Central to a user-generated content marketplace is the ability to easily mint game object, or series of game objects, tied to a smart contract with ownership rights.
A key principle to minting is that it permits minting and melting. Minting is the act of converting $PLAY tokens into a smart contract. Melting is the act of destroying the contract, and extracting the underlying value in $PLAY tokens. From there, the tokens can re-enter the token marketplace- be traded for fiat, or recycled into other game objects. So, for example, where a game has been discontinued, players may wish to melt down their game items.
Central to the creation of smart contracts for tadeable game objects it the intermediate step of a FuseBlock. The FuseBlock provides the ecosystem with a powerful marco-economic tool, to help manage the overall token economy.
In managing a healthy token-based economy, there are risks to be considered:
Volatility: Triggered by either too many or too few tokens available for public trading.
Speculation: Trigered by market incentives that reward short term "day trading" behavior among token holders, as opposed to "long term value investing" behavior.
Inflation: The token supply grows in a manner that creates inflation- the supply of tokens exceeds demand.
Deflation: The supply of tokens fails to meet demand, artifically constraining their utility for the ecosystem.
The FuseBlock system is designed to give greator macro-economic control over the ecosystem, by incentivising long-term value investing.
FuseBlocks are smart contracts in their own right, that govern the overally economy related to minted game objects. Without a FuseBlock, one could in theory mint an object directly. In practice, objects must be minted via an underlying FuseBlock contract. The PLAY ecosystem controls the rules beind these smart contracts, and these rules relate to to $PLAY token as follows:
FuseBlocks are smart contracts backed by a quantity of $PLAY. For example, a "$10" FuseBlock contains $10 of $PLAY at that moment.
A FuseBlock is a precondition to mint game object(s) on the ecosystem. For example, a developer purchases a $100 FuseBlock and mints 100 collectible in-game rewards. These rewards are given to players who've achieved a certain level of game mastery, by a metric set by the developer (levels cleared, XP earned, etc).
The minted game objects in the above example now have two measures of value:
Extrinsic Value: The value as perceived a player in the game context. This is the artistry of game design, that gives status and meaning to a reward consistent with the quality of the game experience (e.g. a super-rare "Skin" for an avatar, where a player has reached the top 1% of players in skill.).
Intrinsic Value: This is the underlying value of $PLAY behind the game object. In the example given, the 100 in-game rewards, using a $100 FuseBlock, have an intrinsic value of $1 each (at the moment of minting, given the price of $PLAY at that instant).
Because the minted objects have intrinsic value, it's now possible for Developers, Creators, and Players to examine the constant value of the game object, independent of the extrinsic value in the game context. This opens up interesting possibilities:
Players can invest in acquiring game objects, knowing that they can have persistent value, even if the game ceases to operate: holders of objects that have lost all extrinsic value can "melt them down" and extract the underlying $PLAY associated to the object. This serves as a type of hedge- or insurance policy- for the player. In turn, this can spur more player spending on collectible objects, rewarding the developer in the immediate term as these consume In-App Purchases (IAP).
The contract can also generate a type of player staking reward for holding game objects in their inventory, and comitting not to trade them for a period of time. For instance, the player staking reward could stipulate that when a player a) places their game objects "on ice" (meaning they cannot be traded, but can be used in-game) then b) they will receive a staking reward commensurate with the overall value of underlying $PLAY in the staked objects (their intrinsic value). Thus a player can be rewarded (and a developer, if they hold FuseBlocks and place them "on ice" prior to using them for minting) for holding on to game objects.
Additionally, FuseBlocks can serve as a powerful market-making incentive.
For example, the Ecosystem Fund could decide to contribute a certain amount of $PLAY to be converted into FuseBlocks. In turn, these FuseBlocks are allocated to a competitive devleoper and/or creator program.
Thus in the totality of uses, FuseBlocks serve to:
Reward players for being long-term holders of minted objects, by providing a yield for "on ice" items.
Reward developers by creating market-making incentives to attract high quality games to the ecosystem (with an appropriate lockup on the sale of the underlying $PLAY in the FuseBlocks).
Allow for "bulk discounts" when devs or creators purchase large quantities of FuseBlocks.