holoz0r rambles about a deflationary ERC-20 token: Shuffle Monster

There's a few interesting "proof of stake" methods out there in crypto world - from systems such as Hive's, and then there's master node - type coins where you need a certain number of tokens locked away.

Then, there's an interesting one I stumbled across on the Ethereum network, called Shuffle Monster Token. It has since rather explosive growth in the last 24-48 hours, but it looks like it has been around for about a year.

With each transfer, there's a 2% fee, in addition to the standard gas you pay. The fee is deducted from the ERC token itself when it is transferred. Transfer 100 tokens to another address? - 98 will arrive. 1% is instantly burnt. The other 1% is randomly assigned to one of the 512 hodlers of the token.

On Etherscan, at the time of writing, you need around 278 tokens to break into the top 512 users, worth around USD$125 in fiat terms.

There's some incredible and fascinating game theory involved with this token. It raises several questions about the strategies that people might employ. These involve (and in some cases resemble a ponzi)

• Establishing a position within the top 512 to have a chance to get a transaction fee
• An increased stake is gathered (over time) by those in the top 512 as transaction volumes in the contract increase
• At the same time, token supply is constantly heading in a downward trend
• If users outside of the top 512 choose to create a position in the top 512, then users who are there previously may increase their stake to hold that position, or may elect to do nothing
• As people in the top 512 exist, those outside that top 512 may be pushed into that "heap" and become part of the group that gains transaction fees

There's so many strategies possible with this token.

The distribution of the token was done in an interesting manner as well:

According to Etherscan, 952,846 tokens remain in existence, which means that some measure of the supply has been burnt already. There's 4,107 addresses that hold the token. The largest token holders (top 2) holdaround 5.5% each, with a fairly even distribution beyond that.

With the top 512 positions being lucrative - because of the 1 in 512 chance of getting a transfer fee each time one occurs, you're likely to see lots of fierce competition for those positions.

This is a complete experiment by the creators of the token, and the only downside to this economic curiosity is well, gas fees act as part of the game itself. That's the thing with all things Ethereum, and as the network activity increrases, Gas fees too increase if you want a transfer to go through quickly.

My favourite part of this token is the sense of humour the devs display on their website - part of the FAQ asks "When Moon?", which is answered by the date of the next full moon. The token can be traded on Uni Swap and DDEX, which are decentralised Ethereum token exchanges.

What do you think of burning the token supply each time it is transacted? Could this work in an economic system outside of a "Game" such as the Monster Shuffle Token? Does it emulate the natural world, where if we're recycling goods, we get lower and lower yields each cycle?

Thanks for reading!