Detailed Explanation of the Economic Model and Product Gameplay of the Binance Launchpad Project Hooked

Author: Misty Sea

Source: PANews

On November 23, Binance announced that it will soon launch its 29th Launchpad project, Hooked Protocol (HOOK). This Launchpad is a BNB special event, based on an investment model that determines the user's investment limit based on their average daily BNB holdings over the past 7 days. The BNB holding snapshot period is from November 24, 08:00 to December 01, 08:00 (UTC+8).

Hooked Protocol is a community-driven social network designed with token economics, providing users with a gamified experience. The team is currently integrating wallets and DIDs. Previously, Binance officially disclosed that Binance Labs and Sequoia Seed Fund led the seed round financing for Hooked Protocol, with participation from A&T Capital and others, though the financing amount has not been disclosed.

Hooked Protocol aims to build an entry point for Web3, offering tailored Learn & Earn product experiences and infrastructure for users and businesses to enter the Web3 world. Hooked has launched a product called Wild Cash in Indonesia and Brazil, which allows users to earn money by answering questions, currently boasting over 2 million monthly active users. The application features gamified learning functions and has achieved exponential growth through its built-in social recommendation mechanism.

This article will provide a detailed explanation of the Hooked Protocol team, economic model, product experience, and earning mechanisms.

Team

Jason Y is the CEO of Hooked Protocol, having previously worked at Uber and Meta (formerly Facebook), with over 10 years of experience in consumer internet and strategic growth, having developed multiple products and managed web2 users exceeding 100 million. According to A&T Capital, the Hooked Protocol team members come from MiDu, a text-based growth platform previously invested in by Tencent, and the core team has rich experience in 2C market promotion and strong product capabilities. Jason Y's LinkedIn profile hides his work history from 2018 to 2022, but several media reports indicate that MiDu's CEO, Yang Ju, worked at Facebook and Uber during the same period as Jason. In October of this year, there were rumors that Yang Ju left MiDu. Jess L is the Chief Marketing Officer, who also worked at Uber and Google, and according to LinkedIn, the two were colleagues at Uber.

Dual Token Economic Model

Hooked Protocol adopts a dual-token model, where the HOOK token serves as the governance token reflecting the ecosystem's value, and HGT (Hooked Gold Token) is the only utility token within the ecosystem, used to dynamically incentivize community contributions.

The HOOK token is primarily used for community governance, gas fees during on-chain economic activities within the protocol, staking incentives, social elements, and longer-term goals. Its governance rights are reflected in the rights and voting in proposals within the Hooked ecosystem, and behaviors beneficial to the platform will receive initial airdrops. The social elements manifest as HOOK tokens providing exclusive rights to purchase limited edition NFTs (game tools, mystery boxes, etc.) within the Hooked protocol and access to exclusive community events, with the platform committing to burn the token revenues obtained from this portion. The overall economic model is similar to that of StepN.

Additionally, HOOK tokens will be invested in innovative practices, benefiting the overall ecosystem for individual participants and businesses, ensuring substantial liquidity and proportional growth of token value with the community's value.

HOOK tokens are based on the BNB chain, with a total supply of 500 million. Of this, 20% is allocated for private placement, 20% to the team, 30% to the ecosystem and treasury, 25% to the community, and 5% for Binance Launchpad. The private placement price is $0.06-$0.12, and the Binance Launchpad price is $0.10, which values the project at $50 million.

The initial circulating supply of HOOK tokens is 50 million, with a circulating supply of 19.16% after one year, until fully released in 2029. Based on the Binance Launchpad price, the initial circulating market cap of HOOK tokens upon launch will be $5 million, with a fully diluted market cap of $50 million. According to CoinMarketCap data, the fully diluted market cap ranks around 320th in the network.

The issuance of HGT tokens has no upper limit, and the amount issued is determined by the user's earnings from completing in-app tasks. The only way to earn HGT tokens is through completing in-app tasks, such as answering questions, inviting others, and PWT mining, driving users to experience Web3 through gamification.

