Token Economy: Lessons Learned From Splinterlands
Splinterlands have a sophisticated token economy. So being a Splinterlands investor/player taught me much about token economics.
Splinterlands, a fantasy-themed play2earn card game, is still played by more than 300k people. I've been playing the game for five months and keep learning new things about the game.
Splinterlands Digital Assets Are Surprisingly Diverse
The Splinterlands ecosystem has 15 different tokens traded on the Hive Engine Exchange. The number increases even more when we include soulbound NFTs, Runi, and tokens under development.
In addition to the original card game, three games are under development in the Splinterlands ecosystem. These games are Splinterlands Tower Defense, Splinterlands Land, and Genesis League Goals. In this article, I will only focus on the digital assets of the card game.
Like many play2earn games, Splinterlands has a reward/management token(SPS) and NFTs. Splinterlands also has a stablecoin (DEC), unlike other games.
There are 4 NFT sets in Splinterlands: Alpha, Beta, Untamed, and Chaos Legion. The cards in the early released sets are more valuable. The reward system also supports this situation. Each card has two versions, regular and gold. The number of cards on the market depends on whether they are common, rare, epic, or legendary. Rarer cards are more valuable.
Each set includes reward cards, promo cards, and extension cards. For example, Riftwatchers is the extension of the Chaos Legion set.
And there are soulbound cards. Gladius cards, the first example of soulbound cards, are purchased with merits(honors earned in the game) and can only be used in tournaments. Since February, new generation reward cards have been distributed as soulbound. These cards will become tradable when the next set of cards is released. Those who have played the game regularly and accumulated their cards will have an advantage until then because it will not be possible to buy new reward cards.
Potions increase the probability of gold and legendary cards coming out of card packs. Potions can be earned as rewards or purchased with money.
Each different digital asset creates additional added value. Of course, these digital assets need to be carefully designed. Each of the Splinterlands cards contains a character, and the characteristics of that character are carefully designed. For example, a new card called Runi was developed in the past months. This card has a special visual appearance and is available for sale on the Ethereum network. Runi failed to achieve the expected success during the sale on Ethereum because it coincided with a period when risk appetite was low. The Splinterlands team destroyed the unsold Runes as a first precaution. Thus, possible additional supply pressure was eliminated. Later, Runi became available in the game. And finally, it was announced that Runi would have a particular function in the land game. Thus, despite the bear market, Runi investors did not suffer.
The Splinterlands team demonstrated a similar approach for the Chaos Legion card packs. Cards that have not been sold for a long time are systematically burned.
On the other hand, many mechanisms were also active in selling Genesis League Goals card packs. Mechanisms such as discounts for those who buy card packages in bulk, the price advantage for those who believe early, and income through staking card packs increased the attraction.
The Splinterlands ecosystem is constantly expanding and benefits existing players/investors. The newly released cards make it harder to be competitive in the game. Because to compete, it is necessary to have freshly released cards. On the other hand, this situation limits the outflow of money from the system and favors everyone in the community.
Airdrops play an essential role in the Splinterlands token economy. Card package buyers are rewarded through promo card airdrops when certain sales thresholds are exceeded. Also, SPS stakers earn Genesis League Sports management tokens.
The examples above are a small part of the token economy mechanisms in effect in the Splinterlands ecosystem. Writing all the mechanics would be beyond the limits of a blog post.
So do we need to complicate things so much? The answer to this question is definitely yes. Because many financial mechanisms are tried within the ecosystem, and the successful ones are disseminated. The ultimate goal is for the savings to stay in the ecosystem for a long time and to have an experience that community members will be excited about. The card game is delightful. I'm also hopeful for other games in development.
Splinterlands is making history in the web3 space, and we are a part of it. Game theory, complicated strategies, and elaborate financial mechanisms... Splinterlands may one day bring all the nerds of the world together.
Thank you for reading.
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