Fact Check: Debunking Common Myths

Whether you voted in favour or against, you’ve likely encountered some common misconceptions on social media and online forums regarding the Plutus white paper 2024 upgrades. To clarify these points, we’ve created an easy-to-understand HelpDesk article that debunks these misleading myths.

1) Dynamic Supply - “Plutus can print unlimited PLU—that's bad”

100% of Compounding Rewards Yield (CRY) is self-sustainable, and up to 50% of Rewards and Perk emissions. This means fewer tokens are minted for emissions, maintaining a low circulating supply. Reconciliations are done quarterly via a regulated third-party, and therefore Plutus cannot mint new tokens unnecessarily.

Current Reward Issuance Process: All rewards issued to customers currently come from a pre-mined pool of 20 million PLU tokens. Each quarter, our database and card transactions are reviewed by a regulated third-party to ensure accurate reward issuance from this pool, preventing us from minting tokens at will. 

Although third-party reconciliations ensure transparency, the current process has a significant single-point-of-failure due to the centralised rewards pool. This system was designed based on our 2015 tokenomics, which initially capped rewards at a maximum of 3%.

As a result, our current system cannot scale to millions of customers long-term, particularly with Reward Levels offering 4-10% in rewards. The new system will combine third-party reconciliations with regulated partners, and implement token minting through multi-signature protocols. This approach mitigates security risks and enhances transparency. On the first day of migration, the total supply will be adjusted to reflect the tokens in circulation.

Validation and Sustainability: Additionally, according to a validation report provided by Ernst & Young (EY), a £7.90 value of PLU or higher can enable 100% self-funding of all emissions including CRY, Rewards, and Perks through FUEL - this means no new tokens would need minting at scale as the system recycles tokens in circulation.

Long-Term Operational Capability: The uncapped supply ensures that the system can remain operational 100 years from now. The accompanying features impact supply and demand dynamics through (a) FUEL which reduces circulating supply by recycling tokens back to the Rewards Pool and (b) new Reward Levels which increase stacking and further reduce the remaining circulating supply. This approach encourages long-term sustainability and a supply shock, as projected in the financial forecasts reviewed by Ernst & Young in their validation report.

Please read the official documents or read the EY preliminary “Plutus Rewards System (PLU) | Strategic Review & Tokenomics Integrity Validation” report to prevent falling for misinformation on social media.

2) Value Comparison - “Rewards slashed without any improvements”

The rewards have not been ‘slashed’; instead, we have expanded the Reward Levels and introduced CRY, which provides even greater value and earning opportunities for your stack. This approach is designed to foster long-term loyalty that benefits the entire ecosystem, rather than just individual customers who may not engage with the app while benefiting from low-cost, lucrative rewards.

To address misconceptions about these updates, we recently introduced a comparison calculator. This tool illustrates the value difference between our new and previous reward systems, specifically targeting concerns from those focused on short-term individual benefits—that ultimately harm all stackers in the ecosystem.

3) Fair Contribution - “Requirements have gone up, but value is down”

Over the past five years, Reward Level customers have been earning triple their original stack. For instance, many Heroes who started with just 250 PLU earned up to 750 PLU each year without further contributing to the ecosystem. Without the recent updates, the system will continue to lose value.

Responding to Community Feedback: In response to this issue, we introduced the Difficulty Adjustment in 2023, which the community later requested to be replaced with a new plan—now reflected in our latest whitepaper.

Unbalanced Expectations & Rewards Distribution: Only 5% of over 125,000 customers were on Reward Levels and they earned £20m worth of PLU from their initial low-cost stack without any changes in requirements. Even Bitcoin undergoes a 'Halving' process—a difficulty adjustment every four years—to manage its emissions sustainably. Expecting the ecosystem to remain valuable while triple rewards are distributed to everyone without fair contributions is unrealistic.

