Proof of Work in the Metaverse
The Treasure project is the first metaverse project to adopt a Proof of Work mechanism for its native token. We believe this mechanism will become the prevailing mechanism for the metaverse. Like Bitcoin, MAGIC was a fair launch creation that will hopefully grow into a powerful, decentralized primitive.
Resources like AGLD will steadily trend towards zero. They will construct gimmicks along the way, like decentralization of governance through DAO implementation (a great PoW design requires no such pretense as the token model itself creates the value of the network and results in decentralized consensus). These will be last-ditch efforts to stave off the inevitable realization that there is nothing buoying the token’s value.
Which is to say, if AGLD wins out as the metaverse primitive, the metaverse will die out. MAGIC or something like it — in design and in genesis — will have to take its place for the metaverse to function as a self-sufficient decentralized economy.
Metaversal Proof of Work
MAGIC is the resource by which treasures become productive. It requires MAGIC to generate resources from treasures. It also requires MAGIC to turn lesser resources into treasures through alchemy.
MAGIC will be, quite literally, mined. Mines are scattered throughout the metaverse, and extracting MAGIC from them will require work, capital, and time. We plan to adopt treasures into the work process, meaning users must craft increasingly complex instruments to obtain the ever-decreasing supply of MAGIC.
Treasures and MAGIC are dual resources that buffer each other’s value. Treasure holders depend on MAGIC miners to bring back the resource through which their own resources become productive. MAGIC miners depend on treasure holders not only as buyers, but also as producers of the instruments used to mine MAGIC.
One cannot exist without the other. Each group provides necessary value to the other. And as the supply of MAGIC begins to decrease over time, the base value of each type of asset rises in lockstep. Demand for treasures and MAGIC are both increasing in concert with their decreasing supply, just as Bitcoin does, and ETH as well (no matter its consensus mechanism).
We are developing this primitive first in our economy, then will export it to the wider crypto ecosystem. The advantage to the wider metaverse is the same as Ethereum. We provide a composable building block.
If ETH is the building block of Ethereum, then MAGIC is the building block for the metaverse.
The ridiculousness of this statement is only as ridiculous as the metaverse itself. Every imagined asset is in part ridiculous.
What sets MAGIC apart — and creates provable value — is that MAGIC is acquired through actual work.
AGLD is extremely liquid now but has no underlying value. MAGIC will face short-term liquidity issues, until it doesn’t, at which it will become a run-away train forming the foundation for the entire metaverse.
Most metaverse primitives, including AGLD, are backed only by the fad from which it was borne. It took no resources, no effort to acquire this token. It took off only by riding the coattails of a viral trend and not through any feat of tokenomics.
AGLD has no second party to create equilibrium. The value of the token hinges on the loyalty of the people to whom it was airdropped, which in the long-term will come to resemble the coyote running off the cliff realizing it has nothing beneath it. Without this push-pull, or alliance between two separate groups with no choice but to cooperate, there really is nothing backing up the imagined asset. It is like the r/Buttcoin critique of Bitcoin (it’s not backed by anything!), but in this instance is actually true.
Bitcoin provided a convincing case why the cost of a Bitcoin must always be higher than the cost of production if the system is to survive. Nearly every convincing value accrual meme in crypto has been a subtle variation on this basis premise. Even proof of stake depends on the assumption that the assets securing the network are more costly to obtain than the instruments used to attack it. It doesn’t require an increasing level work to produce blocks, but maintaining the network is a constant act of labor by validators involving material cost (more so the bonds than the work itself).
The Necessity of PoW
PoW networks that involve a real computational cost will come under increasing pressure to transition to PoS. The environmental consequences, and the comparative decentralization offered by PoS letting anyone with a decent laptop participate in validation, are incredibly good arguments that will begin to mount in peoples’ minds and likely result in ETH and other tokens like it overtaking Bitcoin’s “moneyness”.
This transition will never occur in the metaverse, in my opinion. Work is the only thing holding an imagined universe together. Infinite assets can be produced with no additional environmental cost, which is what makes PoW so necessary to the metaverse’s value. Without some degree of work involved in acquiring these assets, the entire thing falls apart at the seams. The metaverse itself is silly and frivolous. The metaverse only loses its frivolousness through work.
Every great token case depends on some kind of duality. TERRA/LUNA and OHM/sOHM are the best recent examples of how equilibrium between counter-parties creates the solid floor on which a larger economy can be built.
MAGIC and Treasures provide this flooring. Growth of the economy will be slower than other assets, but what we are building is meant to be solid architecture first and foremost.
If something like AGLD takes hold, the metaverse will collapse under the weight of its own silliness. MAGIC will introduce true value to the metaverse and make its integrity as an economic system persuasive to even the most ardent crypto skeptics.
