An Introduction to the LE7EL Network (Tokenomics / Whitepaper)

LE7EL
7 min readJun 21, 2023

Introduction

Before you read: In this article we refer to concepts such as on-chain domains and levels. Dig deeper on those concepts and our Polygon grant here. Furthermore, the LE7EL network has integrations with Unreal Engine tools for developing and publishing games, and Creator tools to grow game communities. This article covers only the LE7EL network and protocol.

The LE7EL network provides P2P server, blockchain and web3 infrastructure to power the next generation game creators and game development platforms.

The goals of the LE7EL network are the following:

  • Mitigate excessive value extraction by game publishing platforms;
  • Reduce server expenses and censorship risk for game creators;
  • Streamline user onboarding by providing interoperability and optional interconnection between games;
  • Eliminate collection and monetization of private user data;
  • Balance the interests of all network stakeholders and ensure a fair value distribution between them.

At the heart of the network is the $L7L token, used to incentivize and distribute value fairly between stakeholders that produce value in the network, ultimately ensuring:

  • Optimization of network value instead of shareholder value;
  • Cost reduction by transforming all stakeholders into contributors;
  • Increased user engagement through co-creation and co-ownership.

Let’s take a look at the token economics of the $L7L token.

“Tokenomics” can be defined as the economics of a token-based system. It encompasses the design, distribution, and use of tokens and how these factors affect the token’s value and helps the project achieve its goals. Key factors that can affect tokenomics are supply, demand, and utility.

Stakeholders

Let’s start with the network’s stakeholders. The main stakeholders of the LE7EL network are Players, Creators, Contributors and Operators.

Players are having fun playing games and are the main beneficiaries of the LE7EL network. All other participants are providing them the means for having that fun. Players are also the ultimate source of income for all other stakeholders.

Creators provide content by building and publishing games and fun experiences. Anyone can be a Creator and publish games on the LE7EL network, using the game development and publishing tools the network have integrated with.

Contributors develop and maintain the software all the other stakeholders need to partake in the network.

Operators provide the P2P server infrastructure that powers gameplay.

Economy

Let’s study the economy between those stakeholders.

Creators have different ways to monetize their games, with the primary way being direct sales of game passes, in-game items or digital assets. Players have the option to buy these items using a credit card or $L7L. If $L7L is used, a discount is granted due to the elimination of credit card payment fees. The LE7EL network charges $L7L for server node usage and a 5 % commission on transactions.

All network revenue is deployed into the rewards pools and distributed to its stakeholders (explained in detail under “Network incentives” below). If Creators want a commission-free model or simply don’t have enough income, they can opt to pay extra $L7L for server node usage instead, based on certain conditions. Creators can also use $L7L to buy and sell native ads in form of in-game portals that send and receive Player traffic between their games.

LE7EL allows Creators to convert their games into NFTs, equivalent to an ownership title for a game and can be sold, lent, rented, divided, or even transferred to a community using DAO ownership and tokenization. When doing such a conversion, the game Creator legally transfers all the intellectual property for the game to the holder of the domain - usually the Creator himself.

Creators can let Players convert their avatars to NFTs as well, enjoying being able to sell, lend, and rent their avatars. Other than obvious monetary benefits, it offers significant flexibility. Retired Players can gift or sell their avatars to their guild, or multiple Players can develop the same avatar in a secure manner.

Contributors develop and maintain the tools that the network utilizes to produce value, and receives $L7L rewards in return that are spent to cover development costs. Contributors need to bond a certain amount of $L7L to stay whitelisted as a Contributor.

Operators participate in this economy indirectly by providing server infrastructure to Players and Creators, bearing the ongoing cost of network maintenance. Decentralizing this part of the LE7EL network is crucial to keep the costs minimal compared to maintaining corporate data centers across the globe or using cloud providers. Rewards are distributed pro-rata based on Operator hardware utilization by Players and Creators, with 10% of the reward amount allocated for participation, regardless of usage, if the minimum performance and uptime threshold is honored. Operators can bond $L7L to increase the chance of hardware utilization when the network load is small, with a minimum bond of a certain amount of $L7L being mandatory for all Operators to prevent fraud.

For any stakeholder to receive rewards, they need to mint an on-chain NFT domain and pay a yearly $L7L renewal fee to the network. The on-chain domains embody a concept called “levels” which essentially is the domain owner’s on-chain reputation, based on tracked or performed on-chain actions that are considered valuable by the network, such as time spent in-game, transactional volume or hardware utilization. These levels are ultimately utilized for distributing rewards fairly among all network participants, and they all base themselves on metrics that the network has reached consensus on. For Creators, these domains have a combined use — both as a reward tracking and distribution vehicle and for managing and owning their game IP on-chain as mentioned above.

While LE7EL commits to being chain-agnostic, the LE7EL network may eventually add its chain layer with $L7L as a gas coin and proof of stake consensus to ensure its security. That would simplify onboarding, as most Players and Creators will own $L7L one way or another, and Web3-powered games are ever-hungry for more cheap block space to store their transaction data. It will also make it easier for the LE7EL network to support Creators’ third party tokens, when applicable.

Network incentives

$L7L earned from domain lease fees, node network fees, fees on in-app purchases, and the yearly $L7L network inflation, will continuously pour into four reward pools split evenly between Players, Contributors, Creators, and Operators.

These stakeholders will get their share of rewards pro-rata based on their domain level.

These core principles will apply to future sources of transactional income as well. For instance, if LE7EL launches a secondary marketplace for digital assets or its own chain, trading commissions and gas fees will pour $L7L back into the reward pools.

Liquidity

For a payment medium to be efficient, liquidity is important. To ensure sufficient liquidity, half of the fees from on-chain domain leases will early on be deployed into a liquidity pool on decentralized exchanges (DEXes).

Supply, demand, and utility

The core utility of $L7L is being a payment medium that incentivizes necessary actions and distributes value among the core stakeholders of the LE7EL network. Eventually, it may also become a gas coin for the LE7EL chain.

The demand side of $L7L is driven by the following factors:

  • Players spend $L7L to pay for game passes or in-game items;
  • Creators spend $L7L to pay for transaction commissions, node network fees and portals placed in other games to attract traffic to their game;
  • Contributors bond $L7L to stay whitelisted as a contributor;
  • Operators bond $L7L to run network infrastructure;
  • All stakeholders spend $L7L to pay for domain lease fees.

The supply side of $L7L is based on the following:

  • Creators get rewards for making games and charging players for in-game items in $L7L;
  • Players get rewards for playing games and spending $L7L for in-game items;
  • Contributors get rewards for making software that all other stakeholders need;
  • Operators get rewards for running network infrastructure.

Distribution

$L7L has a max supply of 1B, with the following allocation:

The tokens are issued according to the following chart:

Governance

To achieve end-to-end decentralization of the network, the network will incrementally decentralize the following four parts:

  • Code
  • Ownership
  • Servers
  • Governance

The network will likely avoid classic token voting, using a four-chamber parliament instead. Stakeholders vote with their domains — the higher the level of their domain, the more impactful their vote will be. The proposal requires approval from at least three chambers to be binding.

The goal is to use formal governance only to tune the network's economic parameters and align the whole LE7EL community on its vision and strategy.

Join the LE7EL network?

If you have any questions or input, or looking to join the network as a Player, Creator, Contributor or Operator, please reach out to us in our Discord server: https://discord.gg/le7el

Thanks for reading this article about the LE7EL network.

— The LE7EL team

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LE7EL

Empowering Players & Creators in the Metaverse