Analysis of STEPN game design ideas and token economic model (reproduced)

May 18, 2022

Combined with ten suggestions on the P2E game economy, the author uses his shallow understanding of STEPN games to analyze STEPN's game design ideas and token economic model.

[This article is reproduced from the analysis of STEPN design ideas and economic model published by the author 0xBigPineapple ]

For more than a month in a row, through the daily update of 33 STEPN data analysis diaries, I have a deeper understanding of this game from emerging to the game-fi leader soon. Combined with Xiaolan 's ten suggestions on the P2E game economy , I hope to use my shallow understanding of STEPN games to analyze STEPN's design ideas and economic models.

Thanks again @Aiko article for inspiring me!

(This article assumes that readers have a comprehensive experience with STEPN, and will no longer introduce the gameplay. For beginners, please read the Getting Started Guide first.)

Return decay/life cycle/destruction mechanism of interest-earning assets

Interest-earning assets should have a return decay or life cycle. If there is no upper limit on the rate of return of interest-earning assets in the game, it will be difficult for the economy to stabilize for a long time.

The loss of interest-earning assets in NFT games should be naturally established, and the impact on net income should be invisible rather than explicit;

The repair, abandonment, recycling, and replacement of interest-earning assets should cause the consumption of basic local currency in the game;

In STEPN, the interest-earning asset is the NFT of sports shoes (gems that enhance attributes can also be counted as an interest-enhancing asset), and players can get GST rewards (interest) through exercise.

Although STEPN's sneakers have a wear/repair mechanism, they lose durability after exercise and require burning a small amount of GST to repair. However, the player quickly concluded the ratio of the best attribute points for gold, and the actual repair durability is only equivalent to reducing a small part of the interest output of interest-earning assets.

For example, 0xBigPineapple has been using a pair of 28-level green joggers. The net output of 10 energy per day is about 110GST. Not counting the gem income and mint income of low-level treasure chests, according to the current exchange rate, it can be stably credited more than 400USDC.

At present, STEPN still has an obvious risk of unlimited output, and the yield of interest-earning assets (shoes + gemstones) can have no upper limit. In the future when user growth is stagnant and there is no new non-investment demand, it will be difficult for the economy to stabilize in the long term.

Compared with Axie, the pioneering pioneer of P2E, one of the fatal flaws is the unlimited output of interest-earning assets. Holders can keep earning without external investment demand, which eventually leads to the collapse of the economic system and the inflation of SLP.

Future Outlook:

Reward decay/lifetime: maybe add a link between shoe age and efficiency/durability

Synthesis/Destruction Mechanism: Perhaps you can add burning shoes to strengthen the function of the main shoe, and you can also add gambling-type gameplay controls such as failure rate to increase the fun and burn too many shoes and tokens in the market.

Difficulty of Return Calculation

The return ratio of interest-earning assets based on local currency should be limited, and should be based on a complex and unpredictable multi-factor cost-output model, making simple and crude rent-seeking difficult to achieve.

As for STEPN's energy cap mechanism, the time for daily exercise to obtain benefits is limited. In the current gameplay, it can be mainly divided into two types: ordinary cash flow and lucky flow.

Among them, Lucky Stream has high randomness, and the output value fluctuates greatly. The level of the dropped treasure chest has a certain degree of randomness, and the level of gems opened in the treasure chest is also very random, and the calculation of return income is relatively difficult.

However, for the common gold flow route selected by 0xBigPineapple, for a fixed level, using the best efficiency/elasticity ratio, and using an ideal speed to exercise, a relatively stable GST income can be obtained by fixing the energy every day.

Under the assumption that the project party can manage to maintain a relatively stable GST price, the return time and daily rate of return of different shoe combinations can be roughly calculated, and stable rent-seeking can be obtained in a simple and rude way.

