Is the extreme price volatility enabled by fully decentralized and open crypto economies a feature or a bug?

For some people, this is a deeply ideological question. Unless the market sets price, it’s not blockchain. By VentureBeat

The extreme price volatility enabled by fully decentralized and open crypto economies is a topic of ongoing debate within the blockchain gaming industry. Some argue that it is an inherent feature of such economies, while others believe that it can be mitigated through various design choices.

In a recent interview with Aron Beierschmitt, CEO of Laguna Labs, we discussed the impact of crypto sentiment on individual blockchain games. Beierschmitt shared his experiences working on Crypto Unicorns, a project that encountered challenges due to its launch during a downturn in the crypto market.

"Once you let these token economies out of the bag, it is impossible to stuff them back in," Beierschmitt said, highlighting the difficulty in adjusting game economies post-launch.

Despite efforts to revive the project over two years, including new game modes, IP expansions, and a blockchain migration, Laguna faced financial constraints due to the prolonged downturn. As a result, the game and IP have been transferred to a community DAO, which will continue development with the remaining token treasury.

Meanwhile, a streamlined Laguna team is working on a new title called Neo Olympus, which will reportedly differ significantly from Crypto Unicorns. Its early stages will focus on the hardcore crypto audience, with launch NFTs requiring players to spend to generate the rarest items.

The game's core economy will be based on the new DN404 standard, which combines fractionalized NFTs and a coupled ERC20 token to enforce additional deflationary dynamics through a buy-back-and-burn mechanism. In this sense, the economy will be decentralized and open but constrained by design.

In a separate development, Limit Break has announced the extension of its ERC721C protocol to ERC20 tokens, creating a new protocol called ERC20C. This protocol will allow developers to programmably define their token features, which can be used for various purposes.

For instance, developers can restrict airdropped tokens to users who install and play the game, create tokens that can only be spent in-game, limit token trading pairs, enforce maximum and/or minimum token prices, create tokens that share revenue with dev/players, and create tokens with an inherent value backed by a foundational asset.

Additionally, Limit Break has launched TokenMaster, a launchpad app for creating a specific type of apptoken that holds its value and operates as its own AMM DEX.

Such protocols provide developers with powerful tools, and the key aspect will be how they reach a consensus on using these tools to create engaging and sustainable blockchain games.