Thoughts on “Value Destruction, Resource Circulation, and the Metaverse”
Can you guess what CCP Games’ EVE Online, Nintendo’s Legend of Zelda: BotW, and the classic MMORPG Furcadia (https://furcadia.com) have in common?
🥁🎵🥁 Dropping stuff on the ground. And it stays there. (Mostly!)
The idea of whether you can/cannot drop things on the ground in a game has two critical implications for virtual economies.
First: “Value destruction” ← of which I think there are two meaningful definitions.
A. The process by which any perceived value of virtual assets (currencies, items, goods, etc.) decreases due to things like inflation, game design changes (e.g. mudflation with level-cap increases), or malicious player activities (exploits, dupes, hacks, etc.).
B. Game mechanics that allow otherwise persistent digital items to be destroyed: item decay, crafting (where 1+1 = 1.5), PvE (monsters eat items), PvP (full-looting mechanics with random perma-losses).
Both EVE & Zelda feature core game mechanics focused on the second type of “value destruction” via wear & tear. Repairing items might be possible, but lowers the “durability” of the item and it breaks faster in its next usage cycle.
Contrast this with today’s skeuomorphic NFTs: immortal, immutable, etc.
We can learn from the past, too. Early Metaverse games, like UO or Dr. Cat’s Furcadia — set the “sandbox” standards. One commonality? The persistence of dropped objects on the ground.
Don’t get me wrong, items could still decay — “a delayed value destruction” — if left ignored for too long, but even in 1996/1997 I remember playing Furcadia and being wowed when a friend dropped a cushion on the ground for me to sit on.
World of Warcraft *doesn’t* let you drop things on the ground, though: it simply deletes the item you abandoned. “Instant value destruction.”
What’s the difference then, if both types of games can destroy value in a disinflationary way?
“Resource circulation.”
All the games I’ve described utilize Type B value destruction as game mechanics. But EVE, UO, & Furcadia are closer to a “simulation” than WoW, and foster higher levels of implicit resource circulation versus explicit trading. Ex: Players being able to pick up and recycle abandoned items.
Takeaway: Today’s Web3 focuses on an explicit “trading metagame.”
Meanwhile, what about Type A “Value destruction”?
Type A is an ever present threat to virtual economies, requiring expert fundamental designs and constant revision. Ironically, we know from experience that the “easy fix” is no fix at all: closed economic loops (deflationary or static) fail rapidly when autonomous agents (like players) hoard items, spike prices, and crash the ecology.
My thought: open virtual economies can design for both types of value destruction. Resource circulation can be valuable for expanding the metagame.
It’s harder than today’s fixed supply tokenomics, but more viable in the long run.
