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$GHST Coming Out Of Its Shell

Sep 21, 2020 · 8 min read

By Piers Kicks

Key points:

  • Aavegotchi is not an offical Aave project, rather a grant recipient after pitching a high-level idea for an Aave-themed game revolving around value-staked NFTs.


  • The one line pitch is to build “provably-rare DeFi-staked collectibles”.


  • The theme is quite amusing, it turns out that Aave means ghost in Finnish and these little characters are actually the ghosts of liquidated yield farmers.


  • Beyond the grant, the project has financed itself by selling its native token, GHST, in a private round, a pre-sale, and most recently the launch of its bonding curve.


  • The project weaves together aspects of DAOs, DeFi, and NFTs all into one. Unlike other projects, rarity is not fixed across the ecosystem. Rather, it is in constant dynamism keeping players on their toes and giving birth to their novel idea of “rarity farming”.


Aavegotchi anatomy:

Aavegotchis are comprised of three attributes that drive their value and rarity.

  • Spirit Force: In order to summon an Aavegotchi through a portal from the Nether to the Ether realm, they must be imbued with Spirit Force. This force is effectively collateral staked in the form of Aave-backed ERC-20 tokens. Every Aavegotchi ERC-721 also manages an escrow address containing this Spirit Force. aTokens are able to generate yield in Aave lending pools, thus increasing the Spirit Force of a given NFT over time.The required Spirit Force stake is determined by an Aavegotchi’s base rarity score (BSR) at the point of summoning. Even if the BSR changes over time as it is upgraded, the minimum stake required remains fixed in perpetuity. Transferring these NFTs to new owners also transfer the Spirit Force contract (collateral stake).Once a buyer decides to remove the Spirit Force (claim staked collateral) from an Aavegotchi, it is ejected back into the Nether Realm for eternity.


  • Traits: Aavegotchis have multiple traits that influence how they will determine things like rarity, performance in mini-games, and which wearables they are able to equip. Some are generated upon summoning, some depend on user interaction, and some are subject to community voting via the DAO.


  • Randomly-Generated: Upon summoning, ChainLink’s VRF is used to assign one of seven rarity levels across seven total traits shown below (although more may be added in time).


Aavegotchi traits by rarity

  • Kinship: Much like how Tamagotchis required a certain degree of user interaction to remain in their healthiest state, the Aavegotchis are able to build bonds with their owners over time. This is predominantly driven by how long it remains with a particular owner, but neglecting them will have adverse effects. These are not intended to be places to passively store crypto. Beyond increasing ownership length, the following methods can also be used to boost kinship:


  • Voting via City Hall in the DAO


  • Playing minigames


  • Feeding Aavegotchis (temporary performance boosts for minigames)


  • Equipping wearables


  • Experience: XP is gained for DAO participation and playing minigames. Aavegotchis can be sacrificed to claim the underlying collateral stake and send it to another ghost. When doing this, the recipient will also be granted a (TBD by DAO) fraction of the accrued XP of the sacrificed Aavegotchi.


  • Level: As XP is gained, Aavegotchis can “level up”. Every few levels, they are granted a Spirit Point which allows them to increase or decreased certain traits.


  • Haunt: Aavegotchis travel from the Nether Realm to the Ether Realm in large groups known as Haunts. The first will contain 10,000 of them, and future Haunts will be determined by the DAO. Certain wearables can only be worn by ghosts from a specific haunt.


  • Wearables: as well as managing the escrow contracts of staked collateral, Aavegotchis also extend ERC-998 in order to be able to manage both ERC-721 and ERC-1155 child NFTs. These are the backbone of the wearables system in the Aavegotchi universe.


Not all wearables are equippable by all ghosts. Many are exclusively reserved for Aavegotchis with certain levels, traits, or collateral staked. Some wearables will alter various traits of the ghost. For example, equipping one with a sword might increase its aggression. Wearables will affect the overall rarity of an Aavegotchi. Slots at launch include:

  • Head
  • Face
  • Eyes
  • Feet
  • Hand (left)
  • Hand (right)
  • Hand (both)
  • Pet
  • Consumables: these are used to temporarily boost certain Aavegotchi stats which may be useful before activities such as minigames. These are burned and removed from an Aavegotchi’s inventory when used. 


