Original compilation:
Original compilation:H.Forest Ventures ,Dinzz
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Recommended reason:
Whether it is DeFi or GameFi, it is a game after all, and there are winners and losers in the game. The author participates in encryption projects with game theory thinking, collects information in multiple dimensions, and predicts the public's judgment on the market, so as to gain an advantage in the competition and win in the end, which is inspiring.
Author's note:introduce:
introduce:
Behind the financial attributes of DeFi and GameFi, participants adjust the game strategy to play the game by evaluating the average action consensus of other participants (that is, the action that most participants will take). Why is it not a simple decision, but a dynamic game? Because player A's decision affects player B's decision, which in turn affects player A's own decision. As a result, players will experience the complexity of the game as their decisions (or sometimes anticipated decisions) happen to all players simultaneously. The development of the game will be multidimensional and happen in real time, especially in a market with sufficient depth and liquidity.
Participating in the market means participating in the game. After evaluating the average consensus of all participants in the market, an action below the average consensus must be chosen to win. If a participant behaves above the average consensus, it will fail.
This paper discusses the unique capabilities of GameFi and its inherent system properties, which are used by multiple parties in a gaming system to facilitate consensus. Take the various interest groups of GameFi as an example, including developers, guilds, and ordinary players. Some players in the game can see the panorama of the entire market, and they can act by anticipating the actions that other players may take, and choose a course of action with a greater chance of winning to gain an advantage in the game.
Summary:
Summary:
1. "Guess 2/3 of the average" game
Two players guess "2/3 of the average" game: "strictly dominant strategy" minimum number is "0".
Multiplayer "guess the mean" game: After evaluating the mean of the numbers chosen by all players, the winner can claim victory by offering a number 1/3 lower than the mean.
2. The consensus game of DeFi+GameFi
DeFi：After evaluating the average consensus of all participants on the project, the winner may win by acting below the average consensus.
GameFi：The sentimental value of NFT combined with GameFi's gaming functionality makes it easy for various interest groups to manage player consensus in the marketplace. Unlike DeFi, which adopts a single token system, the value of GameFi is not only reflected in its token price. The complexity of player interaction patterns and consensus games are also growing.
3.Axie Infinity
Axie's economic model:Player consensus is divided into three types of assets, and the consensus game focuses on maintaining the price of SLP.
Axie team and YGG:YGG has more capabilities and incentives to manage player consensus, but still requires Axie to roll out economic model adjustments.
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1. The average 2/3 game: Evaluate the consensus and win with a weakly dominant strategy
Richard Thaler, in his Nobel laureate in economics book Misbehaving, proposes an interesting game: guess 2/3 of the average.
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1.1 Two-player "mean 2/3" game
In this game, if there are only two players, there is a "strictly dominant strategy" (meaning that no matter what numbers the other players choose, each player will have an optimal strategy to win the game). Picking 0 has a higher chance of winning than picking any number greater than 0.
For example, if the numbers provided by two players are 0 and 100, 2/3 of the average would be (0+100)/2*(2/3) = 33.3. The number 0 is closer to 33.3, so the player chooses 0 to win.
Reduced to its most essential form, a two-player game is really a "whoever picks the lower number wins" scenario. Due to the low degree of freedom of the game, players only need to choose a smaller number than other players to win the game. Therefore, the "strictly dominant strategy" is to choose 0 for all players.
1.2 Multiplayer "Average 2/3" Game
When the game has more than two players, we face further complications, because the presence of a new player forces all players to rethink the motivations of the other players. The winning strategy changes from a "strictly dominant strategy" to a "weakly dominant strategy".
A rational game player would reason like this:
At first, I can make a reasonable assumption:Assume the player's choice of 0-100 will follow a normal distribution with mean 50. 2/3 of 50 will be 33.3. So, to win, I'll pick number 33 as my answer.
Based on the previous reasoning, I can dig a little deeper:If some players followed my reasoning above, they would provide the number 33 as their answer, which would mean that the actual average would be slightly lower than 50. Of course, if every player made the same reasoning as above, the actual average becomes 33. To win, I put 22 as my answer (ie 33*2/3 = 22).
After a process of elimination, the answer will gradually approach 0. Finally, the integer 0 is the final answer, and the game reaches "Nash equilibrium".
Multiplayer games have a higher degree of freedom than two-player games. Its basic mechanism is to predict the average of all players. Simply picking the smallest number 0 will not win the game.
Moreover, for multiplayer games, the point is not that the game will eventually reach a Nash equilibrium.
The point is how far the current system is from reaching a Nash equilibrium, taking into account all players in the game. The answer depends on the degree of information asymmetry within the system and the speed at which information is transmitted between all participants.
For example, players playing for the first time follow the distribution shown in the figure above: more than 6% of players choose 33, less than 6% of players choose 22, and the winning number is 19. Imagine if these players played the game a second time, the winning number would be closer to 0. When all participants realize that 0 is the final answer to win, no player will be a loser. Ironically, the games would end at the same time, with no winners.
