Fomo3D: Angel or Devil?
This report is produced by Huobi Research; please cite “Huobi Focal Point” for reference.
“Fomo3D is a reflection of our nature as humans. The most important thing to consider is beyond the result of one game, however; the most important thing to consider is, how can we, without monetary incentive, lure people into the world of Blockchain?”
On July 22, 2018, day 19 since the official launch of Fomo3D, accumulated pot size has reached a worth of more than 90,000 ETH, with a current pot size of over 20,000 ETH, and tens of thousands of new players joining in everyday. Even if the game stops right now, the final winner alone can take home a prize pool that worths more than $9 million. What kind of game is this?
The main page of Fomo3D writes, “You will guarantee yourself a fortune, you will take everything for yourself, it’s as simple as buying the last key. When hype runs out, the last player, drains the contract — — It should be you!” As such, the sentence above precisely summed up the whole game — — a next-generation new lottery game that honors “rigid repayment” through utilizing Blockchain technology and Smart Contract.
Of course, the above description, although precise, is only an oversimplification of Fomo3D’s game design. Fomo3D combines the element of “Ponzi Scheme” and “dividend payment”, which bear some resemblance to PoWH3D (P3D), a lottery game of similar nature that blew up on the Ethereum network earlier this year. Fomo3D could be regarded as an upgrade to the PoWH3D, in which Fomo3D improved the “dividend payment design” as previously seen in PoWH3D.
In fact, the above mentioned two dApps are both developed by Team Just, formed by two developers (MANTSO and JUSTO). Users can always reach out to them on Fomo3D’s Discord community if they have any questions. There are also interviews by the two members on Youtube (https://bit.ly/2uCMOHk), in which the two members discussed the design of PoWH3D and Fomo3D.
As for now, Fomo3D has become the top-grossing dApp of Ethereum network; according to State of DApps, Fomo3D has accumulated almost 10,000 daily active users, with daily transaction volume to the dApp contract reaching a whopping 67,000 ETH (worth over $30 millions) All of this is achieved through the deployment of four Smart Contracts.
Fomo3D bears an intricate design; it has successfully integrated diverse gameplay with relentless sensory stimulation, both of which are commonly seen in traditional top-grossing online games.
Diverse Gameplay Design
A diverse gameplay design can help attract different players by satisfying a variety of interests or goals. There are four elements to Fomo3D’s gameplay design, with three other elements (see below) accompanying the central “lottery” design.
Lottery
In Fomo3D, each round of game begins with a countdown of 24 hours. During the game, players purchase Keys with ETH to add times to the timer, with one Keyring adds 30 seconds to the timer and up to a hard-cap of 24 hours. If the time runs out, however, the last person in the round to purchase a FULL Key (purchasing fraction of a Key only grants user dividends, as described in the next chapter) will be awarded with 48% of the active pot.
To prevent the possible outcome of a “never-ending game”, Fomo3D utilizes a Key price scaling model that increases the price slightly after each purchase. Then, as time goes by, as the cost of purchasing a Key gradually increases, their will be gradually less purchase of keys to add times to the timer, eventually ending the game. However, since the cost of purchasing a Key increases VERY slightly (currently ~0.005 ETH), this round might still take some time to conclude.
Dividends
In order to attract more players, Fomo3D introduced Dividends feature (As previously seen in PoWH3D). Basically, Keys grant players instant dividends on all volume that flows through a round. The higher share of keys a give player holds (to the total number of Keys purchased), the more dividends one earns. The amount of dividends earned also varies by the teams that players associate themselves with; every time a player purchase a key, he/she can select one of four teams (Snek, Whale, Bull and Bear) that differs in dividends and pot distribution mechanism. Every player is free to select a different team each time he/she purchases a new key.
Every round, players will receive two types of Dividends, one continuously during the course of the game as new keys are purchased, and one at the end of the round where 50% of the active pot will be distributed between players, based on the winner’s final team selection.
According to design as described above, players will be more inclined to join Snek (at least initially) because it will allow the Keys to secure a larger portion of Dividend as other Keys are being purchased. However, as the game comes to a close, we might see a surge in team Bull, because team Bull represents a larger pot being distributed to all players after the end of each round. What’s more, PoWH3D players is also integrated into the Fomo3D ecosystem, as P3D holders can receive Dividends on each key purchase in Fomo3D and at the end of each round. During the interview on Discord, Team Just has also expressed that Fomo3D and PoWH3D belongs to the same ecosystem. Also considering the fact that PoWH3D is a decentralized exchange, we suppose that ultimately Team Just might want to make PoWH3D the definitive token for its gaming Ecosystem, which means that P3D holders will receive dividends from Fomo3D and other games to be developed by Team Just.
Referral
If the dividend feature allows the game to continuously attract new players, the referral feature is the catalyst that speeds up Fomo3D’s chemical reaction. According to the description of “Advisory Board”, Fomo3D’s referral system, players can spend 0.01 ETH to join the board with a exclusive nickname. Upon becoming an advisor, players can share their referral link with anyone and earns 10% of all the ETH put into the game through that link.
Random Airdrop
The random airdrop feature encourages players to participate in the game by randomly awarding players who purchase Keys. According to the game description, each time a player purchase keys, a player has a % chance of receiving a portion of the ETH airdrop every time a player purchase keys. The global chance of receiving an airdrop starts at 0% and increases by 0.1% for every key order (or purchase) over 0.01 ETH. The amount of the ETH airdrop depends on how much ETH players risked to win the airdrop chance:
- Purchase 0.1–1 ETH, and airdrop wins you 25% of the airdrop side-pot
- Purchase 1–10 ETH, and airdrop wins you 50% of the airdrop side-pot
- Purchase 10+ ETH, and airdrop wins you 75% of the airdrop side-pot
Greed-Driven Game
Lottery and Dividends feature divides each round into two phases; “Dividend phase” refers to the early phase in the game when the price of purchasing a Key is relatively low, and “Lottery phase” refers to the later phase in the game when the price of purchasing a Key gradually increases, leading to less Key buy-in and less time remaining in the timer. As long as the odds to win the pot remain attractive, players will be incentivized to continue purchasing Keys to keep the game going. (Since the pricing function of the Key is undisclosed, winning the game relies less on rational calculation but more on radical gambler’s instinct.)
