The Banking Executive Magazine - September Issue 2022

Virtual Economy Users’ Permissions & Constraints Not all functions are accessible to all users. A number of permissions and constraints are put in place by the creators of an application, and usu- ally individual users are able change some permissions and constraints can be set by editing the settings, for example: • Instagram users can edit their set- tings to allow or limit interactions. • Uber Drivers and Riders have very well defined, rigid functions with limited ability to set permissions and constraints themselves. • Games can get extremely compli- cated with varying levels of skills, permissions and constraints that can be set, earned, bought and lost during gameplay. Next to each user function, we can put a detailed description of the as- sociated permissions and constraints. The description should include de- tails such as: • Is the function allowed or not? • Can the user tweak the settings at all? • Is it conditional? If yes then to what extent? • Does it depend on something else? • Can permission be bought or earned? • Are users interacting with someone else through this function or is something interacting with them through this function? STEP #2 USER VALUE We have to specify how users create, earn and exchange value. Creating Value Value can be created on every plat- form and we have to clearly define how value can be created. Users cre- ate value by engaging in a set of ac- tions on a platform. The specific actions that each user can take are defined in the User Profiles. Multiple user types are engaged in divergent actions and therefore create different forms of value. Value is closely related to the users’ functions, so we have to map values to functions. There are two categories of value that emerge on a platform or virtual environment: • planned value which developers have created by design. • unforeseen value that is created by users acting unexpectedly. Earning Value Value can be earned and value can be bought. Value is often traded on unsanctioned auction sites that the platform creators are not even aware of. Several platforms and games allow their users to purchase value within their own ecosystem. We have to define how users can buy value because that will help in properly defining how to create an exchange and keep a pulse on the virtual economy platform. We have also to define and map out rewards. Rewards are an extremely important strategic component of vir- tual economies as they serve two critical functions: • Rewards can strategically be added or removed from a virtual environ- ment to curb inflation or tackle de- flation. • Rewards can be used to encourage or discourage types of economic activity on the platform. Some rewards can be dependent on other factors in the environment, such as time spent on the platform, rank or hierarchy, while others can be open to all participants. Exchanging Value Once value has been created it will be traded. If users can create and ex- change value easily on a platform this will lead to the growth of the platform. Happy users that gain from a virtual economy platform will spread the word and encourage oth- ers to join the platform. We can make in-app environments and tools available to our users in order to enable the productive ex- change of value. The tools and strate- gies include: digital and fiat curren- cies, in app stores, shops and auctions. Currency Exchanges Value is most commonly exchanged in return for currency. Users should be given different currency options to choose from. It could be regular dol- lars, a cryptocurrency or even an in game or in app currency. App Store A store includes things that can be bought and give rewards. The store can be a marketplace or an auction area. A store can be available all the time, or will it be open only for cer- tain times in a particular location or level. Offline Transactions There will still be some exchange of value offline regardless of how opti- mized the in-app exchange mecha- nisms are. The key to having a robust economic system is well informed users. We have to find ways to inform users how they can exchange value on the platform through messages within the app, emails to users, or intelli- gently designed pop-ups during gameplay. Users should know: • How they can buy or sell • What they can buy or sell • Where they can buy or sell • How each item they buy or sell can benefit them STEP #3 MAPPING RELATIONSHIPS AND INTERACTIONS A map of relationships and interac- tion should be built based on the Vir- tual Economy Triangle. Most successful virtual economy platforms will connect two or more types of users and service providers. There are three types of individuals or or- ganizations involved in the Virtual Economy Triangle: • The platform itself • Third party service providers on the platform the BANKING EXECUTIVE 14 ISSUE 165 SEPTEMBER 2022