The Impact of Non-Stacking Behavior: We've also observed that many customers do not stack their rewards; instead, they request monthly payouts to third-party services which negatively impacts the ecosystem.

Encouraging Long-Term Engagement: The new system is designed to encourage long-term engagement within the app, offering the potential for even higher rewards over time while fostering a healthier ecosystem. Our updates shift the model from merely earning and withdrawing rewards to earning, stacking, or redeeming within the app. This approach allows customers to continue enjoying high reward rates, but now in a way that supports a more robust and sustainable ecosystem.

4) Stability Assurance - “CRY is unsustainable - look at the insane numbers Titans earn every year”

Ernst & Young (EY), a "Big Four" accountancy firm, conducted a thorough review of the latest version of the whitepaper released on 31st June, 2024, with a team of experts specialised in economics and financial forecasting.

Based on extrapolated historical data, their projections confirm that all emissions related to CRY are 100% self-sustainable via FUEL at scale, regardless of the token value that influences these emissions.

Moreover, they verified that all PLU emissions—including CRY, Rewards, and Perks—can be fully self-funded if the value remains at £7.90 or higher. This is highly achievable, as the in-app utilities will anchor PLU at £10 redemption value. To view the full report, please submit a ticket here.

5) Free Rewards - “I want more rewards and Perks or I will leave” 

Transitions can be challenging, but they are essential for growth. Our next milestone is to reach one million customers—a goal unattainable under the current usage trends shaped by misconceptions and the focus on low-cost, high-value rewards. Consequently, the system is naturally evolving to prioritise customers who engage productively within the app, leveraging long-term stack benefits and contributing more significantly.

For example, Titans stacking 50,000 PLU are becoming increasingly central to the community. It’s more beneficial for the ecosystem to have fewer customers on the new system who appreciate its unique benefits and engage productively over the long term, rather than a larger number on lower reward levels from the previous model who do not engage.

‍6) Utility Anchor - “PLU value cannot be directly pegged through utilities”

All four of the five planned utilities anchor PLU’s redemption value in-app to a minimum of £10.

Additionally, Plutus Travel offers substantial intrinsic value for PLU (£150 = 1 PLU), providing savings worth £15,000 on larger travel bookings. Furthermore, 1 PLU can guarantee a win through Plutus Cashback, offering an average of 20% back in fiat on commonly used services, as seen with our Perks, and it has the potential to provide 100% cashback on high-value purchases.

Important Note: Plutus provides an in-app utility token and strongly discourages external use of tokens that violate our terms of services. We do not influence or guarantee external conditions.

However, third-party reports, including the financial forecast from Ernst & Young (EY), suggest that in-app utilities for commonly used services can influence external conditions. According to these reports, offering redemptions for real-world value at a minimum fixed rate of £10—above the target of £7.90—can impact the token value through the economic principles of market equilibrium, thereby ensuring 100% self-funding for all payouts, including CRY, Rewards, and Perks.

High user engagement focused on maximising savings will likely result in most activity occurring within the app, discouraging external use. 

See complete list of utilities here.

7) Front-Loading Features - “Why are the lower Reward Levels not implemented yet”

The 1st August, 2024 release includes features that are already built, while additional Reward Levels will feature unique front-loading benefits that are still under development. As outlined in the technical white paper, these features will provide advanced benefits, such as up to 10% rewards and CRY rates for beginners with just 1 PLU stack, aiding progression to higher levels.

Based on EY’s recommendation to enhance lower Reward Levels, we are also incorporating front-loading benefits into all levels in the Beginner category to help customers with 1-500 PLU stacked advance more quickly through the reward tiers.

Please be patient as unique new features and rules are being built. We also highly recommend reviewing the technical documentation to understand the full potential of these forthcoming enhancements.

8) Development Plans - “When will the roadmap arrive”

Our preliminary development plans, outlining our priorities for the rest of this year and into 2025 can be found here. Please note that we will not be providing specific ETAs or dates.

