The Economics of a Guild
We are in the infancy of the metaverse economy and in the midst of a chaotic rush to capitalise on a storyline centred around wealth creation through gaming. Whilst we believe in the ultimate unlocking of vast resources through a metaverse environment, there is a long path ahead to reach a rational equilibrium that meets the wants of the multiple actors in the space (players, financiers, gaming publishers and so on).
Guilds should be built on solid future-proof foundations that capture the logical evolution of the market whilst allowing participation in the current entropy, limited technology and shorter-term opportunities currently available.
This can be achieved by looking at what the role of Guilds will become and drawing on traditional business analogies to solve for economic value and markets.
So what is a Guild? In simple terms Guilds acquire gaming assets as principal, that are then lent to its members for their gaming usage, often to generate a form of yield / profit.
Play2Earn is unsustainable in its current form but Play And Earn will exist once a balance of game utility and economic substance is established. In this regard, we can say that the assets lent to members have a commercial value that is shared between the members and the Guild.
At this level the Guild can be considered analogous to a commercial bank.
It lends assets to create wealth generating a return on its assets. Commercial banks play an important part in economic stimulation which in turn generates the feedback loop to the asset base itself.
The Guild is no different where players maximise the utility and earnings power of the treasury assets. Commercial banks borrow assets from depositors or lenders and the Guild will do the same through its marketplace activity. Both entities manage their surplus cash or equity through treasury and liquidity management.
In any emerging market, the most beneficial position to be in is that of the “Bank” and we see the Guilds as becoming the cornerstone financial institutions of the Metaverse.
The economic power of the Guild comprises of several factors which are highly correlated.
Quantity of assets — the capital wealth of the Guild.
Active players — this is important for the turnover and capacity utilisation of the assets
Quality of players — the better the players the greater the earnings
Quality of assets — the better the assets the greater the utility and earnings
A Guild’s token model and NFT algorithm(s) should incentivise behaviours of its members that drive the above factors and circulate value directly from the asset base to its token capital. This approach will lead to greater membership which catalyses further value of the Guild capital and assets.
Not everyone in the Guild will be playing games. In fact, many games have passive team members who model strategies or have administrative functions. In addition, players are not active all the time but may still spend time in the metaverse. Guild members are consumers and access to the Guild for external goods and services should be monetised and folded back into the Guild economy. This way, the Guild is able to capitalise on non-playing members.
We can consider identity itself as an additional asset for the Guild.
So far, we have looked at the structural profitability of a Guild as a mutual metaverse financial institution built on a rational economic system that enables a self-sustaining and dynamic response enterprise. The corollary of building such a powerful base can now be examined as to the metaverse itself that provides the economic returns for the Guild.
We see a market where the value of games is heavily reliant on the Guilds that they manage to attract which is directly opposite to the current approaches.
With the tail now wagging the dog, we see Guilds becoming the dominant economic force in the gaming industry and eventual metaverse(s).
0rigin designs and builds blockchain and decentralised models that will have a profound impact on the global economy, by fusing traditional disciplines from finance and technology with cutting edge techniques and product innovation.