Economic Design
How Arcania's token economy maintains long-term sustainability and value.
Arcania's economic design is built on hard lessons from the Play-to-Earn industry. By studying the successes and failures of games like Axie Infinity, Gods Unchained, and Big Time, we've created systems designed for multi-year sustainability.
Core Principles
1. Gameplay First
The game must be enjoyable without any earning potential. Players who never convert Arcanite should have a complete, satisfying experience. This ensures:
- Sustainable player retention beyond token speculation
- Organic growth through genuine enjoyment
- Survival through market downturns
2. Controlled Emissions
Token emissions follow a fixed halving schedule with a hard supply cap:
- 6-month halving cycle reduces emissions by 50% each period
- Fixed 100M supply — no unlimited minting
- Oracle adjusts conversion rates and caps based on ecosystem health
3. Multiple Sinks
Value can only be maintained if tokens are consistently removed from circulation:
- Transaction fee burns
- Crafting and enhancement consumption
- Premium feature purchases
- Staking lockups
4. Anti-Extraction Design
Systems explicitly discourage pure extraction behavior:
- Progression gates on conversions
- Better rates for dedicated players
- Time-locks that penalize rushing
- Verification requirements
5. Arcanite Emission Peg
Earned Arcanite is capped at ARC emission × 100 each month. This ensures:
- Arcanite supply never outpaces ARC conversion capacity
- One halving cycle controls both currencies
- No separate inflation schedule needed for Arcanite
- Purchased Arcanite (real money) is exempt — only earned supply is pegged
Why Previous Games Failed
The Axie Infinity Collapse
Axie Infinity's SLP token crashed 99.8% due to:
| Problem | Result |
|---|---|
| Unlimited token minting | Hyperinflation spiral |
| No meaningful sinks | Supply grew 4x faster than burns |
| Extraction-focused design | Players left when earning dropped |
| Scholarship dependency | DAU inflated by economic desperation |
Key Lesson: When earning becomes the primary motivation, any reduction in earnings causes mass exodus.
How Arcania Differs
| Axie Problem | Arcania Solution |
|---|---|
| Unlimited supply | Fixed 100M cap |
| Single sink (breeding) | Multiple burn mechanisms |
| Instant withdrawals | Time-locked conversions |
| No progression gates | Level, playtime, achievement requirements |
| Earning as primary draw | Gameplay as primary draw |
Sustainable Model Examples
Big Time
- Fair launch: 60% to players, 0% to team/investors
- Result: Built community trust, $100M+ NFT sales
Gods Unchained
- Token recycling: Fusion returns tokens to staking pool
- Result: Sustained engagement, $10M+ monthly NFT sales
Illuvium
- Revenue sharing: 100% game revenue to token buybacks
- Result: Aligned incentives between players and holders
Arcania incorporates elements from each successful model while avoiding their limitations.
Economic Health Indicators
We monitor these metrics to ensure sustainability:
| Indicator | Healthy Range | Warning Signs |
|---|---|---|
| Daily Active Users | Growing or stable | Declining 3+ months |
| Arcanite:ARC Conversion Ratio | < 30% of earned | > 50% immediate extraction |
| Time-Lock Distribution | > 60% using locks | < 30% using locks |
| Token Velocity | Moderate | Extremely high (dumping) |
| New Player Retention | > 20% at 30 days | < 10% at 30 days |
Dynamic Rate Oracle
The exchange system splits into fixed parameters (player trust) and dynamic parameters (economic safety). The Oracle only controls the dynamic side.
Fixed Forever
These never change — they are the social contract with players:
| Component | Value | Promise |
|---|---|---|
| Base Rate | 100 Arcanite = 1 ARC | Never changes |
| Account Rate Formula | L30/P20/A50 weights, 40-100% | Never changes |
| 2-Week Lock Rate | 100% | Patient players always get full rate |
| Fees | 3% instant / 2% locked | Never changes |
Oracle Controls
These adjust within published hard limits based on economic health:
| Component | Normal | Stressed | Growing | Hard Range |
|---|---|---|---|---|
| Weekly Cap (Basic) | 10,000 | 5,000 | 15,000 | 5k-15k |
| Weekly Cap (KYC) | 20,000 | 10,000 | 25,000 | 10k-25k |
| Instant Rate | 50% | 30% | 60% | 30-60% |
| 1-Week Rate | 75% | 60% | 80% | 60-80% |
The 2-week lock rate is never touched. Patient veterans always receive 100% of their account rate.
What Triggers Adjustments
| Indicator | Oracle Response |
|---|---|
| Extraction rate over 50% of earned | Decrease instant/1-week rates, tighten caps |
| Player base declining 3+ months | Decrease rates to protect supply |
| Healthy growth + low extraction | Maintain or increase rates |
| Token price stable/growing | Maintain current parameters |
Oracle Rules
- Reviewed every Monday at 00:00 UTC
- Changes announced 7 days in advance
- Published ranges are hard limits — Oracle cannot exceed them
- Current values always visible in Exchange interface
Note
The Oracle only affects instant and 1-week withdrawal rates plus weekly caps. If you use the 2-week lock, your rate is always 100% regardless of Oracle state.