How To Build Sustainable Tokenomic Designs For Move-to-Earn Apps

How To Build Sustainable Tokenomic Designs For Move-to-Earn Apps
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Cryptocurrency projects require a strong token economic design (or "tokenomics") as a vital factor for creating market-controlled, sustainable and balanced token structures. Tokenomics is an important concept for project leads to get right as it plays a huge role in ensuring the token serves its intended purpose, fosters equitable distribution, and maintains long-term value.

A well-built tokenomics structure, like Bitcoin, is likely to outlast a poorly-designed and over-inflated crypto project, as investors will flock to the well-designed platform, increasing demand and possibly the value of the token. Tokenomics determine two things about a crypto economy – the incentives that set out how the token will be distributed and the utility of the tokens that influence its demand.

Finding the right balance while setting up a crypto ecosystem's tokenomics could play a huge role in determining the long-term sustainability of crypto projects. Luckily, crypto allows any developer to introduce any type of game theory they like to ensure the sustainability and growth value of their token. From mining and staking to DeFi protocols' yield farming, from token burns to token allocations and vesting periods –  different platforms apply unique methods to regulate the supply and demand of their tokens. 

Understanding Sweat Hero's token sink strategy

For instance, Sweat Hero's 'token sink strategy' introduces a novel working of tokenomics in the Sweat Economy – via gaming. Simply, players compete within the Sweat Wallet app by connecting with and challenging each other to 'walking duels', with the winner rewarded with Battlecoins and upgrades to their in-game NFTs. 

Crucially, the game is free-to-play, which differs from the conventional M2E games in today's market. Many of these NFT games and M2E platforms sustain their economy by expecting new users to join and purchase an NFT or buy their token to ensure value growth. In contrast, Sweat Hero introduces a novel utility within the Sweat Economy, providing a 'burning' mechanism for $SWEAT tokens and regulating the tokenomics of the ecosystem. 

Players must purchase Battle Coins, using $SWEAT tokens, to join and play the game. Every player wagers their Battle Coins, and the winner takes 80% of the combined pot. The remaining Battle Coins (20%) are sent to Sweat Economy address as a Battle fee, creating a continuous token sink. Additionally, with 6 million+ users on Sweat Wallet App, the token sink strategy could reduce the supply of $SWEAT drastically, if a fraction of the users become players, increasing the chances of $SWEAT being successful.

How Sweat Hero's 'token sink strategy' enhances Sweat Economy

One of the most important factors determining stable and sustainable tokenomics is how the project aligns its incentives among all its stakeholders. Positive reinforcement with participation rewards fosters a robust collaborative environment that drives organic demand and supports long-term growth. While limiting the supply side could lead to growing value, having sustainable demand for the token is crucial to prevent the economy from collapsing in the long run. 

Sweat Hero's 'token sink strategy' ensures the supply and distribution of $SWEAT tokens is controlled while providing more use cases and utility to the holder. This helps attract players and investors to Sweat Economy, as the game shows massive potential to be globally adopted. Additionally, with 120+ million users on Sweat App, the token sink strategy could reduce the supply of $SWEAT drastically, increasing the chances of $SWEAT being successful.

Sweat Hero players and SWEAT holders are also incentivized by burning 20% of the tokens every time they play a game. This helps create a sustainable ecosystem. Every time the battle fee tokens are sent to the token sink, the supply of $SWEAT is reduced, and with a limited supply of 22.6 billion tokens, the token's value could grow in the long term. 

Finally, Sweat Hero provides a first-of-its-kind M2E game, helping build a community around its ecosystem. The game is made on sound tokenomics that allows the community to participate and gain with every token sent to the sink. The community promotes the $SWEAT token and helps attracts new users to the game, which is essential for its long-term success. Players invite and interact with their friends through the game, which acts as a referral engine to invite more users to the Sweat Economy ecosystem.

Final Words

Designing tokenomics is a critical skill if you want to create a successful and sustainable cryptocurrency business. A well-designed tokenomics model can help to ensure that a cryptocurrency is successful by providing a clear value proposition for investors and users. With projects such as Sweat Hero, gamers and players can participate in the tokenomics of the platform, ensuring that the ecosystem is sustainable in the long term.

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