HATTORI

Over the years we have seen that heavy farming MMORPG games (Lineage2, WOW, etc) and mobile games (Clash of Clans, Clash Royale) have proven to have the most sustainable economy.

Usually, in these games, some players are willing to spend many hours grinding resources to craft in-game items, which are then bought by players who don't have time to grind but want to have someplace in the game world.

All of these games do not allow trading in-game assets but there have always been black markets where one could have bought accounts, resources, items, etc.

Eliminating the creator economy resulted in account bans, numerous scams, and projects losing revenue which occurred on the secondary markets.

Axie Infinity is an example where players were able to legally monetize in-game items (and the time they have spent on them) while the project was capturing its part through the fees on the marketplace.

Until now Axie Infinity marketplace has generated $4.3B in volume. With an average fee of 5%, Axie Infinity got $215M in fees which otherwise would have been left on the secondary market.

Hattori Tokenomics Concept

The idea behind Hattori web3 integration is not to create a P2E game but an interesting and sustainable game with a P2E component and creator economy which will attract more users including crypto native people.

Hattori will have the following tokens and NFTs (example names):

• $Gold - is the in-game payment token used as a medium of exchange. It is inflationary, aiming to match the growth of the in-game economy and provide a solid monetary base for in-game economic interactions and onramps to enter the game.

$Gold can be earned in the game or bought on DEXes/CEXes and will be used throughout the game to mint NFTs, craft or enchant weapons, amulets, suits, etc.

The primary burn mechanism will be through purchasing in-game items that progress players further along the game loop. In-game items that unlock new activities, quests, and content.

It is vital to adjust the incoming supply of $Gold so as not to send it into death spiral mode. There are several ways to maintain the equilibrium:

- Controlling the generation of resources

- Adjusting replenishment times of resources

- The number of inputs required to generate a resource

- The output of a given resource

- The effort to harvest a particulate resource

- The amount of energy it takes to complete certain actions

- In-game store prices

- The prices of in-game items will be adjusted on both the buy and the sell side

- Monitoring of the burnt and farmed tokens for adjusting the above parameters, including monitoring on which levels there are more farmed tokens than burnt to reduce the rewards to disincentivize bots' activity.

- PvP tournaments where each player has to add a certain amount of $Gold to participate and the winner takes it all with a tax (eg 2 players added 100 $gold each to participate, the winner gets 180 $Gold, 10% of the gold are burnt)

- PvP tournaments where all $Gold is burnt and the winner receives certain in-game items (chests, keys, or other resources)

- Algorithmic Market Operations Controller (AMO) to adjust the price of $Gold on DEXes. When the price is increasing too much making the game too expensive or extremely profitable for players, we can increase the supply of $GOLD to decrease the price. And vice versa when the price of $Gold becomes too low we will buy and burn $gold from the market to increase its price.

It is important to understand that $Gold is not a speculative asset but is an in-game soft currency.

• $HAT - is the governance token used at each level of governance, representing financial stake in the game, voting power in the DAOs where it is staked, and control of the Treasury. It has a fixed supply that will not grow.

Typical tokenomics of the governance token is the following:

20% - reserved for early investors (seed, private, public)

20% - team and advisors

20% - treasury

25% - ecosystem rewards

10% - marketing

5% - liquidity

Players will be able to earn $Hat in the game. $Hat rewards inflation will be slow and controllable over a period of 5 years. In a future phase, stakers/holders might benefit from the treasury buyback and burn program or revenue distribution if the DAO votes for it. $Hat can be also exchanged for the Gems in the game that are used to speed up some processes such as recovery time, crafting time, etc. All $Hat tokens that were exchanged for the Gems (Gems can be also bought with fiat in the in-game store) are permanently burnt.

• NFTs - main in-game items such as shurikens, suits, talismans, etc will be minted as NFTs and can be sold on the marketplace for a hard asset (eg $ETH). Prices on the marketplace depend on the supply and demand from other users (I will study NAP technology from the borderless later to see if we can fit them somehow). Each transaction on the marketplace has a static fee of 5% which goes to the treasury + 1% royalty to the creator.

All of the NFTs can be upgraded and given different rarities that add bonuses to the stats. Each upgrade requires $gold and extra in-game resources (herbs, parts of the costumes, etc). Upgrades can be also unsuccessful and will lead to the loss of NFT/resources.

To stimulate the trading and burning of the NFTs, we will add a function of burning them to get specific items that are hard to mine in the game. Users will see what items they can get after burning the NFT and a chance of getting them. It can also include $Hat tokens, chests, keys, and parts that are used to mint high-level NFTs (it will also stimulate burning low-level NFTs from the early game and will bring more value for them).

Market place

All non-NFT in-game assets can be bought and sold in the in-game market for $Gold to stimulate trading activity between players and allow players to monetize their activities. Tax will be applied to burn $Gold supply.

All NFTs can be bought and sold on the marketplace as described above.

Additional in-game mechanics

• Building upgrades - to be able to craft new types of items (NFTs) users need to spend $Gold to upgrade the building (or build new ones). It also takes time for the building to get upgraded (Clash of Clans mechanics). Users can speed up building time with Gems. Gems can be bought with fiat or by burning $Hat.

• NFTs upgrades - people can increase the level of the current items. For example, each item can have 7 levels of enchantments. To create a level 2 item you need 2 items of level 1 + resources. To create a level 3 item you need 2 items of level 2 + items. Each crafting has a chance of failure (which will destroy one of the NFTs or resources used for crafting). Each level (rarity) of the item increases its stats.

• Unique skins for each item that might add a specific ability or boost (eg +2% HP, +1% damage, etc). This is an expensive rare and hard-to-achieve upgrade that will cost much higher on the marketplace. Applying skins on the items also has a chance of failing (La2 mechanics where top-tier enchanted items cost a fortune and there can be only a few of them in the whole game).

• NFTs (items) burning to get rare resources that can be sold on the marketplace or used to craft other items.

• PvP tournaments as described above. Brings a new game mode and allows to burn $gold supply.

• Global ranking with prizes at the end of the month (Clash Royale mechanics).

• Adding new NFT items:

- Hats (increases the evasion)

- Gloves (increases the power)

- Boots (increases the speed)

- Tatooes (increases native stats)

• Ability to increase native stats (Stamina, HP, etc) for $gold and other resources.

• The main character can be also sold as NFT as it can be upgraded.

• Clans, alliances, clan battles, etc that will bring new gameplay modes and will socialize players, build communities, bring even more competition, etc.

These upgrades keep the game fun and easy to play session game where users are divided as per their ranking into different levels while keeping room for almost unlimited levels of upgrades that require hardcore grinding or purchasing of the in-game currency to facilitate the upgrades.

The fun of the game does not change drastically depending on your rank, but the presence of the ranking system itself and higher prizes for the higher ranks will naturally push people to compete and grind harder.

Revenue

Revenue from the game primarily comes from marketplace fees, Gems, Keys, and other resource purchases with fiat. AMO will also bring more revenue by keeping the ratio of the farmed/burnt $gold net deflationary and minting new tokens and selling on the DEXes to keep the price in an acceptable range. DEX fees for LPing are also adding revenue for the project. (Revenue from the in-game ads is not taken into account).

However, it is important to understand that the revenue from the AMO will be frequently used to buy and burn the tokens from the market to keep the price in the acceptable range as well.

Assets acquired by the AM)/treasury can be also staked or generate some yield to further increase the revenue.

The initial phase of the game can be slightly subsidized with the raised funds to make it more attractive for P2E gamers.