eSports / enjin

jtobcatupdated
Why Enjin developers shouldn't use melting fees and an alternative
There is no real positive benefit to imposing a high melt fee on assets. Lets look at an imaginary developer here. Developer A raises 1,000,000 enj in presales, he could either 1. Mint 250k enjin into assets with 0% melt fee or 2. He could mint 500k enjin into assets with 50% melt fee. To the end user, they will always get 250 enjin back when they melt, so why should they care? We should care because the developer is now only developing a game with 500k enjin of funding instead of 750k enjin of funding. The developer now has a 250k insurance policy safety net if they fail to deliver their game for being underfunded and their assets become useless. Since there is no game to use them on, many people will choose to melt their items to recoup some of their investment cost. In doing so the developer that set a melt fee of 50% just hit the jackpot with being rewarded up to 250k enjin for his game failing. Lets look at the other end of the spectrum. Lets say the game is wildly successful, so no one should ever be melting items because the value of the item on the open market should exceed the backed value, so why should anyone care what the melt value is? True, no one should be melting items in a wildly successful game, but people are always tempted by the almighty dollar. In a future existence, if enjin was to moon to $1+, that 5000 enjin backed MacGuffin you own could pay off a lot of bills, but what buyer would pay $5000 for your MacGuffin if there is a 50% melt fee? You don't truly own that item outright, you only own half of it as the developer owns the other half of it with a 50% melt fee. The developer just wants to ensure his slice of the pie in the case the future value of enjin takes off. Sure one can say that the melt fee will allow the developer to mint more items, but a player shouldn't have to be his reserve bank. If the developer wants to make more items for every one melted, instead of creating a 500 enjin backed item with 50% melt, he should mint a 250 enjin item with 0% melt that he gives to the player and mints a 250 enjin reserve token that he maintains possesion of that should only be melted by him in the case of an equivalent valued token being melted by a player so he can fund the minting of new tokens. He would be locking up the same amount of enjin in tokens by making reserve tokens vs tokens with 50% melt fee. Minting reserve tokens also ensures there is no safety net for the developer in the case their game fails, thus ensuring they put in the effort needed to develop their game knowing there isn't going to be a monetary windfall even if they fail. So lets go back to developer A from the beginning and add option 3. Mint 250k into user assets with 0% melt fee, mint 250k into developer reserve tokens, and have 500k enjin to develop the game. Now the developer locked up 500k enjin in tokens like they set out to do, and they have 500k enjin to devop a game with 250k in reserves if needed to complete the game without players rewarding him for failing. If he is successful in making the game for 500k enjin like he would have in scenario 2, he now has 250k enjin in his own reserves that he can melt as needed to replenish assets if players decide to melt their items, or if he needs an infusion of funds to make add-ons to the game. And in the end, the player owns 100% of his game item.
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