Tokenomics for P2E Games that work
How to Make Play-to-Earn Games Work on the Blockchain?
Tokenomics is a critical factor in the success of play-to-earn (P2E) games on the blockchain. The rise and fall of Axie Infinity serves as a cautionary tale, with high NFT prices becoming a barrier to entry for its user base, leading to a decline in demand and a drop in the game’s token value.
Billions Quest is determined to avoid these pitfalls by using a sustainable tokenomics model that benefits both the game and its players. Our model is based on the principles of providing clear value generation for our native token stakeholders, a revenue model that pays the bills, and a strategy for long-term value creation for token holders.
Permanently Burning Tokens P2E games that burn the tokens earned as commission face one major problem: lack of liquidity at scale and an eventual expiry date for the game. Burning the tokens permanently means the game will not have the necessary liquidity for a large number of users, leading to its eventual demise.
The Solution: Sink Reserves
Billions Quest introduces a new concept of “temporary burning” through a sink reserve. Tokens earned as commission in the game are sent to the sink reserve, temporarily removing them from circulation. This supports the token price and benefits holders, while the sink reserve, controlled by a smart contract, releases tokens back into circulation when hitting a certain threshold, ensuring adequate liquidity at scale.
Balancing Token Supply with the Sink Reserves
The sink reserves balance the token supply by acting like a federal reserve, releasing tokens back into circulation as demand increases. This creates an ecosystem where the token price is a function of game usage and not an artificial mechanism controlled by the game developers. All stakeholders benefit as the price appreciates with greater usage and the release of tokens back into circulation through the smart contract ensures there are no liquidity constraints to have a large number of concurrent players
What Happens with Low Adoption?
In the event of low adoption, the sink reserves will build up more slowly. However, as tokens are still being removed from circulation with each game, the token holders will benefit from the price appreciation. In the unlikely scenario that the sink never reaches the threshold, the tokens will never be released back thus providing pricing support for our token.
In conclusion, Billions Quest’s tokenomics model provides a sustainable solution for P2E games on the blockchain, balancing the interests of the game and its players.
Read more about our model in our whitepaper.
