"Sink" and "Faucet": How to design an effective economic model for Web3 games?
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Original title: "Sinks & Faucets: Lessons on Designing Effective Virtual Game Economies》
Compilation: Dong Yiming, Chain Catcher
In order for virtual games to maintain an economic balance (ie the relative stability of core currency and props), the asset issuance rate must be balanced with the asset consumption/demand rate. Right now:
something injected ≈ something output
To do this, there are several options to choose from:
Continue to drive the growth of new users, allowing old players to sell game items to new players.
Constantly introduce newer, harder, and more resource-intensive endgame content for existing players, making them consume more resources.
Supply of coins and items(Faucet)and the number of gold coins and props used in the game(Sink, used in this article to describe a token consumption mechanism)To maintain balance.
If this balance is not managed properly, player experience and retention can suffer.
Fortunately, virtual economies have been around for decades, and we can learn lessons from many failed experiments and overinflated games.Table of contents:
Table of contents:
Part 1: Lessons learned from previous games
1. Public facilities, rare collectibles, and gambling
2. Trade tax and land tax
3. Make
4. Staking, converting high-velocity cash into consumables/items
5. Unlock more game content
6. Donations/Events
Part II: Strategies Unique to Web3 Games
1. Use game iterations and forks as token "sinks"
2. Community-based burning mechanism
3. Build and hold core infrastructure
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Solution 1: Public Facilities, Rare Collectibles, Gambling
public Utilities
for example:
for example:
in world of warcraftflight pathand install/upgrade for a faster way to move (in OSRSride the magic carpet)
andOSRSandElderScrolls) significantly replicates the real-life depreciation cost of
Ability to reset attributes/skills for a fee
Buying and furnishing a house (atElderScrolls，final fantasymiddle)
Most of these utility "sinks" are considered a staple of the game - paying taxes and fees is so common that it's no longer painful for the player; Excessive, causing many players to quit (refer to the results of the questionnaire survey above).
In Aion Classic, the Sorcerer's Stone can enhance the functionality of weapons and armor. In both PvE and PVP games, the most competitive characters need to have at least +10 upgrades to armor and weapons, and the maximum enchantment value is +15. The weapon/armor will revert to the +10 enchantment after each +10 failure. Not only do players have to spend hundreds of hours farming stones, but they also often fail, requiring a lot of money to invest in each attempt at magic.
"Phantasy Star Online 2" also uses the same leveling mechanism. For the highest tier weapons (11 or 12 star weapons), the chance of getting to +10 in one shot is 0.0014%, and each weapon needs +10 three times to fully upgrade.
main points:Farming tasks are not evil in themselves. It fosters a sense of mastery and progression, but there are limits. must payUtilities tax can be a useful sink of gold, but quests that have to be farmed and lack rewards lead to player churn.
rare collectibles
Regular auctions/sales of rare collectibles for in-game currency. Can be achieved through luxury seller NPCs, as part of special events, or as a gambling game. This is driven by players' desire for social influence and ownership.
It's also one of the most beneficial ways to stock your community sink, according to the survey we provided above.
gamble
Gambling games have a negative expected value of payoff, but players often gamble for reasons such as getting rare cosmetics, getting extremely rare items, or being fun. for examplegacha game. Every time a player participates in a game, the native token must be paid.Because the expected return is negative, this is a token sink. Driven by the player's desire for ownership.
for example:
for example:
Player Riot in Scream of Fortune
Gambling is by far the most hated form of "sink" from our survey. We guess this is because many gambling sinks create pay-to-win channels.
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Solution 2: Taxes, Trade and Land
Examples include:
Examples include:
Auction house fees in MMOs such as World of Warcraft, Diablo, and Rivers and Lakes.Of particular note is that Auction House fees in Jianghu are used to purchase items in GE - this can be algorithmically adjusted to accommodate targeted items that are experiencing additional supply bursts. This tax also actively encourages interaction between players, adding to the social depth of the game.
overviewLars DoucetoverviewLearns how Henry George's land appreciation tax was applied to the factories in EVE Eve, and how it successfully combated the problem of rampant factory speculation. StarAtlas will also take this approach.
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Image Source:https://www.eveonline.com/news/view/monthly - Economic Report - 2021
In the past 2 years, transaction tax has been the largest consumption of ISK currency.Agency fee(another market tax) followed in third place.
Later in the game, where trading becomes a major part of gameplay -- most MMOs fall into this category -- a transaction tax is added to effectively move gold from the oldest and wealthiest players' coffers to keep new players in the new Holdings during the game.
