How to create a sustainable NFT game economy and why it matters

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This article was contributed by Derek Lau, Game Director of the Guild of Guardians.

Play-to-earn gaming has turned the traditional gaming paradigm upside down. Where Web2 publishers and developers often use pay-to-win dynamics that slash the playing field in favor of the richest (as evidenced by the occurrence of the multi-evil loot box), nonfangible tokens (NFTs) and blockchain games offer more equitable. . Game economies where players can get tangible rewards for their efforts.

However, while NFTs and play-to-earn mechanics lay the foundation for a better and more exciting gaming experience for users, this alone is not enough to ensure a successful and sustainable game economy. Instead, these virtual economies need to consider every element of how assets are created, distributed, and managed to prevent cash from being seized.

Why NFTs?

Why worry about using NFTs to build a sports economy? Many mainstream sports have in recent years implemented built-in economies using methods that have nothing to do with blockchain. However, while this game may promote the bottom line of developers, it does little to serve the end-user.

The implementation of NFTs, meanwhile, has the potential to deliver certain desirable features that non-blockchain games cannot simply collect, such as verifiable, unchanging digital ownership. The in-game assets presented by NFT give the player a hard-coded assurance that the item is theirs – giving them the right to sell, trade or swap it as they see fit.

Likewise, the unchanging nature of NFTs allows game developers to provide their audiences with a real, verifiable scarcity. Instead of taking the word of the creators that in-game items are properly rare, blockchain game players can ensure that their NFTs are unique by checking the number of issues on the blockchain ledger.

This emphasizes the real sense of ownership, not to mention allowing players to retain the value placed in the game. With NFTs, when a gamer moves on to a different game, they will have the option to sell items they have made, earned or purchased on a previous platform, or to bring those items with them into a new environment. Either way, the effort or money they put into acquiring those assets will not be lost on Ether alone.

Gameplay must be built on the promise of NFTs

The fact that blockchain opens the door to profitable gameplay is, without a doubt, an exciting prospect. But it attracts opportunists and profiteers rather than passionate and loyal fans.

There are already multiple titles promoting blockchain integration and NFTs, but there are too many titles to work on the system for financial rewards. This is not to say that there is no suitable project, but many people put the idea of ​​making money against other elements of the gameplay, which is not so attractive to gamers for profit.

A look at the top blockchain games by User Base reveals projects that have already been overturned by an army of bots programmed to manipulate the system and extract value from it.

That is why NFTs should be exploited in a way that does not destroy the purpose of the game and promotes a system where earnings and gameplay complement each other. Users should first be attracted to the title for its key mechanics and only then be mesmerized by the possibilities of real property ownership or income generation. Anything other than this will always result in a large money-minded audience, and it is unlikely that such user base will be sustainable.

Smart token distribution

The distribution of tokens also plays a significant role in the long-term viability of the in-game economy. Although we have observed that financial incentives are not sufficient to establish vibrant gaming communities, improper distribution of tokens and NFT items can make gaming communities non-starter.

When developers distribute most of their tokens in private sales, it leaves gamers with fewer prizes to win through active gameplay. Early financial investors – who have no intention of having direct contact with the game – collect profits if the game succeeds and the game economy becomes unbalanced in the process.

Developers should avoid selling a lot of game assets in private sales and find a way to achieve their fundraising objectives without stripping them of the final product. To this end, manufacturers may consider selling only a limited number of items in the initial sale round, which will serve to encourage investors by keeping most of the in-game assets for players to find themselves during active gameplay.

It is also important to ensure that most blockchain items still require dedicated gameplay from the players who want to receive them. On top of this, other limitations such as occasional resets for player progress (e.g., seasonal implementation) move in some way to maintain a higher level playing field over time and will only focus on farming for profit.

Token utility

Even if NFTs form the basis of a game economy, their in-game functionality will provide the basis for real market stability. Assets should avoid being largely speculative in nature, and their efficiency should be determined by how they benefit players outside of their financial value.

An example of this could be the use of utility tokens that gamers need to mint NFTs in a game. Then, whenever such tokens are spent, they can be automatically sent to the pool of mass rewards and redistributed to the game by the stacking mechanism. This will encourage active gameplay on the part of the player by encouraging engagement while providing value and demand on utility tokens from the first day of the title launch.

Combining the creation of a new NFT with the original utility token, the problem of NFT distribution is also addressed: the game world is naturally controlled and protected from saturation by a sudden flood of in-game items.

Vesting period

Then there is the importance of proper vesting periods, a topic already familiar to many cryptocurrency users. Westing periods are often important to entice investors to buy into the token sale of a particular project. There is also a need to be aware of the original vesting periods of the GameFi project given by gaming economies. A sudden sale of tokens will usually result in a crashing token price. This can leave the rest of the players trapped in a failed game ecosystem while holding tokens that deplete their value.

Game developers also need to be careful when fine-tuning their vesting periods. Asking early sponsors to lock their tokens for too long can drive investors away from the start, meaning developers have fewer resources with which to gamble their game world. On the other hand, short vesting periods may please seeds and private investors but may bring the above development of the economic base of the game.

Conclusion

Over the past decade, gaming has become the primary means of entertainment, surpassing the music and film industries in the process. With the global gaming industry expected to be worth $ 250 billion by 2025, the rewards for successful GameFi implementation promise enormous – but getting there will not be easy.

Many of the basic elements of the game’s core economy need to be carefully considered. There is probably no single model that will work for all games, but a range of possibilities that will prove more or less effective. Nevertheless, developers who consider these variables carefully stand to build a platform with long-lasting survival and loyal players. Those who are not lucky but probably will not be able to retain interested gamers and instead run the risk of becoming a little more than a proud gambling platform.

Derek Lau is the game director for the Guild of Guardians.

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