So, for players looking to win, there are a few things to consider:
How to evaluate the consensus of all players;
How to win by behaving below the overall consensus;
How to interact with other players or influence the choices of the entire community.
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2. Consensus Game in DeFi & GameFi
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2.1 DeFi
DeFi participants need to assess the overall consensus on the DeFi project and all the information to be collected in the market. Consensus can be reflected by many factors, including average market behavior or current trends in token prices.
When the form of DeFi swap that integrates DEX and AMM appears, market liquidity is greatly improved. Therefore, market behavior can be directly reflected by users' opinions, and the token price directly reflects the quantitative market consensus.
However, the token price does not fully represent the average consensus of all participants on the project. The concepts involved in DeFi are much more complex than a game of "guess 2/3 of the average". DeFi project parties can directly participate in the design of the game system, and continuously introduce new concepts, values, cooperation forms, and financing during the operation cycle, including but not limited to:
Design a sustainable token economy model;
To implement effective business operations;
maintain community building;
increase the value of the project;
Improved forecasting of the future value of the project;
Grasp the macro market trends, etc.
The DeFi project team is good at using the unique DeFi mechanism to improve players' evaluation and expectations of the project, increase the average consensus of market participants, and ultimately extend the project life cycle (that is, delayed Nash equilibrium).
2.2 GameFi
GameFi also has similar game mechanics. But unlike DeFi’s single-token system, GameFi adds the following two key features:
Introduce multiple Token systems + multiple capital pools + NFT market
As an interest-bearing asset, NFT also brings additional emotional value (ie, non-financial products) to players. Additionally, the rarity grading and functionality of the NFT itself introduces new ways to manage market consensus.
Being able to continuously inject value is the most significant advantage of GameFi: Players' evaluation of GameFi projects is greatly influenced by emotional factors and inherent game value. Additionally, project valuations are not necessarily directly related to their token prices.
When playing DeFi and GameFi games, project parties, whales, and institutions often have a clearer vision, better channels, and higher risk tolerance than ordinary players, which makes them more proactive and available in the game The advantages. With rich market information and funds that can influence market behavior, these players can quickly accumulate in-game assets, influence the average expectations and consensus of all players, and ultimately determine their own winning goals.
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3.Axie Infinity
Take Axie Infinity as an example. When the GameFi project endows its NFT with the value of interest-bearing assets, the rise of game guilds becomes inevitable. The three-party consensus game between guilds, project parties and ordinary players has become more complicated. Due to Axie Infinity's own characteristic dual tokens and its NFT economic model, the consensus goals of market participants are relatively scattered, which provides more operability for project teams and guilds, and injects project value into the community.
3.1 Axie Economic Model: Dual Tokens + NFT
By establishing a sustainable economic model and a manageable consensus system, AXS can continue to create project value and help Axie NFT expand SLP usage scenarios. Ultimately, the market consensus will mainly focus on the price of SLP.
Axie Infinity assets are divided into three categories:
AXS：The total number of ecological governance tokens is 270 million, and 100% of AXS tokens will be in circulation in 2026.
SLP：Consumption tokens required for Axie Infinity game events. It has no supply cap and is the main source of income for players. Players can obtain SLP through character daily tasks, battles, PVE-adventure mode, PVP-arena mode, daily rewards, etc.
Axie NFT：The main method for game content. Inside Axie Infinity, it is an interest-bearing asset that can generate SLP, and it is also a way to burn AXS and SLP tokens.
As a card battle game, the gameplay of Axie Infinity requires players to combine a team of three Axie NFTs through the PVP/PVE battle mode to obtain SLP. SLP can be used for upgrading and breeding of NFT. Excess SLPs can be sold on the secondary market, which is the source of income for most players in the secondary market.
In the Axie Infinity economic model, AXS and Axie NFTs are more valuable (in the long run) than infinite supply SLPs.
AXS：A lot of AXS is controlled by the Axie team.
Axie NFT：YYG holds a large number of NFTs. NFT is similar to production materials. YGG rents Axie NFT to ordinary players who use NFT to make gold. In return, YGG will draw a certain percentage of the tokens obtained.
Until the output of AXS and SLP fails to meet consumption, the prices of both tokens will continue to rise. In effect, players burn AXS and SLPs to generate Axie NFTs, which are then used to generate SLPs. However, SLPs don't have much in the way of reducing inflation, leading to SLPs taking all the selling pressure on all three assets.
Given SLP's high inflation economic model, it is inevitable that SLP will continue to decline. When the number of new players joining starts to decrease, the demand for Axie NFT will also decrease. If there are no more ways to spend, SLP prices will drop, which will further reduce NFT production rates. The growth rate of Axie NFT will become 0.
Although SLP prices continued to rise in the DeFi summer of 2021, it only lasted for 4 months. After peaking in July, the SLP has never returned to its peak.
In fact, the decline in SLP prices is an inevitable trend. But as mentioned earlier, the Nash equilibrium is not the most important problem for us. As a direct participant in the market, we are more concerned about the following issues:
How to evaluate the consensus of all players.