Raw materials and returns for interest-earning assets

The input and return components of the interest-earning asset itself should be appropriately diversified and complex, and should follow a pyramid structure – that is, the higher the quality and utility of the asset and return, the more complex the input resources and final result.

Light usage: Necessities, high output and high consumption rewards. Input and output can be very simple

Moderate Use: Consumables, temporary high combat power bonus. Input-output is appropriately complex

Heavy use: Advanced equipment and luxury items. Input-output is complex enough.

Add interest-earning assets, in-game value savings products, and external value carriers as appropriate.

The investment diversity of interest-earning assets in STEPN games:

Essential Durable Goods: Sneakers. The attributes are determined at the time of purchase, and the input-output calculation is relatively simple.
Non-essential Durable Goods: Gems. Advanced gem synthesis has high randomness, but the calculation of input and output is relatively simple.
Blind boxes: shoe boxes, treasure chests. The randomness of obtaining items is high, and the input and output can be calculated through the mathematical expectation of big data, but it has the nature of gambling, and the volatility of single use is relatively large.

The output complexity and randomness of interest-earning assets in the TEPN game:

Gold: Theoretically, the relationship between attributes and income is a black box. The official white paper only uses qualitative analysis, but the model has been summed up by players. 0xBigPineapple recommends that beginners can simply simulate expected returns on some websites. Players who want to obtain the various probabilities in this section can also refer to the complex models based on big data.
Gem synthesis: The synthesis success rate is a black box, which may be approximated by the player's big data. However, the project party can make modifications and realize economic regulation later.
Treasure chest drop: It is related to energy consumption and luck value. The specific drop probability is a black box, which can be summed up by the player's big data to approximate the probability, and the project party can make modifications and realize economic control.
Gem drop from the treasure chest: It is related to the treasure chest level and luck value. The specific drop probability is a black box. The approximate probability can be summed up by the player's big data, and the project party can make modifications and realize economic control.
Shoe box drop: The probability of obtaining the quality of the shoe box is public, but the probability of dropping the twins is a black box, and the project party can modify it and realize economic regulation.
Sneakers from the opened shoe box are dropped: the quality probability of obtaining shoes is public, and the slot probability is public, but the expected attribute is still a black box, which may be regulated.
In STEPN games, there is no concept of consumer goods for the time being, and the items produced are for permanent use. (Because the price of shoe mint increases with the number of mint, the mint attribute of shoes may be regarded as a consumable in a certain sense)

Future prospects: Add more experiential distinctions to the game, such as custom pace music drum beats for different shoes, or display of social attributes. Add more external value-carrying and non-return-oriented needs.

Asset outflow risk of profit-oriented users

In the complex and diverse P2E user ecosystem, it is necessary to recognize the risk of asset outflow brought by profit-oriented users, and convert them into "value investors" with playability and precise rewards.

Different from the pure value input of traditional game players in the past, the property rights and rent-seeking rights of Web3 games make it possible for users to obtain value from them, and thus it is easy to attract users who are purely return-oriented. In addition, most of the current P2E games lack entertainment, and it is difficult to form consumer demand (“non-return-oriented demand”), resulting in the overall value outflow of most games far exceeding the value input, which requires the investment of new players to offset the value outflow. This is not only unsustainable Pond's, but also a waste of the value of entertainment and enjoyment that the game itself brings to players.

From the chart of "Ten Suggestions", we can see that for Web3 games, gold users, speculative players, and game guilds / gold studios will cause an outflow of overall value, while the actual focus on game experience is krypton gold / leisure Players can bring an overall value input. The goal balance of Web3 games is to achieve that the user's contribution in the right half is not less than the user's claim in the left half.

STEPN also has a common problem with Web3 games like Axie: there are many gold users and speculative users, and the first question that many new users ask 0xBigPineapple when they join is "How long will it take to pay back?". This kind of pursuit of the fastest return solution and less diversified game experience makes many Web3 games unsustainable, and the value outflow continues to exceed the value input.

