Zypher Games: Incentives Simplified

This document is crafted to assist our players in better understanding the Zypher Games incentives system. If you’d like to delve into more comprehensive details, please refer to the original post. For a closer look on the chart please check out this link.
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Designing Principles of the Zypheronomy

I’d like to guide you through the Zypher Game incentive system design. Before delving into the specifics, it’s essential to note that its design aligns with the ethos of the Zypher Games manifesto. While our ultimate goal is to establish a community-owned and financially autonomous metaversal social contract, we recognize that the gaming realm is a microcosm ripe for experimentation — a testing ground for technologies and systems that can redefine society at large.

When formulating the Zypher Games Incentives system, we envisioned it being similar to the economic framework of a nation-state — balanced by monetary and fiscal policies, taxation, and governance. We aim to maximize the collective benefits for both the platform and its players, granting the governance entity a moderate level of authority for effective decision-making and policy enforcement.

Designing Principles of Gold Points

The exclusive gaming token facilitating the operations of this system is $Gold Points. These points are pivotal to Zypher’s economic structure, yet they are not governance tokens.

$Gold Points circulate seamlessly throughout the entire Zypher ecosystem, transforming and transitioning between various assets — whether being converted from $ETH, utilized in minting NFTs (and subsequently burned), or allocated into Vaults for diverse objectives. Governed by smart contracts, the flow and circulation of $Gold Points are verifiable, ensuring the utmost integrity. For better visualization, we employ a spectrum of colors to delineate the diverse pathways through which $Gold Points traverse the system: Pink (taxation) Vault, Green (Platform Revenue) Vault, Blue (NFT Marketplace) and Yellow (Debt) Ledger.

$Gold Points mirror money’s basic functions: store of value, unit of account, and medium of exchange.

• Unit of Account: $Gold Points act as the primary currency unit for scoring, ranking, and staking activities on the Zypher platform.
• Medium of exchange: $Gold Points can be employed across all games on the platform, including zBingo, z2048, zTCG, and Candy Crush.
• Store of value: each $Gold Point is backed by a corresponding reserve of $ETH at a set rate.

So what can you do with $Gold Points?

Let’s now dive into Gold Points’s utilities.

Game Entry: Skill to Earn

Gold Points can be used to pay the entry fee to initiate a game. Depending on the game chosen, players have an opportunity to reclaim corresponding GPs by outplaying their opponents, a system we’ve coined “Skill-to-Earn”.

Currently, three games are available in production (or pre-production) on the platform built by community developers: zBingo, z2048, and zAce each with different fee mechanisms. In the game Bingo, players might pay an entry of 5,000 Gold Points and claim 8,500 Gold Points if he/she wins the game, earning 3,500 from opponent players. 1,500 Gold Points are reserved as taxation to sustain the platforms’ regular operations. This 15% taxation is a dynamic number and may vary in other games, with all tax proceeds sent to the Pink (taxation) Vault. We’ll delve deeper into the Dynamic Tax Rate in the next section.

For visualization purposes, different colors are used to represent various types of transfers within the system. Pink, denotes all transactions related to taxation. A percentage (t%) corresponding to the tax rate is applied to the entry fees paid by players, and this amount is directed to the (taxation) Vault. The remaining balance is redistributed back to the players as rewards

In-game Purchase

Gold Points serve as the “medium of exchange” within Zypher’s ecosystem, enabling players to engage in various transactions and purchases. For instance, the upcoming game “Divine Cataclysm,” powered by Zypher’s Game Engine, allows players to use Gold Points to acquire add-on features or character skins. Gold Points can also be used to mint battle passes, unlocking additional gaming content and opportunities.

Regular events and special campaigns, such as the forthcoming “Guardians of Zypher,” are integral parts of the gaming experience, often featuring substantial prize pools. These events facilitate the circulation of Gold Points, contributing to the vibrancy of the gaming economy.

Gold Points spent on the above items are considered platform revenue and transferred to the Green (Platform Revenue) Vault.

For visualization and tracking purposes, different colors represent distinct transaction categories. Green, specifically, is allocated for transactions involving player purchases like game loot and battle passes. The Gold Points collected from these transactions are considered as platform revenue and are systematically channeled into the (Platform Revenue) Vault.

Depository Pass (DP) NFTs

Players can use Gold Points to mint Zypher’s Depository Pass (DP) NFTs. The DP NFTs represent a premier class of assets within the Zypher ecosystem. When Gold Points are used to mint DP NFTs, they are directed back to the Gold Points Minting Protocol and effectively nullified.

DP holders may stake their DPs on Zypher’s NFT marketplace to earn a share of the profits from the Green (Platform Revenue) Vault, thus partaking in the revenue potential of the entire platform. Additionally, DPs can be listed for sale on marketplaces in exchange for $ETH, with Zypher facilitating matchmaking and liquidity support.

It’s important to note that the minting price of a Depository Pass is dynamic, reflecting the platform’s revenue performance and market expectations. Despite this variability, all DPs share equal treatment in profit-sharing stakes. For instance, a DP(T₁) priced at 1.3 times the Base Price (the price at T₀) will carry the same weight in revenue sharing as a DP( T₀).

The formula for calculating the Depository Pass Minting Price is as follows:

Depository Pass Minting Price = BV × [1− Debt Adaptation Coefficient (DAC) × Debt Rate] ×
[1 + (Performance Coefficient (PC) × Protocol growth Rate / interest rate)]



* BV = DP's Base Value

Blue is designated to represent all transactions related to Zypher Depository Pass (DP) NFTs. Players can use their Gold Points to mint DPs. Following minting, players have the option to list their DPs on the NFT marketplace in exchange for $ETH. Additionally, the player can choose to stake their DPs for the platform’s revenue sharing.