9) Usability - “Will the PlutusSwaps actually arrive? And will it be available in the UK?”

Please note that PlutusDEX was introduced in our 2015 whitepaper and was launched in 2019, remaining operational for five years. However, due to its partial centralisation, it was not scalable to millions of customers. We are now planning the development of a true decentralised exchange with innovative features such as Pool & Earn and Tokenised Deposits.

Availability depends on your jurisdiction:

• UK: PlutusSwap will launch once we secure the necessary licensing with the FCA. Although we don't have specific dates yet, we are making progress with our assigned caseworker, whose recommendations have been implemented over the past year. The remaining compliance upgrades are expected to be completed by next quarter. We are fully committed to ensuring a successful outcome and reinstating the swap feature for our UK customers.
• EEA: As mentioned by Danial Daychopan (CEO & Founder) in a recent AMA, timelines aren’t guaranteed but we are all hands on aiming to launch a Web2 version of our quick swap feature this year. The Web3 version of PlutusSwaps will arrive next year due to required licensing and regulatory set up for tokenised deposits required to use on a complete DEX.

10) Keeping Promises - “Plutus never delivers on its roadmaps, just look at DEX!”

Plutus is one of the only startups from 2015-2016 that has fulfilled all its key promises since its $1 million token sale nearly a decade ago when there were only a handful of ERC-20 tokens. We have delivered significantly more than many others in the space who followed since and raised much more in funding but achieved far less, with many of them disappearing entirely.

Early Decentralisation Commitment: Showcasing our early support for decentralisation, we committed to being the first to launch a loyalty rewards card with a non-custodial DEX. We fulfilled this promise by operating the DEX for five years with no fees for customers. Plutus covered all GAS fees and spent over $5 million to provide liquidity and facilitate swaps (crypto and fiat) valuing $50 million, all while allowing customers to maintain self-custody—efforts that have been largely forgotten and unrecognised.

Scalability and U.S. Launch: The DEX was paused to enhance scalability, a necessity we have communicated extensively. This is also the reason for the delay in our U.S. launch; developing a scalable app and establishing robust tokenomics and stability are essential before entering a market of 330 million consumers.

Transition Roadmap 2023: The transition roadmap from last year has been largely executed, with only minor delays due to third-party issues, such as the manufacturing of physical cards.

Misguided Criticism = Self-Sabotage: Claims that Plutus does not deliver are unfounded and only serve to undermine the community and those stacking PLU rewards in-app.

11) Ecosystem Benefits - “Only Plutus benefit from new reward level requirements, not customers”

No, the exact opposite is true.

Plutus doesn’t profit from Reward Levels; instead, we offer extra benefits for free, which actually results in lost revenue. Customers unlock Reward Levels by stacking what they earn from their subscription fees, or by receiving PLU from others not directly from us. We created the reward system in 2015 for the benefit of customers to help with their daily spending. 

Our rewards system, created in 2015 specifically to help customers with their daily card spending, has delivered £50 million in value over five years to more than 125,000 customers who together spent £1 billion. This achievement, was driven by our community-focused approach, minimal marketing, and no outside funding—a rare success that is often overlooked.

12) Non-Custodial Stacking - “Plutus is making it expensive to earn triple the stack”

We advocate for non-custodial stacking, meaning we don’t lock customer funds or use them for stadium sponsorships. Customers retain all their original stack and rewards, with the only cost being the ~£9.99 subscription fee. This fee provides thousands in value when combined with Reward Levels that, although centralised, solely serves the community, which is why similar benefits do not exist elsewhere—another privilege that is misunderstood.

Reward Levels offer unmatched benefits and require customers to engage productively to remain valuable. To maintain long-term value in this high-reward ecosystem, fair contributions and collective commitment to its principles are crucial. Mis-using rewards for third-party payouts undermines both individual and community goals, while responsible use helps strengthen the entire ecosystem.