Dynamic Treasury Pools

Dynamic Treasury Pools

At Million on Mars we are all-in with web3 and blockchain enabled gameplay — as you know we have a strong preference for the term Play and Own. Unpacking that, we believe in making great games that are just plain fun to play, where you also own your assets! We cast side-eyes, or even flat out roll our eyes, when we see some projects with breathless claims of the earning potential of their offerings — zomg, let’s go to the moon! Let’s bring it in a little, as the cool kids say these days.

In our view, Play to Earn is a thing — it is a marketing tactic. It is not gameplay. Play to Earn is not bad or evil or a rug pull. It is a tactic for growing your game. The world is full of amazing entertainment options — thousands of great games developed by passionate teams, amazing serialized theatrical shows, millions of books, and I have even been told there is some grass outside that is able to be touched! There is fierce competition around the world for people’s leisure and hobby time — even more than competing for revenue; we believe that the true competition is to rise up to be the top of someone’s hobby attention span.

Play to Earn is the latest innovation in marketing in games — before Play to Earn we had Free to Play, and before Free to Play we had Shareware! Remember Castle Wolfenstein, Commander Keen, and Doom!?

All along the way we had casual games like the games Mitch Zamara and I built at Zynga that employed viral marketing and social loops, and then mobile games really blossomed with micro transactions.

How do game designers, product managers, and business executives make effective use of these marketing tactics? There are books and videos and all sorts of places you can learn more about these — in this article I am focusing on Dynamic Treasury pools applied to managing the Play to Earn marketing tactic. But before I go straight to the meat of this innovation, I will lay out some ground work.

All great games really do grow by word of mouth. Of course you can buy ads on Google, Facebook, or pay an influencer or any number of other paid marketing venues to get an inorganic bump to your installs — but, and here is the most important but in this article — a game is a very different beast when it comes to entertainment: a game simply has to be good and fun to play. With bad movies and TV they can be fun to watch and trash talk, heck there have been numerous businesses created out of the fun of bashing a bad movie! But games are such an intimate, immersive, and interactive interplay between the players and the game developers with such a time commitment, creativity cost, and social capital cost that, in short, means no one has time for a bad game. (Remind me to do a long form article on why Monopoly is the dumpster trash of games!) So for games, yes you can pay for ads, but if the game itself is no good, then after the install and a few minutes or an hour of gameplay, the player drops the game. This is so well understood that the official policy of Steam is that any player can get a full refund for any game for any reason within two weeks of purchase and less than 120 minutes of gameplay.

Okay, so you have to have a great game otherwise you will lose the new player, but why is word of mouth so important? Well, games are a huge industry and make over $180 billion a year, we are all in competition, and with that $180 billion the large incumbent games are able to buy up the ad inventory;because they are large, they must have been great in the past and so they have a moat around their business. Classic business school stuff. To break in and to become a breakout hit — you need to be a great game and have your own players use word of mouth to attract more players. For the product managers out there the cost per install needs to be less than the lifetime value of an average install. CPI < LTV? = Party!

Unpacking this, the cost per install is what you pay for an ad-based install of your game; with that language, it is clear to think of Play to Earn as a marketing expense where you simply budget how much a given player should be able to earn while driving installs. Sounds simple right? But, execution is what matters!

How do you encourage word of mouth? Again, have a great game that people enjoy playing and they will naturally want to share that with their friends. You could also have a kick-ass referral rewards system that measures each person’s gameplay that a person invites and with real engagement systems that unlock rewards in a referral shop. You could also create a full freaking Settlement system with five different levels of roles: Owner, Director, Manager, Member, and Associate, so that the players may organize themselves into fully realized settlements on the Red Planet, where they can create their own meta goals and play styles. You could also create Group Quests for an Aerospace Expansion where players leverage their various Profession Expertise and work together to create Port Zilker at Waterloo City and mine asteroids. Absolutely! You should do all of those fun things! ;-)

Whew! Now we are ready to discuss the Dynamic Treasury properly! We are on web3, and we have an “inflationary token” we call Dusk that players earn by playing our game Million on Mars. The vast majority of this Dusk is obtained through our crafting chains, but there are many other ways as well — creating a Settlement and renting your buildings for other players to use and craft,by executing jobs on behalf of other players, by rolling up sleeves and doing some Scavenging on the red planet, or by trading items in the marketplace — well heck, there are a lot of ways to gather Dusk.

Players use this Dusk to buy new building blueprints, land deeds, resources from other players, upgrades, and much more. We have dozens of utility flows for Dusk. However, one utility flow for Dusk is that our players may withdraw the Dusk and take it to Alcor or Raydium and exchange it with another person for a different crypto token — hence Play to Earn.

What is better than Free to Play? Be paid to play! Right!? That is the hotness and the hype. And it works! We have been live for almost a year and our Dusk token has been live since December 9th, and while we are not at our peak value for Dusk we are still within the same order of magnitude of value for Dusk — and I do not know of any other project in the web3 space that has demonstrated that performance.

So I am saying we do a good job at it, but we are about to take it up to the next level with our Dynamic Treasury Pools. Thank you dear reader for hanging on here.

