Dual token models for materially and energetically constraining the Metaverse. And helping solve the bot problem of Play-to-Earn
When you’re finished here, make sure to check out the rest of the articles from: The Universal Asset Framework Series.
What is the dual token model?
The dual-token model, also known as dual-token economy or two-token economy is a system used by some blockchains that utilizes two types of tokens to power the chain instead of just one. The typical way for a Blockchain to work is to have a single token that powers the chain (such as in Bitcoin, Ethereum, Cardano…). This token is necessary, as it can act as an antispam and antisybil mechanism, and it’s used as a reward for people maintaining the chain (usually block producers). A dual token model introduces a second additional token, different than the first.
There are many potential types of dual token models, but for the purpose of this article we want to focus on one hypothetical type of model. A model where our first token is similar to your typical token that “runs” a Blockchain, in the sense that it is rewarded to block producers, or another set of actors that do some kind of “work” that benefits the chain. This could be storage, compute, etc. this token could even be rewarded to validators from other different chains for doing this work. The special part is where the second token comes into play.
The second token is meant to act as a resource, that gets constantly created over time by the first token, and regularly spent (as a tx fee) and burnt, or locked somewhere. It only lives inside of our “Metaverse” blockchain, and is exclusively used as a form of fuel or matter, imitating how energy and physical matter works in the real world. The general idea is that by locking/linking the first token to a virtual object, entity, or a character, it generates the second token at a constant rate, that this item or entity can use and/or spend.
Metaverse-wide game mechanics/systems
This could be used for example as a fully on-chain mana system, where casting a spell is equivalent to a tx, using the second token (here playing the role of mana) as a fuel/fee that gets burnt. Or alternatively, the first token could generate additional tokens, acting as the equivalent of digital atoms, a sort of digital mining. What makes this concept interesting, is that implementing such a system at a blockchain level instead of any particular virtual world/game, allows us to have a world-independent system for generating, managing, and spending things like magical energy (mana) or digital atoms, that is controlled by a decentralized protocol which virtual worlds can integrate with.
This is specially interesting in the context of interoperable Metaverses, where all/most worlds could share a common mana, digital atoms system, that is externally controlled by a decentralized blockchain and governed by the users of that chain, Metaverse users. This gives virtual worlds guarantees that the tokens associated to these digital atoms, mana, etc. are finite, and come from a known source, with a predictable issuance rate, that the collective of users of that “Metaverse” blockchain have agreed upon.
Furthermore, it brings a new perspective to define what a Metaverse is. If you have an Blockchain acting as a mana system, mining system for digital atoms, plus other stuff we could implement, for many virtual worlds, we can now talk about the Metaverse as a whole. Anyone can see on-chain for example, how many atoms in total exist in this Metaverse, or how much mana in total this Metaverse has/generates. And the collective of worlds that integrate with this chain and users, can become part of the governance of the chain itself.
Every world is restrained by the rules of the protocol of the blockchain they integrate with, and this is conducive to interoperability.
Helping solve the Play-to-Earn bot problem
This dual token model is also a particularly interesting solution to potential bot problems in Play-to-Earn settings. In a typical setting where each virtual world implements their own system for magic/mana for example, and some other Play-to-Earn mechanics (tokens, nfts, etc.), there’s an economical incentive for people to just train a bunch of AIs to go into dozens of virtual worlds and grind to earn things with actual economic value, like tokens or items that can later be sold.
This is a potential huge problem for the Metaverse, because we don’t want the Metaverse to be full of AI bots instead of players, and for virtual worlds to start catering to what the bots want instead of players (since worlds can request a fee for any Play-to-Earn rewards, there could be economic incentives to just keep bot farmers happy instead of actual human players). It’s just a recipe for disaster for a naive implementation of Play-to-Earn mechanics in virtual worlds and games (which unfortunately we can see today in practically every Play-to-Earn implementation out there). But our hypothetical dual token model could help alleviate this problem.
In our model, actually casting spells or “materializing” items with digital atoms — which could be a requirement virtual worlds impose to allow importing assets from outside their world into it — requires spending or locking an actual resource, the second token. An AI can’t simply connect to 10 different worlds and grind 24/7 for some rewards, they need to have these second tokens to spend, which they need to acquire by providing an actual benefit to the Metaverse chain (in order to get the first token that generates the second one at a predictable rate), or buying them in the secondary market. This serves as a powerful anti-bot mechanism!!
It introduces an additional cost, which makes it less profitable to just Play-to-Earn. There’s still a lot of questions around how can one create such a system of tokens that is fair and doesn’t end up deriving into pay-to-win or pay-to-win mechanics, which we don’t want, since these are very toxic towards players.
This is the eternal dilemma of free vs. pay a small fee. Email is free, but you get tons of spam, if you had to pay a few cents to send an email, this would help solve the spam problem, but it actually no longer is free. Or you can sell all your data to use a free service like social media and accept in addition having to see ads, or pay a fee to make running a network actually profitable. “Fee systems” are much more sustainable in the long-run, but unpopular, since people want stuff for free, even though nothing is really free, the cost is just hidden from them or takes a different form than money.
Final remarks
More and more, it seems to me that implementing systems at a protocol/blockchain level presents benefits specially for interoperable Metaverses, which could facilitate interoperability in both technical and economic ways. This is a new paradigm we haven’t seen before and that parts away with the traditional models for building virtual worlds and games. But given that we have absolutely zero real interoperability in today’s worlds and games, perhaps this could be one of the key missing ingredients for having truly interoperable assets between different worlds/games we’ve been looking for so long.
Blockchains are a very recent still wildly low-adopted technology, which could explain in part why we haven’t seen any real alternative interoperable solutions before. It could be part due to interoperability being a technological problem which none of our older tools and technology seems able to solve. In any case, systems like this are not in my opinion necessary for interoperability, but they are conducive for interoperability.
