Exploration of New GameFi Models: ServerFi and High Retention Player Rewards

Blockchain games have promoted the rapid development of the GameFi sector by combining traditional gaming with decentralized ownership and economic incentives. However, these games still face significant challenges in terms of market stability, player retention rates, and the sustainability of token values.

This article reviews the development of blockchain games and analyzes the main flaws of the current token economic model using the theory of entropy increase. We propose two new models: ServerFi, which emphasizes the privatization of asset synthesis, and a model that focuses on continuously rewarding high-retention players. These models are formalized through a mathematical framework and validated through group behavior simulation experiments. The research results indicate that ServerFi is particularly effective in maintaining player engagement and ensuring the long-term viability of the gaming ecosystem, providing a promising direction for the future development of blockchain games.

Background: The Rise of GameFi

Blockchain games primarily create crypto assets in two ways: by marking in-game items as NFTs and by using fungible tokens as in-game currency. In 2013, Meni Rosenfeld's concept of colored coins sparked interest in the ownership of virtual assets. In 2017, Larva Labs launched the CryptoPunks NFT series, which became an important milestone in the development of NFTs.

CryptoKitties, as the first Ethereum blockchain game, leveraged the appeal of true ownership and potential financial gains, attracting a large number of players through in-game financial cycles. Axie Infinity further developed this model by introducing more complex game mechanics and in-game economies.

Challenges and Solutions in Token Economics

Blockchain games face fierce competition from traditional online games. Although blockchain technology has brought new possibilities for game asset ownership, there are still challenges in maintaining token value and player engagement.

Taking CryptoKitties as an example, its breeding mechanism inadvertently increased the supply, resulting in the rarity and value of individual "cats" declining over time. Axie Infinity also faces similar issues, including token oversupply, price volatility, and a lack of long-term incentive mechanisms.

Based on the analysis of these challenges, we propose two suggestions to improve the GameFi token economic model:

ServerFi: Achieving privatization through asset synthesis

ServerFi allows players to gain control over game servers by accumulating and merging in-game assets. This approach not only incentivizes players to invest more deeply in the game but also aligns with the decentralized spirit of Web3. For example, players can earn raffle opportunities through daily contributions, collect fragments to synthesize NFTs, and then share server profits by staking their NFTs.

Continuous rewards for high retention players

This method continuously identifies and rewards highly active players through complex algorithms and data analysis, in order to maintain token vitality and a healthy game ecosystem. For example, a portion of the server revenue can be airdropped daily to the top contributors, creating a "play-to-earn" dynamic.

Experiment

We conducted group behavior simulation experiments on the two proposed models and compared their differences in value capture capability. The experimental results show:

• In the ServerFi model, the total contribution value of players shows a continuous upward trend as the number of iterations increases, indicating that the model can effectively maintain player engagement and promote long-term value growth.

• In the continuous rewards model for high-retention players, player contributions initially rise significantly but then decline noticeably, indicating challenges in maintaining player engagement over the long term.

Analysis indicates that the strategy of continuously rewarding high-retention players may exacerbate player stratification, marginalizing tail players and setting a high entry barrier. In contrast, the ServerFi mechanism introduces randomness through fragmented lotteries, enhancing social mobility and providing opportunities for new and less-contributing players, thereby fostering a more sustainable ecosystem.

Conclusion

This study delves into the challenges of tokenomics in blockchain-based games and proposes two promising solution models. Through extensive simulation experiments, the ServerFi model shows significant potential in maintaining player engagement and ensuring the long-term sustainability of the game ecosystem.

ServerFi promotes social mobility among players by creating a dynamic competitive environment, fostering a more vibrant and inclusive community. This approach may represent a significant shift in the structure of token economics, providing a more sustainable development path for the integration of decentralized technologies in gaming.