> For the complete documentation index, see [llms.txt](https://tg-games.gitbook.io/whitepaper/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://tg-games.gitbook.io/whitepaper/products-and-services/sustainable-business-model/revenue-3-redeem-tokens-with-merchants.md).

# Revenue #3 Redeem Tokens With Merchants

### Redemption of Points

100 points = $1.

### Commission from Merchants

The commission rate from partner merchants can vary. A common range is 5-30%. TG Games takes an average of 10% commission rate for our model.

### User Purchases with Merchants

If the user redeems points for cash and spends it at a merchant's store, TG Games makes a commission. Since 100 points = $1, and TG Games makes a 10% commission, then for every $1 spent by the user, TG Games earns $0.10.

#### Example

<figure><img src="https://lh7-us.googleusercontent.com/x0URSKSEiSv9MF7B5CUzxj7xz-1q6hs1WtC80U7buWFUccEBLcZfZmCnd0EjGIf2QGjDjjQGhMALgYM7OYsDG9Jl4eKDeW9Q2RAJm3_bLH_ML_uoAcfD6sMY_9CC_dZlgY07RUMwsNFvMvgaqohL22I" alt=""><figcaption></figcaption></figure>

**User's In-App Points:** The user has 500 in-app points, which are equivalent to $5 in value. These points are used as a discount or currency to make a purchase at a partner merchant's store.

**Total Purchase Value:** The total value of the purchase at the merchant store is $50.

**TG Games' Commission:** TG Games has an agreement with the merchant to receive a 10% commission on the sales made through its platform. Therefore, on a $50 sale, TG Games would earn $5.

**Merchant's Revenue:** After paying the $5 commission to TG Games, the merchant is left with $45. However, since the user used $5 worth of points to make the purchase, the actual revenue for the merchant is $40.

**User's Expense:** The user redeems their 500 points (worth $5) and pays an additional $45 out of pocket to complete the purchase.

Here is the structured model:

* **Initial Purchase Value:** $50
* **User Redeems:** 500 points (worth $5)
* **User Pays Additional:** $45
* **TG Games Commission (10%):** $5
* **Merchant Receives:** $50 - $5 (TG Games Commission) = $45
* **Net Merchant Revenue After Points Redeemed:** $45 - $5 (User's Points Value) = $40

In summary, for a $50 purchase:

* The user utilizes $5 worth of points and pays $45 cash.
* TG Games earns a $5 commission.
* The merchant receives $40 after the commission and points redemption.

| Time Period | DAU     | Daily Purchasing Users (if 1%) | Total Daily Purchase Value | Daily Commission Revenue | Monthly Commission Revenue |
| ----------- | ------- | ------------------------------ | -------------------------- | ------------------------ | -------------------------- |
| 2025 Q1     | 40,000  | 400                            | $20,000                    | $2,000                   | $60,000                    |
| 2025 Q4     | 100,000 | 1,000                          | $50,000                    | $5,000                   | $150,000                   |

### Other Revenue

In-App Purchases (IAP)

Premium Subscription (Token/NFT Gating)

#### Expenses Projection

| Quarter    | Number of Staff                                 | Monthly Salary Expense | Other Expenses\* | Net Monthly Revenue |
| ---------- | ----------------------------------------------- | ---------------------- | ---------------- | ------------------- |
| 2024 Q1    | Op x1, Dev x2, Game Dev x2                      | $27,000                | $10,000          | -$37,000            |
| 2024 Q2    | Op x1, Dev x2, Game Dev x3, Marketing x1        | $37,000                | $16,000          | -$11,500            |
| 2024 Q3-Q4 | Op x1, BD x1, Dev x3, Game Dev x3 Marketing x1  | $47,500                | $16,000          | -$7,500             |
| 2025 Q1-Q3 | Op x2, BD x2, Dev x3, Game Dev x4, Marketing x1 | $64,500                | $23,000          | $68,500             |
| 2025 Q4    | Op x2, BD x2, Dev x4, Game Dev x4, Marketing x2 | $74,000                | $30,000          | $271,000            |

**Monthly Salary Expense**

Operation Manager (Op): $6,000

Business Developer (BD): $5,500

Developer (Dev): $5,000

Game Developer: $5,500&#x20;

Marketing Personnel: $4,500

**2024 Q2 (As the company is starting up, expenses are estimated to be baseline):**

Office Space and Utilities: $2,000&#x20;

Cloud Services and Hosting: $10,000

Legal and Administrative Fees: $3,000

Subscriptions and Memberships: $1,000&#x20;

**2025 Q1 (Anticipating significant growth):**

Office Space and Utilities: $2,500 \* 3 months = $7,500 (increment due to more space required)

Cloud Services and Hosting: $15,000 \* 3 months = $45,000 (increased to support larger DAU)

Legal and Administrative Fees: $4,000 \* 3 months = $12,000 (scaled up for increased operations)

Subscriptions and Memberships: $1,500 \* 3 months = $4,500 (additional tools and services needed)<br>

**2025 Q4 (Preparing for further scaling):**

Office Space and Utilities: $3,000 \* 3 months = $9,000

Cloud Services and Hosting: $20,000 \* 3 months = $60,000

Legal and Administrative Fees: $5,000 \* 3 months = $15,000

Subscriptions and Memberships: $2,000 \* 3 months = $6,000