Deciphering the Matr1x Economic Model: The Sustainable Growth Path of Web3 Gaming

1. Three-Token Asset System

The economic system of Matr1x belongs to a typical three-token model, where the first token is the equity token (carrying ownership value), the second token is the utility token (carrying usage rights value), and the third token is NFT (carrying data, product, and service value).

(1) Governance Token MAX

Based on existing public information, the governance token MAX of Matr1x will primarily be used for incentives and staking. Staking can earn treasury allocations, partial commodity trading pricing (corresponding to revenue rights), operation and community activity voting, and event voting (corresponding to governance rights). Clearly, MAX carries the ownership value of the entire Matr1x ecosystem. Due to the existence of treasury allocations, the anchor of MAX’s value will be the protocol revenue, treasury allocations, and governance value of Matr1x.

As the MAX token has not yet been issued, according to the whitepaper description, the production of MAX will occur after the game is launched. MAX tokens can be obtained by raising the game level, ranking in tournaments, or holding top-tier NFTs. In terms of token allocation, 8% will be allocated to Matr1x FIRE, and an additional 12% of tokens will be reserved for other games. MAX tokens will have the highest threshold and the longest production cycle among assets.

Figure: MAX token distribution

(2) Utility Token: FIRE

The core positioning of the utility token FIRE is for the core loop of the MATR1X FIRE product, and it is also an important asset for players to pursue a sense of achievement. The distribution of FIRE tokens is relatively simple, with the team, community, and ecosystem collectively receiving 17.5% of the tokens, while the remaining 72.5% of tokens will be generated through gameplay, including playing games, opening loot boxes, participating in tournaments, and used for character development, loot box opening, esports rewards, and purchasing privileges. Some of the consumed FIRE tokens (such as asset upgrades, loot box openings) will be burned.

(3) Assets and Items Existing in NFT Form

MATR1X designed a “Triangular Strategy” for gaming, esports, IP, and co-creators, and based on this, a series of NFTs were created:

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

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

From the output side, these resources roughly have two sources. One is the pre-issued assets from the primary market and their subsequent mappings, such as the already issued NFTs - MATR1X KUKU and NFT-Matr1x 2061. The other type comes from in-game production. Unlike most Web3 games, the game earnings in MATR1X FIRE are primarily distributed in the form of loot boxes, which can contain firearms (with a small chance of obtaining golden items) and various weapon stickers. From the consumption side, FIRE is the main carrier of the in-game economic cycle. Character upgrades, breeding, weapon synthesis, upgrades, and loot box openings all require the consumption of FIRE, and some scenarios also require the consumption of USDC.

Based on the in-game cycle, several types of participants can be derived:

(1) P2E players

Players earn loot boxes and tokens by participating in the game. This type of player typically pursues absolute returns and output efficiency, serving as both the demand and supply side of game assets.

(2) Competitive players

By achieving higher rankings and tournament placements, players obtain high-value rewards. This type of player pursues higher scores and technical skills, serving as the primary consumers within the game and the demand side of game assets.

(3) Business-oriented players

Purchasing, producing and selling in-game assets at the first level and obtaining income are the main suppliers of in-game assets.

(4) Free Play players/pure casual players

MATR1X FIRE provides a free way to play, but if users do not have Avatar NFT, they cannot obtain any on-chain assets.

3. How to avoid the death spiral?

When it comes to Play-to-Earn (P2E), most people naturally think of Ponzi schemes and death spirals. This unfair Web3 script has been replayed many times over the past few years: poorly designed games attract users virally, continuously drawing in new participants through asset cycles and wealth effects until the building collapses.

So we get to a starting point: a good Web3 game first needs to be a good game, otherwise discussions about death spirals or economic models are meaningless. As pointed out in “Why Should We Invest in Matr1x?”, Matr1x Fire has sufficient competitiveness in terms of graphics, gameplay, and other aspects even in the Web2 space to attract many players in the shooting genre. A survey by Folius Ventures also showed that over half of the users believe that the playability of Matr1x Fire is higher than that of competing mobile games like CrossFire, PUBG, and CoD.

With this premise, the economic model will help Matr1x attract the mass market as much as possible and build a sustainable economic cycle.

(1) Huge Asset Reservoir

One problem faced by many X2E models in the past is the lack of asset diversity and the disproportionate emphasis on means of production. In a pure pay-to-win model, all assets continue to inflate, and “holding” is not an effective option; users need to constantly pursue the maximization of capital utilization efficiency.

Matr1x offers a wide variety of NFT assets with different functions, and earning is not linearly related to means of production. From the user’s perspective, they first acquire basic means of production in some way. Through gameplay, users obtain some loot boxes, ideally needing to obtain FIRE and NFTs by opening these boxes.

At each step, participants have three options, and due to the scarcity of some assets, these options are genuinely effective, leading to differentiation and retention. These assets will become a reservoir, ensuring that Matr1x can enjoy growth brought by incentives while not turning all economic output into selling pressure, during the process of user scale and asset value growth.

(2) Balancing Speculation with Real Demand

From the perspective of in-game circulation, the speculative nature of Matr1x Fire is far lower than that of other Web3 games. On one hand, some assets in Matr1x Fire are non-production assets, such as weapon stickers, which are more like collectibles. It can be foreseen that the diversification of players, including pay-to-win players, competitive players, business-oriented players, and collectors, will make Matr1x not purely driven by speculation from the beginning. With the strong playability of the game and strategies such as esports and fan economy, both real player consumption and protocol revenue will continue to increase, reaching a final balance and sustainability.

On the other hand, the main consumption within the in-game cycle is FIRE and USDC, while participation in the governance token MAX is relatively low. This approach will result in the scale of players and behaviors affecting FIRE, but pure “in-fighting” or “cutting” will not drive the value capture of the MAX token. Moreover, the team/investors have a very low proportion in FIRE, so they will not benefit from Ponzi-like growth. This helps ensure that the team effectively executes the roadmap and ultimately benefits from long-term genuine growth.

(3) Expandable Boundaries

Even in the long term, while breaking away from Web2 and achieving protocol revenue growth is likely, it still needs to address the possibility of decline before reaching a turning point. The solution is to provide sustainable expectations. From Matr1x’s planning perspective, there are several aspects:

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

(2). The NFT market, DEX, and wallet provide additional value capture.

(3) Subsequent game development.

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