Calmdonut

Calmdonut

07-04-2022

11:27

1/ I was asked what my opinion was on GameFi's single vs. dual token model. vs. three token model? Which token models are better? {Spoiler: It doesn't matter}.

2/ For the single token model, I will be using @DefiKingdoms as an example Dual-token model: @AxieInfinity Three-token model: @PlayCrabada

3/ Game's sources and sinks are CRITICAL to develop a healthy economy of a game, both web2 and web3. It helps to shape a sticky user's behavior, and, of course, affects user attraction and retention.

4/ One thing I've learned from examining all of the single, dual, or three token models is that they're irrelevant as long as they have a balanced relationship with one another, with game sources, and with game sinks.

5/ Majority of in-game currencies (e.g., SLP, TUS, and THC) have uncapped supplies (Ignore JEWEL; I'll explain why later.) These currencies are created out of thin air, distributed to players via in-game battles (game sources), and then flooded the market

6/ Hence, game sinks are CRITICAL. However, these games frequently make the error of not having enough *recurring* sinks. The word recurring is critical here.

7/ Consider Axie Infinity. SLP oversupply began in July 2021, and the only way to balance it is through breeding activities in which SLP is burned. Breeding is the ONLY SLP sink, that ultimately depends on people buying more Axies.

8/ But @SkyMavisHQ reacted 6 months after the first known oversupply happens (Sep, 2021)

9/ The problem here isn’t because of @AxieInfinity uses a dual-token model. It was because of - Inadequate SLP sinks - No recurring SLP sinks - Increased the depth of an existing sink too late They have plans to fix it btw: SLP sinks through cosmetics, Axie Origin, etc.

10/ Would it be better if they adopted a single token model in order to focus exclusively on AXS? No. How about JEWEL's DFK then? (ignoring Crystalvale for now)

11/ DFK is simply gamifying DeFi by adding some P2E elements (heroes/breeding heroes), but they're adding more gaming mechanics (PvP, dungeons, pets). For now, they're NOT the same as most P2E out there. They're more similar to clicker games with DeFi as underlying.

12/ JEWEL is soaring in value due to its single token model, which includes a RECURRING sink that serves as a gas token for the DFK Chain. All other sinks are considered secondary sinks, as they are dependent on the outcome of other DeFi + breeding activities.

13/ JEWEL is capped at 500mm token. With the breeding mechanism and the gas token, JEWEL is effectively deflationary. What happens when a token is deflationary and capped? Depends on the token demand, go figure.

14/ Is JEWEL sustainable? When a token value is expected to go up, it incentivizes some bagholders to become permanent community members. To some... it makes JEWEL... A store of value. lol People would spend less and cause a stagnant DFK economy. (in a distant future).

15/ How about a three-token model Γ  la @PlayCrabada? Crabada's third token is CRAM, that serves as a loyalty points. You can only get CRAM through single stake CRA.

16/ Loyalty points can be an extremely effective psychological tool for aligning Crabada's loyal users with the game's objectives, allowing Crabada to attract and retain its core users. The current perks is adding extra member to the default 3 crabadas + lucky draw.

17/ In the pipeline Crabada's team gonna add something called Special Mining Zones. No deets yet but I speculate that the Crabada team may include cooperative gameplay for gaming guilds for the special mining zones. So that would drive the demand for CRAM.

18/ That said, CRAM has a direct relationship with CRA but not with not TUS. This is good because any sudden increase in CRAM will have no effect on TUS (e.g. high demand from guilds to access game perks).

19/ All in all, Recurring sinks are necessary to keep the wheel spinning. Is there a different continuous sink other than the gas fee? Yes. @Stepnofficial.

20/ I'm quite impressed with StepN's dual tokenomic model. It has a recurring sink known as "shoe repair", akin to fixing a worn-out running shoes. The more you run, the more you have to repair, which consumes GST.

21/ StepN isn't a P2E. It's a social fitness app. Different user demographic. Running is a perpetual activity for those who wish to keep themselves fit. Hence, StepN's base players are more sticky compared to other games.

22/ So, in summary, single, dual, or triple token models are irrelevant if the game's sink and sources are not thoroughly considered + target demographic + game objectives. Personally, I favor a dual or triple token model that separates investor and player incentives.

23/ It is challenging to figure out a healthy GameFi tokenomics because they are easily tradeable. The openness disrupts the tokenomics of in-game currency, resulting in an imbalance. This is similar to Asian 1997 Financial Crisis, Soros manipulated several Asian currencies.

24/ We are all at the experimentation stage. We are early. I believe we all will figure it out together. Note: - This is just a simplified version of token analysis. Deeper analysis of each project can be found at @TheBlockRes



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