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Crypto: A Quick Review of Star Atlas Game Economics and Tokenomics

Updated: Sep 5

Star Atlas recently released their game economics paper detailing how $ATLAS and $POLIS tokens will interact with the game. Since token pre-sales concluded not too long ago, I wanna share what I think of the game economics and tokenomics in this post.


Before that, check out their dope ass trailer and the newly launched interactive website!



Goals of the economy

Under "Skill-Tree Progression" with their aim to "minimize player fatigue and multi-account clutter":

...By employing a skill tree approach, the game allows its users to dedicate their time and resources to a certain activity. This allows them to unlock perks and bonuses from their skill tree that they can then purchase with ATLAS...

Right off the bat, it's clear that Star Atlas is not Free-to-Play (F2P) but Pay-to-Win (P2W). Probably a good thing for $ATLAS holders, not so good for players with tight pockets. At first I thought it was a strange but I guess they're not wrong to use P2W as a solution to game grinding... at the same time sending their tokens lol.


Game economics

Not gonna comment much but I think the production role might have the highest reward/risk ratio for Play-to-Earn. Just sit around and fabricate things lol. No worries about being attacked, having your ship destroyed and looted in the process.


But it all depends on how the game turns out. If majority of players think the same as me then naturally r/r for other roles will go improve.



Tokenomics: $POLIS

Starting with $POLIS, it is a governance token with a fixed supply of 360 mil... suited for whoever that wanna govern the shit out of it lol. Though I think $POLIS is gonna be different from most gov tokens and might have some value.


The common problem with DAOs has always been the lack of participation which the team seems to recognize and came up with a workaround. Knowing that no one would actually say no to free money, the DAO incentivizes active participation through revenue distribution:

"Members of the DAO will also earn portions of the tax revenue."

All $POLIS holders gotta do is stake their $POLIS, click on a Yes/No button and earn more $POLIS. Easy money for a simple task right?


There is a slight penalty for not participating as quoted:

"...game DAO does not have restrictions on in-game activities, but disincentivizes passive presence by reducing (to a point) potential voting weight and distributions from the entirety of the Metaverse economy..."

Concerns

So $POLIS = good moon coin? Not really, here are some of my concerns:


1. Unfair Token allocation

Screenshot from Star Atlas economics paper

The team holds 30% (quite high compared to most projects, CT says sweet spot is around 20% lol) and 22.5% for the VCs. Combined together, that is more than half the total token supply.


As for retail, only a tiny 7.5% is up for sales with the remaining 40% slowly minted over 8 years. With such lopsided distribution, can it even be considered as a DAO? Lol

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So if you're the kind that goes like "I hOdL xxx $PoLiS, iT iS mY rIgHt To Be HeArD!" then this is definitely not for you.


If it's me, I would be fine with trusting the team to decide what's good for the game since they are in a better position and it's their interest to do so.


2. Vesting period too short

Considering that the team couldn't give a reliable estimate of when the game would be released makes the two years vesting period feels short. For all you know, unlock might occur far earlier since there is no info on when the lock up will end yet. I'm guessing maybe latest June 2023 for the private seed round.


The lack of transparency raises a lot of doubts like what if the game still isn't ready after 2 years at the end of lock up? Would they dump on you and bail?



Tokenomics: $ATLAS

The in-game currency within Star Atlas for mission rewards, DAO rewards, purchasing in-game assets etc. Total token supply will begin at 36 bil and subjected to change based on game economy state. This is to keep in-game items reasonably affordable to avoid pricing out new players.


$ATLAS token allocation is similar to $POLIS, VCs hold 22.5% of total supply vs the puny 7.5% retail has access to lol.


Other than that, it is pretty much a utility token. Hard to say if there is any value in holding.


Land NFTs

So neither tokens appeal to you? Perhaps check out land NFTs! Be a land lord and maybe tax your subjects to oblivion hehe.

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How it works

Each planet is divided into parcels. Specifics of each parcel (i.e. size, borders, location, current ownership) are recorded as on-chain NFT.

Land lords can have various buildings (production, recreation) built and collect taxes from players using these facilities.


Benefits of owning land

  • earn $POLIS from participating in governance

  • collect taxes from players for using the facilities

  • take a loan using the land as collateral

Cons of owning land

  • subjected to Land Value Tax (LVT)

  • land will be auctioned away for failing to pay LVT

  • increasing land value requires active participation (construct buildings)


Governance

The final hurdle before your governance rewards.


Star Atlas introduced something fresh here with 3 different tiers of governance: Star Atlas DAO, Faction DAO and Region (Local) DAO.

Screenshot from Star Atlas game economics

Personally I find it interesting but... who's gonna prepare the policies? In most protocols, policy-making is considered a full-time job.


Then, another challenge would be keeping up with multiple concurrent policies. Since everyone is incentivized to vote, no one should miss the voting period. How can participants be notified and make informed decisions?


Would it become similar to a work situation where there is too many meetings about the smallest things? Hence, running the problem of the game being overly governed? Lol.


Summary

The good:

  • Revenue sharing through incentivized voting

  • More than one way to have exposure ($POLIS, $ATLAS and land NFTs)

  • Growing hype

Screenshot from Google Trends on Star Atlas

The bad:

  • Token allocation for retail is low

  • Possible token unlock before game release

  • Land ownership is not permanent, cannot buy and forget

  • Maybe over-govern

Well, one thing for sure it is still early to determine anything since game economics is far from being finalized as stated in the disclaimer:

This Star Atlas Economic Paper is for information purposes only. We do not guarantee the accuracy of or the conclusions reached in this Economic Paper, and this Economic Paper is provided “as is”... ...Please note that contents of Star Atlas Economic Paper may be altered or updated at any time in future by the project’s management team.

Do take everything mentioned here with a pinch of salt.


Disclaimer: The information listed here is accurate at the point of writing. I am not endorsed by any of the platforms mentioned here. It is strictly my personal opinion and should not be regarded as investment advice. Please do your own due diligence.


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