Rarity farming:

Unlike other NFT projects, rarity is not fixed in the Aavegotchi universe. It is constantly fluctuating based on a number of inter-woven dynamics. Your ultra-rare NFT might become less rare the following week based upon the overall distribution of wearables and traits throughout the universe. This enables a novel concept that the team has named “rarity farming”. The objective is to promote and reward thoughtful participation from users by allowing the trainers of the rarest Aavegotchis to collect a distribution of GHST rewards derived from all sales involving the token.

In addition to the aforementioned Base Rarity Score, Aavegotchis also have an Absolute Rarity Score which is determined by the rarity of their traits in relation to the system overall.

For example, if many players have trained their Aavegotchis to have maximum Energy Level, then the Absolute Rarity Score (ARS) for Energy Level – TURNT would be lower than that of Energy Level – WASTED. 

Absolute Rarity Score is calculated in terms of percentiles out of 100 for each of the Aavegotchi traits, so if only 5% of all Aavegotchis possess a certain trait, then that trait would receive a bonus of 95 to its ARS. 

The Total Absolute Rarity Score for an Aavegotchi is the sum of:

  • Base Rarity Scores for all traits


  • Base Rarity Scores of all equipped wearables


  • Absolute Rarity Score for all traits


The given rarity of an Aavegotchi in the overall Aavegotchi Universe is constantly shifting as players summon more Aavegotchis, equip more wearables, and level up their Aavegotchis. Thus, players must make strategic decisions on how they train and equip their Aavegotchis. 

There is currently no limit to how many interactions an Aavegotchi can perform each period, but if bot activity became a problem then the AavegotchiDAO could vote to add circuit breakers to reduce bot activity.”

Calculation of Traits Absolute Rarity Score

The $GHST token:

The GHST token is used as the base currency for the entire Aavegotchi ecosystem. It is required to purchase digital assets ranging from portals (to summon Aavegotchis into the Ether Realm), wearables, consumables, and other collectibles. Furthermore, GHST must be staked in order to mint REALM which are the land parcels of the Aavegotchi Realm. 

GHST Usage Within The Ecosystem

Essentially, players are required to purchase and spend GHST in order to summon and train Aavegotchis. A portion of this value is directed back to the DAO for funding, with the majority going towards ecosystem rewards for governance participation as well as, of course, rarity farming rewards for the best trainers in the ecosystem.

Token Distribution

The Aavegotchi Realm:

The Aavegotchi Realm is a 2D pixelated map where the ghosts can live, encounter each other, compete in mini-games, call smart contracts, and participate in governance of the DAO. In addition to physically developing parcels of land, owners are able to implement smart contract interactions to unlock a whole world of creativity and experiences for visiting Aavegotchis. 

“Physical” congregations around the City Hall for reviewing proposals could add a new dimension to DAO participation that we are yet to see. This simple yet stylistic world will serve as the social layer for the entire ecosystem. It provides a universal and engaging interface through which it hopes to contextualize the fusion of DeFi, DAOs, and NFTs.

The AavegotchiDAO:

Aavegotchi follows in the footsteps of successful DeFi protocols such as Compound and Synthetix by following a process of “gradual decentralization”, beginning with the founding team, Pixelcraft Studios organizing a DAO-governed token distribution event (DAICO using Aragon) and culminating in placing governance of Aavegotchi, including all game mechanics, smart contracts, and funding, under the auspices of the AavegotchiDAO, but subject always to the prevailing regulatory environment. This will be accomplished in three phases.

Comparison of AavegotchiDAO Functions

Concluding remarks:

Whilst the project is still in its early stages, the team appears to be adopting a sensible approach to the rollout of what is actually quite an ambitious marriage of a few of the topics we’ve grown to love. 

After last week’s bonding curve launch, there has been an explosion of activity across their community such as the “Aavegotchi Aagents” navigating through a number of weekly missions to boost their Discord Agent levels.

Assuming this early community momentum can be maintained and built upon in the run up to mainnet launch, I’m cautiously optimistic about the project. There is a lot going on and a few blanks still to fill, but its reception thus far has been encouraging. Its strong meme game should also be noted…

An important aspect of a project like this will also be immunizing rarity farming against becoming purely a whales game. I’m interested to see what mechanics the team is able to introduce to mitigate the risk of this.

Depending on audit timings, the team plans to launch on mainnet in December. The first Haunt isn’t too far away—I’ll be keeping tabs on this project as the first 10,000 ghosts are released into the wild! 

Value Flow Across the Aavegotchi Ecosystem

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