Some game teams that W Labs has recently contacted have put forward the following request in economic model design: Can we not add tokens to the model? At first, our team thought that this would cut out the most exciting and thrilling part of blockchain games. However, after a thorough understanding of the background of this demand, we felt that it was still necessary to provide some solutions. In this article, we will discuss how to design blockchain games to be playable without adding tokens.

1. Why does the project propose a blockchain game economic model but does not want to add tokens?

Here are some reasons why we have summarized the ideas of the following project teams:

First: policy restrictions in certain countries or regions. For example, in the United States, if the token of a project is classified as an equity asset, it will be subject to the jurisdiction of the U.S. Securities and Exchange Commission (SEC), which is very troublesome for the project. On March 16, SEC Chairman Gary Gensler also told reporters that equity proof token holders can get returns from staking, so they should be regarded as securities and need to be registered under U.S. law and under the jurisdiction of the SEC. Including the New York Attorney General, he also said that Ethereum is an unregistered security, so the founders of Ethereum, including Vitalik Buterin (V God), violated U.S. securities laws, etc.

Which founder of a project would want to be sued for breaking the law when the project is going well? Unless it reaches the scale of Binance, it is worth it. At worst, you will never go to the United States. Therefore, all projects that expand in North America say that their tokens are utility tokens, not equity tokens. However, there is no conclusion on how to classify tokens. If you don’t want to cause trouble, you must prepare a lot of legal and public relations resources in advance. Therefore, some blockchain game teams do not want to touch this thunder and directly delete the token option in the project economic model, which is understandable.

In addition, in the mysterious country of the East, the management is still in the stage of slowly recognizing the entire crypto industry. Projects without tokens are considered safer by the team. At the Hong Kong summit, the theme of Dr. Xiao Feng's speech was the "three-token" model, which surprised me a little. I thought Hashkey had to talk about some macro-narratives, but it turned out to be a three-token model that we had discussed last year. I thought about it yesterday, maybe I still have a shallow understanding. Is it intentionally sending a signal to WEB3 practitioners that they should not be afraid of talking about tokens? Hashkey has dared to discuss the design of the token model at a public summit. Does that mean that the policy will be gradually relaxed?

Secondly, it also represents the views of most teams that do not want to add tokens to the economic model: tokens are the original sin of the death spiral of blockchain games. If there is no token in the model, users will not be able to smoothly make and withdraw money, which will form a selling market. The W Labs team has reservations about this view. This is like a newly established economy that has been maintaining a barter circulation model for fear that the issued currency may be inflated in the future. This is an idea of ​​​​throwing the baby out with the bathwater. We have written more than 100,000 words of investment research articles in order to strive to design the economic model more reasonably and more in line with the characteristics of the project itself. Now many projects are quickly in a death spiral, because they have not spent more time on the model and operation according to local conditions. The ancestors of the United States came to North America on the Mayflower. If they simply copied the "constitutional monarchy" and "parliamentary system" of the British Empire that had already been successful, they would not have their own "separation of powers" system.

Of course, we agree that in the early stages of the project, it is necessary to partially restrict the external liquidity of tokens. Some people say that this is not WEB3, but from the perspective of the long-term development of the project, there is nothing wrong with it. It is just like a country that has just established its economic system and basically has to have foreign exchange controls. If there is no threshold, it will be robbed by the big crocodile funds outside.

Third, for some projects that mainly focus on diverting traffic from WEB2 users, having tokens in the game will greatly increase the difficulty of entering the Apple App Store and Google Play.

Second, how to design an economic model without tokens?

Okay, regardless of whether the above three ideas are reasonable, let’s discuss them directly as a composition topic.

The first point is the most important. Without tokens, there must be a medium that links the game inside and outside, right? NFT can play this role, so the economic model without tokens should focus on NFT. In fact, the economic model we are designing now, even if there are N kinds of tokens, is still the same to guide liquidity to NFT. We have been emphasizing this idea in the previous long article. Why? Because compared with tokens that can be sold whenever you want, NFTs are not as easy to sell as tokens in terms of liquidity, emotional support, and value storage. This reduces the selling pressure and extends the life cycle of the game.

