This is a really important innovation, in my opinion, and @lotm’s viewer really helps in illustrating what’s possible. Forgive me for the wall of text here and let me know if this belongs in a different thread but I think the reason why this is a really important innovation is because it attempts to solve a problem that has always plagued gaming and entertainment NFTs, which is trying to balance the sometimes competing interests of owners, users, and builders:
- Owners - Interested primarily in increasing the value of their stake. This may require sacrificing short term value in exchange for potential long-term value (e.g., using treasury to fund builders, agreeing to some inflation in order to expand owner base, etc.).
- Builders - Often also owners but primary interest in ensuring that what they build reaches the widest audience possible and, as a result, increases the value of either their stake (if they are an owner as well) and/or of their external project or brand.
- Users - Interested in using the product for the value they derive from the product’s use. This could be pure enjoyment value but, if it’s a play-to-earn model, there could be financial value for users as well.
For most NFT projects, it isn’t that difficult to align these three sets of stakeholders. The users are often the same as the owners (i.e., if you’re an owner in an avatar project, you’re also a user). The builders are also usually owners. All stakeholders here are looking to drive the value of each NFT up and therefore are all completely aligned financially toward this goal. Inflation, therefore, has to be carefully considered to determine what long-term value it brings. This is true across crypto (not limited to NFTs) and is arguably the most important differentiator of its new economy.
For gaming and other entertainment projects, though, it is much more difficult to align the competing stakeholders, as is the case here. While some of the initial builders are indeed Loot Bag holders (and therefore owners), the goal here is to have builders who may or may not already be owners. For the owners, this is desirable because it ensures that the value of their stake increases. These builders, though, may have a competing interest, which is that they want to ensure their product reaches the most users possible–larger than the owner-base.
I think this is the crux of the issue here, as well as for most other gaming and entertainment NFTs and different projects have come to different conclusions. The creators of Stoner Cats, for example, want the show to reach the widest audience possible. However, they’ve made the show available only to owners of the Stoner Cat NFTs. This theoretically drives value to the Stoner Cat NFT but is perhaps short-sighted in that it doesn’t reach the maximum number of users possible.
I think we all agree that we need to strike a different balance. The question is how can we allow more users to use and enjoy the products that are developed by the builders while still driving value accrual to the owners.
One option is to inflate the # of owners so that more users can be owners. That, in my mind, is the option presented by xLoot and other solutions. The other option is to not require ownership to access and use what’s being developed by the builders.
And I think that’s the option that’s being presented here with Synthetic Loot. It allows builders to build comfortably knowing that their userbase isn’t limited to the owners. It doesn’t dilute the value of ownership (which may sometimes be necessary but should always be done with careful consideration of the short and long term benefits). And it also has the potential to bring in a large number of users when you consider the fact that everyone with an Eth address may be interested in knowing what their Synthetic Loot Bag contains and may also be interested in joining related guilds or communities.