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# Claim Reward and Tax

Every PPP earned from NFT Hero daily farm**, Selling NFT Hero/Pet, Selling NFT Items** in the Game is consider Player Income and will be a Taxed if Player want to claim it out to On-Chain PPP
There is a min/max amount limit to Claim PPP to On-Chain, you can only claim when you have greater than or equal to 20 in-game PPP. For non P2E player (player whom doesn't own any NFT Hero) this limit is 120 PPP.
The max amount limit to Claim PPP in one time is: 100000 PPP For non P2E player max amount limit is: 1000 PPP

### 1.Dynamic Tax Rate

The tax model is based around a fact that Claim PPP reward out have a cool-down period. When the game is launched this period is first set to 3 days. Then increasing by one day every week. At 4 weeks after Game launching, this cool-down period will be 7 days. Then it will be keep constant until further notice.
Every time you want to claim your PPP, a portion of your claimed amount will be taxed. Based on this model of 3 brackets: 20%(free) 30%(low-tax) 50%(high-tax)
20% of your total unclaimed In-Game PPP is free to claim.
30% of your total In-Game PPP will be taxed using curve formula follow a targeted price P1 with (b)ase is 30% and (M)ax rate is 50% (min 20%)
$r1 = M-b *|ln(P/P1)|$
50% of total In-Game PPP will be taxed using curve formula follow a targeted price P2 with (b)ase is 50% and (M)ax rate is 80% (min 30%)
$r2 = M-b *|ln(P/P2)|$
P is current price of token PPP
P1 is following 25 days MA (Moving Average) of price of token PPP
P2 is following 7 days MA (Moving Average) of price of token PPP
This tax rate formula will create a incentive for Player to hold the PPP coin when the current Price start drifting from targeted price. The further price is moving away the lower the tax rate.
The total maximum tax rate if player withdraw all is theoretically capped at 55% according to this formula (when P=P1=P2) In-realty the tax rate will be lower than that. For example, if player have 100 PPP unclaimed reward and he want to claim 80 PPP. At the claim moment, the price of PPP = 1.5$while targeted price P1 = 1$ and target price P2 = 2\$.
20 PPP at r=0% tax , player receive 20 PPP
30 PPP at r1= 37.83% tax , player receive 18.65 PPP
30 PPP at r2= 54.45% tax , player receive 13.66 PPP
Final claimed amount will be 52.31 PPP (27.69 PPP is taxed) resulting a total 34% tax
However if Player only claim 20% of his total In-Game PPP at a time. He will not be taxed at all (r=0% tax). He can keep claiming 20% at a time for each cool-down period to avoid the tax completely.
This tax mechanism encourages player to spend his unclaimed PPP to reinvest or just diamond hand holding it to wait for a lower tax rate to claim.

### 2. Frequency of altering Tax Rate

For first 2 weeks of the game the tax rate will be set fixed to a low minimum:
r1=20% and r2=30%
After that the tax rate will be recalculated daily using formula above but with targeted price P1 and P2 set by the team. Depend on market sentiment and growth expectation we will set these targeted price to reflect that.
Once the game finish its first quarter. The targeted price P1 will be automatically set to follow the current 25 days MA price and P2 will be automatically set to follow the 7 days MA price.
Note: The targeted price P1, P2 may some time will be keep constant and not tracking Moving Average price of PPP token on purpose to keep the economy stable.