But the behavior itself, in 0xBigPineapple's view, is of course not the user's problem, but the natural problem of the game itself.

If the game itself can easily bring economic benefits to users, the game experience itself cannot make users pay for it, and at the same time, continuous value investment cannot allow users to obtain sufficient non-return-oriented value, then a large amount of overall value outflow is also can be expected.

Web3 Game Association/Golden Studio: A single studio is equivalent to a large number of gold users, and the return scheme developed by the studio/can ensure that the speed of claiming the value of the game is almost kept to the maximum. When the number of studios in Web3 games grows uncontrollably, the overall value outflow of the game will be significantly more than the value input, and the continuous blood-sucking of a large number of studios will eventually lead to the collapse of the game economy.

STEPN's outdoor game mechanism can greatly increase the difficulty of entering the gold studio and reduce the number of batch gold users. Its anti-cheating mechanism can also partially reduce the number of gold users and force users to experience the game.

But even so, as of the time of 0xBigPineapple's writing, it is still possible to see that there are some tactical bonuses in the market that allow some Twitter big Vs to show off, such as cheating on behalf of running. For batch running, in actual operation, it may not be easy for the project party to manage effectively through technical solutions. Fortunately, the difficulty of entering the studio is still relatively high, and the resistance will be much greater than that of traditional Web3 computer games. For this, it is worth paying attention to in the future, and I believe that the project party will have a response plan.

STEPN hopes to cultivate users' healthy living habits and maintain long-term entertainment and value investment through sports. And because of its sports and outdoor attributes, it naturally has various activities and social needs. In the future, it will be easier to realize the social game claimed by the project party. And social needs can encourage users to get a sense of bragging/accomplishment. These two user needs, compared with other Web3 games, can increase users' non-return-oriented needs, thereby converting them into value investors in a larger proportion.

Mining and mobilizing user emotions to achieve continuous non-investment resource consumption

Game developers need to fully tap the psychological needs of players, try to use the playability and story of the game itself to touch the consumption of non-investment resources, and downplay its investment attributes.

In addition to the sports and health attributes of the game itself, there are few non-investment-oriented and gameplay-oriented consumption scenarios customized for the special needs of users, and basically focus on the scenarios analyzed before:

Speed up to upgrade sneakers, speed up to open treasure chests
Gambling gameplay: open treasure chests, synthesize gems, mint out shoe boxes, open shoe boxes

0xBigPineapple believes that STEPN, as a game, is still too strong in terms of investment guidance:

In the sports interface: the gst income is placed in the center, and there is a sound of gold coins falling every minute, which enhances the player's attention to income.
Although shoe NFTs have identity attributes, most players are more concerned about the impact of their attributes and slots on revenue, rather than NFT art style or game worldview.
The current shoe upgrades and gemstone inlays basically only stay in the distribution of attribute points, and ultimately fall into the income, without any appearance changes or other show-off/sense of achievement rewards.

These more or less hints and missing elements may be optimized and compensated for later.

The exchange rate of game currency to fiat currency is expected to be stable

If the currency of the game exists, maintaining the stability of its exchange rate against the fiat currency and building optimistic expectations of users is a very important but often overlooked issue.

There are currently two very important trading pairs in STEPN games, GST/USDC, and GST/SOL. Due to the relatively stable income of gold gst, the exchange rate of the former determines the user's exercise income. Since the price of shoes/gemstones is calculated in SOL, and the cost of mint/synthetic gemstones is mainly priced in GST, the exchange rate of the latter determines the raw material cost and return ratio of interest-earning assets (shoes/gemstones).