The mechanism applied to Axie is shown in the figure below (click the picture to view details):
main points:The tax was sadly only in third place in the "Gold Sinks of Disgusting" survey, but it was very effective. Taxes on marketplaces, transactions, and idle resources can be used for additional burns or community-oriented activities.secondary title
Solution 3: Make
The forging system can be used both as props and as a kind ofCurrency Consumer (Sink). Players use lower level items to create higher level items/consumables/decorations which consume component items and sometimes in-game currency. This is driven by players' desire to master the game, their curiosity to discover new items and experiences, and their creativity to discover new combinations.
《Guildwars2» has a blacksmithing mechanism that doubles as a prop sink. Blacksmithing requires a lot of material, and it's a bottomless pit for both lower-level and higher-level materials.
put upput upSkill. Upgrading a building requires repeatedly building and then destroying the furniture, thus destroying the materials consumed to make the furniture. Each plank needed to make furniture costs money, while nails and other components must be crafted or purchased. In the presence of a taxable market, high-value transactions incentivized by hard-to-train skills can be a powerful reservoir of gold. Planks are one of the most traded commodities on the big exchanges. It should be noted that to reach the maximum level, you need to build a GP investment of at least 1 million (4 million for the fastest method), which is a large investment for casual players.
Forging an item sink, will only work if the item being forged is in low supply on the market.If an item can be obtained in a more time- and money-efficient way than forging, and players can easily buy raw materials and then sell the forged product for a profit, then this model may generate more gold coins.
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Solution 4: Staking/locking the exchange rate
Staking is not new to the crypto space, but similar solutions exist in web2 games.
Managing Miscellania is a mini-game in Runescape. Players can deposit up to 5-7.5 million gold coins in the safe (depending on mission completion). As much as $50,000-$75,000 is being taken out every day to pay "workers" for acquiring resources that are then reclaimed by players. Rewards are often lucrative, but resources are skills that are widely needed and consumed. Players deposit gold coins into the vault because they are eager to earn achievements and improve their skills.
《Managing Miscellania》Effectively locking and burning millions of tokens and converting them into slower items or consumables for game progression.
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Solution 5: Unlock More Game Content
Rather than requiring players to purchase additional game content, memberships, and DLCs (Downloadable Content), it can be sold to players for a large amount of in-game currency. Content quality and player experience will be key drivers affecting players' desire for unpredictability (curiosity) and fulfillment (complete all games).
Runecsape BondsPlayers will be given a 14-day membership, but can also be purchased from another player for 4.7 million GP. 1 month fiat purchase costs $11. In the hour before this writing (9:00pm ET Sunday), 553 bonds were bought on the Grand Exchange, totaling about 2.5 billion GP. Proportionally rated, this means that bonds account for about 1.2% of daily GP trading volume. 2.5 billion GP is also equivalent to usingWays to get the most gp/hr in the gameherehereYou can view real-time data.
If Jagex were to sell bonds for GP instead, this would create a very healthy sink of gold.
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Solution 6: Donate/Event
According to Reddit polls and my own personal experience, the most community-friendly gold sinks are donations and events.Examples include:
Examples include:
"Gaiaonline"'s2009 Rescue Incident. To coincide with the revamp of the NPC shops, Gaia has duly hosted the Emergency Relief 2009 event, in which each shop owes a "GRS" tax and players are required to donate to each shop to ensure it survives the update. One criticism of the campaign is that regardless of the total donation, the outcome is predetermined and no perks are given to those who donate large amounts.
Because in cryptocurrencies it's easy to automatically return funds if a certain threshold is not met, it's easier for game developers to create updates that rely on funds as community events.
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A player donates to the well
those toWell of Goodwill Those who donate over a certain amount earn a rare title--perhaps the rarest and most coveted item in the game.
well allows people who don't have bank accounts or can't send money a low-cost way to donate (by accepting the in-game currency), play, and collaborate with the community. Those who donate more than 5 billion GP (a staggering sum for those who have never played the game) will be awarded the title of "Billionaire."
As popular as this sink is, it won't be returning to the game.
In line with the Reddit survey, I personally really like this type of sink. It breeds a community experience combined with lore: Take Gaia for example -- it updates the game. Take Runescape for example - it gives players bragging rights and adds an element of fun and achievement to donating and burning gold.
main points:Integrate Gold Sink directly into community activities/knowledge.first level title
Part II: Strategies Unique to Web3 Games
In the previous part, we explored balancing solutions for traditional games. However,secondary title
Solution 1: Game iterations and forks as token "sinks"
"Modded (iterative) versions of games are always able to push gameplay into new areas and genres. In fact, some of the most popular games were created inspired by other games."
——From "Power to Players: Open Source》。
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Another famous mod: Dota is a mod that started from "Warcraft 3", and its popularity has also boosted the popularity of MOBA
Because Web3 games can monetize through secondary sales and taxes on core infrastructure, and thus benefit from the expansion of the entire game ecosystem, they have a strong incentive to create new mods and player works that create code for their ecosystem. organic demand for coins. It's a natural counterforce to the innovator's dilemma that creates games that evolve, which in turn creates games that last.
