Building an Open Economy: Practical Examples

A Variety of Game Mechanics on the Expload Platform

This document describes the basic components that can be used by developers to build open in-game economies on the Expload platform.

Transaction Parties

Developers and players can interact with each other as transaction parties, thus creating two possible types of interaction within the games: developer-to-player and player-to-player.

Developer-to-Player

In this classic model embraced by many free2play games, the developer holds a monopoly on the in-game items and services that cannot be obtained from any other source, or that are released in limited quantities (one of the methods to increase player engagement). The developer generates income by selling such in-game items and services to the players for fiat money. The developer can replicate the items at no additional cost.

The developer-to-player trading is always a one-way process because the developer has no interest in purchasing any items back from the players for XGold. Such a process is likely to have an adverse effect on their profits given that the developer should consider allocating funds to in-game marketing (prize pools, loyalty rewards, etc.) as a tool to enhance audience engagement.

The inability to compete as an item trader, or service provider in this monopolistic system limits the players’ purchasing decisions predominantly to those dictated by the current gameplay experiences, rather than other needs. As a result, players who would like to offer a competitive service to other players have to leave the game’s boundaries and most likely breach the rules of the game established by the developer. For example, to sell in-game gold for fiat money in The World of Warcraft or similar MMORPGs.

Player-to-Player

Despite solely supporting player-to-player transactions, this model also caters to the needs of the developers, as they can benefit from the charging of fees on transactions. This means that both parties operate in equal conditions and both have the opportunity to benefit from the system. In addition to making purchases with in-game currency, players also have an opportunity to buy this currency.

This enables players to both purchase items for their own gameplay needs and benefit from the potential of making profits on their investments into buying items. In this model, the prices are set by the players themselves, as opposed to the controlled economy described above in the developer-to-player system.

Subject of Transaction

As a part of the deal, the players can agree to transfer the ownership of:

• One or several items. In this document, the word ‘item’ denotes a digital asset that is represented in a game in whatever form: a sword, a tank, golden bullets, a land title, a production patent, etc.
• In-game currency: XGold or XPlatinum, which can be used for the purchasing of items, as well as for paying the difference in barter trading, etc.

Basic Examples

Further in this document, Player 1 and Player 2 are used to denote the transaction parties. In certain cases, the developer can also act as a transaction party.

Direct Trade

Player 1 pays Player 2 for the transferring of an item, from Player 2 into the ownership of Player 1. This trading scheme can include two players or a player and a trading platform.

Auction

These mechanics are used to trade rare items, where the demand significantly exceeds the supply. The players can compete with each other for items by offering a better price.

Algorithmic Trading

This method consists of using a preprogrammed legal bot to perform trading operations on the marketplace. For instance, a bot can have a certain amount of funds at its disposal and be instructed to use these funds for the purchasing of crafting resources, provided that they are priced below the set cap. Likewise, a bot can be programmed to bid in the auction and even to raise the bid within pre-set parameters.

Trade-In

Player 1 can transfer an item to Player 2 in part payment for another item of a higher value that is owned by Player 2. The balance to be paid by Player 1 is agreed upon by both the parties.

Renting Items

In the event that Player 1 needs an item owned by Player 2 for temporary use, they can choose to rent this item. The simplest example would be renting a sword or a tank.

Examples from a Real-World Economy

Patent

Players who wish to craft in-game items can be required to obtain a patent for their inventions. This will limit the number of players permitted to craft such items. Alternatively, any player can be allowed to craft items for a small fee paid to the patent owner. A patent can be owned by one or several players in unequal shares.

Secured Loans

Player 1 can take out a loan from Player 2 against the pledge of an item owned by Player 1. In the event that Player 1 fails to repay the debt and/or pay the interest due to Player 2 prior to the maturity date, then ownership of the item will be transferred to Player 2.

Furthermore, players can borrow funds if they cannot afford to purchase an item. In this scenario, the player receives the item immediately and repays the loan at a later date.