In practice, a common idea is that the soft tokens obtained by players in the game, such as diamonds, gold coins, and crystals, can directly or indirectly provide upgrades for NFTs. Through this NFT development model, WEB3 gold players upgrade the original 100 UMint blank NFT to a level 10 NFT. Because the level 10 NFT is empowered in the high-level copies of the game, the price in the NFT trading market reaches 200 U, and the player earns 100 U by selling it. This idea can make players who want to make money pay for it. Without tokens, you can make your NFT assets appreciate and then cash them out.

At the same time, NFT can also solve the problem that Blizzard and NetEase had before, which is decentralized storage. It doesn’t matter if the centralized server is gone. All the assets in the game are empowered with NFT, and players can then transfer NFT to their wallets.

Second, the economic model should be designed towards win to earn, and the traditional play to earn approach should be avoided. Of course, this is also related to the nature of the game itself. For example, Texas Hold'em, Moba, CSGO, and COC-like games with strong confrontation are naturally suitable for win to earn models. If it is the kind of mining or cultivation, it should be guided more towards PVP ranking rewards, and designed as a rewarding win to earn such as rankings.

The biggest difference between Win to Earn and Play to Earn is that Win to Earn is a casino-like business that relies on rakes to survive, rookies get rewards, and experts make more money; while Play to Earn is a project that gives rewards, and players make more money. But why should the project let you keep making money? If you keep making money, won't the project lose money? It's nothing more than earning 1 U at the beginning, and then keeping an eye on the 10 U in your wallet.

In a win-to-earn blockchain game, there are no tokens. Experts can only upgrade NFTs continuously, and then have a higher chance of winning in PK, and then obtain more NFT development resources to continue development. The most important thing is that the winner earns the loser's development assets, not tokens, and there is no obvious token inflation problem.

The third point is to strengthen the serial value capture function of NFT, hoping that players can play to own. A problem in reality is that even if the WEB2 game is fun, players will get tired of it, not to mention the blockchain games that are not very playable at present. Even if the strategies or tactics in various model designs are strengthened, the game energy will eventually decline. At this time, the superiority of NFT as a decentralized asset can be reflected: if the project party has the next blockchain game project, it can directly announce that the NFT of the previous blockchain game can get a new NFT airdrop in the next game, so that players do not need to rush to sell NFT in the previous game. Keeping NFT may have greater empowerment in the next game. Why cut meat when the floor price is 30%?

This type of thinking has begun to be applied in the "platform + multiple chain games" model, and a "platform points" system can be added. Yes, there is no need for tokens, a complete points system + NFT with serial value capture will do.

3. Examples of blockchain games without tokens

Let’s continue to apply what we have learned and give a few examples to illustrate.

Big Time

Big Time is a project that is relatively familiar to blockchain game players. It is one of the few 3A masterpieces launched in 2021 that is still under continuous development and evolution. For this reason, we have to give it a thumbs up.

To give a brief introduction, Bigtime is an MMORPG blockchain game that incorporates the concept of NFT. Players who have tried the game can see at a glance that the game screen, operation, etc. all have the shadow of World of Warcraft. The background of the Big Time team is also very dazzling. The CEO is Ari Meilich, co-founder of Decentraland, and has recruited a star development team composed of veterans in the game industry from companies such as Epic Games, Blizzard, EA and Riot. The project financing results are also dazzling. In the first two rounds of financing in 2021, it raised 21 million US dollars, with star investors such as FBG, North Island, Digital Currency, OKEx, Alameda, etc. In addition, a lot of capital reserves have been accumulated by selling Passcard and Space in the past two years.

Big Time has always been a representative of the token-free economic model and has been operating for two years. It was only this year that it announced that it would issue the TIME token at the right time. However, the overall model is still built around various NFTs in the game. Most of the TIME tokens will be produced in the game by equipping time hourglasses and cannot be traded in the in-game market.

The biggest feature of Big Time is that it uses skin NFT as the core foundation of its economic model. Skin NFT has many functions. In addition to showing status and uniqueness in the game, it also allows players with equipment to enter limited areas or exclusive dungeons, and realize the asset chain of NFT and free trading. The supply of skins in all series is limited and unchanged, and each has a fixed number. To create a special skin NFT, you need to obtain space (land) and functional NFTs (such as furnaces, armories, time guards, etc.) to complete it.

The TIME token serves as the main currency in the game. Players generate TIME tokens through time guards, and further generate skin NFTs through functional NFTs. Finally, these NFTs will reach the end buyers, realizing a closed loop of complete production and trading. The maximum issuance of TIME tokens is 100 billion. They can be generated by equipping a time hourglass and completing tasks or dungeons, or imported through player wallets. The main functions include refining, upgrading, manufacturing, accelerating NFTs, and accessing special areas and dungeons in the game.

