Constraining open economies
Limit Break and Laguna Labs' different approaches
Is the extreme price volatility enabled by fully decentralized and open crypto economies a feature or a bug?
For some people, this is a deeply ideological question. Unless the market sets price, it’s not blockchain.
For others, this sort of debate is irrelevant as long as “the number goes up” (or even not down too much).
Certainly the impact of crypto sentiment on individual blockchain games was to the fore in Blockchain Gaming World #187 as I discussed the trajectory of Crypto Unicorns with Laguna Labs’ CEO Aron Beierschmitt.
“Once you let these token economies out of the bag, it is impossible to stuff them back in,” he commented of a project, which launched in early 2022 just as that boom cycle was bursting.
“The combination of rough launch with six weeks of red candles to the cycle bottom, ETH at $800, ‘crypto is dead’ etc. We couldn’t recover momentum,” he states.
So despite working on Crypto Unicorns for two further years, launching new game modes, a couple of web2 IP expansions, even migrating everything to the new Xai L2 blockchain, the project wasn’t financially viable for Laguna, which had grown to 90 staff.
The result is that the game and all associated IP has been placed in the hands of a community DAO — which has around $1 million in its token treasury to continue development — while a streamlined 10-strong Laguna is working on new title Neo Olympus.
Given previous experience, Beierschmitt says this game will be very different to Crypto Unicorns. In its early stages, it will be focused on the hardcore crypto audience.
Its launch NFTs will require players to spend big to reroll stats to generate the rarest items, with the core economy being based on the new DN404 standard which combines fractionalized NFTs and a coupled ERC20 token to force additional deflationary dynamics through a buy-back-and-burn mechanism.
In this respect, the economy will be decentralized and open but strongly constrained by design.
However, a very different approach has been announced today by Limit Break, which has extended its ERC721C protocol to ERC20 tokens in the shape of its ERC20C protocol.
In a long Medium post (17 minutes reading time), Limit Break says this will enable developers to programmably define their token features.
Labelling them “apptokens”, Limit Break says their use can be restricted in a surprising number of ways such as:
Gating access to airdropped tokens only to users who install and play the game,
Creating tokens that can only be spent in-game, not traded externally,
Limiting token trading pairs,
Enforcing maximum and/or minimum token prices,
Creating tokens that share revenue with dev/players,
Creating tokens with an inherent value backed by a foundational asset etc.
In addition, Limit Break has launched TokenMaster, which is a launchpad app for creating a specific type of apptoken that holds its value and operates as its own AMM DEX.
Of course, such protocols are just tools. What will be as significant is how developers come to a consensus about how they are going to use these tools.
I’d also argue that while Limit Break’s ERC721C has become a defacto standard for NFTs that’s because it’s the only way to enforce creator royalties, which became an existential problem for NFTs creators.
Extending this sort of thinking to ERC20 tokens is — I think — radically different, at least in terms of what players expect and will allow developers to do, no matter what developers can actually do in their code.
But as a fairly laissez faire observer of such economies — not someone trying to get a token-based game to sustain through multiple crypto cycles — what do I know?
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Calendar
Xterio’s XTER TGE — 8th January
Soccerverse season 1 launches — 9th January
The Machines Arena releases on Steam — 14th January
Goat Gaming’s season 2 ends — 15th January
Idle RPG Castille launches its pioneer season — 16th January
Forkast’s TGE on Ronin — 28th January
Everyone Hates Xterio news
I’ve never owned any Xterio NFTs, nor been involved in any of its social farming events, so I have no skin in the game of whether its NFT holders — for games Overworld and Age of Dinos — and its social farmers have been justly rewarded from today’s XTER token generation event and airdrop or not.
The particular issue appears to be that although 28% of XTER token’s total supply have been allocated as community rewards, only 2% was made available at TGE, with the rest coming as future rewards for those who stake their tokens.
Several NFT holders have put numbers on their disappointment, with DonaldP saying he spent 8 ETH (c.$19,000) on rare NFTs during its Q1 2024 mint, and was disappointed in only getting around $1,000 of XTER from the initial airdrop.
I guess the obvious contrast being made is that Pudgy Penguins’ recent PENGU token launch gave the vast majority of the total supply to NFT holders, with each Pudgy Penguins holder getting around $85,000-worth of PENGU per NFT.
More generally, some KOLs argued that the situation with Xterio is just the most recent example of a set of bad decisions and poor communications over the past 12 months, resulting in the accusation that Xterio is farming its community.
In particular, Grail said the team “smashed out a series of home run disappointments this week that even exceeded our collectively low expectations”, while 1mpal called the airdrop “abysmal”.
However, WolvesDAO co-founder Sparkc — who was once “gigabullish on Overworld nfts” — reckons that NFT holders should have taken more responsibility.
As for Xterio, CEO Michael ‘Fatleopard’ Tong says he will set up a $6 million fund to buy back NFTs from Xterio’s Age of Dino game. Post-mint in January 2024, these NFTs had a floor price of 1 ETH. Now they’re down to 0.24 ETH.
For the record, XTER’s day-1 price is down 34% from its initial listing price on CoinGecko.
AI Agents Going 3D news
With the resurrection of its Twitch and Twitter AI agent Limbo in full swing, Today has announced it’s building a launchpad for real-time 3D AI agents. CEO Michael O’Connor laid out the plans on X saying the browser-based platform will allow creators to deploy their agents in Today as well as other games, thanks to Unity and Unreal integration.
As for Limbo, O’Connor labelled her a demonstration of future features for crypto agents that will live across apps and games.
Additional Links
Coin Artist has launched Project_89 — ARG x agents x crypto.
Planet Mojo’s Worldwide Agents has added Pudgy Penguin #793 as a player for its forthcoming GPT-4o-based Agents of Poker game.
Illuvium is using Virtuals’ GAME framework to power NPCs in its MMOG.
Someone just spent $50,000 sweeping InfiniGods NFTs prior to its TGE.
Pirate Nation’s Christmas event rewarded players with 200,000 PIRATE but players spent 235,000 PIRATE, making the event revenue positive.
Ronin-based shooter The Machines Arena is coming to PS5.
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