Author: 798.eth, creator of the web3.devmeebits Chinese community
There’s a Merge Lab on http://slonks.xyz . Opening https://slonks.xyz/merge-lab reveals a strange image. On the left is Slonk #608, a normal male punk avatar, slop=15. On the right is Slonk #645, a normal female punk, slop=3. In the middle is the fused form, a mixture of black hair, blue eyes, and blond hair fragments, slop=161, +146 slop.
Using this chart as your entry point to Slonks economics is 100 times more intuitive than reading the white paper.
mechanism
Slonks are collections of NFTs that reconstruct CryptoPunks using an on-chain neural network model. Each Slonk corresponds to a CryptoPunk source, and the model renders the reconstructed image using a 24×24 pixel + 222-tone palette. The model is not perfect; the pixel difference between the rendered image and the original punk is the slop value of this Slonk. The slop ranges from 0 to 576, because the canvas has a total of 576 pixels.
The core mechanism of the $SLOP token scheme currently being developed is called voiding. Holders submit Slonks to a void contract, which then mints a corresponding number of $SLOPs based on the current slop value. A Slonk with slop=15 void will produce 15 $SLOPs. A void Slonk with slop=400 will produce 400 $SLOPs. The $SLOP cap is 5,760,000, which is equal to 10,000 × 576, representing the limit of a completely void Slonk.
Merging is another approach. One Slonk acts as the survivor, and the other as the donor. The donor is permanently destroyed, and the survivor is upgraded to the next merge level with a new embedding. The new embedding is used to render a new graph, which is then compared with the survivor’s source, and the Slop value is recalculated.
Regarding the logic behind the increased slop after merging, there was a previous misunderstanding. Here, we need to correct a detail at the mechanism level (thanks to jef for the reply): The increase in slop is not random, nor is it simply due to a decrease in the simulation capability of the hybrid model. Rather, it is determined by the morphological difference between the two source punks. For example, pairing a hoodie with a large head with a female with a small head results in the greatest morphological difference, and the slop after merging will soar to its highest. Therefore, to achieve the maximum $SLOP yield, you need to find the pair with the greatest morphological difference. You can try it out in the Merge Lab.
Merging doesn’t generate $SLOPs on its own, but after merging, `void` can generate more $SLOPs. This path isn’t explicitly stated in the whitepaper, but it’s mathematically valid. In the example of #608 + #645, originally, both `void`’s generated only 18 $SLOPs, but after merging, #608 alone can generate 161 $SLOPs. The cost is the permanent loss of Slonk #645.
Data and Deflation: Scale is the Scar of Destruction
Slonks were deployed on May 1st, and 5 days have passed. The current total supply is 9,505, the cumulative mints are 10,012, and the cumulative burns are 507. 5.06% of Slonks have permanently disappeared from the chain.
Daily burn count: Day 1: 0, Day 2: 79, Day 3: 175, Day 4: 60, Day 5: 69, Day 6: 124. The 175 burn count on Day 3 was due to a surge in community-wide merge testing, and the 124 burn count on Day 6 was driven by the escalating strategy following the $SLOP whitepaper. The merge rate is accelerating, not slowing down.
It’s worth noting that voiding hasn’t started yet. The $SLOP contract hasn’t been deployed, so all the burns happening now are pure merge actions. Players were already strategically consuming resources based on slop values before $SLOP launched.
The destruction process keeps Slonks in a state of continuous deflation, and the Slonks’ mergeLevel is the scar left by the destruction.
In the entire collection, less than 5% of tokens have a mergeLevel greater than 0. mergeLevel is a strange field in the contract. The tokenURI shows that it can be filtered on OpenSea, and each Slonk on the chain records its level number, but there is no view function in the contract that exposes it, and no mechanism that relies on it to distribute rewards.
Its only hard constraint is same-level merging. L0 can only be paired with L0, and L1 can only be paired with L1. That is to say, each time you upgrade, you need to destroy twice the number of slonks of the same level. L1 burns 2 L0s, L2 burns 4 L0s, L5 burns 32 L0s, and L10 burns 10% of the total collection’s slonks. The theoretical limit is L13, which requires burning 8192 L0s to replace one, and the entire collection simply cannot survive to this level.
