March 21st, 2024 | Loki ABCDE

1. Three-Token Asset System

Matr1x’s economic system belongs to the typical three-token model, where the first is equity tokens (carrying ownership value), the second is utility tokens (carrying usage rights value), and the third is NFTs (carrying data, product, and service value).

(1) Governance Token Matr1x

Based on public information, Matr1x’s governance token MAX will primarily be used for incentivizing and staking, where staking can help participants earn treasury, partial commodity trading pricing rights (revenue rights), operational and community event voting rights, and tournament voting rights (governance rights). MAX most definitely carries the entire ownership value of the Matr1x ecosystem. Due to the existence of treasury allocations, the anchor of MAX’s value will be Matr1x’s protocol revenue, treasury allocations, and governance value.

Currently, MAX token has not yet been issued. According to its white paper, MAX’s output will be later than its game launch, and MAX tokens will be obtained through leveling up in its games, on leaderboard ranking, or by obtaining top NFTs. Looking at its token allocation so far, seems like 8% will go to Matr1x FIRE, and an additional 12% of tokens are reserved for other games. MAX tokens will have the highest threshold and the longest production cycle among assets.

Diagram: MAX Token Allocation

(2) Utility Token FIRE

The FIRE token is the core of the MATR1X FIRE product loop, and also an important asset to pursuit for players. The distribution of FIRE tokens is relatively simple: the team, community, and ecosystem collectively receives 17.5% of the tokens, and the remaining 72.5% is produced through various activities, including playing games, opening loot boxes, participating in tournaments. These tokens can then be used for character development, loot box opening, E-sports rewards, and purchasing privileges. FIRE will be burned in some cases such as asset upgrades, loot box openings).

(3) Assets and Props in NFT Form

MATR1X designed a “triangular strategy” for its games, E-sports, IP and co-creators; and based on this strategy, they also designed a series of NFTs:

2. In-game Loops: Integration of Web2 and Web3 Business Models

Matr1x set up a series of system output assets for players, mainly including characters, equipment, materials, and consumables. These elements are not completely independent but closely relate to each other in terms of resource synthesis and exchanges.

From the output perspective, these resources roughly have two sources. One is the pre-issuance and subsequent mapping of the primary market, such as the issued NFT-MATR1X KUKU and NFT-Matr1x 2061. The other source is in-game output. Unlike most Web3 games, MATR1X FIRE’s game revenue is mainly distributed through loot boxes, which can contain firearms (with a small probability of obtaining gold items) and various weapon stickers. From the consumption side, Fire is the main carrier of the in-game economic cycle, and character upgrades, breeding, weapon synthesis, and upgrades, and loot box openings all require the consumption of Fire. Some scenarios also require the consumption of USDC. Based on the in-game loop, several types of participants can be roughly derived:

(1) P2E Players

Earn loot boxes and tokens by participating in the game. These players typically pursue absolute returns and efficiency in output, serving as both the demand and supply side of game assets.

(2) Competitive Players

Obtain high-value rewards through higher rankings and tournament placements. These players pursue higher scores and skills, being the primary consumers of in-game assets.

(3) Entrepreneurial Players

Purchase and produce primary game assets for sale, generating income, and being the primary suppliers of in-game assets.

(4) Free Play Players/Casual Players

MATR1X FIRE offers free gameplay, but if users do not have Avatar NFTs, they cannot obtain any on-chain assets.

3. How to Avoid the Death Spiral?

When talking about P2E, most people naturally think of Ponzi and the death spiral. This unfair Web3 script has been replayed many times in the past few years: shoddy games attract users virally, and continues to attract new participants through asset cycles and wealth effects until the building collapses.

Thus we have a starting ground: A good Web3 game first has to be a good game, otherwise, discussions about the death spiral or economic models are meaningless. As we have pointed out in the article “Why Do We Invest in Matr1x?”, Matr1x Fire is competitive in terms of gameplay, visuals, and other aspects even among Web2 games, which therefore attracts many players in the shooting field. Folius Ventures’ survey also shows that over half of the users believe that Matr1x Fire’s gameplay is superior to games such as CrossFire, PUBG, CoD, etc.

With this premise, the economic model will help Matr1x attract a mass market of players, and build a sustainable economic cycle.

(1) Huge Asset Reservoir

In the past, many X2E models face problems such as the lack of asset diversity and excessive production proportion. In a pure gold farming model, all assets are continuously inflated, and “holding” is not an effective option. Users need to constantly maximize their capital utilization to ensure efficiency.

Matr1x provides a variety of NFT assets, each with different functions, and Earn is not a behavior linearly related to production materials. From the user’s perspective, after obtaining basic production materials and by playing the game, the user then manages to obtain some loot boxes, and it is best to obtain FIRE and NFTs by opening the boxes.

At each stage, participants have three options, and due to the scarcity of some assets, these options are real effective options, thereby bringing differentiation and retention. These assets will then become a reservoir for Matr1x, ensuring that while it enjoys the growth in asset value brought by its users, it can also relatively avoid turning all its economic output into selling pressure when asset values are realized.

(2) Balance Between Speculation and Real Demand

Looking at its in-game loop, Matr1x Fire has far lower speculative properties than other Web3 games. First of all, some assets of Matr1x Fire are non-producible, such as weapon stickers, which are more like collectibles. So from the beginning, Matr1x players such as gold farming players, competitive players, entrepreneurial players, and collectors are not purely driven by economic incentives. With strong gameplay, E-sports, and fan economy strategies, real players’ consumption and protocol will drive increases in real income, achieving a final balance and sustainability within the game.

Secondly, the game mainly consumes FIRE and USDC, and the participation of governance token MAX is relatively small. This approach enhances the significance of FIRE, and pure “internal coils” or “mutual cutting” will not drive the value of MAX tokens. Furthermore, the proportion of the team/investors in FIRE is very low, therefore, the team/investors will not benefit from the Ponzi growth, which helps ensure that the team effectively implements the Roadmap and help Matr1x to realize long term growth.

(3) Expandable Boundaries

From a long term perspective, a Web2 breakthrough and growth in protocol revenue is highly achievable, but there is still a need to address potential downturns that may occur before reaching the turning point. We can solve this by providing sustainable expectations. Looking at Matr1x’s planning, there are several main aspects:

(1) The complexity of Matr1x Fire’s games and assets provides a more sustainable playability.

(2) The NFT market, DEX, and wallets providing additional value.

(3) Development of subsequent games.

About ABCDE

ABCDE is a VC focused on leading investment in top Crypto Builders. It was co-founded by Huobi Cofounder Du Jun and former Internet and Crypto entrepreneur BMAN, who both have been in the Crypto industry for more than 10 years. The co-founders of ABCDE have built multi-billion dollar companies in the Crypto industry from the ground up, including listed companies(1611.HK), exchanges(Huobi), SAAS companies(ChainUP.com), media(CoinTime.com), and developers platforms(BeWater.xyz). If you are a Builder with the dream of changing the world, join us to build the next-generation encrypted network.

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