📝Salary Cap

The overall pay scale for drafted Ballers will be based on their respective ranking as a percentage of the Hoopsverse salary cap. The salary cap is the maximum amount of money any Hoopsverse basketball team is permitted to spend on their payroll for drafted ballers. Like many professional sports leagues, the Hoopsverse basketball league has a salary cap to limit costs and achieve equality amongst teams.

In the first season, the salary cap will be calculated as a percentage of the game treasury fund as well as based on $HOLA’s current price as of the day of the draft. For all subsequent seasons, the salary cap will be determined by vote, and all members of the DAO will be able to participate.

The Hoopsverse basketball league has a soft salary cap. This means that teams are allowed to deviate 10% above or below the salary cap. Teams that exceed the 10% stipulated deviation, however, will pay taxes depending on different tiers. These tiers are defined based on how much money that team has exceeded the cap, and the tax will be paid to the Hoopsverse treasury.

The tax penalty is broken down into two tiers:

• If a team exceeds the 10% stipulated deviation by less than 5%, the team will pay a 10% tax (e.g. if a club spends 110 $HOLA coins versus the salary cap of 100, the club will pay 11 $HOLA in taxes)

• If a team exceeds the 10% stipulated deviation by 5% or more, the team will pay an additional 50% luxury tax on the excess amount (e.g. if a club spends 115 $HOLA coins versus the salary cap of 110, the club will pay 11 HOLA in taxes + and 2.5 $HOLA in luxury tax)