Building Sustainable Web3 Games with Owned Liquidity & Tokenized Assets

I suspect we’ll see more games move to bring as much of their liquidity as possible into their own treasury so they can capitalize on this. We’re already in the process of doing this as Crypto Raiders, both by exploring Olympus Pro style bonding of our outstanding liquidity and issuing more tokens for in-game assets.  

And that’s just the in-game token. Trading volume is much higher on the governance token, Raider, which currently does ~2.3m in volume per day. Under the same assumptions, we would generate $80,500 per day in revenue by owning that liquidity.

With ~10,000 active players, the daily volume on our in-game currency AURUM is ~$600k per day. If we scale up to 100,000 players and that ratio holds, the daily volume would be $6m. If we brought the AURUM/USDC and AURUM/MATIC liquidity into the treasury, that would be $21,000 in revenue per day earned from people trading our in-game currency.

By leaning on existing Decentralized Exchanges, we can create highly liquid instant-settling trade markets for in-game assets that didn’t exist in past games. You always needed someone on the other side of the trade in WoW or Runescape. In crypto, with Automated Market Makers, you don’t. 

Ideally, the primary revenue driver should be in-game activity amongst existing players. Not selling new characters to new players, since then the health of the game depends on attracting greater and greater numbers of players.  One elegant method is through the combination of tokenized game assets and protocol owned liquidity. This is what we... See more

So the question for crypto gaming is: how to create a game that is fun to play, rewards gamers for their hard work, and generates enough revenue to fund continued development? 

This might seem like a good idea on the surface, but it’s not a very sustainable dynamic. For one, it favors investors not gamers. Breeding isn’t a very fun game, but it’s where most of the revenue (and incentive) for Axie players comes from. For another, it builds the in-game economy on a very shaky foundation. Once the flow of new players stops, ... See more

The most famous example is Axie Infinity. In order to play, prospective gamers have to buy or rent an Axie from an existing player. The game economy works because new players buy Axies from old players in hopes of reselling those Axies to newer players who join after them. 

Part of the magic of Web3 gaming is the ability for players to cash out their in-game work. So far, though, most play-to-earn games rely on attracting new players to make this possible.