..But some old-school game mechanics will, if used correctly. Web3 games think a lot about tokenomics, but they don’t think about how to keep things running once their community is live.
No plan tokenomics model survives first contact with the enemy players.
The Issues
The most important thing to understand is that web3 game economies are real economies. And so web3 games have real economic problems, like inflation. Every asset in a web3 game has a real dollar value. It’s subject to the free markets that exist on the blockchains the games operate on.
Game designers are used to increasing player engagement by giving players free stuff. Player hasn’t signed into your game in a week? Send them a notification that they have free gems waiting for them. In a web3 game that causes inflation and devalues the assets. It can severely damage a game. Same can be said about unchecked staking rewards.
There are a lot of tools to gather data about what’s happening in a game. But not a lot of good tools to fix economic issues in a sustainable way.
Tokenomics + Analytics
Why are web3 analytics, while crucial, not enough to manage an economy? Dashboards can tell game designers “Inflation is out of control over here,” or “This person is dumping your ERC20 token or currency.”, etc. But analytics are only as good as what you do with them.
After you get that data in a timely manner it’s also important to have tools to address the issues quickly. That’s the point at which most people don’t know what to do because they’re unfamiliar with web3.
There’s no need to reinvent the wheel and develop such tools yourself. There are companies like Moonstream that provide infrastructure tools to work in conjunction with analytics. We launched in fall 2021, and since then, we’ve supported millions of transactions worth hundreds of millions of dollars.
Analytics + Web3 Infrastructure
Moonstream provides mechanisms to manage economies right out of the box. We have smart contracts and APIs that can be plugged into a web3 economy, and create deflationary pressure whenever you want on any token.
We make it easy to incorporate off-chain data as well as on-chain data for games that are not fully on-chain. You can easily join on-chain analytics with analytics that you’re collecting from game clients and game servers.
We also support testnets and any EVM-based blockchains. You can use our tools for testing before launch and to support already existing economies. We take all the risks of running your on-chain operations.
The key mechanisms to manage web3 economies are old-school gaming mechanics with a touch of web3. Those mechanisms start with the analytics and are: leaderboards, drops (token distribution), on-chain crafting, NFT Inventory, and other foundational tools that help the system run smoothly.
All of those tools work together to help game designers control web3 game economies.
Leaderboards and Drops vs. Inflation
With analytics you can see all the on-chain actions that a player takes. You can associate point values to each of these actions. From those point values, you can create a leaderboard. Designate rewards for each leaderboard position at the end of the event and distribute those rewards with drops. Moonstream automates this entire process.
When you’ve set up your reward distributions correctly, players are highly motivated to compete to rise on the leaderboard. Competing requires on-chain actions. If you incentivize actions that burn tokens or create deflation in your economy, then the leaderboard event’s net effect is deflationary pressure.
Crafting and Inventory vs. Lack of Value
The name of the game when managing an economy is liquidity management. You need to manage liquidity and distribution. The standard approach is staking rewards. However, if you don’t manage the emitted tokens properly, you’re just postponing the economic shock.
Once your user base realizes the emitted tokens lack value, the game’s credibility collapses. You must create value for those tokens. For that there should be a concept of production within your economy, and this production must be balanced.
To create utility we’ve implemented a crafting system fully on-chain, where game developers can create crafting recipes. Instead of emitting a currency without intrinsic value, why not release items that carry value within your game?
For example, by staking NFTs, players can harvest in-game resources like wood or stone. Then use five wood and one stone to craft an axe. Players can then equip their characters with the axe using an on-chain inventory system. This equipping mechanism provides bonuses, like a boost to resource harvesting rates. There are numerous ways to introduce utility as you develop the game’s universe.
Conclusion
When you integrate these on-chain mechanisms into your game and ensure they fit within its context, you’re crafting a natural, organic economy. Building a game isn’t solely about creating a resource or emission scheme. It’s about constructing an engaging world.
With that, all that’s left for the game development team is to balance those things in their economy. It’s an ongoing process, which is to be expected even in traditional online and mobile gaming. You’re always having live ops, you’re always shipping updates, and finding ways to keep things moving.
These were some examples of specific infrastructure tools that have proven to work sustainably in a running web3 game economy. Thank you for reading! Join our Discord for all the latest technical updates.