Rumble Kong League - Tokenomics Vision

General Ideas
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Rumble Kong League - Tokenomics Vision

We are excited to share our initial tokenomics vision for the Rumble Kong League gaming economy.

Over the past 6+ months we have spent an immense amount of time analyzing existing Web3 game economies, traditional Web2 game “economy” models, where certain models succeeded, where others failed, and future potential ones. The ultimate goal of sharing this document with you all is to open our ways of thinking and gain insightful feedback, questions, or other concerns. We will continue to operate towards a more open ecosystem and involve stakeholders every step of the way!

Please consider the following a work in progress and actively being worked on. Again, community input is accepted and encouraged.

For a cleaner/more interactive version please use the following link

Goals of the RKL Token System

Above all, the primary goal of the token system is to provide a stable economic environment for players in the RKL ecosystem. We want to avoid issues whereby non-players are acquiring the token with an expectation of pure price increase or other speculation.

This behavior is not useful and in fact harmful long term, and thus we aim to discourage it. Furthermore, extreme swings in the token price are highly detrimental to the stability of the in-game economy.

To re-iterate, the stability of the token price is absolutely paramount for the health of the overall micro-economy within THE RUMBLE KONG LEAGUE.

The properties that the token system must adhere to are:

  • Players are able to roughly calculate the expected return of their effort hours
  • The average cost of items and services do not deviate wildly
  • The system can grow and become more valuable with time, player increase, and overall ecosystem growth

The main KPIs of a successful token system:

  • Low volatility
  • Steady growth of token price and token supply
  • Token velocity growth

Existing P2E Token Model Problems

Initial Problems

Please read the “Initial Problems” section in the following write up here. In case it is unreachable or updated, below is the relevant archived section.
(Credit to MetaSoccer for the following)

After exploring the more “traditional” approach of a limited supply token, we found that it wasn’t the best solution to reach our goals, since the market will have full control of the MSU price. Big price jumps can be seen as desirable, but since all users entering the game will need to buy MSU we could easily reach a point where the token is too expensive or just unavailable for them, therefore limiting game adoption and long-term growth. The opposite is also dangerous since all game rewards are MSU-based: if the price drops, the value of the rewards will drop proportionally, potentially leading to a self-destructing loop where users want to exit the metaverse to look for more profitable games. In short, a fixed supply token isn’t suited to build a dynamic and sustainable metaverse.

However, dynamic supply tokens also have their own risks. Most of the time, the project owners can unilaterally mint new tokens, adding a source of uncertainty to the metaverse actors. Early investors can reasonably see risks of dilution, and users would worry that their potential rewards will have less value than they initially expected. In some extreme cases, disproportional token minting could even lead to the full destruction of the metaverse by flooding its economy and leading to “run-to-the-bank” situations.

Also, consider reading through the following discussion replies:
https://twitter.com/AlgorithmicBot/status/1531989725506150401

The Token Purpose

It is crucial to be clear about the primary purpose of the P2E token in the first place. Its purpose is a unit of exchange within the RKL ecosystem, that also has a monetary value that can be extracted by its users/holders.

Within the design, we must attempt to avoid traders speculating on the token price and making strictly investment decisions, as this affects the price of the token and therefore directly impacts the actual players of the game.

By incorporating a bonding curve design, and building the price function insensitive to large orders, there becomes no extreme incentive for external agents to speculate with the RKL token.

But Why?

When there is a clear investment only/speculation ability built into the token design and the game’s token drops in price, you will see a direct decline in player base. These players were not playing for fun, entertainment, or overall enjoyment, but rather to earn and speculate:

Main competitor Alien Worlds did even better in terms of unique active wallets, nearing the 1 million mark. Unfortunately, the game saw its native token TLM lose over 50% of its valuation in May, which caused the dapp to drop to second place in this ranking.

Above is an excerpt from the following article. You can find numerous examples similar to this. We believe it is absolutely crucial to design an as stable as possible reward token.

$LEAGUE Token Supply & Structure

As briefly explained above, the absolute token price has an extremely important impact directly on the game’s ecosystem. This means it must be taken into account when designing the in-game reward system.

If the price is left to market participants, it will swing wildly and become increasingly difficult to model and reason about. With that being said, the RKL token ($LEAGUE) will be priced with a bonding curve model just as we’ve described in the above section.