Upgrading in Slonks incurs exponentially higher costs but offers no exponentially higher rewards. Completely reversed from traditional games, upgrading in Slonks involves throwing one of your kind into the incinerator one by one. The level number doesn’t record how many times you’ve won, but how many of your kind you’ve burned. `mergeLevel` is currently an empty trait. The team has retained its interface, and whether a $SLOP economic incentive will be added in the future remains to be seen. However, the visuals after merging clearly show that the level is simply a trace of the destruction of your kind.
Dual valuation
At this point, the facts are solidified. Slonks does not have a single valuation logic; rather, it has two conflicting valuation logics.
The first valuation method considers the rarity of the source punk. In the CryptoPunk community, 9 Aliens, 24 Apes, and 88 Zombies are generally considered rare. If a Slonk’s source is Alien #2890 or Ape #5275, no matter how realistic the rendering is, it cannot eliminate the scarcity premium of the source itself. The lower the Slonk’s slop and the higher its fidelity, the more visually recognizable the green face of Alien or the ape face of Ape will be. Low slop is the core value of this type of Slonk.
The second valuation method considers the amount of $SLOP that voiding can generate. The higher the slop, the more $SLOP can be generated from voiding. This valuation method is completely unrelated to the rarity of the source punk. A typical male punk with a slop of 400 will generate 400 $SLOP from voiding. An Alien punk with a slop of 15 will generate 15 $SLOP from voiding. In terms of $SLOP price, a typical punk with a higher slop is far more valuable than an Alien punk with a lower slop.
The two sets of valuations directly conflicted in the merge decision.
If you hold a source that is a low-sloping Slonk from Alien, merge will do two things.
- First, it was given a new embedding, and the rendered image no longer faithfully replicated Alien’s green face.
- Second, destroy one of the donor Slonk.
The result is that you get a Slonk with an increased slop, but it’s visually unrecognizable as an Alien. It’s unrecognizable as an Ape, a Zombie, or any rare punk. The scarcity premium attributed to it by the CryptoPunks community has vanished to zero.
In return, all they gain is the potential to void an additional $100 $SLOP in the future. The price of $SLOP is unknown as it hasn’t been launched yet, but Alien’s secondary market value is well-documented. This trade is negative in expected value for those holding rare Source Slonk.
For those holding ordinary source-low slop slonks, merging has a positive expected value. These slonks lack both source scarcity and SLOP quantity value, placing them at a valuation low point. The most valuable thing they can do is to merge them into high slop slonks.
evolution
Extrapolating this logic to the entire collection level yields a Darwinian picture.
Slonks with poor model reproduction are the fittest. They have high slop scores, making them a goldmine for voiding; no one will merge with them, so they survive.
The reconstructed Slonk models are divided into two layers. Rare sources survive, as no one dares to merge them because it would destroy visual recognition. Ordinary sources are recycled and used as donors in the merge process to upgrade other Slonks.
Ultimately, collections will evolve into two coexisting categories. One category consists of “perfect failures” with high slop, where the model renders these punches unrecognizable, but their voiding value is high. The other category consists of “rare faithful reconstructions” with low slop, where the source is Alien/Ape/Zombie, resulting in low slop while preserving visual recognition, and high secondary market value.
Slonks in the middle ground continue to disappear. Slonks from ordinary sources and ordinary slops have no valuation advantage and are natural donors for merges. They contribute to two types of survivors and then permanently exit the market.
5% in 5 days. This rate will continue to rise as merge tools become more widespread and the $SLOP launch approaches. Slonks is an NFT project designed to disappear voluntarily. Its scarcity is not a hard-coded number of 10,000 at launch, but rather the result of a collective calculation based on every merge decision made in the market.
ending
Slonks and unipeg are both playing the scarcity game, but in opposite directions. Unipeg uses dust accumulation to make integers difficult to collect, causing the number of NFTs to fluctuate around 6,000. Slonks, on the other hand, directly destroys NFTs, losing over 500 in 5 days, with no signs of slowing down, and the loss is irreversible.
The white paper describes merges as a neutral mechanism. On-chain, however, this isn’t the case. Merging is a means for Slonks to optimize their aggregate valuation through self-consumption. Each merge is essentially a market vote, permanently removing a Slonk from the world in exchange for an upgrade to another Slop.
Five days ago it was 10,012. Today it’s 9,505. $SLOP hasn’t even launched yet, but the elimination process has already begun.
