Editorial / Opinion

ESSENCE: VOLUME & CIRCULATING SUPPLY?!

This is an article in our “Opinion” series. Here we write more freely our opinionated thoughts and ideas and would love for you to comment your thoughts about the article itself or your own ideas and debate the thoughts in the article!

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ESSENCE now confirmed being EARTH 2s CryptoCurrency, similar to MANA in DECENTRALAND and SAND in SANDBOX GAME.

POLYGON to bring ESSENCE to the MARKET!

This achievement will be done via the partnership of POLYGON STUDIOS that have been involved with numerous Ethereum based blockchain projects. Among these projects are OPENSEA.IO, the worlds largets NFT marketplace platform, and the Metaverse competitor Decentraland and the MANA Token!

What will be the characteristics of ESSENCE?

Please also read the previous article: Essence Crypto Good or BAD?! <- Click

QUESTIONS Such as:

  • How much is in CIRCULATING SUPPLY ?
  • How MUCH has been released and how/when will MORE ESSENCE be released ?
  • Can ESSENCE be “Burnt” / Removed from Circulating Supply?
  • Is there a MAX VOLUME ?
  • What could the VALUE of ESSENCE Token be ?

All questions that will clarify for each passing week and month!

However, this is what we know so far!

How much is in CIRCULATING SUPPLY ?

ESSENCE was implemented the 7th of August 2021. Almost exactly 4 months after (120 days) came the closing of TIER 1 and Earth 2 stated that aprox. 251 Million ESSENCE had been distributed during this time. Seen in below picture.

Lets do some calculations, estimations and assumptions to break this down!

TILES base distribution: A total of 59 MILLION Tier 1 Tiles have been sold. The E-ther generation is 1 E-ther per 59 Tiles (Excluding jewel bonus for now). Hence ALL these tiles generated 1 MILLION E-ther per day. 120 Days have passed which gives us a total of 120 MILLION E-ther. However, there is the Transformation Ratio aswell to get it into ESSENCE. The AVERAGE Transformation Ratio is 68% (This have been measured by us in a big study group over all 4 months).

This leaves us with 81 600 000 ESSENCE generated via TILES / MENTAR Detection.

NOTE: This is only if everyone have logged in every day and claimed their Essence. It is safe to say that many have not done this or missed many days. We do not know this value though. Hence, it is less than 81 MILLION

Jewels Production: This was introduced 11th November. Aproximately a Month before Tier 1 tiles stopped selling. The +2 E-ther Bonus also needs to convert with the 68% ratio.

Here it is important that not all have single tiles and can slot 1 Jewel per 1 Tile. Larger properties like a 750 Tile Property can only slot 12 Jewels = 1 Jewel per 62 tiles (750/12). Lets assume people can slot double than that to get a reference line. That is 1 Jewel per 30 tiles. And also now assume that ALL investors have done this with the 59 MILLION tiles. 59 MILLION / 30 = about 2 MILLION JEWELS slotted. They give 2 E-ther. Which gives us an additional 4 MILLION E-ther per day for about 30 days = 120 MILLION E-ther and transformed to ESSENCE (68%) = 81 600 000 ESSENCE (AGAIN!) This was a random coincidential calculation. Funny!

So now we have 81 MILLION (from Tile Detection) + 81 MILLION (from Jewel boost) = 160 MILLION. Now we are only lacking the AIRDROP.

AIRDROP: We have tried to get an aproximate ratio vs how much investors had before but it seems to be highly volatile. However, it cannot be another 160 MILLION as we did not get double our ESSENCE. Closer to 50% in average or so. Hence perhaps another 81 MILLION !

Earth2 posted 2 pictures with 2 different values (seen below). It could be that the picture with 207 MILLION is without (excluding) the Airdrop and the picture with 251 MILLION is including airdrop.

If that would be the case then the airdrop size was roughly 44 Million. If this corresponds to 20% then the 100% EDC would be 220 MILLION. The EDC is also the MINIMUM ESSENCE investors will recieve. What / how investors would do in order to gain more ESSENCE is hidden in the dark. Luck? Gaming? or other activites we do not know.

Result: 81 (Tile detection) + 81 (Jewel Boost) + 44 to 81 (Airdrop) = 200 – 240 MILLION ESSENCE ! Very close to their number on the website!

NOTE: of course these numbers are calculated by assumptions. However, these numbers are rather optimistic calculated as we have not subtrack the value of people not slotting all 2 MILLION Jewels and logging in everyday to claim Jewels. Also ESSENCE burnt via EPL and Jewel upgrading.

Hence our conclusion is that the ESSENCE currently in circulation is not much more than:

APROXIMATELY 150 – 250 MILLION ESSENCE CIRCULATING

The picture might state 251 but it may not be circulating, merely distributed.

How/when will MORE ESSENCE be released ?

At the closing of TIER 1 tiles EARTH 2 also introduced a new term “EDC” or ESSENCE DISTRIBUTION COMMITMENT. Now investors learnt that ESSENCE would be locked to the property and 20 % of the locked ESSENCE would be distributed directly.

TOTAL EDC: If the Airdrop mentioned above was between 44 to 81 MILLION ESSENCE then the 100% would be:

220 to 405 MILLION ESSENCE IN TOTAL EDC

Except for the EDC process it is also stated that TIER 2 properties will generate ESSENCE; however, Unpredictable Generation and Unpredictable Conversion. TIER 2 cannot be slotted with Jewels at this times, thus no +2 Ether boost.

More ESSENCE will be released and possibly in various ways.

