A Mature Blockchain Mini-Game

Author: Yue Xiaoyu

Pet-raising games were popular in the Web2 era, such as QQ Pets. However, in the Web3 world, everything is just beginning. By overlaying a more open and liquid economic model on the traditional game mode, new vitality can be brought forth.

Recently, a Web3 pet-raising game called xPet.Tech has caused a sensation in the Twitter ecosystem. This game is much more mature in terms of product development compared to similar competitors, and its economic model design is also very interesting. Therefore, this article will analyze this product in detail.

01 Basic Introduction

xPet.Tech is a pet-raising mini-game on the Arbitrum chain, similar to QQ Pets. Pets are fed to level up and then can earn tokens through labor.

The process for ordinary users to enter the game is as follows:

1. The product form of xPet is a Google browser plugin, so you need to download the plugin. (The lack of an app or web version does limit the entry of many types of users into the game.)

2. After the plugin is successfully installed, connect your Twitter account and enter an invitation code. (Both the inviter and the invitee can receive certain rewards. This social viral model is widely adopted. On one hand, it does limit the entry of some users into the game, but on the other hand, it creates scarcity and arouses the interest of users who are truly willing to try. Overall, the benefits outweigh the drawbacks.)

3. Based on your Twitter account, a wallet is automatically created for you. (This method of creating a wallet is a trend. Recently, various Web3 social or gaming applications have adopted this model, making it very smooth for traditional internet users to enter the blockchain world.)

4. After entering the game, you can get a pet for free. The main interface of the game is embedded in the Twitter page. (This setting is also very reasonable, as this type of pet-raising game is suitable for playing in the scenario of browsing the news feed to pass the time.)

From the entire process of users entering the game, it can be seen that this game is completely tied to the Twitter ecosystem, from newcomers needing an invitation code and a Twitter account to later opening treasure chests by browsing tweets, all of which are completed within the Twitter ecosystem.

Next, let's take a closer look at the gameplay of this game.

1. Feeding Pets: Pets can work and generate income after reaching level 7, so the higher the level of the pet, the quicker the return on investment.

2. Unlocking Treasure Chests: Users can browse the news feed to find hidden treasure chests. By replying "xpet" under a post with a hidden treasure chest, users can receive a series of rewards, including tokens and food. (This indirectly creates a spreading effect and can even collaborate with external projects or individuals to drive traffic, which is also a business model.)

3. There are two ways to upgrade pets: one is to spend XPET tokens for upgrading, and the other is to directly purchase pets above level 7 in the store using XPET. (After calculation, the cost of directly purchasing higher-level pets is lower than upgrading free pets, making direct purchase more cost-effective.)

4. So, as we can see, the core requirement is XPET tokens. How can XPET tokens be obtained? First, you need to recharge ETH to the wallet, then in the lending system, pledge ETH and borrow XPET. (The pledge rate is 85%, meaning pledging $100 worth of ETH can borrow $85 worth of XPET.)

5. With XPET, you can use it to upgrade pets and factories. The higher the level of the pet, the more berries you can obtain; the higher the level of the factory, the faster it can convert berries into BPET, which is another type of token in the game. (XPET and BPET have the same application in the game, such as being used to upgrade pets and factories.)

6. BPET can be exchanged for XPET, and XPET can be used for repayment to redeem the pledged ETH. After the return on investment, it's pure profit, so this mechanism is similar to mining.

From the entire gameplay, it can be seen that raising pets is just one layer of the game. Although it can satisfy some spiritual needs, the more important aspect is the ability to earn income, which is the biggest difference between Web3 games and traditional games.

02 Economic Model

For blockchain products, the economic model determines the sustainability of product development. Therefore, let's take a closer look at the economic model of this product.

The entire economic model can be divided into three subsystems: deposit, earning, and withdrawal.

Deposit

1. Deposits are mainly made through the lending system, where users pledge their own ETH and exchange it for XPET tokens at an 85% collateralization rate.

2. Initially, the price of each XPET was fixed at $0.1. Later, the XPET trading pool was opened, and the price of XPET is no longer fixed. The quantity of XPET that can be borrowed changes in real time based on the price.

Earning

1. Earning mainly relies on pets and factories: pets produce berries (BERRY), and factories can convert berries into BPET.