How to win with below-average consensus actions;
How to influence the project consensus of other players or even the entire community.
Due to the limited space of this article, we will only discuss YGG for the time being. We will discuss other related topics in subsequent articles.
3.2 Axie team and YGG
Axie Infinity exploded, YGG's role cannot be ignored. YGG is responsible for operating the community, introducing and educating new players, cultivating player needs, and tapping the potential of NFT games. When YGG held a large number of Axie NFTs and SLPs, the main responsibility for operating the user consensus was transferred from the Axie team to the YGG Guild.
From a risk management perspective，The Axie team holds a large amount of AXS tokens. Compared to SLP tokens, the economic model and distribution of AXS make it less likely that the price will drop significantly. Having said that, in order to prolong the life cycle of the project, the Axie team does not want the SLP to drop. For YGG, however, the need is more pressing as it owns even more Axie NFT and SLP tokens.
From a consensus management perspective,Maintaining the SLP price is also one of the important tasks of YGG in community governance. YGG members are mainly low- and middle-income people in Southeast Asian countries. The close personal relationship in the Asian cultural circle makes it possible to optimize consensus management. Through the offline development and governance of the community, the guild can effectively manage the expectations of gold users, and gradually transform gold users from SLP producers to final NFT users and recipients.
YGG holds high-quality NFTs on the market. Axie NFT is not only an interest-bearing asset, but also represents its gaming experience. YGG improves the average consensus of players to a certain extent by controlling the NFT market, and provides additional usage scenarios for Axie NFT and SLP tokens.
However, YGG's control over SLP gradually weakened as the project reached a stalemate.Until recently, the Axie team released SLP adjustments as follows:
Adjusted Axie NFT breeding formula: SLP cost increased by 3 times, AXS cost decreased by 50%.
Eliminate SLP rewards for players ranked 800 in daily missions.
Removed SLP rewards from Adventure mode; reduced SLP rewards in PvP mode; higher MMR, higher SLP rewards.
Add more SLP usage scenarios.
Gradually reduce or even eliminate SLP rewards in daily missions and PvE modes.
Although the above method increases the amount of SLP destroyed, it reduces the market circulation and leads to an increase in the price of SLP.
However, reducing SLG's output to increase its token price won't last long and will be counterproductive.Ordinary players know it, Team Axie knows it, and YGG knows it. When token demand and price can only rise through slashing, the average player consensus for a project falls.
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4. The consensus game will never stop
In the words of Richard Thaler, the participants give numbers under the condition of information asymmetry and limited speed of information dissemination, and the final winning conditions depend on the degree to which the participants obtain information and make judgments based on the information obtained .
With each round of elimination, the information will diffuse further in the system. Until the end, when all participants "know it all", when all participants realize that the integer "0" is the final answer, the game ends. Until a new game restarts, new players come in.
For the Axie development team and other participants with more complex identities in the community, they have a better understanding and estimation of the direction and final results of the project when they play games with ordinary participants. At the same time, they have a panoramic view of the consensus of all participants, enabling optimized consensus management. They can continue to bring in external funding, create new ways to play, turn speculators into value investors, and find new applications for tokens and in-game assets.
Additionally, Axie Infinity is actively exploring a new identity. The launch of the Ronin sidechain and its native infrastructure, along with the development of several new projects, has transformed Sky Mavis (parent company of Axie Infinity) from an application developer to an infrastructure provider. That is, players of the current "game" can seamlessly participate in the next round of the new consensus game.
Every consensus game will always have an ending, but at the same time, new consensus games will continue to emerge.
Everything could end, but the lessons learned along the way are valuable. Whether it is DeFi or GameFi, short-lived projects will inevitably appear during the development process.
But the consensus game is always there. As game participants, we will stick to it and hope that the new round of Dapp can break through.
Translator's note:
Translator's note:
In game theory, there is the most classic case "Prisoner's Dilemma", which is also the origin of the DeFi2.0 concept Olympus (3,3) theory. The Prisoner's Dilemma roughly talks about such a case. A and B were arrested together for committing a crime and were taken to the interrogation room for interrogation. A and B are told:
① If both of you plead guilty, both will be sentenced to 3 years;
② One person pleaded guilty and the other did not plead guilty, the one who pleaded guilty was sentenced to 1 year, and the one who did not plead was sentenced to 10 years;
③ Neither of them pleaded guilty and will be acquitted.
At this time, A will analyze: If I plead guilty, my result will be 1 or 3 years. If I deny it, the result is acquittal or 10 years. Judging from the results, there is a high probability that A will choose to plead guilty. Similarly, B will do the same analysis, so there is a high probability that both A and B will choose to plead guilty. Although the result of neither pleading guilty is the best for the community of the two, but pleading guilty is the best choice for oneself while protecting one's own interests.
Therefore, in this market, the interest game between individuals,Individual best results do not represent the overall best results, and sometimes even conflict,Official account: H Forest
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