Game Utility Creates Natural Staking Effect on Tokens

Many crypto / blockchain projects with a utility token behind them have an issue creating value. They promise utility, but generally the tokens are held purely for speculation with the only goal being profit. So many Web3 games often fall into this same routine where people often buy tokens hoping for a quick profit, with the promise that millions of players will come and need those tokens.

Projects often resort to creating artificial utility like staking as a way to incentivize long-term token holders. These projects often implement lock-up mechanisms to deter token selling. However, it's worth noting that while some games successfully integrate staking in a way that benefits and enhances gameplay, the majority do not.

The other thing we hear a lot is that gamers are perfect for crypto. We don’t entirely agree with that statement. We think game economies are often perfect for Web3 concepts, but at the end of the day, gamers aren’t usually crypto or financial traders. They don’t care about bids, asks, floor prices, total volume sold, or any other metrics that traders think about. Their focus is more on what enhances the entertainment experience and makes the game enjoyable for them such as stocking their inventory with better items, showing off an awesome rare skin, or completing their collection from their favorite teams, players, or artists.

Overall, while we don’t think we should view gamers through the lens of a crypto trader, it’s undeniable that Web3 has a unique impact on gaming. Game utility creates a sort of natural staking effect in Web3 economies.

What is Natural Staking?

Well, we made up the phrase, but gaming ultimately brings a similar effect that many projects try to create artificially. Staking is often used to lock up your tokens with some incentive – usually to earn more tokens creating a yield. Natural staking happens more organically. Gamers keep their tokens in the ecosystem not for direct financial gain, but because they value the in-game benefits and experiences these tokens provide. Instead of withdrawing, many users prefer to keep a balance in-game to make future purchases and further enhance their continued participation in the game.

To illustrate this effect with real data, we wanted to share what we have seen with the game NFL Rivals. We have seen some really interesting natural trends happen and now we are seeing this on a real scale. Gamers are coming in and immediately starting to play NFL Rivals without understanding anything about Web3 or blockchain.

As players start to engage with the economics of the game, they naturally start buying in-game virtual currency to use to buy game assets to build their team. With weekly and daily events, they often look to upgrade their teams to be more powerful. Much of this is done purely from gameplay, but many game players are entering the Mythical Marketplace to acquire NFL players that others might not need anymore or are looking to trade.

Most players use fiat currency to purchase digital assets in the secondary market, but behind the scenes, through a fully licensed third party entity, that fiat is exchanged for native MYTH to be used on the blockchain to securely and atomically record and complete the transactions. Since the launch of NFL Rivals, we have seen significantly more purchasing (deposits) of MYTH into the chain than selling or withdrawing from the chain.

The majority of the time this isn’t about profit taking or making a buck for gamers; it’s about having the ability to trade and access items they might not already have. It’s about their affinity for certain players or teams they want to collect, and about upcoming events where they might want to augment their team roster, etc. This is game stuff –real game utility– not crypto stuff, but the blockchain and the use of the MYTH token makes it happen safely and seamlessly in the background.

In fact, we have seen only a handful of days where withdrawals ever exceeded deposits. The most notable spikes in withdrawals occurred when we introduced new withdrawal partners, leading to some players utilizing these new services. However, behavior quickly returned to normal. Impressively, we have only seen about 35% of tokens ever withdrawn from the Mythical ecosystem!

Token Locked Value

Another term often used in crypto, TVL or “total value locked”, basically means how many tokens are in the ecosystem at any given time vs sold and cashed out or removed. In our case, for every $1 that comes in, only $0.35 ever leaves.

Every day, more and more tokens are added in the ecosystem (in players’ wallets) increasing their purchasing power, participation ability, and the entertainment value not just in a single game, but any game or application in the Mythical Ecosystem. A player can right now sell an item in NFL Rivals and buy another item in Nitro Nation, sharing the same native MYTH balance across all games. This effect will compound with each game or application added and each gamer that joins, creating a robust ecosystem that we already see accelerating. Below is what we have seen with just one game on the secondary marketplace.

What’s Next

We now have cutting-edge marketplace technology tied into a robust and easy to use blockchain experience. We have been seeing record numbers each month, but with this strong foundation, we are just getting started on the fun part. The coming year is packed with massive updates, many of which we test with DMarket (a marketplace which has a significant daily volume of gamers trading all kinds of gaming-related items) before bringing to the Mythical Marketplace and games like NFL Rivals and Nitro Nation World Tour.

This year has already had some amazing marketplace updates. The biggest of these was the in-game marketplace in NFL Rivals, which had a massive effect on transaction volume, adding a nearly 50% increase in marketplace volume.

Next was bidding, which not only significantly increased transaction volume, but also directly enhanced marketplace liquidity. By enabling quicker and more dynamic trading, bids became another improvement for both buyers and sellers of digital assets.

Up next is QuickTrades, a patent-pending process we built on DMarket to allow for cashless peer-to-peer trades between players. This cashless exchange accounts for over 60%+ of all DMarket transactions and will be live on Mythical Marketplace this month!  We’re excited to share more on this soon, and like this post, we’ll be revealing the data we see in Q1 2024. We believe this has the potential to 2-3x all transactions in the Mythical Marketplace for NFL Rivals and Nitro Nation World Tour.

In 2024, we will continue significant feature development extending QuickTrades across Mythical’s games and then soon to games by other developers in web2 and Web3 that utilize Mythical Marketplace technology. This creates a powerful network effect and the reason we chose blockchain technology in the first place.

We also saw a first glimpse of the creator economy in Blankos PC and look forward to extending this with the launch of Blankos Mobile (first to mobile and then to PC again). Most Blankos were created by third party artists, not by Mythical, and we can’t wait to bring that back and hopefully help to improve the creator economy in other games as well.

Finally, we think game item trading is just the start of the extensive potential for MYTH utility. We believe that once gamers can extensively buy, sell, and trade game items within and across games, the possibilities for MYTH utility become even broader, including things like rewarding streamers and content creators, integrating into social gaming apps, fostering broader community participation, governance and much more. The sky’s the limit!

The future is coming quickly and the combination of Web3 + gaming offers real consumer utility and value without the gimmicks of traditional Web3 approaches.  

We can’t wait.