in a Previous articleWe present three tokenomic models for single-token blockchain games and their respective pros and cons.

In this article, we will review dual-token projects, an innovation that came after single-token games, which is the most popular model today.

The dual token model emerged in the first half of 2020 when Axie Infinity introduced SLP (Smooth Love Potion) to reduce selling pressure on AXS, the original Axie Infinity gaming token.

Since then, almost every major title has had a dual-token economy.

To understand how dual chip games work and why this model exists, we need to see how axie deployed SLP.

Before introducing SLP, Axie was a single-token GameFi, where players put in USD and received the game token, AXS. With tremendous growth in users and money from many PE funds backing the market, Axie successfully operated on a single token for over a year.

However, it wasn’t hard for Axie to realize how critical the new users were to the projects. Once he stopped bringing in new money, he would start a death spiral.

To alleviate the selling pressure on AXS, Axie introduced SLP in 2020. While AXS was used to Governance and staking rewards, players would use the in-game SLP utility token to spawn new Axies and earn more SLP. The development team increased the ratio of $AXS-$SLP required for replay and increased the amount of $SLP required for replay.

At first, the new model worked as planned. According to Footprint Analytics, AXS price roared right after PFS was introduced to the game, while the price of the SLP token remained below $0.1 for several months. SLP had seen a bullish trend drawn by newcomers since GameFi’s summer.
However, this trend did not last long and SLP soon fell into a death spiral. The Axie team responded by changing the community governance structure to make it more decentralized. They also removed SLPs as the game’s PVE (Player vs. Environment) yielded profits on February 9th to reduce the mint and supply of SLPs. With these changes, the price of SLP increased.

The dual token model has been solidified where one token is used primarily for governance (owning more of this allows the holder to have more voting power in community votes on the project) and another is used for functions on the project. the game, that is, the utility token. . In most games today, players get most of the return in the generally lower value utility currency and a little in government currency as a premium, for example if they hold valuable NFTs.

In addition to Axie, several other popular GameFi projects, such as BinaryX Y star sharks, also use the double token model.

Two different categories of dual GameFi tokens

Most of the recently launched dual-token GameFi projects adopt the “game token in, game token out” model.

For example, BinaryX players use government tokens to start the game and generate utility tokens in return, while Starsharks players start and generate utility tokens in-game.

We know from the previous article that the cost and returns are highly correlated with the token price of this model. It is much easier to tune tokenomic models without centralized tuning with dual tokens than it is with the USD value-based model. The USD-based model requires an oracle to specify the number of corresponding tokens, which complicates the dual-token model.

In this article, we provide an analytical approach to split different categories of GameFi dual tokens: After the Genesis NFT sale, what approach does the project owner use to increase the amount of NFTs on the market to meet the demand for new NFTs? players? ?

At first, most GameFi projects will sell Genesis NFTs on the official platform or partner platforms like Binance NFT or Opensea to accumulate initial players. They then have various mechanisms to mint more NFTs while fueling the consumption of tokens. These include:

Breeding model: In this model, the second generation NFTs and later NFTs come from the reproduction of the Genesis NFTs, and no more blind boxes are sold. This mechanism requires burning/spending tokens to mint the new NFTs, allowing the game to influence the selling pressure of the tokens based on the minting price. Blind box model: Compared to the breeding model, the blind box is simple. The team sets the number of NFTs in the game, and when the market is good or consumption is up, Players sell more. This drives up the price of the tokens. because they need them to buy the NFTs.

However, all ambitious long-term projects will state that most of the money from blind box sales, whether in USDT or utility tokens, will go directly to the community treasury or be burned. Starsharks is so popular because it announced that it would burn 90% of utility tokens from blind box sales.

GameFi Dual Token Summary

tokenomics are a crucial part of a GameFi project, along with metrics like the number of new players, the number of active players, and the contrast between production and consumption.

As GameFi evolves, each cycle sees new business models and innovations, each with their own advantages and disadvantages. Serious investors can also learn to spot trends within specific tokenomic models to time funds, predict FOMO inflation, generate returns during fund stabilization, and other strategies.

An article originally from the Watermelon Game Guild, edited by the Footprint Analytics community.

The Footprint Community is a place where data and crypto enthusiasts from around the world help each other understand and gain insight into Web3, the metaverse, DeFi, GameFi, or any other area of ​​the blockchain world. Here you will find diverse and active voices supporting each other and moving the community forward.

What is footprint analysis?

Footprint Analytics is an all-in-one analytics platform for blockchain data visualization and insight discovery. Cleans and integrates on-chain data so users of any experience level can quickly get started investigating tokens, projects, and protocols. With over a thousand dashboard templates plus a drag and drop interface, anyone can create their custom charts in minutes. Discover blockchain data and invest smarter with Footprint.

Posted in: Review, GameFi

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