For anyone curious about understanding PNKSTR and other STR tokens by TokenWorks with a level of financial literacy, I’ll describe what’s happening behind the game theory here: Recap of token structure [skip if you already know how STR tokens work] As most are aware, these tokens are “tax farms” with 10% of volume (token buys and sells on DEX) being taxed. 8% goes to buy NFTs, 1% to the NFT collection owner as royalties and 1% goes to buyback/burn PNKSTR. For the PNKSTR, I believe it’s just 2% to TokenWorks (but maybe 1%/1% shared with Yuga?). NFTs purchased are then listed at 1.2x purchase price and once sold, proceeds are used to buyback and burn the STR token NFT Narrative One could make the argument that you don’t even need NFTs involved, you could just tax 10% of volume and buyback/burn the token with it (this has been tried many times in a variety of ways since 2020) Including NFTs serves 3 functions: -Recruits an existing community (NFT collection holders) -Creates a meme/narrative for the token outside being a tax ponzi -Serves as a source of revenue (I’ll explain this later in the post) Functional impact With 10% of volume extracted from the STR token market, the 1.2x listing is designed to pay that capital back to the STR token holders. If we run an example of $100K in volume: $10K is taken as tax, $8K is used to buy NFTs which are then listed at $9.6K (1.2x $8K), $2K goes to -> team, collection owner or PNKSTR So total net buy pressure is slightly less than what’s taken from the tax. $2K is taken and $1.6K is returned Where does the money come from that’s returned to holders? NFT collection buyers. Of the $2,000 taken in fees in this example, long term, STR token holders/traders pay $400 of it and NFT collection buyers pay the remaining $1,600 Game theory analysis The fud narrative would be that basically these tokens obfuscate the transfer of money from NFT collection buyers and STR token traders to TokenWorks and NFT collection owners, but it’s not that simple STR token holders buy NFTs upfront with their tax, NFT collection buyers long term are paying STR token holders for this service. Token holders buy NFTs, NFT buyers pay them back with a premium for buying and holding that NFT supply In efficient market dollar terms, STR token holders as a collective group never get back their full capital, lose a small amount, but STR token holders are also getting something of value in return - a narrative, a passionate community, and a group who will share the costs with them Winners and losers Winners: -TokenWorks -NFT collection owners -NFT holders (pre-STR token) -Early STR token holders -PNKSTR holders (uniquely, due to all other STR tokens paying them) Losers: -STR token traders -NFT collection buyers (post-STR token) -(Potentially) late STR holders Summary & trade analysis (imho) At the end of the day, these STR tokens rely on both STR token volume and NFT collection buy volume to sustain with increasingly higher prices. The issue I see with sustainability is majority of the fees are expected to be paid by NFT buyers, which tend to have much lower volume than STR tokens. STR token holders front the costs to push NFT prices higher, with the expectation that price reflexivity will bring enough new NFT buyers to eventually pay it back with interest. If an NFT collection is too weak to do this, likely STR token narrative for that collection will weaken as STR token holders realize there aren’t enough NFT buyers to pay back these costs, and the game will crumble for that collection I think these tokens represent a cool money game and experiment, aligning long term NFT communities with new token launch speculators with a DeFi-esque game. Personal opinion is that these are likely not sustainable, with the possible exception of PNKSTR benefiting from both the strongest NFT market (CryptoPunks) and all subsequent STR tokens (all subsequent tokens buyback/burn PNKSTR with 1% of fees)