From the beginning of the game to the present, the GST price has been fluctuating and rising as a whole, and the shoe price has fluctuated slightly, but the overall price has also fluctuated upwards. Because new users enter the market faster, mint shoes are profitable most of the time. The project party has repeatedly emphasized that GST is a deflationary state, which is conducive to the long-term development of the project. GST/USDC has officially set up a swap pool, so that when there are many players who buy GST to burn, the price of GST will increase, and the expected income of burning (mint/gem synthesis) will decrease. Gradually, players who buy GST will decrease, and players who sell GST will increase, and vice versa. The current status of tokens in the swap pool is also true, which is relatively stable and can be automatically adjusted by the market.

Potential user groups and advantages of the game

The potential user group of STEPN is much larger than most other Web3 games, mainly for the following reasons:

Game style and scene: Outdoor sports. Compared with other games that need to sit in front of a computer, STEPN is obviously much healthier, and coupled with its low-carbon attributes, it can be spread by players generously. Users can play games "by the way" in their daily life without taking up too much time.
Game equipment requirements: mobile devices such as smartphones. Compared with other PC-side Web3 games, mobile games can make it more convenient for people to open daily, and the average daily usage time and user stickiness are relatively stronger.
Difficulty of getting started: Easy. Compared with the strategy and operation of other Web3 games, STEPN can be said to be very easy to get started, and 0xBigPineapple is basically easy to introduce to parents who never play games. After you have the shoes, you can click START to start running, and the interface is very simple.
Game interface style: neutral and simple. Compared with the cartoonishness of Axie, Alice and Star Shark, STEPN's design style is relatively neutral and suitable for players of all ages.
Out of the circle: strong. In the form of making money by walking that more people are familiar with, plus a simple and easy-to-operate game mode, and healthy attributes, as well as less interaction with the blockchain, you only need to send a pair of shoes to friends outside the circle to let them experience . It's much easier to recommend this healthy, low-carb game than to recommend a complex strategy game to friends and family.

Design Mechanism for Maintaining Game User Stickiness

The game gives the player short/medium/long-term goals, and these goals will occupy your mind at the same time, there is never a moment when you feel that everything you want to do is done, you always have hope, it seems that you are not playing this moment, but immersed in the future.

The reward per minute in the STEPN game is to gradually drop at a rate of 0.05gst each time. After waiting for the last minute to complete the drop, the movement of this minute is about to be completed. Players who are ready to give up the exercise in the middle will lose their money because of this short-term small amount. The temptation of the target and hold on for dozens of seconds until the reward of the next minute drops. With this continuous small reward, you can help players complete an exercise that may have been difficult to maintain before.

STEPN uses the method of recovering limited energy every day to limit the upper limit of the user's daily use time, and uses the peak-end law to ensure that the rewards obtained by the limited exercise time are maximized. It avoids the boredom of games in the future after a short period of excessive gaming.

And because the STEPN energy bar can store up to 24 hours of energy, if it is not exercised in time, the excess energy will overflow and waste. Use this method of consuming energy to obtain short-term and medium-term rewards of token rewards to help players develop the habit of daily exercise.

Most people just because of the sweetness of this little financial reward, fitness that may not have been adhered to before can also be carried out happily every day. Before, I would lazily reduce the running speed or stop taking a rest in the middle, and I would also persevere in order to obtain the maximum profit and advanced treasure chest. Encouraging players to share their sports experience after the exercise can also help players gain a sense of achievement while being supervised by friends (and advertised at the same time).

The investment in the game is maintained at about 30-50 days of repayment time. This long-term repayment goal allows players to smoothly develop the habit of daily exercise after repayment, and continue to exercise to complete longer-term goals instead of Immediately sell shoe covers and leave now.

The game also includes an upgrade mechanism and a gem mechanism, which allows users who spend money to strengthen interest-bearing assets to have higher returns, further enhancing user stickiness. Coupled with some features that have not yet been launched (rental system, badge system), users have a longer-term expectation.

In fact, there should be at least a section on "Investment, Speculative Governance Boundaries and Distribution Strategies of Governance Token GMT", but since it has not officially landed yet, I will run it stably for a period of time after the landing, and then update the analysis.