Such a set of gameplay with NFT as the core and TIME token as the auxiliary will help to precipitate the value of the entire game on NFT, achieve "fair competition", and focus the game on game equipment and experience, rather than a variety of DEFI financial gameplay. This idea also echoes what we said earlier, using NFT as a medium to connect the inside and outside of the game, reducing overall liquidity and reducing real-time selling pressure. NFT skins with limited quantities and unique functions will also give players a better sense of belonging to Play to Own, and generate more sense of honor and spiritual sustenance for NFT, rather than cold numbers like tokens.

Legend - Flame Judgement Collector's Edition

The digital collection version of "Legend - Flame Judgment" was launched in December last year. It is a special type of game without a token model: WEB2 game + digital collection. The equipment of the digital collection can be used to create valuable props in the game and then sold. We also conducted in-depth research on this game last year. It was not popular in the WEB3 circle at that time, but it was very popular in the digital collection circle.

The game uses the IP of "Legend" and has obtained a version number. "Legend" needs no further introduction. Since its launch in 1999, it has been popular for more than 20 years and still has hundreds of billions of yuan in annual turnover and tens of millions of users.

Compared with traditional players who are still fighting for equipment on traditional web2, the advantages of the digital collection version of "Legend" are obvious. Players can achieve full-server interoperability through digital collections and certified national version chains, and can also own the same digital collections in other servers, and can trade freely to achieve compliant circulation. The use of the domestic version of the alliance chain with domestic characteristics is mainly to circumvent supervision, while putting assets on the chain, without using sensitive words such as public chain and NFT.

The gameplay is basically copied from "Legend - Ice and Snow Legend", and even the values ​​have not changed much. There is no token design in the game. Players can recharge talismans with RMB, and talismans are the main krypton gold game currency in the game. They can be further exchanged for ingots, trade equipment and items, unlock special abilities, etc., but talismans cannot be reversed into RMB.

The function of Digital Collection is mainly realized through the "Legend Order". The "Legend Order" can not only greatly increase the probability of equipment dropping after killing monsters, but also has a higher explosion rate of dropping equipment that can be synthesized into digital collections. If players want to experience the chain and transaction functions of the complete Digital Collection version, they must hold the "Legend Order". We can understand the "Legend Order" as a Pass card in the web3 game. Only by holding this card can you extract digital collections and these "NFT" chain transactions.

However, looking back a few months after the game was launched, it seems that the Shuzang version of "Legend - Judgment of Flames" did not make much waves in the web3 game field. In the game, almost all the players are from the "China Shuzang" guild name, and the guild names have dozens of numerical suffixes (China Shuzang 1, 2, 3...), which means that basically only players in the Shuzang circle are playing, while in the web3 circle, there are very few players discussing this game.

The reason why the digital collection version of "Legend - Judgment of Flame" is not popular in the web3 field is not because of the economic model, but because the digital collection circle is originally different from the web3 circle. In addition, the "Legend", an IP that has been rehashed for many years, lacks mainstream web3 gameplay for web3 players who like to try new things but don’t pay much attention to gameplay. The game itself looks a bit outdated in terms of picture quality and gameplay.

BitstarWar

BitstarWar, which has been tested in the GuaTian community these days, is a COClike (a copy of SuperCell's masterpiece "Clash of Clans"). We have previously published an article analyzing COClike chain games. This kind of SLG gameplay will make hardcore players addicted, but it has extremely high requirements for numerical planning and gameplay, and requires a balance of strategic matching. BitstarWar is the most complete and playable COClike chain game we have ever seen. The style is also very good. The friends who are testing it are very addicted to it, and they really feel like they can't stop playing. In addition, this is not a WEB2 chain-modified game. According to the introduction of the project team, it has been developed for almost three years, and their main storyline is mining. The main base is like a mining pool, which can install various mining machines to produce star coins in the game. The project party is currently doing a marketing promotion activity to build momentum for the blind box sales at the end of April. Players who are paying attention to this project should not miss the specific sales date.