We shall implement a token bonding curve (referred to as TBC) smart contract through which buy and sell token transactions are to be executed.

What is a Token Bonding Curve (TBC)?

For high-level details of how TBC works, please read the “Bonding Curve Solutions” section from the link provided in the section above.

Alternatively, the required section is below:

Bonding Curve Solutions

To avoid the downsides of a fixed supply token and the uncertainty of project-controlled ones, we’ve decided to use a TBC (Token Bonding Curve). This state-of-the-art solution was made possible thanks to the evolution of SCs (Smart Contracts) and AMMs (Automated Market-Makers).

A Token Bonding Curve is essentially a SC that has control over the token supply, and continuously mints and burns tokens alongside a mathematical function “Price = F(Total Supply)” commonly known as “The Curve”. This SC consequently acts as an on-chain AMM that ensures liquidity for anyone willing to enter/exit the metaverse. Usually, the price increases when minting and decreases when burning.
The main advantage of TBCs is that they offer a dynamic token supply but in a predictable, controlled way that can be easily simulated and they provide a “reference price” for the token over time that follows demand. By using the formula behind the Curve, it’s possible to know the reference price for a given supply, therefore creating certain and healthy expectations for the whole ecosystem. This solves the uncertainty issue with the dynamic supply token discussed previously.

Furthermore, thanks to its AMM nature, the Curve will also stabilize the prize all over the network. Even if the community creates additional exchange solutions for the token like a DEX (Decentralized-Exchange) pool, sudden price fluctuations will lead to arbitrage opportunities between them and the Curve that can be exploited by anyone (probably bots will take care) therefore stabilizing the price no matter where the token is trading.
Another interesting advantage is that the MetaSoccer TBC is configured to react softly to big buys/sells, reducing the incentives for short-term speculators (“pump&dump” schemes) while ensuring new users will always be able to enter the ecosystem at a reasonable price. This supports continuous game adoption and hence the long-term growth of the ecosystem. While this can be seen as an “upside limitation”, it’s also a “safety” measure when demand shrinks. Not only the price will decrease along the Curve, limiting sudden price crashes, but also the burn feature will result in a greater decrease of the Market Cap thus making the project more attractive for new users.

To sum up, the TBC adapts the MSU supply to the metaverse demand expansions and contractions by minting and burning tokens respectively. By doing so on-chain, it also eliminates the uncertainty related to manually controlled dynamic supply tokens and allows users to have healthy price expectations for a given token demand. The TBC offers a solution to the problems discussed initially, and it also supports our goals of continuous adoption and long-term sustainability.

For more details on bonding curve designs, we suggest you to also read through the following:

The “Reward Token”

Within the design there will be one primary token ($LEAGUE), as described in the above sections, that attains a real monetary value attached to it (the bonding curve token).

There will also be second “token” (the reward token) that does not have a value attached to it explicitly. Think of this “token” similar to existing game economies within popular web2 mobile/traditional games which have all sorts of one way “currencies” like Fortnite’s V-Bucks, Roblox’s Robux or Candy Crush’s Gold Bars.

“Reward Token” Purposes

There are a multitude of purposes for the “reward token”, but at its core we must not create excessive selling pressures on the token with the real value (TBC Token — $LEAGUE), or there will be no monetary rewards within the game ecosystem.

In case that such an event occurs, this secondary in-game token does not have explicit monetary value, but is one that can be used for specific/limited in-game transactions.

Examples Include:

  • A rare in-game wearable item drop
  • A unique stadium customization
  • A unique visual/animation player NFT (IE: fire coming out of a Kong’s shoes)
  • Signature moves from brands, sponsored athletes, or other collaborations
  • Other limited time drop NFTs/in-game assets etc…

We will speak more in depth in the future about how this exactly will function, where the value is, and how loyal holders are rewarded.

Just please know, we absolutely recognize the incredible community you all are and take this into account, in every decision.

Existing Ecosystem Holders

We recognize and deeply appreciate the loyalty the RKL community has shown, and continues to show, to date.

Given it will cost real money in order to provide the initial liquidity on the bonding curve, it would be challenging to carry out an “airdrop” that everyone is accustomed to, and in fact these are majorly negative long term in the majority we have seen to date.