2. The higher the level and quantity of pets, the more berries they can produce; the higher the level of the factory, the faster it can convert berries into BPET. To obtain the maximum output, try to control the production rates of pets and factories to be consistent.

3. Upgrading pet levels and factory levels requires consuming XPET or BPET.

4. Besides being used to upgrade pets and factories, the BPET produced by the factory can also be used in two other ways: one is to exchange BPET for XPET, and the other is to pledge BPET to obtain more BPET (this feature is not yet open, but the overall logic is that the longer the pledge time, the higher the earnings).

Withdrawal

1. BPET produced by pets and factories can be exchanged for XPET.

2. In the entire economic model, there are two types of tokens: XPET and BPET. The total supply of XPET is constant at 300 million, but the quantity of BPET is constantly expanding, which users can continuously produce in the game. Therefore, it is most important to convert the obtained BPET into XPET as early as possible.

3. Since the total supply of XPET is constant, but the quantity of BPET is constantly increasing, how can there be enough XPET available for exchange? The design of the exchange mechanism relies on the secondary distribution of project income.

4. The secondary distribution of project income has three directions: 5% goes directly to the project party, 45% is exchanged for BPET and placed in the fund for further feedback to users, and most importantly, the last 50% goes to the exchange system, from which users can obtain the quantity of XPET that can be exchanged for BPET.

5. Since the XPET in the exchange system comes from user deposits, without deposits, it is not possible to withdraw or there will be a limit on the withdrawal speed (currently, the single exchange limit is 100 BPET and requires queuing for multiple days), which slows down the vicious cycle of mining and selling frequently seen in DeFi liquidity mining. The project has closed the entire economic system.

From the entire economic model, it can be seen that through controlling the rates of deposit, earning, and withdrawal, the game's balance has been initially achieved. However, with the increase in user scale and the opening of token trading, the complexity of the economic system will significantly increase. Whether the game's balance can be maintained remains to be seen and heavily depends on the team's operational capabilities.

On the other hand, we can also see that this game uses the classic three-token model: game token + governance token + NFT.

• BPET is the game token: it has practical utility value in the game;
• XPET is the governance token: it mainly represents the ownership value of the project;
• Pets are NFTs: representing commodity value, they can provide emotional value or actual rights to users.

It can be said that the three-token model has become a standard mechanism design in GameFi (Game+Finance).

03 Comprehensive Analysis

First, let's look at the advantages of this game:

1. Viral marketing: Around the Twitter ecosystem, it has achieved a screen-swiping effect through invitation codes and opening treasure chests, attracting a lot of traffic;
2. Good product experience: Compared to competitors like FrenPet, the product user experience is better and relatively more mature;
3. Closed-loop economic model: A typical DeFi liquidity mining model, but on the basis of mining, the project income limits the withdrawal speed, making the economic system closed-loop and sustainable to a certain extent.

The disadvantages of this game are also very obvious: due to the restriction on withdrawals, the off-market XPET token price will have a premium. In order to attract more users to play and increase the intrinsic value, the project team has a strong incentive to push up the price. This brings about a problem: users will pay more attention to the token price rather than the game itself.

On the other hand, in the early stages of the project, if the XPET token price is too high, it will hinder more users from entering the game, which is not conducive to project growth.

To solve this problem, one solution is to open the BPET trading pool as soon as possible. Users will sell a large amount of BPET, which will create more demand for XPET.

It can be seen that introducing external factors will have a significant impact on a closed self-circulating system, so the project team needs to control the overall project pace.

Now let's look at the risks of this project.

There are mainly two types of risks: one is internal risk, as the team currently does not have endorsement from well-known investment institutions, the project party may run away; the other is external risk, as this game is completely based on the Twitter ecosystem, Twitter may ban such games.

Both of these risks are relatively uncontrollable, so it is not suitable to invest a large amount of funds.

Overall, this game is very interesting. The social viral mechanism, automatic wallet creation design, mining mechanism design, and three-token model design used in it are all typical paradigms in the GameFi (Game+Finance) track, and it is worth participating in and exploring in the early stages.

The future development of this project depends on the team's operational capabilities, such as attracting a larger user base, the timing of asset trading opening, and so on, all of which will have a significant impact on the project's development. We can continue to follow the development of this project.

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