🏪Marketplace
What is asset?
One of the key difference between LumiTerra and other MMOPRG games is that almost all the virtual resources you obtain from the game belong to you
For more detail, please visit The Economics of Lumiterra
Asset in LumiTerra means almost everything you get in the game, experience, equipment, weapon, building, resource, even your characters
Players have the full rights to their assets, like trading with other players, giving to friends or even destroying them without any permission from the game or dev team
Marketplace is the center for users to trade assets. Players can freely buy game assets like props from other players, and also sell their own game assets.
Almost everything in LumiTerra is on the blockchain (meaning trading can also be done on other platforms like Opensea), and all assets belong to the users.
On LumiTerra Marketplace, we offer various trading tools, including a traditional Order Book and an AMM (Auto Market Maker). To enhance the user experience, we developed Sodium using technologies such as ZK and MPC, making it simple and secure for users to enter the game and manage their assets.
What determines the price of assets?
The price of asset is automatically calculated based on the number of assets and Token in each vending machine “slot”. When an asset owner adds an asset to the marketplace corresponding liquidity pool (i.e. the vending machine), they must also add another token like LUAUSD(we also support other Token, like USDT).
By doing so, the asset owner creates a pairing. If the particular item has yet to be added to the marketplace liquidity pool, the first person to do so determines how much LUAUSD they would like to pair their item with. The LumiTerra official team will bootstrap some pairs in the very beginning, the price will be determined based on the real players' demands
For example, let's say someone adds 10 sword X and 10 LUAUSD. The price is automatically calculated based on the ratio between the two tokens types. So in this scenario, the price starts at ~$1.00 LUAUSD.
Since everyone can add assets pair to that pool, someone else can later add another 5 sword X and 5 LUAUSD without affecting this ratio. They cannot, however, add 5 sword X and 2 LUAUSD since this would change the current ratio, which would affect the price.
Being a liquidity provider is easy, and you can earn the trading fees based on how much you contribute to that pool, but we recommend advanced crypto users, Defi experts, developers to do so, please Do Your Own Research.
The automated market-making algorithm behind the marketplace AMM(the vending machine) uses this formula
x is a specific asset like sword X and y is the LUAUSD(or other Token).
k is the constant used to determine the price, not the price itself.
Here’s how it works:
Say a supplier puts in 10 LUAUSD and 10 sword X, the product (multiplying the two numbers together; i.e. 10 * 10) equals 100. Whenever a player removes an item from the reserve (by buying 1 sword X, let’s say), they must maintain the original product. The total LUAUSD multiplied by the remaining assets must equal 100.
So when players try to extract 1 asset from the vending machine in exchange for exactly 1 LUAUSD, the new product becomes 99 (i.e. 9 * 11). This is clearly off-balance as the product must equal 100 in order to maintain its original state.
Therefore, the player must instead place approximately 1.11 LUAUSD into the vending machine to get 1 sword x. The result looks like this: 9 sword x * 11.11 LUAUSD ~= 100. That means buying 1 sword X will cost 1.11 LUAUSD.
If the player takes out (i.e. purchases) an additional sword X — which would leave 8 sword X in the pool in total—the second transaction costs even more LUAUSD to maintain the original state. The calculation here would be: 8 sword x * 12.5 LUAUSD = 100. After the previous trade simulated earlier, the current LUAUSD held in the Pool(vending machine) is 11.11. So the amount of new USDC the player needs to put in (i.e. spend to buy the additional sword x) is 12.5 - 11.11 = 1.39 LUAUSD. Making the total cost 2.50 LUAUSD(1.11+1.39) to acquire 2 sword x.
The price of the asset reflects the demand, please refer to the The Economics of Lumiterra to learn more the open economy in LumiTerra.
Who provides liquidity to LumiTerra marketplace?
Liquidity providers are oftentimes advanced crypto users, decentralized finance experts, or other developers.
The LumiTerra marketplace smart contracts automatically applies a small trading fee (collected as USDT / Y Token ) to buyers and sellers to those who deposited tokens or assets in the corresponding liquidity pool. This fee that encourages network participants to supply assets and USDT/Y Token — for it is this supply that enables players to buy and sell game assets instantly.
How Does LumiTerra Marketplace relate to the LumiTerra Economy?
The Marketplace is an integral part of the The Economics. Without it, building up your gaming experience would likely be cumbersome and potentially more expensive. Cumbersome because you’d have to find a buyer or seller for every item. And potentially more expensive if you forget to do your due diligence before making a buy or sell transaction (i.e. “trading” in the Market).
We also support Order book style trading.
We believe removing these friction points will create a robust and healthy economy for LumiTerra. The ability to trade instantly is what makes a MMORPG game more fun.
Can I play LumiTerra without buying or selling anything?
Absolutely! If you have no interest in buying and selling any game asset, there is no need to participate in the LumiTerra Marketplace. But if you want to gift your game assets to your friends, then, you have to use your Sodium Wallet to do that. You can collect the almost all the game assets for free in a reasonable timeframe just by playing the game and leveling up.
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