Thus, another very important and primary purpose of the “reward token” is to be used to reward existing and loyal RKL ecosystem NFT holders without effecting the primary game economy.

Long term holders and investors in the RKL project can be rewarded with this secondary token, that no-one but them will hold initially which can be used to acquire all sorts of custom and interesting in-game items for their playable characters, clubs, stadiums and more that can be eventually sold for the token with monetary value.

This will achieve an effect that someone new to the ecosystem whom wishes to obtain said items, will have to buy the bonding curve token for real money, thus adding more fiat to the bonding curve for the holders of the token to be able to extract.

Moreover, the secondary token could theoretically be continuously airdropped on Kong/RKL NFT holders. It could theoretically also be dropped with a multiplier to those who held their Kongs the longest (an incredible majority of wallets, in fact <3).

https://twitter.com/AlgorithmicBot/status/1542454523217707010

This way we will be driving the value directly back to long term loyal holders that have supported the RKL from day one. If the Kong gets sold, this streak gets cancelled and the new owner will not be gaining any multiplier or benefit, effectively starting over.

Non-NFT Ecosystem Players

Another crucial purpose of the “Reward Token” is to slowly on-board new and non NFT familiar gamers into the ecosystem. This is where we on-board the next 10+ million gamers to web3.

We are able to incentivize these non-NFT players with a small allocation of secondary token that they would be able to then utilize/spend on some cheaper in-game items and services. Pair this with a built in-game on-boarding funnel and education pieces, and you get ways to continue engaging deeper levels of play while learning about digital asset ownership without even fully realizing or knowing it.

Where do you expect to get the liquidity from in such a model?

FUN AND ENGAGING GAMEPLAY OVER EVERYTHING.

By building a truly fun and engaging game that everyone actually wants to play, rather than simply value extract. Somewhere along the way of early web3 games, the fun was lost… you know the core soul of gaming?

The current P2E game landscape is quite the opposite. We have seen P2E games driving the demand through a token as an incentive mechanism, we are flipping this model on its head. We must be a fun game first, to have any form of monetary rewards within. This, is in fact, how the traditional gaming industry works. With the core, extremely important difference, that players do not truly own their in-game and digital assets.

Fortnite, for instance, monetizes the fun you gain from their game by selling you back unique items, and people spend billions on skins (Fortnite generated a $5.8 billion revenue for Epic Games in 2021). Likewise, RKL, will be a fun deeply engaging game first.

Only having achieved this, can we hope to achieve a stable, non short-term ponzi fueled gaming ecosystem, with ownership in the hands of the players.

As we have preached since day one, the RKL ecosystem is built with long term values, robustness, and mass adoption in mind. The goal is to have a traditional looking game, that gives players back the ownership and absolute freedom they deserve.

Demand

We will drive the demand for the bonding curve token by allowing users to spend it on virtually everything inside of the RKL gaming ecosystem. This is akin to how you have to buy V-Bucks with fiat to purchase anything within Fortnite.

Bonding curve liquidity increases, RKL builds up a treasury and can then use these funds to funnel back into the game in the form of new feature developments, game expansions, as well as player rewards.

The non-monetary token is an exclusive reward that can only be spent on a specific ultra rare in-game items, whereas the majority of the transactions are denominated in the bonding curve token.

Security

A single token with monetary value reduces infrastructure complexity and therefore improves security. All of the essential utility is encompassed in a single token. This provides an easier upkeep of such an economy.

Compare this to a two-token model (governance token and earn token). If the project is multi-chain, you suddenly have to manage at least two tokens on each one of those chains. ****(because you may also have staked versions, vote escrowed versions and so on).

TLDR

  • Single bonding curve token model
  • Virtual token without a monetary value for ultra rare, unique, and limited drop in-game items
  • Also used as an airdrop token and a continuous dividend token for Kong holders.

Liquidity Providers Removed

Usually, token pairs will have liquidity providers. Simply put, these are the people that you buy the token from on decentralized exchanges (DEXes) like Uniswap, Sushiswap etc.

These liquidity providers wind up complicating the design of the token when balancing a sustainable game economy. The project has to decide how many tokens to allocate to these agents for the liquidity provided in the form of rewards (liquidity mining). The providers may also decide to remove their liquidity at any point if there is no liquidity locking, incentive to provide or other various reasons. To motivate them to lock for longer periods, usually, more protocol tokens are allocated to them that are vested over a given schedule.

