---|
| Creator | 80,000 | 80% | Retain majority ownership |
| Uniswap V4 Pool | 20,000 | 20% | Enable trading liquidity |
| Total | 100,000 | 100% | Fixed, immutable supply |
Token Properties
| Property | Value |
|---|---|
| Standard | ERC-20 |
| Supply | 100,000 (fixed) |
| Decimals | 18 |
| Mintable | No |
| Burnable | No |
Initial Pool State
When trading is enabled, the Uniswap V4 pool starts with:
┌─────────────────────────────────────┐
│ INITIAL POOL STATE │
├─────────────────────────────────────┤
│ │
│ ETH: 0 │
│ Tokens: 20,000 │
│ │
│ Price: Undefined │
│ (waiting for first buy) │
│ │
└─────────────────────────────────────┘
This is single-sided liquidity - the pool starts with tokens only.
Price Discovery
First Trade Sets the Price
The first buyer determines the initial market price:
First Buyer: Sends 0.1 ETH
Receives: ~15,000 tokens (depends on AMM curve)
Pool After:
ETH: 0.1
Tokens: 5,000
Implied Price: ~0.00002 ETH/token
AMM Price Dynamics
Using Uniswap's constant product formula (x × y = k):
Buy Pressure → ETH increases, Tokens decrease → Price UP
Sell Pressure → Tokens increase, ETH decreases → Price DOWN
Revenue Added → ETH increases, Tokens same → Price UP
Why 80/20 Split?
Creator Benefits (80%)
- Majority Ownership - Retain controlling stake
- Flexibility - Sell some, hold some
- Aligned Incentives - Success benefits creator most
Pool Benefits (20%)
- Immediate Liquidity - Trading starts instantly
- Price Discovery - Market determines value
- No ETH Required - Single-sided initialization
Why No Unlock Mechanism?
Mathematical Impossibility
Due to AMM (x × y = k) mechanics:
To buy back 99% of tokens:
Cost: Extremely high (exponential)
To buy back 100% of tokens:
Cost: INFINITE ETH
This Creates:
| Benefit | Description |
|---|---|
| Permanent Liquidity | Trading always available |
| No Rug Pulls | Creator can't withdraw NFT |
| Long-term Value | Continuous appreciation potential |
Revenue Distribution Model
Non-Tokenized Songs
Creator holds NFT directly:
| Recipient | Share | Method |
|---|---|---|
| NFT Owner | 80% | Off-chain payment |
| Platform | 20% | Off-chain |
Tokenized Songs
NFT locked, tokens exist:
| Recipient | Share | Method |
|---|---|---|
| Token Pool | 80% | On-chain donate() |
| Platform | 20% | Off-chain |
Value Appreciation Mechanism
How donate() Works
// Revenue Hook adds ETH to pool
poolManager.donate(poolKey, ethAmount, 0, "");
This:
- Adds ETH to pool reserves
- Does NOT add tokens
- Result: Token price increases
- All holders benefit proportionally
Example Calculation
Before Revenue:
Pool: 2 ETH + 20,000 tokens
Price: 0.0001 ETH/token
Total Value: 2 ETH
Monthly Revenue: 0.5 ETH
Platform Share: 0.1 ETH (20%)
Pool Share: 0.4 ETH (80%)
After donate():
Pool: 2.4 ETH + 20,000 tokens
Price: 0.00012 ETH/token (+20%)
Total Value: 2.4 ETH
Platform Economics
Revenue Sources
| Source | Amount |
|---|---|
| Ad Revenue | 20% of all streaming revenue |
| Swap Fees | 1% per trade (platform owns LP) |
| Future | Premium features, subscriptions |
Sustainability
- No token emissions
- Revenue-based model
- Aligned with user success
Token Holder Benefits
For Creators
- Immediate Liquidity - Convert to ETH anytime
- Revenue Share - Benefit from song's success
- Majority Control - 80% ownership
- Flexibility - Hold or sell at will
For Investors
- Early Access - Buy at low prices
- Upside Potential - Price appreciates with popularity
- Liquid Market - Trade 24/7 on Uniswap
- Transparent - All activity on-chain
Comparison with Traditional Music
| Aspect | Traditional | AceSteps |
|---|---|---|
| Creator Share | 10-20% | 80% |
| Fan Investment | Not possible | Direct token ownership |
| Revenue Timing | Months/years | Real-time |
| Transparency | Opaque | On-chain |
| Liquidity | None | Instant |
Key Metrics
| Metric | Value |
|---|---|
| Tokens per Song | 100,000 |
| Creator Allocation | 80,000 (80%) |
| Pool Allocation | 20,000 (20%) |
| Swap Fee | 1% |
| Ad Revenue to Pool | 80% |
| Ad Revenue to Platform | 20% |