When Axie Infinity rose in popularity, the world went crazy. The tagline was “blockchain games are the future” “NFTs are the future.” Different NFT content creators flooded the internet, and various games were created, games that introduced people to blockchain gaming. However, there is an underlying issue within the current majority of NFT games and that is token utility.
First, let’s understand what an NFT is.
NFTs are (non-fungible tokens) digital collectibles; they are created so that people can own things on the internet. You can buy different kinds of them; there are collectible NFTs like the UFC NFT, where people can own virtual cards of their favorite fighters. There are also gaming NFTs; their primary role is to be used in games of their metaverse. Axies are NFTs in the Axie Metaverse, same with Pegas in the Pegaxy Metaverse.
So now that you know what NFTs are let’s talk about some issues in NFT gaming specifically. Certain games are very simplistic in their economies. Ie, breed A + B get C and that’s it. Repeat where your expected value is greater than your costs and repeat the process. Many games do not offer other token utility and this becomes a large problem. After time, mint to burn ratios are out of whack. Essentially for every player generated token that is used to breed 10 more are generated and creating very large sell pressure on a token. The other problem with this is with the ever expanding base of NFTs / babies, you’re essentially also devaluing the current batch as more and more are put onto the market causing large inflation.
So what are some solutions here?
A few solutions taken up by the Axie Infinity team was reducing the population that was inside of axie infinity. The axies went on a journey and were sent to a contract address. In exchange, you received an item of random value with weighted scaling. .
During the Lunar Year Festival, Axie Infinity launched the Axie Release, their own NFT burn mechanism. Over 130,000 Axies were released during the time of the event.
This was good and all but it was still a first but basic step into managing an economy / NFT inflation problem. What are some other solutions?
Examples of increased token utility in NFT Gaming
So what are some examples burning mechanisms that we can actually introduce and have complex economic decision making?
Crafting
Crafting below is taken from path of exile. One of the more complex games from an economy standpoint and an action rpg similar to Diablo 2. The below represents different types of crafting materials and each has specific use / value in the economy. For examples, chaos orbs randomize items that are rare with 3 to 6 in game stats. These can be spammed to craft items or alternatively used as currency to buy items in POE trade site.
There may be some technology limitations here as confirming a tx for every single transaction would be a huge pain. However, this is an idea that can be used in specific games if you design around it.
Permanent Death Feature
If you read our article about Crypto Raiders, you knew about this. Permadeath is a feature where NFTs can die permanently. In Crypto Raiders, if you bring your character (NFT) on a quest that is too high for its level, it can die. Meaning your NFTs will only have one life for the whole game. When your NFT dies, you won’t be able to use it ever again.
Another addition to this feature is buying a potion to revive a dead character; with this, you can use the game’s token. While this feature may not be applicable to every NFT game, this is a great way to minimize the game’s population. The permadeath can also balance the game’s distribution of rewards and can make the whole game more thrilling and fun. Another example could be increased costs per revive which act as an incentive to play more cautiously.
Aging/Evolving NFTs
While the Permadeath feature may only available to specific games, Aging or Evolving NFTs can be applied to most. This year, Sifu, one of the most recent games, included an aging system where your character age whenever you die or fail a mission; if you fail lots of times, your character will become senile, and you won’t be able to finish the game.
Developers can add varieties on how they want to specify NFT’s aging; they can go Pokémon way where an NFT would evolve from one form to another or just simply age them. And of course, if there’s aging, there’s the end of life. NFTs can die here; however, you can make the best of your NFTs with their life cycle. This is an excellent concept and can even balance the overpopulation breeding cause.
In-Game Items
Since buying an NFT means owning it, there shouldn’t be any harm in customizing it and just like any other esports game, there should be an in-depth marketplace for every NFT game. A marketplace where you can customize everything on your NFT.
This is a great idea, especially on Axie Infinity and Pegaxy’s guilds; with this, they can make uniforms on their guild’s Axies or Pegas. The marketplace is also a great way to burn tokens; whether you dress them in cute little hats, shoes, or armor; this is a great way to make your own NFT unique.
Consumable Food for NFTs to Regain Energy
Imagine this feature in Axie Infinity, every time your Axies reached 0 energy they will have to rest and consume SLP to regain their energy, now I know what you’re thinking, and before you got mad, think of this, each of your Axies will consume three SLP to rest well so you can use them with full energy for the next day.
The math is you will need 9 SLP a day to make your team going, for a million players playing Axie Infinity every day that’s a total of 9 million burned SLP every day, that is a lot. Of course, this feature can also be applied to many upcoming NFT games. Developers can apply varieties to this, maybe food or a pellet that the game’s token can buy. This feature can greatly bring balance to the game’s economy.
Game Pass/Battle Pass
Every gamer knows about this, and almost every game right now has this feature. Through the Battle Pass system, everyone can unlock and enjoy tiers of free content, helpful content that impacts game balance, and different unique in-game items for your NFTs.
DOTA 2 Battle Pass
This feature can be activated every season and purchased by the game’s token. There are endless possibilities with the Battle Pass system; it can have all the different features like coaching, game analysis, tutorials. The added quest and features can also make the game more fun, interactive, and intuitive.
Conclusion
NFT games are still in the early stages of their development and just like any beginnings, there will be a rough road ahead. Developers should prioritize long term decision making and longevity over short sighted wins that may crash their economies. Games should be deep + offer vertical scaling to allow a smaller player base a deep economy that can be balanced with fewer people. Playing in games that go through a hyper inflation cycle within days is absolutely bad for the ecosystem and bad for many of those involved.
So what do you think about these ideas? If you have some, put it in the comments below. If you have questions, as always just contact me!
