Abstract

Free-to-play & Lucky-to-earn

When we are obsessed with the magic of tokenomics and fantasize about the future of it, but don't know how to build a sustainable economic system, let's take a look back at a basic theory in "Capital: Critique of Political Economy" - the process of social commodity production, which consists of production, distribution, exchange, and consumption. Together, they constitute the operating mechanism of the commodity economy.

Changes in production and distribution will directly affect the supply and demand of tokens, which in turn will affect production and distribution. If the token supply exceeds demand, there will be inflation and prices will fall. If the token supply is less than demand, there will be deflation and prices will rise. Therefore, to promote the sustainability and stability of the crypto economy, we can introduce Bonding Curves managed by DAOs to build a transparent and controllable fair distribution system and achieve supply-demand balance. Once the economy is stable, we need to promote exchange and consumption to stimulate the growth of various roles in the ecosystem. The more prosperous the ecosystem economy is, the higher the fund efficiency, liquidity, and market price discovery will be, leading to the wealth effect.

Due to the differentiated demand for the wealth effect among different groups in the crypto market, as well as the financial liquidity brought by onchain asset ownership, it is sometimes difficult to distinguish between real consumption or exchange demand and pure arbitrage behavior. Therefore, when designing game trees, introducing expectation-based random variable models is a good choice to introduce authenticity consumption. It should be noted that different random variable distribution models have different applicability in describing different random phenomena. The most suitable distribution model should be selected according to the specific application scenario and data characteristics.

For example, in different types of games, we need to use different random variable models to describe the probability distribution of various events. In a positive-sum game, we may need to use a binomial distribution to describe the probability of players completing tasks or winning battles. In a negative-sum game, we may need to use a normal distribution to describe the profits and winning probabilities of each player. In a zero-sum game, we usually use distribution models such as binomial or hypergeometric distributions to describe the probability of each player winning when choosing different strategies. This is what we define as "Free-to-play & Lucky-to-earn."

It should be noted that the random variable model is only a part of game theory, and different games and scenarios may require the use of different models and methods to describe the probability distribution of various events. These models are theoretical models and may need to be modified and adjusted based on specific situations in practical applications.