So with any online game, the game designers do their best to map out ahead of time what the inputs for a given system and the outputs should be to make it fun. Itoes not always have to be about “ROI Positive”; sometimes it is about unlocking, exploring, achievements, etc. These are dynamic systems with many actors — in fact, it is an economy with an annualized GDP of about $9M between the players. Sometimes we need to buff a system that is not appealing and sometimes we need to nerf a system because it is “a Dusk printer”. In a web2 game, game designers buff and debuff all day long. And yes, sure when the players see their favorite “build” get nerfed, they complain a bit, but the cycle continues — there is a new “meta” (as the cool kids say) and people move on. However, in the web3 space, the nerfings are a bit more impactful to the players, and while we are Play and Own and not hyper marketing Play to Earn, people still have expectations, make plans, and the nerfings are Not Fun.

While many projects do a 80/20 or 90/10 split of fees/taxes (can be in-game or on-chain) and create a Treasury pool which is used to start a new cycle of rewarding players for their engagement — in practice these games tend to issue NFTs that generate the inflationary token, and as that token rises in value, more and more of these NFTs are purchased and then many more people jump on the hotness and print much more of this token, until the token inevitable peaks and then crashes. We have the solution to both the nerfings and the boom and crash cycle, and we think the best solution: Dynamic Treasury Pools.

With the Dynamic Treasury Pools we take the currency that is flowing in from the various utility flows andwe re-distribute the Dusk to sub-treasuries that we call Dynamic Treasury Pools. Each of these pools is dedicated to their own portion of the game design loot table space, for example a pool for Cantina Rewards and another pool for Roverworks missions. Now when a player earns Dusk and is rewarded in Dusk — that Dusk is explicitly drawn down from that specific pool. Somewhat similar to all of those personal finance gurus that tell you to have dozens of smaller budgets for each part of your life and stick cash in an envelope, and when that envelope is empty you simply have to wait again for your next paycheck to fill up all of the envelopes before you are able to draw down again.

Being game designers, we have to make it a little bit more fun though — when a pool is packed with Dusk and the “water line” is getting high we increase the rewards from that pool to more than its designed normal range, and in reverse when the pool is low on Dusk we reward less than the normal range.

This way there is an organic, natural, “meta” re-balancing effect, where if all of the players dog-pile and attack the latest hotness, then the Dusk gets deplenished rapidly and the rewards slow down. And the neglected systems that people passed on? Well they might just seem more attractive when the pools are brimming with Dusk.

A diagram might help explain this idea:

The pools are continuously replenished as the various fees flow into the system, and the various Dynamic Treasury pools are visible for all players to see their current balances. This opens up several new modes of dynamic gameplay. The way our crafting game works is that players combine various inputs and then transform the inputs into an intermediate commodity or a finished product. The transformation usually takes some period of time in hours. (Sometimes days, sometimes minutes).

The resulting loot from the crafting sometimes has Dusk, and many of our crafting loot tables have rewards with variance — you will see the ranges and weightings of rewards, but you do not know what they are until you try it and finish your crafting recipe! During that time, other players are also crafting in the same systems, and Dusk is flowing out (and in!) so timing the collection of your completed craft and triggering the loot table is a new form of dynamic gameplay. Watching the ebb and flow of these Dynamic pools puts another layer of dynamism on the players into finding “alpha” and surfing the changing meta.

And now we can get out of the business of harsh, reactionary nerfs. Of course, over time we will need to change systems, retire stuff that is not fun or make other adjustments. But frankly, if we are imperfect at our jobs and make one system overly kind in “Dusk printing” we will not cause harm to the whole Dusk economy — we will just be making that one Dynamic pool very attractive for players and it will auto-correct!

We will still be printing inflationary Dusk and adding into the top reserve pool, named after Ceres, the dwarf planet with the second largest store of water in the solar system. That inflationary printing is necessary to offset growth as new players are added to the game, and to offset the deflationary pressure from our burnt fees (as we do not sell-back our collected Dusk).

Currently as of this writing we have about 23.7M Dusk in the Treasury = soon to be called Ye Olde Treasury. That 23.7M Dusk will be placed into Ceres, where we will then move off the Martizens endowment to it’s own pool,the Artifact endowments to their own pools, and divy up the remaining of that 23.7M into a number of sub pools corresponding to the various game systems. We will also hold back a solid chunk of this Dusk in Ceres as the reserve pool that feeds the other pools and to establish the “normal water lines” for both Ceres and the other pools.

To be clear, Dusk will remain inflationary and the dev team will top off Ceres with more Dusk from time to time, and we have weighting knobs we can turn to buff or debuff a given Dynamic Pool — so we still have work to do! But overall this system we expect to be at least an order of magnitude more automated in the management of Dusk from the loot systems in a manner that is much more fun for the players.

Under the hood we have made this system to be powerfully data driven and will be using this tech from Day 0 with Glitter to be sure that we are very explicit and intentional about all Play to Earn sourcing of Glitter from fees and given out for gameplay engagement. And beyond Dusk and Glitter — this tech is ready to go with any item in-game. Think about the classic traveling sales NPCs that have a small stock of rare stuff as they are wandering about in Waterloo City!

We are building with all of you and we are just at the beginning of this great adventure;this is another example of our dedication to be the thought leader in web3 game systems, transparency, and reliable token systems.

Ad Astra! -Erik

Originally published on Medium.