It’s hard to resist the lure of “easy money”. BCC (Bitconnect Coin) is a open-source, community-driven Bitcoin lending platform and exchange where users can earn interests by purchasing and storing BCC on the platform. According to the official projections, the interest rates are very impressive — averaging about 1% per day. Bitconnect also relied on aggressive marketing strategy (a pyramid scheme) to recruit new investors by enlisting a large army of multi-level affiliate marketers to recruit new investors, who could work their way up (and earn commission fees) by bringing in even more new investors. However, on January 16th, 2018, the platform was officially shut down following warnings and accusations of being Ponzi schemes from regulators. What’s next? BCC price drops 87% in a day and users lost all their money.
Are PoWH3D and Fomo3D Ponzi schemes? In the strictest sense, no. Both games ran on decentralized Blockchains and are executed by smart contract according to the predetermined rules, thus the game can proceed without any human interference and winners are guaranteed to receive their prize. Ponzi schemes, unlike Fomo3D and PoWH3D, requires a continual stream of investments to fund higher returns. As such, as soon as the pace of investment slows down, the scheme will automatically collapses as the scheme starts to have problem paying the promised returns to the earlier investors.
According to the design of Fomo3D, the late participators are “doomed” to lose their money. But just as “you can’t wake a person who is pretending to be a sleep”, every participator in the game believes there will be even more late-comers to follow. The game will thus gradually slow down and eventually conclude when the game loses its traction.
The success of PoWH3D depends not only on the continue influx of new participators but also on the design that prevented panic run. However for Fomo3D, when the game gradually loses its traction, there will no longer be a continue influx of new participators to purchase Keys, which will lead to gradually conclusion of the game. The beginning of the end of Fomo3D is very likely to caused by duplicate games.
Because DApps are by nature open-sourced, the game design could be easily copied and modified. As such, the original Fomo3D game could easily lose its players to a duplicate game with that grants higher reward. Oftentimes, this could be easily achieved by simply modifying certain parameters in the codes, such as limiting the countdown time or redesigning the pricing function for Keys, to shorten the length of each round.
Don’t forget, after PoWH3D (Proof-of-Weak-Hand), we have also seen bootleg versions such as Proof-of-Weak-Leg and Proof-of-Strong-Body. Although these duplicate games still exist to this day, they receive very little attention (basically dead). If you are a late participator to Fomo3D, then you can only wish for more Key buy-ins by late participators; the process might be extremely long, and as new Key buy-ins gradually slows down, breaking even will become even slower.
Relentless Sensory Stimulation
Fomo3D divided the game into various rounds. This design bears resemblance to the famous US lottery game Powerball, which reached a accumulated prize pool of 1.59 billion USD in the beginning of 2016. The accumulating pot feature in Fomo3D (the winner of each round, based on his/her team selection, can choose to keep a portion of the pot for future rounds) also provides extra incentive for players to stay in the game after a round ends.
According to the game design, after the end of each round, there will be an 1-hour grace period (Long Con mode only) before the start of next round where key purchases are disabled. The beginning price of a Key of every round remains constant, and each address is limited to 1 ETH max purchase until the prize pot reaches 100 ETH in a given round. Thus, the first 100 ETH could be regarded as the “ICO” phase of each round, where the later phase could be regarded as a continuous reverse Dutch Auction mechanism. As such, the design of Fomo3D sarcastically bears resemblance to the “Hype-Release-Pump-Dump” process of certain “scam” ICO projects.
In fact, the accumulating pot feature turns Fomo3D into a game of “relentless sensory stimulation”; although majority of the players lose money at the end of each round, many of them keeps participating in the game in hope of winning back the money lost in the previous rounds. Similar to drug addiction, when players are no-longer satisfied by the lengthy 24-hour countdown time, they will leave Fomo3D to other copycat games that provides higher rewards and more intense sensory stimulation, which will result in the demise of the original game.
Takeaway
Fomo3D is a reflection of greed, desire and other human impulses. However, on the other hand, without Fomo3D, many people would not be introduced to and be familiar with the world of Blockchain. Although people drawn into these games are most likely to lose money, these DApps, such as CryptoKitties and Fomo3D, gains traction for Blockchain technology and lure people to the world of Blockchain.
However, it is important to note that Fomo3D is not the epitome of DApp games. Games thrive on its ability to entertain, and technologies such as Blockchain and Smart Contract are merely providing a different approach to game design. In order for DApp games and Blockchain technology to truly flourish, we have to gradually move beyond simple monetary incentives and to attract players with intricate design.
We are optimistic toward the future of DApp economy; with the continuous technological development, we firmly believe that a truly-viral DApp that utilizes Blockchain technology to accompany specific use case will soon lure more people to the amazing world of Blockchain.
Huobi Research
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Huobi Research of Blockchain Application (Huobi Research) was founded in April 2016 and started research and explorations in various aspects in blockchain area since March 2018. We cover blockchain technology research, industry analysis, application innovation and economic model explorations etc. We aim to establish a research platform and to offer theoretical foundations as well as judgements of trends in blockchain to the public, ultimately promoting the development of the entire industry.
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