In a previous article, we launched three tokenomic fashions for single-token blockchain video games and their respective execs 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 preferred mannequin immediately.
The twin-token mannequin emerged within the first half of 2020 when Axie Infinity launched SLP (Easy Love Potion) to scale back promoting stress on AXS, the unique sport token of Axie Infinity.
Since then, nearly all main titles have had a dual-token economic system.
To grasp how dual-token video games work and why this mannequin exists, we should always have 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 person progress and cash from many PE funds supporting the market, Axie efficiently ran on only one token for over a 12 months.
Nevertheless, it was not troublesome for Axie to appreciate how crucial new customers had been for the tasks. As soon as new cash stopped coming in, a loss of life spiral would start.
To alleviate promoting stress 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 workforce 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 price roared proper after SLP was dropped at 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 time.
Nevertheless, this pattern didn’t final lengthy, and SLP quickly fell right into a loss of life spiral. The Axie workforce responded by altering the group governance construction to grow to be extra decentralized. Additionally 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 especially used for governance—proudly owning extra of this permits the holder to have extra voting energy in group votes concerning the venture—and one other is used for in-game capabilities, i.e., the utility token. In most video games immediately, gamers earn a lot of the yield within the normally lesser valued utility coin and a bit within the governance coin as a premium, e.g., in the event that they personal worthwhile NFTs.
Two totally different classes of twin tokens GameFi
A lot of the newly launched dual-token GameFi tasks undertake the mannequin of the “enter sport token and output sport token” mannequin.
For instance, BinaryX gamers use governance tokens to begin the sport and yield utility tokens as returns, whereas Starsharks gamers begin and yield utility tokens within the sport.
We all know from the earlier article that the fee 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 venture proprietor use to extend the variety of NFTs out there to satisfy the demand for NFTs from new gamers?
To start with, a lot of the GameFi tasks will promote Genesis NFT on the official platform or companion platforms corresponding 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 embody:
- Breeding Mannequin: On this mannequin, the second era 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 stress on the tokens relying on the worth of minting.
- Blind Field Mannequin: In contrast with the breeding mannequin, the blind field is straightforward. The workforce units the variety of NFTs within the sport, and when the market is nice, or consumption goes up, gamers promote extra. This buoys the worth of the tokens as a result of they want them to purchase the NFTs.
Nevertheless, all formidable, long-view tasks will declare that a lot of the cash from blind field gross sales, whether or not in USDT or utility tokens, goes straight to the group treasury or burnt. Starsharks is so widespread 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 an important a part of a GameFi venture, 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 execs and cons. Critical buyers may also be taught to identify tendencies inside particular tokenomic fashions to time bottoms, predict FOMO inflation, generate yield throughout backside stabilization, and different methods.
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