The Metaverse may be just beginning to take shape, but Crisis of the Virtual Land has been around for 30 years.
What’s the problem? In terms of scarcity, having virtual land too close to physical land can cause economic problems that can stifle games and virtual worlds.
I wrote an article on this topic earlier this year and pointed out how NFT projects are considering an older concept, the digital land tax + civic dividend combination, as a way to address this problem of excessive speculation.
However, now a new mechanism has emerged in the NFT space that also seems to bring sustainability to virtual land sales. In this post, let’s take a closer look at variable rate progressive Dutch auctions (GDAs) and how the Metaverse NFT project uses them.
Variable Speed GDA (VRGDA): A Path to Sustainable Virtual Land Sales?
What is Variable Speed GDA
Paradigm is a crypto investment firm whose research division brings together some of the brightest minds in the web3 ecosystem.
Over the past year, Paradigm researchers have released a number of innovative NFT primitives and mechanisms, including Floor Perps, RICKS, Mortys, RICKS, MultiRaffle, and Gradual Dutch Auctions (GDA).
The latest innovation from these researchers is Variable Speed GDA (VRGDA). In particular, as the creators put it, NFT issuers are allowed to “sell agents on a near-custom schedule over time by raising prices when sales are ahead of schedule and lowering prices when sales are behind schedule. currency”.
Example of an NFT “Ahead of Time” – from paradigm.xyz
Paradigm developed VRGDA for Art Gobblers, a digital art experiment they helped incubate with Rick and Morty co-creator Justin Roiland.
The idea of Art Gobblers is to start a self-sustaining ecosystem centered around the creation and collection of art, into which the project’s Draw Tool will be incorporated. Art Gobblers will be released as finished products, so once its basically free minting is done, it needs to be able to sustainably handle additional NFT issuances, i.e. creations, without human intervention.
Here, please refer to VRGDA, which are designed to accommodate the issuance of two types of NFTs – one with a fixed supply, say 10,000, and one with an unlimited supply that is released steadily indefinitely over time – without relying on reservations auction.
A possible VRGDA release schedule
In their post outlining VRGDA, the Paradigm researchers provide a general example of how this mechanism works:
“Imagine a simple schedule where we want to sell 10 NFTs per day. We set a starting price of 1 token for the first NFT. Let’s say it’s day 5, so we should sell 50 NFTs. But , the demand has been high and we have sold 70. We were supposed to sell 70 NFTs until the 7th day, so we moved two days earlier. So we want to charge higher prices in the future. We use an exponential curve to determine how much higher. This may vary by parameter, but in this case, let’s say we are 2 days ahead, so we increase the price by 2*2 = 4 times, so since our initial price is 1 token, the new The price will be 4 tokens, making it harder to buy more NFTs. 10 days later, on day 15, we were supposed to sell 150 NFTs, but the user only bought 120, which is what they would have done by day 12 The quantity that should have been purchased, which means we are 3 days behind schedule. We adjust the price [down] to make it easier for users to buy more NFTs.”
Why VRGDA can be used for virtual land sales
As I mentioned in the introduction, virtual land crises are nothing new. Over the years, we’ve seen them emerge in mainstream franchises like Ultima Online, FinalFantasy, and EVE Online.
However, how did these land crises arise? Historically, this has happened when virtual land is too close to modeling physical land. Virtual lands are not necessarily scarce or necessary to the gaming experience, but when virtual lands are artificially too scarce, obviously beneficial, and too valuable in the context of their location, speculators tend to take over, with their exorbitantly high Prices and rent-seeking behavior keep actual users and builders out.
One possible solution to this problem is a land tax, which would eliminate excessive speculation. But if that approach isn’t your style, I think VRGDA is an interesting new way to similarly curb over-speculation in the Metaverse.
Why do I say that? Because through VRGDA’s dual-token approach, virtual world projects can introduce an element of unlimited land supply in a flexible and sustainable way, so basically anyone can buy it at any time.This “open supply” aspect could ease the aggressive land grabbing mentality that has sparked virtual land crises in the past.
For example, suppose a virtual world NFT project uses the VRGDA system to release 10,000 “Capital City” NFTs + an uncapped supply of “Countryside” NFTs over time. Capital NFTs will undoubtedly trade at a premium and have a higher prestige, but their price and limited supply will not deter ordinary users from joining the world, thanks to the unlimited supply of “Countryside” NFTs with changing price curves, which can act as a stress reliever valve demand and prevent excessive speculation. Growth will not be stifled, but promoted.
Variable velocity GDAs (VRGDAs) are interesting because they allow projects to issue NFTs on a customized schedule, while also making it easy for people to buy them almost anytime. So the mechanism can be used for a lot of things, and I think sustainable virtual land sales is definitely one of them. Meanwhile, VRGDA is brand new. Art Gobblers isn’t live yet, so so far we don’t have an example of how a live product can be checked. However, Paradigm’s Transmissions11 has released a reference implementation with multiple possible release schedules, so it’s only a matter of time before we start seeing more VRGDA projects arriving.In the Metaverse ecology, let’s see which upstart project makes this leap first!
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/virtual-land-vrgda-a-sustainable-metaverse-land-sales-strategy/
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