Building a decentralised monetary system

Designing in-game economics is complex. In WoC, we are now right in the beginning of building a decentralized in-game monetary system. The economic system will be used throughout the game if everything works smoothly. The obvious question is how should we design a fault-tolerant financial system? Do you think it should be inflationary or deflationary? Or the best guess would be something in between.

Let’s imagine a moment where thousands of players play WoC in almost real-time. They will probably compete to get as much economic power and in-game wealth. These players also use in-game currency to transact with others and the system itself. If we max-cap the in-game currency and decrease the supply over time with a constant factor, it will be a deflationary asset like in bitcoin today. How about the prices of goods and services in the game? If you know the currency will be a lot rare in the future, would you still use it to exchange for goods and services, or would you hold it and wait for the moment it appreciates.

I think these are good questions that we will answer in the future.

How about a monetary system that can inflate or deflate at any time. We can track the economic activities through blockchain, as all transactions are open. When things heat up, the monetary system will deflate. Otherwise, let’s say very few players are transacting, the system will inflate itself to speed up economic activities.

In this algorithmic approach, we are not going to max-cap the currency. But, we need to incentivise people to have a say in the system. When prices are about to inflate, the system needs to take action and then decrease the supply. Of course, we haven’t designed the smart contract yet, but one way to implement this approach is to have a relative multiplier on players’ wallets. So, the system can indirectly influence the amount of currency in players’ wallets. A simple scenario will be having different amounts of money in players’ wallets changing day by day. What would be the consequences of this approach? No one can tell without experimenting with this in the first place.

I think we have good questions and experiments to take this further. If you are also curious about designing decentralized monetary systems, you can join our community.