Credit History and Rankings

These mechanics supplement the lending and other financing mechanics. Records of all transactions undertaken by the player are located in one place. This allows users to verify the player’s reliability and discourages players from ignoring the debt and deserting to another game.

Ratings

This is an opportunity for the best players to be listed in top player rankings. As an option, they can apply for a spot in the ranking.

Insurance

Player 1 pays a small amount of funds to Player 2, while Player 2 undertakes to transfer a larger amount to Player 1 in the event that the latter experiences a loss, such as the loss of an item, etc.

Multi-level Marketing

The seller undertakes to share a minor portion of their income (such as proceeds from the sale of items) with the players who have enrolled the seller into the scheme. Similarly, those players shall pay a certain amount to other users for letting them join the scheme, etc. This model can be implemented in clans. For example, where a clan specializes in creating unique items, its members can help sell these items, whilst paying a percentage from each sale to the clan’s treasury and leaders.

Retirement Savings & Funds. Business Lending

This model can function with or without intermediaries. Player 1 agrees to transfer small amounts of funds to Player 2 on a regular basis and Player 2 agrees in the longer term to repay the received amount to Player 1 plus the interest, either as a lump sum or in regular instalments. The developers will benefit from such a relationship since it boosts retention.

Crowdfunding

Players can financially support other players or teams by participating in crowdfunding campaigns. Such campaigns can use the Kickstarter mechanics, where donations are frozen till the cap is hit, or the Patreon mechanics, where the backers donate small amounts on a monthly basis, rather than as a lump sum. Funding options can be broken down into repayable and non-repayable categories. For example, players can support a clan by financing a raid in return for a share in the loot. Likewise, players can finance a crafter to create a unique item. The items can only be distributed among the backers and cannot be replicated in the future.

Paid Jobs

Salary-Based or Contract Jobs

Player 1 regularly pays remuneration to Player 2 for the completion of various tasks. This can be either in the form of a one-off assignment (contract) or regular employment (salary-based). The agreement between the parties can have additional terms and conditions incorporated, that determine the nature of the assignment. Such terms may require the player to be present in the game at a specified time and location, or to hand over the mined resources to the employer.

The players should be aware that using smart contracts for transactions is more beneficial than making direct transfers, otherwise the salary system won’t be efficient. The following solutions are suggested for consideration:

1. The developer does not charge a fee on salary related transactions. Therefore transacting via smart contracts can be no less beneficial than direct transfers. The developer will still benefit by the charging of a fee on purchase-and-sale transactions undertaken by the players, and it is highly likely that the players will use their salaries to make such purchases.

2. In the case of no established trust-based relations between the customer and the contractor existing, smart contracts can help track the parties’ performance within the game by means of automated controls. This will enable strangers who haven’t yet gained trust in each other to cooperate securely and effectively.

3. An assignment cannot be confined to a mere extraction of resources that can be mined and sold without concluding a contract. The parties should only enter into a contract, where there is a necessity for a particular service (security guarding, launching an attack, organizing the logistics), or for a resource that cannot be extracted using the regular methods.

In the event that the sponsors and developers would like to engage players in a particular activity, they can also act as employers.

Another possible type of assignment can be for the producing of design drawings and the performing of construction work. For example, in the event that the clan members desire a custom designed mansion for their clan, they can employ the services of a famous architect and hire the builders.

XGold and in-game resources can be stolen, as opposed to XPlatinum and items purchased for XPlatinum, which become the player’s property and are not owned by the developer. As such, they cannot easily migrate from one pocket into another. This security benefit can incentivize the players to purchase XPlatinum in order to keep their assets safe. As an option, the ownership of the rarest and most remarkable assets could be transferable, for instance, granted to the winners of PvP combats.

Uber-Type Systems for Players

Assignments can be distributed by an automated system on account of the player’s location in the game universe and other factors.

Coaching Fee Linked to Achievements

The player can acquire certain skills by hiring a coach on a fee paid basis, however, the coach will only be entitled to payment of the full fee, provided that the player has achieved the target, for instance, to become a Top 10 Battle Royaler.