The Max Volume will not end at the around 500 MILLION ESSENCE via Early bird generation + EDC (+higher than minimum) + TIER 2 generation. It is possible that Earth2 will follow a release schedule, a common process for centrally release of tokens. Time will tell.

Can ESSENCE be “Burnt” / Removed from Circulating Supply?

YES!

ESSENCE can be burnt / spent. Currently it is via Purchasing EPL and Upgrading Jewels. How much ESSENCE that have been “returned” to Earth2 is not known. In the future it is quite possible that more activities will/could require ESSENCE and thus deflationary tools are in place for ESSENCE. Making Circulation more scarce and increase the price of ESSENCE.

Is there a MAX VOLUME ?

Except for the expected levels of 500 MILLION ESSENCE (The circulating 250 + the 80% AIRDROP left of 250) it is still a way too low volume for a crypto TOKEN. Considering SAND token volume at 2 000 MILLION (from the metaverse Sandbox game) and the MANA token at 3 000 MILLION (Decentraland) it would be a failry good bet ESSENCE could be expected at the same numbers.

That leaves us with perhaps a volume of 2 500 MILLION ESSENCE yet to be released.

In the Sandbox case 40% of the 2 MILLION SAND was distributed to players and in Decentraland 60% MANA was have been distributed to players/people

If we then assume 50% of ESSENCE would be released for circulation it leaves us with aproximately 1000 MILLION more to be released over time in various types of activities. Normally this happnes over many years as can be seen in the Sandbox graph below.

What could the VALUE of ESSENCE token be ?

Many E2 Investors look at the relationship between E2 dollars and ESSENCE existing in the platform. This exist for the purchase of EPL’s. Currently Investors can choose to buy EPL for 4,95 USD or 400 ESSENCE giving a 1,23 cent value of essence.

However, when ESSENCE goes to the open MARKET it is in the hands of the external world and speculating crypto investors. This will be a highly volatile market but price might rise to much higher levels than 1 cent per ESSENCE. Recently metaverse tokens have been hot on the open market where MANA sits at 3.67 USD and SAND at 5.26 USD.

Depending on if the hot market is still running while ESSENCE enters in we would most likely see prices in the same range. IF not volume is much higher than the competitors below.

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3 comments

Vitchge 2021-12-06 at 22:21

While I agree that the market cap could be comparable to the competitors I think you’re underestimating the amount of tokens/coins in circulation and hence its price. Many people reported couple of weeks ago that the amount of essence reached number of tiles. With airdrop and jewel boost I think it’s safe to say that this has now on average doubled, meaning that each tile so far produced 2 essences. If 1 essence would be worth 4$ each (T1) tile would return on average 8$, and would give many players fantastic instant ROI. Very optimistic imo.

Reply
E2Economist 2021-12-08 at 07:58

Hi Vitchge! Yes, interesting approach. We looked at this as well. (May need to update our article above to include this). A total of 59 MILLION Tier 1 Tiles have been sold. The E-ther generation is 1 E-ther per 59 Tiles (Excluding jewel bonus for now). Hence ALL these tiles generated 1 MILLION E-ther per day. 120 Days have passed which gives us a total of 120 MILLION E-ther. However, there is the Transformation Ratio aswell to get it into ESSENCE. The AVERAGE Transformation Ratio is 68% (This have been measured by us in a big study group over all 4 months).

This leaves us with 81 600 000 ESSENCE generated via TILES / MENTAR Detection.
NOTE: This is only if everyone have logged in every day and claimed their Essence. It is safe to say that many have not done this or missed many days. We do not know this value though. Hence, it is less than 81 MILLION:

Jewels Production: This was introduced 11th November. Aproximately a Month before Tier 1 tiles stopped selling. The +2 E-ther Bonus also needs to convert with the 68% ratio. Here it is important that not all have single tiles and can slot 1 Jewel per 1 Tile. Larger properties like a 750 Tile Property can only slot 12 Jewels = 1 Jewel per 62 tiles (750/12). Lets assume people can slot double than that to get a reference line. That is 1 Jewel per 30 tiles. And also now assume that ALL investors have done this with the 59 MILLION tiles. 59 MILLION / 30 = about 2 MILLION JEWELS slotted. They give 2 E-ther. Which gives us an additional 4 MILLION E-ther per day for about 30 days = 120 MILLION E-ther and transformed to ESSENCE (68%) = 81 600 000 ESSENCE (AGAIN!) This was a coincidential calculation. Interesting.

So now we have 81 MILLION (from Tile Detection) + 81 MILLION (from Jewel boost) = 160 MILLION. Now we are only lacking the AIRDROP.
We have tried to get an aproximate ratio vs how much investors had before but it seems to be highly volatile. However, it cannot be another 160 MILLION as we did not get double our ESSENCE. Closer to 50% in average or so. Hence perhaps another 81 MILLION !

Result: 81 (Tile detection) + 81 (Jewel Boost) + 81 (Airdrop) = 240 MILLION ESSENCE ! Very close to their number on the website!
NOTE: of course these numbers are calculated by assumptions. However, these numbers are rather optimistic calculated as we have not subtrack the value of people not slotting all 2 MILLION Jewels and logging in everyday to claim Jewels. Also ESSENCE burnt via EPL and Jewel upgrading.

Hence our conclusion is that the ESSENCE currently in circulation is not much more than aproximately 150 – 250 MILLION ESSENCE.

Reply
Vitchge 2021-12-06 at 22:23

* overestimating its price

Reply

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