Welcome to the April edition of BlockchainGamer.biz’s regular Mavens group. If you’d also like to join the discussion, please contact editor@blockchaingamer.biz
Gaming tokens are coming in hot, but as an increasing number of blockchain games gear up to launch their tokens, we asked our panel of industry experts what advice they would give to help build long-term value rather than short-term speculation.
Canaan Linder – Founder and CEO, Stardust
With so many blockchain-based games launching tokens, it is extremely important to remember that while the community may want “number-go-up” tokenomics, sustainable tokenomics hardly ever do.
When looking at games like Runescape, World of Warcraft, EVE Online – games that have had currencies within them for decades – great sources and sinks are keys to maintaining an equal balance of supply and demand. This phenomenon allows games to survive for the long term by growing a larger non-speculative community, which creates a thriving player environment without astronomical wealth and power accruing in the hands of a few.
Tokens must be perfectly balanced, as all things should be. Don’t give in to community members or investors pressuring you to make the number go up. If you try to please everyone, you will end up pleasing no one.
David Amor – CEO, Playmint
I wouldn’t claim any expertise about token launches, but it’s something we talk about a lot as a team. More launches go wrong than right and I’ve seen token launches cause issues with fundraising later down the road, so it’s something I approach with a lot of caution. The most successful ones seem to avoid thinking of tokens as money and instead think of them as incentives to bootstrap a network.
Ben Cousens – Chief Strategy Officer, ZBD
My advice would be to not launch tokens at all. In today’s landscape, I simply don’t see a reason to launch a new token other than to profit from unfounded speculation and promising users future profit, which renders the thing a security. There are already so many cryptocurrencies out there, can you really not just use a bigger market cap coin for your project?
I highly doubt new tokens are required for the sake of enabling the technical features blockchain games need them to perform and any small-cap coin is likely to face either market manipulation or liquidity problems, or both. If you’re building for long-term value, use an asset that has actual value. And no cryptocurrency has greater value, global acceptance or regulatory clarity than Bitcoin.
Christina Macedo – Co-Founder and COO, READYgg
When we talk about tokenization, we think about investment. But the concept of investment in blockchain gaming has become more meaningful than financial speculation — at its core, it’s about engagement. Tokenization in gaming now empowers players to become true partners in the game’s ecosystem. When a player acquires a token, they’re not just anticipating financial gains, they now have a stake in how games are developed and they can contribute to a thriving community.
By turning token ownership into a tool for empowerment and community building, by applying a delegation protocol, players can support their favorite projects and interact with game developers, content creators, and streamers directly. This promotes a sustainable community-driven environment where the value of a token is closely tied to real contributions and interactions within the gaming ecosystem, valuing long-term engagement over short-lived speculation.
Robby Yung – CEO, Animoca Brands
This is a question that we’ve grappled with as a company for years now, and it’s also a reason that we’ve built up a large, dedicated tokenomics team in-house. We’re in a new sector, with new tools available to us, and what was made clear in the 2018 – 2022 period was that simply being good at designing inflationary Web2 game economies (hard as that may be), or being an economist, wasn’t enough. Designing large scale fixed-supply open economies that are sustainable, flexible, and (hopefully) immune to manipulation, is a very tall order, and it requires a multi-disciplinary team who can collaborate and bring all manner of experiences to the table.
But as I said, it’s a new sector, and the reality is that the systems and structures that we put in place may have been field-tested and carefully thought through, but they still only represent a handful of years of live operations. Only time will tell if they have the longevity that we have planned for, and we continue to learn from our mistakes and seek continuous improvement.
Sam Barberie – Head of Strategy and Partnerships, Horizon Blockchain Games
The challenge that a lot of early game tokens had was poor design. They were funding vehicles that were disassociated from the content or community. Some of this was an unfortunate side effect of poor regulatory guidance and misunderstandings about what could be natively integrated into a game or marketed to users. But a lot of it was misguided strategy: game devs who saw it as the primary product, with a game as the secondary. In fact, I think we’re seeing many highly anticipated games who launched tokens now in a mode of constantly pushing out beta or full game release dates. This is not a bug, it’s a feature. Once the game launches, speculation is over. There’s nothing for the game to hide behind, and the token’s value will reflect that.