Element of Randomness

Tournaments

In many cases, it may be difficult to predict the winner.

Individual players or teams of players can be required to pay an entrance fee to participate in the tournament. These fees are used to build the prize pool, which will be distributed among the winners with a portion of funds allocated to the developer. Alternatively, admittance to the tournament can be free of charge or for a symbolic fee and in this scenario the bulk of the prize pool is contributed to by the sponsor.

Fair Loot Boxes

Due to the pre-generated content, each set of loot boxes is guaranteed to contain a fixed number of top prizes. The developer may wish to roll out 100 epic swords in the game using 10,000 loot boxes for this purpose. Once all of the loot boxes have been bought and opened, there will be exactly 100 epic swords in circulation.

Lottery

In this model, the winner is determined by random choice, rather than skills.

Logistics

Games tend to automate their commodity and financial flows. Any item can be instantly purchased or offered for sale, irrespective of its location or the batch size. The items are linked to the player’s inventory and survive the character’s death.

However, in the event that the developer opts to omit this feature and emulate real-world transactions, this will add a logistics component to the game. As the items are physically represented in the game universe, they need to be stored and transported somehow, whilst the players have to wander through the universe in search of stores and items available for purchase.

Private Stores

This option is well-suited for games without a common marketplace, but with private stores instead, where players can buy items wholesale and resell them to retail consumers. This process helps to engage sellers into the game’s economy, as they need to find and rent premises in high-traffic locations and channel investments into promotion campaigns.

This particularly applies to convenience shops that offer basic foodstuffs, as this is a service in regular demand with players. Why not open a kebab house at the edge of the world and reap the benefits of trading in a competition-free environment?

Wholesale Stores

Players who prefer buying wholesale should have access to a wholesale store for their convenience. This feature could be beneficial for clans who extract resources for commercial purposes. Given that the trading routines consume vast amounts of time and resources, the wholesale opportunity can present a huge advantage for clans.

Consignment Shop

In the event that a player fails to sell an item on their own, they can use a consignment shop to speed up the process, and the shop can charge a fee for its services.

Plants and Conveyors

Before taking its final shape, an item may undergo several production stages. In this case and for the sake of optimizing logistical flow, it could be worthwhile structuring the whole production line in one place. This will generate additional jobs and give a real production feel, unlike with crafting items in the interface, where players get instant results after merely loading the resources and pressing a button.

Such mechanics already exist outside of the Expload platform. They can be found in farming games (harvest the wheat -> clean the grains -> feed the birds -> get an egg -> bake a cake) and survival crafts (chop down the tree -> process the timber -> make a wall -> repeat 20 times to build a house).

Robbery & Secure Storage

Player 1 can pay Player 2 for the safekeeping of an item belonging to Player 1. Where the mechanics allow for the permanent presence of items in the virtual world, such items can be picked up by any player, unless diligently looked after. Thus, securing an item may take special effort such as renting and safeguarding a storage space.

Other Examples

Achievements and Records Log

All of the players’ achievements can be recorded to a shared log, which is accessible for viewing by all users. Record breakers and the best players will be immortalized in the server history.

Seal

Users can seal their items. This option is meant for sponsors and advanced crafters.

Elections / Voting

There is an opportunity to implement a transparent and auditable voting system that cannot be controlled by the game developers and bots.

Kings

One of the players could be empowered to alter the ratios specified in the smart contract. This can help redistribute the funds in a more efficient way by allocating the necessary amounts to science and research, healthcare, military needs, etc.

Diplomatic Treaties

The parties can enter into non-aggression treaties secured by substantial amounts of funds from each party. Should a party breach the treaty and attack the other party, the whole security amount will be transferred to the party attacked.

Clan’s Treasury

This is a solution for the transparent treasury management within clans, when regular clan members are granted access to the clan’s financial flows. For more details, please see the mechanics described above.