HomeEthereumGameFi Tokenomics 101: Twin-token blockchain video games

GameFi Tokenomics 101: Twin-token blockchain video games


In a earlier article, we launched three tokenomic fashions for single-token blockchain video games and their respective professionals and cons. 

On this article, we’ll go over dual-token tasks, an innovation that got here after single-token video games, which is the most well-liked mannequin at present.   

The twin-token mannequin emerged within the first half of 2020 when Axie Infinity launched SLP (Clean Love Potion) to scale back promoting strain on AXS, the unique recreation token of Axie Infinity.

Since then, nearly all main titles have had a dual-token financial system. 

To know how dual-token video games work and why this mannequin exists, we should always take a look at how Axie rolled out SLP.

Earlier than introducing SLP, Axie was a single-token GameFi, the place gamers enter USD and obtain the sport token, AXS. With large consumer development and cash from many PE funds supporting the market, Axie efficiently ran on only one token for over a yr. 

Nonetheless, it was not tough for Axie to appreciate how essential new customers have been for the tasks. As soon as new cash stopped coming in, a dying spiral would start.

To alleviate promoting strain on AXS, Axie launched SLP in 2020. Whereas AXS was used for governance and staking rewards, gamers would use in-game utility token SLP for breeding new Axies and incomes extra SLP. The event staff elevated the ratio of $AXS- $SLP required for breeding and elevated the quantity of $SLP wanted for copy.


At first, the brand new mannequin labored as deliberate. In keeping with Footprint Analytics, AXS’s worth roared proper after SLP was delivered to the sport, whereas SLP’s token worth stood beneath $0.1 for a number of months. SLP had seen an uptrend drawn by newcomers because the GameFi summer season. 
Nonetheless, this pattern didn’t final lengthy, and SLP quickly fell right into a dying spiral. The Axie staff responded by altering the neighborhood governance construction to develop into extra decentralized. In addition they eliminated SLP as the sport’s PVE (Participant vs. Atmosphere) yielded earnings on Feb. 9 to scale back SLPs mint and provide. With these adjustments, SLP’s worth elevated.

The twin-token mannequin has solidified whereby one token is principally used for governance—proudly owning extra of this permits the holder to have extra voting energy in neighborhood votes in regards to the mission—and one other is used for in-game capabilities, i.e., the utility token. In most video games at present, gamers earn many of the yield within the often lesser valued utility coin and a bit within the governance coin as a premium, e.g., in the event that they personal invaluable NFTs. 

Moreover Axie, a number of different well-liked GameFi tasks, akin to BinaryX and Starsharks, additionally use the dual-token mannequin. 

Two totally different classes of twin tokens GameFi

A lot of the newly launched dual-token GameFi tasks undertake the mannequin of the “enter recreation token and output recreation token” mannequin. 

For instance, BinaryX gamers use governance tokens to start out the sport and yield utility tokens as returns, whereas Starsharks gamers begin and yield utility tokens within the recreation.

We all know from the earlier article that the price and returns are extremely correlated to this mannequin’s token worth. It’s a lot simpler to regulate the tokenomic fashions with out centralized adjustment with the twin tokens than the USD value-based mannequin. The USD-based mannequin requires an oracle to specify the variety of corresponding tokens, which complicates the dual-token mannequin.

On this article, we offer an analytical strategy to dividing totally different classes of twin tokens GameFi:  After the sale of Genesis NFT, what strategy does the mission proprietor use to extend the variety of NFTs available in the market to satisfy the demand for NFTs from new gamers?

To start with, many of the GameFi tasks will promote Genesis NFT on the official platform or accomplice platforms akin to  Binance NFT or Opensea to build up preliminary gamers. They then have a number of mechanisms to mint additional NFTs whereas fuelling token consumption. These embrace:

  • Breeding Mannequin: On this mannequin, the second technology NFTs and subsequent NFTs come from the breeding of Genesis NFTs, with no extra blind containers bought. This mechanism requires burning/spending tokens to mint the brand new NFTs, which permits the sport to affect the promoting strain on the tokens relying on the value of minting. 
  • Blind Field Mannequin: In contrast with the breeding mannequin, the blind field is easy. The staff units the variety of NFTs within the recreation, and when the market is nice, or consumption goes up, gamers promote extra. This buoys the value of the tokens as a result of they want them to purchase the NFTs.

Nonetheless, all formidable, long-view tasks will declare that many of the cash from blind field gross sales, whether or not in USDT or utility tokens, goes straight to the neighborhood treasury or burnt. Starsharks is so well-liked as a result of it introduced to burn 90% of the utility tokens from blind field gross sales.

Abstract of dual-tokens GameFi tokenomics

Tokenomics are a vital a part of a GameFi mission, together with metrics just like the variety of new gamers, the variety of energetic gamers, and the distinction between output and consumption. 

As GameFi evolves, every cycle sees new financial fashions and improvements, every with its personal professionals and cons. Critical buyers may also be taught to identify developments inside particular tokenomic fashions to time bottoms, predict FOMO inflation, generate yield throughout backside stabilization, and different methods.

 

An article initially by Watermelon Recreation Guild, edited by Footprint Analytics neighborhood.

The Footprint Neighborhood is a spot the place information and crypto fans worldwide assist one another perceive and acquire insights about Web3, the metaverse, DeFi, GameFi, or every other space of the world of blockchain. Right here you’ll discover energetic, various voices supporting one another and driving the neighborhood ahead.

 

What’s Footprint Analytics?

Footprint Analytics is an all-in-one evaluation platform to visualise blockchain information and uncover insights. It cleans and integrates on-chain information so customers of any expertise stage can rapidly begin researching tokens, tasks, and protocols. With over a thousand dashboard templates plus a drag-and-drop interface, anybody can construct their personalized charts in minutes. Uncover blockchain information and make investments smarter with Footprint.

Posted In: Evaluation, GameFi
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