Game designers who plan to launch tokens now have the benefit of hindsight. Hopefully they’ve focused on the core game loop as the primary product of the company, and then designed a token in recognition of where it can be an accelerant of the game. Tokens can powerfully align incentives with players, user-generated content creators and publishing partners. They have to answer questions like: What if I had a mechanism to ensure that players who contribute to my game can participate in its success? Can I align upside with a publishing partner around more than just a revenue share? What is the flywheel that encourages long-term movement and holding of my token through gameplay? If devs look at this and don’t have well established and easily communicated answers, perhaps a token isn’t for you.
Alexander Goldybin – Founder and Chairman, iLogos
When considering the launch of tokens in blockchain games, it’s crucial to strategize on how the token will hold value within the game’s context. Be extremely cautious with your token launch – carefully plan and calculate the number of tokens you wish to circulate on the exchanges to avoid causing inflation or complete devaluation of the token. Think through mechanisms to protect the game’s internal economy, especially in the case of games with an open economy, from external influences.
It’s also important to partner with a reliable entity for market making and to stabilize the trading book. Lastly, do not proceed with launching a token unless you are confident that it is a sound decision, as an ill-timed launch can prematurely diminish its value.
Aron Beierschmitt – Co-founder, Laguna Games
The simple yet challenging problem to solve is managing token inflation against a combination of new demand alongside sinks within the ecosystem. Everyone continues to try to build out inflation schedules in whitepapers before they have a single player. Attempting to predict future demand (and future consumptive use) is impossible. Instead, focus on finding a way to codify your monetary policy on-chain via a self-regulating mechanism design. Thus, for any given amount of demand, participants understand how tokens flow and are ultimately distributed. This is something we are actively working to deploy for Crypto Unicorns and future projects.
Carlos Roldán – CEO, Elixir Games
Value is directly created through the product. There’s a notable trend among investing firms and eager development teams who aren’t ready to invest the time and care necessary to produce a stable product. The purchasing and stability of your token will be upheld by your users, and that’s the harsh reality. Develop an appealing product with incentives that extend beyond economic benefits to include progression and gameplay. This is where you’ll find the perfect balance between quality and profitability.
Focusing solely on one aspect of this issue overlooks the complexity of creating a stable project. There’s a foolproof trick: don’t force mechanics and systems into your product just because they’ve worked for others or because you need a business model but don’t know how to develop it.
Create your product as a valuable asset, ensuring users desire its stability not just for generating more income but to continue playing without their NFTs, tokens, or assets losing value. Let them enjoy the game while you focus on delivering quality work.
Roy Hui – Founder and CEO, LightLink
Focus on your mission, forget the noise. Build fantastic user experiences, delight, amaze your players and everything will work out itself.
I see many projects focusing on promotional material, token prices with the fundamentals, the core game experience. I think the most important element to the game is the core game experience, it should be the first and foremost thing to focus on.
Quinn Kwon – Head of web3 strategy, Delabs
First and foremost, building a solid core community is paramount in web3. While blockchain technology is a significant factor, web3 distinguishes itself by its strong emphasis on community building. Having a community aligned with your vision, who will collectively build and grow the product, is crucial for long-term value.
One of the most essential aspects in terms of building long-term token value for blockchain games is tokenomics in relation to the game. For blockchain games that utilize tokens, designing emission mechanisms is crucial as they drive user behavior in games; designing sinks is equally important to mitigate inflation in the ecosystem.
An important focus when designing game tokenomics is user acquisition. It’s evident that tokens, representing financial value, are powerful drivers for acquiring users. However, the more critical aspect is structuring the acquisition steps to retain users as active participants, rather than allowing them to leave after short-lived speculation. A well-thought-out initial onboarding structure that guides users to a certain point in the game, where they can have a stake and a desire to continue playing, is essential for effectively leveraging the high financial motivation behind token emission.
Another crucial aspect is converting users into paying customers. Ultimately, a game cannot be sustainable solely through emission. Tokenomics must be designed so that emission is weighted towards those who spend in the game. This can be achieved by offering prizes in competitive modes or leaderboards, encouraging users to spend in order to improve their performance in competitions. Maintaining a healthy balance between sinks, payments, and emitted tokens is vital for building long-term value. Whether fiat payments are used to buy back tokens or tokens are directly used in games, it’s important to design a balanced approach to sinks to ensure the sustainability of the tokenomics model in the long term.