Their primary reason for providing liquidity as a service is financial gain, which can adversely affect the game economy in the long term. The reason being, these parties likely are not primarily interested in participating in the in-game economy and wind up dumping or hoarding the tokens as speculation, to then dump at a further point. On top of this, there is no guarantee liquidity providers will stay beyond the incentivized liquidity locking period, especially if liquidity rewards are dried up/the spigot is cut off.

Projects have to also worry about liquidity fragmentation. One may need liquidity providers on different chains. Liquidity providers is a considerable hinderance in game economic token design.

For this reason, we provide a different methodology for trading and price discovery, namely through the bonding curve token (TBC). Thus, liquidity providers as tokenomic agents are completely removed in this design.

Initial Liquidity Launch Mechanism

Given the above thoughts about liquidity providers and traditional incentive structures, we will need some initial capital to seed the liquidity. All of this capital will be deployed on a bonding curve to buy the initial bulk of tokens through an initial offering.

With time, as players transact with the in-game token ($LEAGUE) inside and outside of the game ecosystem, a percentage will go into the RKL treasury that will then serve as the prize pool for the subsequent payouts and player rewards.

RKL Game Token Sinks & Faucets

Below you will find a brief overview of the MAIN sinks and faucets within RKL.

Sinks require a user to spend the token, whilst faucets produce the token.

Sinks

  1. Rent Kong(s). Someone external to the game can acquire the RKL token, go to RKL marketplace and rent a Kong to play the game (ranked match). Note, that not all Kongs are rentable. The owner of the Kong must first lend their Kong. Owner can lend a Kong and denominate the rental in RKL token only. All Kongs have different boosts, thus will have varying chances of winning in a match and thus earning the token. The earned token will be split between the renter and the lender as per the rental agreement in a completely automated and trustless way provided through the reNFT Protocol.
  2. Rent Club(s).
  3. Purchasing in-game items and services:
    • In-game wearables and customization/cosmetic items
    • Stamina refills
    • Gameplay consumables
    • Abilities
    • Poses/emotes/dances (end of game screen)
    • Custom animations
    • VFX and SFX
    • Branded signature “moves”
    • Loot (which can contain any of the above) as well as keys to open them
    • Tournament buy ins/fees
    • and a lot more we haven’t unveiled
  4. Purchasing Game Character(s) (Kongs, Rookies, and future species). You can only buy game characters with RKL token.
  5. Purchasing Club(s). You can only buy clubs with RKL token.
  6. Purchasing Club Customizations (post-release). You can customize clubs, stadiums, and add extra engagement layers to your club(s)

Primary Faucets

We will dive deeper into how these play out more in depth in future articles. There is a lot of gameplay and economy balancing we are tinkering with before we feel comfortable putting out concrete information.

  1. Ranked Play
  2. Tournaments
  3. Leagues

Open Discussion

To reiterate, these tokenomics outlined represent the initial vision for The Rumble Kong League gaming ecosystem and any and all community feedback is welcomed!

We encourage deep thought-provoking conversations and questions as replies to this thread where we will be actively participating.

We’d like to again thank the entire community for their constant support and commitment to the RKL vision, we wouldn’t be here without each and every single one of you. Every single day we are blown away by the support and deep love rooted for RKL.

Our team continues to build, grow, innovate, and push the boundaries for the web3 space to cement RKL as the premier sports gaming metaverse and culture hub. We love you all! <3

#WEAREKONG

Additional References and Research Inspiration

Vitalik’s article on why token voting is bad

https://medium.com/1kxnetwork/sinks-faucets-lessons-on-designing-effective-virtual-game-economies-c8daf6b88d05

https://academic.oup.com/rfs/article/34/3/1105/5891182

https://arxiv.org/pdf/2008.02538.pdf

https://www.eveonline.com/news/view/monthly-economic-report-february-2022

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After recently attending a Crypto Convention but more so a “What’s next in Web3 gaming” panel it is obvious that NO-ONE has the “right soloution” to tokenomics yet so there is a lot riding on RKL & understandable to why team is taking the required time to develop this in the way you belive can be successful long term.

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