HGT tokens earned through various in-app tasks and behaviors can be unlocked and converted into uHGT (unlocked HGT tokens). HGT tokens themselves are not tradable, so a uHGT mechanism is used to manage HGT liquidity. uHGT employs a community-driven and algorithmically adjusted unlocking mechanism to ensure a sustainable model, adjusting reward amounts, frequency, and unlocking limits based on user participation proof and community contributions, thereby reducing the speculative risk to reputation and value during token price fluctuations.

The consumption mechanism for HGT is for in-app purchases of NFTs, enhancing game experiences, and unlocking premium rewards. The earned HGT tokens can also be converted into HOOK tokens. The current price of uHGT is $0.00000065, with a liquidity pool of 9,900 USDT.

Screenshot from Dexscreener

Product Experience

Hooked Protocol has launched its first pilot application, called Wild Cash. According to Binance Research, shortly after its release, Hooked became the first and only Web3 application to dominate the Google Play rankings in Indonesia for nine consecutive days, with over 2 million monthly active users.

Wild Cash is currently only available for download through the Google Play Store, allowing users to log in using their Google or Facebook accounts, and then select the in-app language according to product guidance to participate in earning. It is important to note that once a language is selected, it cannot be changed. After successfully registering for Wild Cash, users will be assigned a cryptocurrency wallet address, with no current option to export wallet private keys or import their own wallets.

Wild Cash reduces the probability of being exploited by bots for zero-cost token farming through its question bank and correct answer rate mechanism. Community feedback indicates that completing token farming through simulators and scripts for multiple accounts is highly inefficient, and answering questions seriously can yield more rewards. However, the invitation rewards are very high, allowing users to achieve witch attacks by inviting multiple accounts to gain a large number of tokens.

Earning Mechanisms

Currently, the ways to earn tokens in Wild Cash include answering questions, inviting others, PWT mining, and staking. The tokens earned by users are Gold, which can only be used within the application to upgrade in-game items (more efficient mining tools, mining trucks, etc.).

Answering Questions for Tokens

The question-answering earning activity is divided into prize quizzes and Q&A training camps. In both activities, users have the opportunity to earn Gold token rewards.

Users can first participate in the prize quiz to understand the answering scenario and familiarize themselves with the question bank content in preparation for the special Q&A segment. The prize quiz has two modes: one for a limited time to share 500 million Gold tokens, and another for a limited time to share 1 billion Gold tokens. Users can participate in any of the activities from the first answering time until 24:00 on the same day.

Participation is through timed answering, with token rewards distributed the next day. Each quiz consists of 10 questions, and if a user answers incorrectly or fails to answer within the specified time, it is considered a quiz failure. Users can use a revival card to revive, with 3 revival opportunities available per activity each day. Each time a user successfully invites someone to download and register for the Wild Cash application, they will receive 5 revival cards as a reward, with no limit on the number of revival cards.

The Q&A training camp has 3 training zones, each with different difficulties and token rewards. The question bank consists of 10 basic questions related to the cryptocurrency space, with a 60-second answering time for each question. If users correctly answer all 10 questions, they will have one chance to earn Gold token rewards. If they do not answer all questions correctly, they will continue to cycle through the questions until all are answered correctly. If they exit midway, they will lose the reward.

The Q&A training camp will set the number of questions users can answer each day based on their historical correct answer rate; the higher the correct answer rate, the more questions and rewards they can earn. According to PANews testing, each answering session can yield 1,100 to 1,800 Gold tokens.

Inviting Others for Tokens

Users can copy their personal link in the invite-to-earn interface to invite friends to participate. Successfully inviting a single user can earn 5,000 Gold tokens. There is also a tiered invitation reward system, where the first successful invitation earns 30,000 Gold tokens, and successfully inviting 3 people earns 31,000 Gold tokens, and so on.

When the invited users start mining, you will earn 5% of their mining rewards. This reward is a platform reward, and the invited user's mining rewards will not be reduced. In the invitation interface, you can click the corresponding button to remind the invited person to participate in mining, with reminders allowed once every 24 hours.

POWT Mining

POWT stands for Proof of Work Time mining, which simulates Bitcoin mining. Users can mine limited Gold tokens through in-app functions (such as token mining mini-games), thereby cultivating and enhancing the daily Web3 experience for Hooked users.