This is the strategy adopted by Sandbox, Aavegotchi and Sky Mavis after opening the Axis SDK and allowing developers to develop based on Ronin. In all three cases, the core team has established infrastructure, sufficient liquidity, and an initial ownership base. Next, they encourage ecosystem builders to create plugins and sub-games on their platform and earn revenue in the form of an activity tax. That's why Axie bills itself as a "country".
"You can think of Axie as a country with a real economy, and the holders of AXS tokens are the governments that receive taxes. The inventor/builder of the game --- Sky Mavis holds 20% of all AXS tokens."---From the Axie white paper.
The Aavegotchi mini-game is a community-developed game that can only be played by those who own Aavegotchi tokens. Because every game is different, Aavegotchis with different characteristics are beneficial for different games.
Sometimes, in certain minigames, Aavegotchi with a lower base rarity score perform better than those with a higher rarity score, creating demand for various Aavegotchi. Playing mini-games also earns you XP for a specified time period, making it more likely that you'll win leaderboard GHST prizes. According to the Aavegotchi wiki entry:
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Sushivader is a mini game by Aavegotchi
But in order to use the above strategies, the game must be decentralized while incentivizing platform talent building(See Roblox DevEx program). They must also allow game makers and ecosystem developers to take a cut of the economy they create (via royalties and rewards associated with contributions), while operating as a DAO.
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Solution 2: Community-based burning mechanism
estimateestimate, about 98% of Axie's DAUs are academics. Considering that Axie's DAU is 2 million, and the largest guild YGG has 10,000 scholars --- we estimate that the number of scholars in the guild may not exceed 5-10%. If this number increases, also taking into account managers, then it becomes very important to introduce burning mechanic in scholar level guilds.
An example of such a mechanism would be a fair swap of SLPs held by academics (assumed to be highly liquid) to SLPs held by guilds or protocols. It may be the case in guild-level games that scholars can stake/exchange SLP for better cards or items, although the profitability of this strategy for the guild is uncertain. Alternatively, the Axie Treasury can distribute AXS rewards to guilds that implement community-supported initiatives, including a community-led burn mechanism.
An example of an existing community burning mechanism is when YGG pledged to stake its SLP treasury in RON, or previously used its SLP entirely to breed new Axies.
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Solution 3: Build and own the core infrastructure, and charge for it
This is an extension of the first part of the tax.
P2E games can be built, managed and monetized by holding core infrastructure and taxing the use of core infrastructure."Sky Mavis" has its own chain, market and DEX (Katana), and charges gas fees (RON) and market fees (4.25% of ETH) to those who use the protocol. These agreements all generate fees, which can then be bought back and burned, or taxes can be burned directly.
It is much easier for a P2E game studio to develop a protocol infrastructure than to build a game ecosystem (Strategy 2).If the P2E economy is a protocol, the larger the scope of the protocol it covers, the greater the value generated.
But in the long run, high adoption rates may not be sustainable in an open source project.Only if P2E games provide the highest quality core infrastructure and incentivize the best operators to contribute to their infrastructure (rather than build it for themselves) can they prove that critical infrastructure is a sink for tokens or that they It is a huge source of income for treasury operations.
main points:in conclusion
in conclusion
In a virtual economy, a balance of taps and sinks is necessary to maintain a healthy balance of prices. However, the sink does not guarantee that any game token will regain its value high. In fact, sinks only work if people are using them.
The advantage of Web2 games is that they are closed economies, once money is in, it is very difficult to get out (converting in-game currency to and from USD is not easy, transparent and legal). This means they also benefit from a greater separation of money from fiat in the minds of players. This means that players:
1. No choice but to spend money in the platform/game
2. When engaging in any activity, it is unlikely to perform highly mathematical calculations to obtain rewards
3. More likely to use currency for random things or for fun
However, P2E games cannot enjoy these benefits. In order to encourage players to participate in the Reservoir in an environment where the USD value of depositing and withdrawing is very obvious, it must provide additional currency for burning (which will further increase the supply) or other forms of additional utility.
In order to encourage players to "sink" in an environment where the USD value of input and output is very transparent, it must provide additional currency for burning (further increasing the supply) or other forms of additional utility.
Therefore, in an open economy, the sink is valid only if the following equation holds.
Motivation + additional benefit of using a sink > cost of using a cistern
What determines a sink's effectiveness is whether or not people will use it, and only if they see the value in it.
"Ultimately, people need to consume for entertainment, status, convenience, and more importantly, for the economy to function permanently." - Jihoz
