ORIGIN game theory explanation

The simplest ORIGIN mode, with two players and three possible actions:

· ● Pledge LGNS (stake)

· ● Buy bonds (bond)

· ● Sell LGNS (sell)

When the LGNS staking income increases and the price of LGNS increases, players are more willing to stake LGNS. Players are most likely to sell LGNS when they predict that staking returns will decrease and prices will fall. When players have not been significantly negatively affected and have no apparent tendency, they are more willing to buy bonds (bonds have discounts, and there is room for arbitrage. The third part of the white paper, bond contracts, will elaborate on bond discounts).

Staking LGNS can push the price up by +2, and selling LGNS can push the price down by -2. Players who operate the LGNS band can get 50% of the profits. Buying the bond without pledging LGNS does not impact the price, but since the bond has a discount, the profit is +1.

As can be seen from the above table, the optimal strategy is for two players to cooperate. The result of both pledgings is 6; one buys bonds, and the other stakes 4, selling/stake and selling/buying bonds mutually. Hedging is a neutral 0; the worst outcome, where two players distrust each other and compete to sell, is -6.

Player behavior depends on premiums, market outlook, macro environment, and other factors. Nor is it necessary to attach too much importance to the numbers' size and positive and negative. The table is only to show the positive area created by cooperation.

Extreme environment.

Cooperation will produce the best results; if you don't plan on sticking with it long-term, we suggest you don't.

Participate. We don't need people who sell BTC for $50,000 and repurchase it for $30,000. The LGNS you hold is a better BTC.