The default mining efficiency of the application is 1 Gold token per second, with a mining duration of 1 hour, and a single account limit of 10,000 Gold tokens produced every 24 hours. Users can increase mining efficiency by clicking the Tap button or by crafting higher-efficiency mining tools. The crafting price for a 2HGT/s efficiency pickaxe is 9,600 Gold tokens, and for a 3/s efficiency pickaxe, it is 19,800 Gold tokens. Additionally, users can increase the mining truck capacity to enhance the daily mining quantity, with a crafting price of 36,000 Gold tokens for a 16,000/24h mining truck and 68,000 Gold tokens for a 33,000/24h mining truck.

According to the system settings, the primary task is to upgrade mining efficiency and truck capacity to maximize daily token production.

Upgrading the pickaxe to level 3 provides a mining efficiency of 3/s, allowing users to earn 10,800 tokens in 1 hour at normal speed, with a level 1 mining truck being sufficient at this point. If users additionally click the screen to enhance mining efficiency, they will need to purchase a level 2 mining truck. Therefore, after starting mining, users should first upgrade the pickaxe, then continue to upgrade it to level 3 after the next 24 hours, and subsequently upgrade the truck capacity after another 24 hours. After the third 24 hours, they will upgrade the pickaxe again, with the efficiency currently being in blind box form, so subsequent actions will depend on the pickaxe efficiency.

Staking for Tokens

HGT earned through the above methods can be staked to earn more tokens, with an annual yield of 20%. The staked tokens can be withdrawn at any time. When the earned Gold reaches 800,000 tokens, users can exchange them for uHGT within the application, which can then be converted to BUSD. According to the Wild Cash application, the exchange rate between Gold and uHGT is 1:1. Based on the current secondary market price of uHGT, 800,000 Gold tokens are valued at $0.5.

Future Plans

Hooked Protocol announced its launch on the BNB Chain mainnet on October 24, with plans to expand to other Layer 1 networks (such as Solana, Avalanche, etc.) in the fourth quarter of 2022, while also expanding into global markets and launching quiz experiences in more regions.

In the first half of 2023, it plans to launch more diverse gamified learning experiences, establish ongoing collaborations and partnerships with more Web3 projects, and introduce wallet solutions for Hooked community users. In the second half of 2023, it aims to become one of the largest Web3 explorer communities and explore the DAO governance structure for the Hooked Protocol. Additionally, it will leverage the infrastructure of the Hooked ecosystem to launch more different applications and middleware solutions (wallets, DIDs, etc.) for ecosystem developers, exploring business models.

According to information disclosed by Binance, there will be a long-term and sustainable collaboration between Hooked Protocol and the BNB Chain, incentivizing the Hooked community to explore attractive benefits and diverse experiences within the BNB Chain ecosystem.

Conclusion

In summary, from the product experience perspective, the application is highly complete, and the official rules for answering questions have reduced the risk of HGT being exploited by bots through bulk accounts. Moreover, the limited-time purchase of tools to enhance mining efficiency has slowed down the mining output speed, requiring users to invest more time and effort to participate. However, the invitation reward mechanism has significant loopholes, allowing for zero-cost witch attacks, and the current economic ecosystem within the application is extremely singular, with demand unable to meet supply. This model will lead to the HGT token price lacking supporting value in the short term, necessitating observation of whether the Hooked official will improve the invitation mechanism and build a richer economic cycle within the ecosystem.

From the economic model perspective, the parent token HOOK has a very low initial circulation, with a fully diluted market cap of only $50 million, possibly aimed at achieving strong control by market makers. Additionally, the Hooked official previously conducted a Halloween event, distributing over 40,000 Hooked Party Passes (in SBT form, non-transferable) to the community. According to official information, this Pass can be seen as a certificate for early users. If the official attracts market attention by airdropping HOOK tokens to this Pass, there will likely be a large amount of zero-cost token selling in the short term, requiring close attention to official information.

From the ecological needs perspective, currently, in the Binance ecosystem, apart from Stepn triggering short-term FOMO that has made economic activities on the BNB Chain extremely active, no other similar phenomenon-level products have emerged. Hooked Protocol has the potential to attract more users to the BNB Chain. However, this relies on the economic cycle within the Hooked Protocol being sufficiently diverse; otherwise, it will be another period of silence following a wave of FOMO sentiment.