Game Governance Domains: a NFT Support Nightmare

A Game’s Governance Domain

There have always been key governance requirements for object trading economies in online games, even before user-generated-content enters the picture.  I call this the game’s object governance domain.

Typically, an online game object governance domain has the following features (amongst others omitted for brevity):

1. There is usually at least one fungible token currency
2. There is often a mechanism for player-to-player direct exchange
3. There is often one or more automattic markets to exchange between tokens and objects
   1. May be player to player transactions
   2. May be operator to player transactions (aka vending and recycling machinery)
   3. Managed by the game operator
4. There is a mechanism for reporting problems/disputes
5. There is a mechanism for adjudicating conflicts
6. There are mechanisms for resolving a disputes, including:
   1. Reversing transactions
   2. Destroying objects
   3. Minting and distributing objects
   4. Minting and distributing tokens
   5. Account, Character, and Legal sanctions
   6. Rarely: Changes to TOS and Community Guidelines

In short, the economy is entirely in the ultimate control of the game operator. In effect, anything can be “undone” and injured parties can be “made whole” through an entire range of solutions.

Scary Future: Crypto? Where’s Undo?

Introducing blockchain tokens (BTC, for example) means that certain transactions become “irreversible”, since all transactions on the chain are 1) Atomic and 2) Expensive. In contrast, many thousands of credit-card transactions are reversed every minute of every day (accidental double charges, stolen cards, etc.) Having a market to sell an in-game object for BTC will require extending the governance domain to cover very specific rules about what happens when the purchaser has a conflict with a transaction. Are you really going to tell customers “All BTC transactions are final. No refunds. Even if your kid spent the money without permission. Even if someone stole your wallet”?

Nightmare Future: Game UGC & NFTs? Ack!

At least with your own game governance domain, you had complete control over IP presented in your game and some control, or at least influence, over the games economy. But it gets pretty intense to think about objects/resources created by non-employees being purchased/traded on markets outside of your game governance domain.

When your game allows content that was not created within that game’s governance domain, all bets are off when it comes to trying to service customer support calls. And there will be several orders of magnitude more complaints. Look at Twitter, Facebook, and Youtube and all of the mechanisms they need to support IP-related complaints, abuse complaints, and robot-spam content. Huge teams of folks spending millions of dollars in support of Machine Learning are not able to stem the tide. Those companies’ revenue depends primarily on UGC, so that’s what they have to deal with.

NFTs are no help. They don’t come with any governance support whatsoever. They are an unreliable resource pointer. There is no way to make any testable claims about any single attribute of the resource. When they point to media resources (video, jpg, etc.) there is no way to verify that the resource reference is valid or legal in any governance domain. Might as well be whatever someone randomly uploaded to a photo service – oh wait, it is.

NFTs have been stolen, confused, hijacked, phished, rug-pulled, wash-traded, etc. NFT Images (like all internet images) have been copied, flipped, stolen, misappropriated, and explicitly transformed. There is no undo, and there is no governance domain. OpenSea, because they run a market, gets constant complaints when there is a problem, but they can’t reverse anything. So they madly try to “prevent bad listings” and “punish bad accounts” – all closing the barn door after the horse has left. Oh, and now they are blocking IDs/IPs from sanctioned countries.

So, even if a game tries to accept NFT resources into their game – they end up in the same situation as OpenSea – inheriting all the problems of irreversibility, IP abuse, plus new kinds of harassment with no real way to resolve complaints.

Until blockchain tokens have RL-bank-style undo, and decentralized trading systems provide mechanisms for a reasonable standard of governance, online games should probably just stick with what they know: “If we made it, we’ll deal with any governance problems ourselves.”

Business Education Technology Theory | Posted by Randy at 2:14 PM | You can comment, or send a trackback from your own site.