Web3 Games Don’t Need Tokens 🧵

Revealing the Closed Door Discussions🤫

(As a Tokenomics Consultant)

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0/17 Why Would a Game Launch a Token?

⚫️ Fundraising
⚫️ Incentive Alignment w/ Players
⚫️ Payment Currency

Let’s look at each of them

1/17

Ownership in Web3 Gaming is Bullshit 🧵

An Objective Take on "NFT Ownership" in 15 Tweets

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0/15 Ownership

Blockchain supposedly allows for permanent ownership of in-game assets. While in-game assets live on a centralized database of a web2 game, web3 game assets permanently live on the blockchain which is a decentralized ledger.

1/15

Limit Break just announced a new NFT standard!

1/ Creator Royalties become ENFORCEABLE
2/ Royalties are SHARED across all NFT owners
3/ Rights to future royalties are TRANSFERRABLE

https://twitter.com/gabrielleydon/status/1655998931963355136

1/ Creator Royalties become ENFORCEABLE

We're all familiar with this one

What's the point of making in-game assets trade-able if you can't even charge 1% from secondary transactions?

https://twitter.com/VaderResearch/status/1649094161360994332

Value Accrual Case Study: Yuga Labs 🐵

We analyze how the value generated within the Yuga Ecosystem is distributed among Yuga Stakeholders

0/15 🧵 1. Capital Structure & Enterprise Value

Web2 Enterprise Value consists of equity and different tiers of debt. Using the same logic Web3 Ecosystem Value consists of equity and issued tiers of tradable assets.

Yuga Eco Value = Yuga Labs Equity Value + Value of Yuga NFTs & Tokens

.@playSHRAPNEL has one of the most interesting web3 game economy designs. Shrapnel's head of economy Francis Brankin joins the pod to dive deep into Shrapnel's economy design.

🧵 on Shrapnel's economy design

0/7

Shrapnel is a first-person extraction shooter. Extraction shooters are similar to battle royales (Fortnite, PUBG) - the difference is that you can choose when to leave a match and when you leave, you can take the loot you found with you and you can port it to other matches

1/7

Token Value Accrual 🧵

What is value? How to decide on inflow currency? What are the differences between different value accrual mechanisms (buybacks, staking, token incentives)?

We cover it all in our latest piece!

1/13
defivader.medium.com/token-value-ac… Value Creation

Value is created through inflows to the ecosystem - regardless of the payment currency. These could be player-to-protocol transactions where the protocol gets a 100% cut or player-to-player transactions where the protocol gets a 5% cut

2/13

Why STEPN's collapse is inevitable?

Why guilds, partnerships, ads, cosmetics won't save GMT?

A fundamentals driven analysis on STEPN's token economy

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defivader.medium.com/why-stepns-col… STEPN runs an X-to-earn ponzi similar to that of P2E games

STEPN theoretically offers ~10x annual returns to new users

And users are attracted by these yields - but where do them yields come from?

Just like in every ponzi - yields come from new users

Not all game genres are suited for NFTs

Puzzle genre might be one of them - think of games like Candy Crush, Royal Match, Homescapes

Here's why 🧵 Puzzle genre is the largest mobile game genre by IAPs in the West

Levels have increasing difficulties as one progresses - the smoothly increasing difficulty curve combined with the compulsion loop is what makes players come back the next day

Why Play to Earn Games Crash? 🧵

And What Can Devs Do?

All You Need to Know about Play to Earn Economies in 11 Tweets

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0/11 Game NFTs earn X amount of daily tokens

This token is minted out of thin air

And is burnt by players to mint new NFTs

1/11

There are 2 types of game economy sinks 🧵

1) Fake Sinks 😒
2) Real Sinks 🤩 1) Fake Sinks 😒

You pay $100 now to upgrade/repair/craft/boost your NFT and you can earn an additional $200 over the next 4 months

This is a net inflationary sink - $100 is sunk immediately but $200 will be minted in the longer term

1/ Really enjoyed this @naavik episode. Great thoughts from @matejlancaric and @NicoVereecke on UA in web2/web3 games. I think one very important web3 UA tool not discussed on the pod is the play-to-earn rewards which is driven by the economy/tokenomics design.

https://twitter.com/NicoVereecke/status/1492147606763585538

2/ Let’s take Axie for example, an average player (3 Axies) can earn 50 SLP per day. Axies don’t have a lifetime but for simplicity, let's assume they live for 3 years. This means the CAC for a player is 550k SLP. This calculation assumes the player was acquired through wom.