Inflation Balancing Mechanism

To address the pain point of uncontrollable inflation in the Web3 game economy, SA World has established a set of rules to assist game developers in managing and balancing the economy, preventing inflation in the game:

  1. Only Game Type 1 is authorized to issue In-game Currency (symbol: IC) on the ecosystem's blockchain.

  2. Only owners of Primary NFTs are eligible to mint IC.

  3. The quantity of Primary NFTs allowed to circulate will always adhere to the Nmax regulation (upper limit and thresholds set for creating Primary NFTs).

  4. In Game Type 1, the following metrics will always be measured:

  • Measurement of the quantity of IC burned over time

  • Measurement of the quantity of IC minted over time

  • Based on the desired inflation rate, the system will adjust the Mint-to-IC ratio and spending levels to Burn IC.

Formula for calculating the money supply at a given time:

IC supply (t) = ICsupply(to) +t0tCmint(t)*dt - t0tCburn(t)*dt.

  • ICsupply(t) = The amount of IC circulating in Game Type 1 at time t.

  • ICmint(t) =The amount of IC minted at time t

  • ICburn(t) = The amount of IC burned at time t

The rate of change of the IC supply: Delta = Lim ( ICsupply(t) - ICsupply(to) / (t-to)

Goods basket:

Mt= { M1.t, M2.t, M3.t…} where Mi.t is the price of item i at time t.

Inflation Rate (IR) will be calculated as follows: IR = 1- {(Mi.t)/(}*100%

Balancing the in-game economy will be based on 2 indices {IR; Delta}. Essentially, Delta will be controlled to achieve the desired IR according to the formula: IR = F(Delta). (For more details, a matrix of Minting IC actions and Burn IC actions needs to be established, which will be clarified at the time of specific implementation).

In addition, SA World has developed a mechanism to determine cases of burning In-game Currency and cases of keeping it in circulation.

  • Every Game Type 1 must list the possible actions to mint, use, and burn IC. To ensure transparency, this table must be controlled, reported, and updated on the Blockchain.

  • The table reporting actions of a minting IC can be called the Table Mint IC (TMIC).

  • The table reporting actions of using and burning IC can be called the Table Burn IC (TMBC).

  • Every Game Type 1 must also list the actions where IC must be used, and the amount of IC to be retained in circulation. This table must be updated, controlled, and stored on the Blockchain.

  • This table can be called the Table Forward IC (TFIC).

Based on these three tables (TMIC, TMBC, TFIC), SA World will create a detailed and transparent accounting ledger on the blockchain system and design an accurate management wallet system.

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