Collateralized Ownership of In-Game Items in Farsite Using NFTs

We are roughly 2 days and 6 hours away from the launch of the Farsite NFT store at the time of writing this post. If you've never heard of Farsite allow me to give you a brief introduction.

Farsite is a blockchain-powered sandbox MMO RTS game with elements of adventure in a sci-fi setting based on a post-apocalyptic story.

Similarly to other successful blockchain games such as Alien Worlds and Upland, the developers of Farsite are trying to create a player owned, persistent virtual universe running within the confines of player-controlled economy fueled by NFTs, credits and the blockchain. This article will give you a very brief overview of the various aspects of the game but there's a ton more info you can read on the official website. Honestly there's way too much info to cover here so as always I recommend you DYOR and check out the official documentation. There's pages of information about the game and the underlying technology. This is not an investment tip or financial advice.

NFTs and Collateralized Ownership of In-Game Items

Players create items in game using materials found while exploring the universe or obtained by other means. Item production requires access to Blueprints, item Components, a Base and some Credits (the in-game currency that represents tokens outside the game - more on that later). Components can be made from Resources which can be found (on Asteroids and Planets) or purchased. Here is the official list of the various item types that can be found in-game:

• Blueprints (NFT, ERC-721) — a licence to produce an item in the Farsite universe;
• Ship Hulls (cNFT*) — a space vehicle required to explore the universe;
• Modules (cNFT*) — provides a Ship Hull with powers and functions;
• Components (NFT, ERC-721) — what Ship Hulls and Modules are made from;
• Resources — what Components and Ammunition are made from;
• Ammunition — consumable in fights;
• Crates (NFT, ERC-721) — container for items, acquired in the official Store or via Airpdrops;
• Stickers (NFT, ERC-721) — exclusive decails for a Ship.

The interesting thing to note here is that some of these (specifically Ship Hulls and Modules) are actually cNFTs (ERC-721) that are collateralized using credits (ERC-20) locked inside the tokens representing the items. That means that the
items hold a certain amount of real insurance value beyond just their in-game usage - more on this later. First let's mention the currency.

The Interesting Relationship Between Credits and FAR Tokens

The official currency used inside Farsite are credits. These are used as a payment method for all sorts of actions in-game using a Layer 2 solution to cut down on fees. The can be then transferred to the Ethereum Network where they would get swapped for FAR tokens. Their relationship here is that they are intertwined and actually represent the same value/entity. 1 FAR token is the same as 1000 credits and this rate is hard coded into the smart contract.

Here comes the important part: When Credits are transferred to the Ethereum Network they are burned on the Layer 2 and a corresponding amount of FAR tokens is issued / minted on the main ETH network. This ensures that the amount of currency stays the same while also combating the rising ETH fees and transaction times which would be detrimental to the flow of the game.

After the initial distribution, new Credits would be created only by opening a new Crate — in other words, the only way a total supply of Credits or a FAR Token (combined) may increase is when someone purchase a new Crate in the Store.

Tech and the cNFT Protocol

All of this magic in relation to the currencies will happen thanks to the fact that Farsite uses 3 layers of distributed ledger technologies.

• The first layer (Ethereum Network) ensures ownership of items and secures the game rules as well as the token supply.
• The second layer (Polygon, aka Matic) is responsible for hosting virtual wallets and supports immutability. Polygon is favorable because of its instant transaction times which play well within the confines of a dynamic player-driven universe. What's good for the players here is that this way the Farsite team is able to cover the low fees as most operations in-game will happen on this layer.
• The third layer is a sort of a database containing hashed summaries of all operations on Layer 2 and allows for fast operation of non-critical actions that do not use Credits.

What about those fancy cNFTs?

cNFT — a proposed standard for ERC-20 collateral staking on Non-Fungible Tokens for borrowing against game assets

The best way to think of the cNFTs in Farsite is as insured items having an intrinsic value represented by tokens. In other words: cNFTs are NFTs that hold a certain amount of ERC-20 tokens as a collateral. To get those tokens you can burn the cNFT as long as it is not being used for staking. These special types of NFTs can also be used as a collateral for a loan - because not only do they represent an in-game item but also have an actual value attached to them.

Broadly they will be usable for hauling goods on a Ship in-game (the Ship is the cNFT) but also as collateral for borrowing Credits, storage of value (hold a ship if you think it will be more valuable later), burned for Credits or sold. Every cNFT purchased on the market will also give you rights to the ERC-20 staked within.

The best thing is that they can be used as a collateral for loans. Meaning that if you lend Credits you can be sure that you will get some value back if the borrower defaults on the loan and doesn't pay in time.

If a ship is destroyed in game the collateral inside may go back to the owner to offset the losses. If the ship is being used as collateral however and the player may not be able to cover the loan then the credits might go to the lender.

Roadmap

As always keep in mind that this is a as of yet unfinished project. Refer to the roadmap available at the time of writing below:

Phase I — Game Design

Q1 2021

Game Design Document
Cinematic Trailer

Phase II — Preorder

Q2 2021

The Store Opening
Ships Hangar and Modules Fitting
Airdrops Campaign
FAR Tokens and Credits smart contracts deployed

Phase III — Star Map

Q3 2021

Interactive Star Map
FAR Token Listing
Internal Marketplace Opening

Phase IV — Early Alpha

Q4 2021

Gameplay Demo (Early Alpha)
Sectors Acquisition

Phase V — Game Launch

TBA

Game Launch
Planets Exploration
Recruit a Pilot Campaign
Further Development
Corporations
Stations
New Constellations (game seasons)
Alliances
Contracts
Just to name a few.

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If any of this seems interesting to you check out the Farsite website and keep an eye out on the release later this year. And remember - the store is opening in a couple of days. And as always - DYOR before putting any money in.