Pixelmon’s intent is to create the first Decentralised Game Ownership (DGO) system that provides the right incentives for play-to-own (P2O) gamers while leveraging the proven model in free-to-play (F2P) gaming and microtransactions. We want to create an ecosystem that is accessible to all and rewards Pixelmon supporters and holders throughout, regardless if you are a Web3 native, hardcore gamer or complete beginner.
The key to achieve the above lies in clearly differentiating the demographic of investors from the demographic of gamers/consumers of the product, not just in company strategy but in the NFT collection structure itself and throughout every future expansion.
The mechanism enabling this vibrant, balanced and rewarding system is something we call Right-of-Game (RoG). Right-of-game is an innovative incentive mechanism based on L1 Genesis and L2 in-game NFTs that anchors early collectors as in-game asset distribution nodes in any GameFi ecosystem of players.
What’s the difference between L1 Genesis & L2 in-game NFTs?
Pixelmon will utilise a 2-tiered NFT system that we named Right-of-Game (RoG). This system is composed of L1 Genesis NFTs and L2 in-game NFTs, where the first embodies the right to use a specific asset or asset class in-game and bear a claim on its proceeds, and the second are in-game assets that enable all users to play and take part in the ecosystem.
The current Pixelmon Generation One Collection (including all evolutions), future Pixelmon Generations, and the upcoming trainer airdrop with their accompanying weapons, accessories and clothing that will be tied to them are all examples of L1 Genesis NFTs. Holders of these NFTs will be rewarded when their item is used in the game in any one of a wide range of varying capacities relating to L2 in-game NFTs.
In-game NFTs on the other hand, are derivatives or offshoots of these original L1 Genesis NFTs that will be available to use in-game to allow for a wide player base and an interactive in-game ecosystem. In Pixelmon, these include but are not limited to characters (Pixelmon, trainers), cosmetic elements and skins, gears and armours, and stat changing abilities.
With RoG in place, in-game asset ownership is decentralised and fractionalised. Free-to-play (F2P) players can obtain the aforementioned through grind play-to-own (P2O) or microtransactions (primary & secondary). The game ecosystem will be open to mass adoption while Genesis investor ownership rights are upheld.
Let’s consider Borg as an example: To allow mass market adoption of the game and a high player base, there needs to be unlimited versions of Borg that are available to the wider player base. This is where in-game NFTs come into effect and where they will play a pivotal role in the ecosystem.
Borg Genesis holders will be able to obtain a share of the proceeds generated by all the in-game Borg NFTs by staking their Borg Genesis. Of course, Borg will also be a playable creature for all holders of the Genesis NFT though an airdrop of the L2 in-game NFT.
To better understand this concept, refer to the Borg illustration below: The Borg Pixelmon Genesis NFTs (of which limited copies exist in the secondary market) represent the right to claim a revenue share on all Borg species in-game NFTs and variants.
Currently, skins have become the predominant source of many game companies’ revenue, accounting for 70% of the gaming industry revenue at an estimated $200bn in 2022. When talking in these terms, in-game NFTs will predominantly be copies, variations, adaptations and derivatives of the Genesis NFTs as well as skins of the in-game playable assets. As such, the original L1 Genesis NFT holders will be eligible for a revenue share of any in-game derivative or variation of an NFT they own.
Here’s a numerical example: Let’s assume that a total of 4 players purchase a Borg Basic Armour for $2, a Shiny Gold Skin for $49, the Borg Wrath Hammer for $5, and the Dry Fire Ability for $4. Let’s also assume that the royalty level for Borg is 4%. We’ll see that the payout reserved for the Borg Genesis NFTs is Y=(2+49+5+4)*0.04= $2.4, and if we assume that 10 Borg Genesis NFTs are staked in total, that translates into a $0.24 payout for each individual Borg Genesis NFT.