The project team is Eastern Fantasy Verse Studio, which has several years of experience in WEB2 game development. The game started internal testing on April 17. The main storyline of the game that is currently open is the PVP cycle of obtaining resources, building bases, developing troops, and plundering other people's bases. Through PVP, you can get trophies to improve your ranking in the league. The current internal test version also has GVG guild wars, which is the core point of social interaction in COC-like games. PVE gameplay will also be opened in the future.

We have come across many COC-type games, the most representative of which are Heroes of Mavia, which was popular last year (not playable yet, too slow), and Galaxy Blitz, which recently started public beta. But the uniqueness of BitstarWar is that it is also a game without a token model.

How to make money without tokens? For most of the current blockchain game players, the most important thing is "whether they can make money and how to put the money in their pockets". According to the white paper of the project party and their communication, the chain is like this:

At this stage, players can only download the APK package or Apple package from the official website to play, so they can only use U to buy blind boxes or use U to make in-game purchases, which is still for Web3 players. In the next stage, the game will be available for download on the overseas App Store or Google Play, and then overseas WEB2 players will be able to use in-game purchases to top up in the game;

Players can complete two types of transactions in the in-game trading market: NFT transactions can be made with U; equipment, mining machines, collectibles and other props use diamonds (the in-game recharge currency). The act of selling diamonds to obtain U is performed by spontaneous market makers in the player group, and the project party does not directly set the price for this;

After players obtain U, they can withdraw it to the on-chain wallet.

Without tokens, the focus of the entire economic model is NFT. BitstarWar's NFT model is based on officer NFTs, which are issued by the official in the form of blind boxes. Players need to purchase and own at least one officer NFT to enter the game. Officers have powerful combat skills, which can help players plunder resources and largely determine the outcome of a battle; at the same time, officer NFTs will also have certain mysterious attributes, which have social identity distinctions in the game; officer NFTs can also be freely traded on the trading platform built into the official website. In addition to officer NFTs, skins (equipment), mining machines, collectibles and other NFTs in the game can also be freely traded on the trading platform.

Another economic mainline of the game is in-game purchases. In the beta version of the game, you can see that various building upgrades, technology research, hero upgrades, item purchases, etc. all require a lot of star coins and metals. In the beta version, star coins are more important than metals in the early stage, and there are three ways to obtain them: mining machine output, buying gift packs with diamonds, and robbing other players.

The combination of the above two models builds the overall economic model ecology of BitstarWar, which is relatively simple and direct. It has both the web3 elements of NFT and is far away from various cumbersome Tokenomics settings, while retaining the channels for depositing money into the game. Through the continuous upgrading of the game, the value is gradually deposited on various game NFTs, and finally completed through the trading market. The transaction is realized, creating a relatively stable internal economic cycle.

It should be said that the token-free economic model in this game is similar to the Treasure House in Fantasy Westward Journey to a certain extent. There are special market makers who buy low and sell high to realize the circulation of props, but in BitstarWar it is NFT. The biggest problem with this kind of model is that if the number of basic players is not large enough and the market makers have no profit, no one will do this spontaneously. Judging from the game quality currently shown by BitstarWar, it is considered to be a success in the blockchain game. I hope to rely on this advantage to accumulate more WEB3 players.

4. Summary of the economic model without tokens

Through the summary and analysis of the above three cases, we can feel that the game without token model is not an unpopular option. On the contrary, some game teams have voted with their feet and chosen the model without token. All three cases use NFT (or digital treasure) as the main value carrier and provide a free trading channel for monetization. At the same time, the soft tokens in the game are used as auxiliary to lubricate the various economic activities in the game.

In fact, if we think about it, isn’t the most basic economic model of Web2 games very similar to this model? Krypton gold is exchanged for game coins, game coins are used to buy equipment and upgrade heroes, and then the equipment and hero accounts obtained are cashed in or out of the field. The only difference is that in the above three web3 cases, with the support of NFT on the chain, it becomes safer and more convenient for players to cash out their assets.

Such an economic system eliminates the complex elements of staking and token market making that are common in web3 projects. It is a relief for both players and project owners. It uses a simpler and more direct approach that is closer to the essence of "this is a game, let's play it first", and conveys the truest soul of the game to players.

In such a token-free model, everyone will focus more on the playability of the game itself and be more immersed in the fun of the game. We believe that such a token-free economic model of web2.5 between web2 and web3 will be adopted by more high-quality game teams, especially game teams transitioning from web2 to web3, after the great waves of elimination.