Speaking of the Gold Point’s minting Protocol

Recalling the three core functionalities of Gold Points, which echo real-world money: Store of Value has not been mentioned yet. This feature is guaranteed by the GP’s minting contract: $Gold Points must have the backing of an equivalent $ETH reserve at a fixed rate.

In practical operations, the reserve comes in 3 ways:

• Direct $ETH Deposit: Players can deposit either $ETH or $BNB (on BNB Chains like opBNB or Combo), receiving $Gold Points at an exchange rate of 1 $ETH for 2,000,000 $Gold Points. This system, akin to the Gold Standard, operates on an “Ether Standard”. The reserve assets are directed to the (Treasury Reserve) Vault.
• Staking Yield: Players can stake supported tokens, such as $USDC, to mine $Gold Points. Under the hood, the staked USDC accrues yield via partnered DeFi protocols. This yield is converted to $ETH, serving as the reserve for newly mined Gold Points.
• Debt Obligation or Treasury Bills: This concept, mirroring the Treasuries issued by the US Department of the Treasury when the government requires funds, allows us to mint $Gold Points for community and marketing purposes initially, with a commitment to repay the debt through future tax revenues. These Treasury bills are designed to be interest-bearing.

More on the Treasury Bills backed by Taxation

Let’s delve deeper into the specifics of Debt Obligations within the Zypher ecosystem. Fresh Gold Points ($GPs) can be minted by recording a Treasury Bill token, labeled as $TB, in the Yellow (Debt Obligation) Vault (compared to a Vault it's more like a ledger). This process ensures that the financial ledger remains balanced and organized.

Imagine a scenario where 1,000,000 $GPs are minted and categorized as ‘Treasuries.’ A corresponding ‘promissory note,’ denominated in $TB tokens, is logged in the system, aligning with the issuance of the new GPs. This organized entry ensures a seamless alignment between the newly minted GPs and the logged promissory note.

Debt within this ecosystem is fundamentally issued and backed by taxation, establishing a closed loop where it is also repaid via taxation mechanisms. To understand this better, let’s revisit the Pink (Taxation) Vault. Gold Points are strategically redirected from this vault for debt repayment purposes. Each Gold Point moved and nullified from the Pink Vault results in a corresponding nullification of a Treasury Bill token in the Yellow (Debt) Vault, facilitating a systematic Debt Resolution process.

In instances where a surplus in the Pink (Taxation) Vault., the excess is methodically redirected to the Green (Platform Revenue) Vault, which will be shared with Depository Pass NFT holders via staking.

The Dyanmic Tax Rate Mechanism

Naturally, we aspire to settle the Debt swiftly, minimizing interest expenses, and maximizing tax commissions from each game. However, striking a balance to optimize the system’s overall utility is crucial. Hence, we’ve introduced a dynamic tax rate mechanism described by the formula:

Y = Debt Acceleration Coefficient ∗ x² + Base Commission Rate

Here, Y represents the tax rate, while x signifies the debt rate within the system (Total Debt / Total Outstanding GP). Simply put, when the platform’s debt ratio escalates, the tax rate also increases to expedite debt settlement, and vice versa.

Left: zBingo’s dynamic tax rate mechanism. Y = 0.13 ∗ x² +0.07. The Debt Acceleration Coefficient is 0.13. The Base Commission Rate is 0.07. When there is no debt on the platform, the tax rate is 7%. Right: z2048 features a fixed tax rate of 10%; which means the Debt Acceleration Coefficient is 0 and Base Commission Rate is 10%. Y = 0.1.

Governing Body: Zypher Management and Budgeting Committee (ZMBC)

ZMBC, the platform’s governing body, is entrusted with preserving the economic stability of the Zypher Games platform. Operating under the pillars of decentralized governance and community management, the committee undertakes tasks like fiscal and monetary policy supervision, treasury management, and market operations oversight. A prime duty of ZMBC is to set a predefined cap on the yearly debt obligation, which we term the “debt ceiling.”

Ending Note: The Art of a Balanced Ledger

In the beginning, we articulated a vision: an economic system flourishing in autonomy. Our design has brought this vision to fruition. Within the Zypher ecosystem, $Gold Points circulate with seamless precision, morphing and transitioning across diverse assets, all while adhering to a singular, fundamental rule.

∑ Gold Points + ∑ NFT Par Value = ∑ Treasury Bills + ∑ ETH reserve

Rooted in this principle, we stand confident in proclaiming the creation of a robustly autonomous and self-sustaining game economy. It’s more than a token-economy; it’s a finely-tuned, thriving game-economy.

About Zypher Games

Zypher Games is a pioneering gaming platform powered by ZKP and AI, providing the next-gen infrastructure for game developers to build autonomous worlds with fully on-chain, yet immersive gameplay. Zypher’s game engine UZKGE leverages a highly optimized ZKP library, complemented by a rapidly expanding library of circuits, to cater to the diverse needs of game developers, ensuring the gameplay is provably fair and scalable while preserving information imperfection.

Zypher Games offers dev — friendly interfaces of a suite of in-game features. Strategy games like z2048 and Decrypto Rumble utilize ZKP for scalable and concurrent gameplay; card games such as Divine Cataclysm Oblivion and zAce leverage the game engine’s decentralized shuffling process. Even massive multiplayer online (MMO) games akin to Minecraft can be reimagined within our fully on-chain ecosystem.

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