The exact values of these payouts are dependent on a wide range of variables such as rarity, value and volume of transactions for each L2 in-game NFT variation. For example, higher rarity Pixelmons such as dragons will receive a higher percentage of revenue share (which is fixed by rarity tier and growing with rarity).
Furthermore, the total revenue generated will be influenced both by the number of trades/purchases made and by the average value of these. Other factors to consider would be the maximum number of stakable Genesis NFTs for the species. The fewer staked, the larger percentage each L1 Genesis NFT holder would be eligible to claim.
Within this logic, it can happen that a Pixelmon Genesis NFT that is less rare but very popular in-game will obtain a higher payout than a Pixelmon that is more rare but less popular, since the more popular one will generate more revenue.
Therefore, when buying an L1 Genesis NFT and looking at its potential long-term payout generated from the game, buyers can consider 2 elements:
- Rarity tier, since on average the revenue payout percentage applied on all sales will be higher the rarer the Pixelmon species is.
- The design and “popularity” or mainstream adoption that a specific Pixelmon can have in-game. As mentioned above, both the volume and the value of transactions will be demand-driven factors, thus a very popular character in-game will provide higher yield to L1 Genesis NFT holders.
What NFTs are considered L1 Genesis NFTs ?
All of the current and upcoming collections of Pixelmon characters, all evolutions, Trainer characters, their equipment and land are considered L1 Genesis NFTs.
The most straightforward collection next to Pixelmon Generation Ones and their evolutions are the Trainers and their accompanying weapons, accessories and wearable NFTs. These will be subject to a similar logic as the Pixelmon creature NFT, with Trainers holding multiple different revenue sharing rights for each weapon, accessory and trait they hold.
For example, a Trainer that is revealed with a mythical sword will be eligible for revenue share on all the proceeds generated by that mythical sword’s in-game NFTs.
Trainers will be expanded upon and described later in a future article, alongside more details on how our Decentralised Autonomous Tribes (DaT’s) will work, and their effects on revenue share and claims.
The long-term vision behind RoG
As mentioned previously, RoG seeks to differentiate Investors from Gamers, and by doing so it also wishes to solve the long-time issue of content scalability in gaming by offering all creators a Create2Earn solution.
RoG, is in fact, the perfect tool for a self-sustained User Generated Content (UGC) strategy: Creators are capable of financing their development costs upfront with the sale of Genesis NFTs. They also simultaneously hold a productive share of their creations whilst enabling in-game usage for F2P with the L2 in-game NFTs, making the game IP fully decentralised from creation to licensing. Decentralised creation can be applied to all game content: creatures, gear, map expansions and even quests.
With RoG applied to UGC enablement and rewards, the game becomes much more than just a game. It becomes a platform where all 3 stakeholders have clear roles that provide value to each other in a scalable manner:
- i) Investors finance Creators and provide liquidity to Genesis NFTs generated by Creators;
- ii) Creators enable content scalability. They make the game self-sustainable and self-expandable, and they enable better gamer retention s. Essentially, Genesis payout mechanisms ensure that Creators build based on what gamers want, not what Investors want.
- iii) Gamers via in-game NFTS and microtransactions consistently create revenue and value for the ecosystem, rewarding Creators and Investors alike in a sustainable and potentially infinite manner.
The RoG system of NFTs will be supported by an in-game coin that will function as the currency for the players, enabling liquidity and trades in the game’s markets. The coin will be mostly purchased for FIAT in-game, or released to players in the form of rewards and incentives. Traditional cryptocurrency will also be allowed as currency for players to trade NFTs peer-to-peer in the in-game marketplace.
Ultimately, RoG not only allows us to build, develop and sustain a constantly evolving game through UGC, but it also empowers us to incentivize and reward creators, NFT holders, mass market consumers and players alike.
More details on the revenue share for L1 Genesis NFTs, Pixelmon’s in-game coin, in-game NFTs and other assets within the Pixelmon collection will be released in the coming weeks. Follow our Twitter account and join our Discord to receive Pixelmon’s latest updates and insights.