Evaluating and Managing Tokenomics for Non-Fungible Tokens in Game-Based Blockchain Networks
Hyoungsung Kim, Hyun-Sik Kim, Yong-Suk Park

TL;DR
This paper presents a novel NFT inflation management method for P2E Web3 applications, utilizing contribution rewards, NFT burning, and market-based token valuation to stabilize NFT value and incentivize contributions.
Contribution
It introduces a new inflation control mechanism combining NFT burning, ERC-20 reward tokens, and liquidity pools, enhancing NFT valuation and ecosystem stability in P2E blockchain games.
Findings
NFT burning reduces circulation and inflation.
CP tokens link NFT value to market dynamics.
Liquidity pools stabilize token and NFT values.
Abstract
Non-fungible tokens (NFTs) are becoming increasingly popular in Play-to-Earn (P2E) Web3 applications as a means of incentivizing user engagement. In Web3, users with NFTs ownership are entitled to monetize them. However, due to lack of objective NFT valuation, which makes NFT value determination challenging, P2E applications ecosystems have experienced inflation. In this paper, we propose a method that enables NFT inflation value management in P2E applications. Our method leverages the contribution-rewards model proposed by Curve Finance and the automated market maker (AMM) of decentralized exchanges. In decentralized systems, P2E Web3 applications inclusive, not all participants contribute in good faith. Therefore, rewards are provided to incentivize contribution. Our mechanism proves that burning NFTs, indicating the permanent removal of NFTs, contributes to managing inflation by…
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Taxonomy
TopicsFinTech, Crowdfunding, Digital Finance · Digital Platforms and Economics
