---
# System prepended metadata

title: Harberger tax and NFT characters in games.

---

# Harberger tax and NFT characters in games.

`NFTs are great because there are so many different functionalities that can be coded into them. Agave's initial NFT series, for example, will have a function in the Legendary level NFT that requires the owner to burn it to get the other Legendary. The only way to have each will be to buy one from someone who either did or didn't burn, depending on what you yourself did with yours. `

`## Something about the contests and voting on the NFTs that will be used.`

`There are going to be many exciting use-cases for the NFTs. Maybe they can be game characters, or maybe they can be tickets to events, or maybe they can be used to stake on Agave. People aren't going to want to sell without holding on to at least some of the earning potential of their hard-won Legendary NFT.`

Formerly residual interests were taken care of by commissions on sales, but people have been finding workarounds for this, cutting out the creator of the NFT. One of the creator solutions coming into popularity is the [Harberger tax](https://medium.com/@simondlr/what-is-harberger-tax-where-does-the-blockchain-fit-in-1329046922c6). While the Harberger tax has been proposed to solve [land use and zoning issues](https://www.overcomingbias.com/2019/02/conditional-harberger-tax-games.html) with revenue generated being applied to a UBI, blockchain implementation is more win-win. With a Harberger tax there is a steady stream of income to the NFT creator, potentially from the moment of sale.

The Harberger tax also helps find real market value of a particular NFT. The purchaser of the NFT sets a sale price *at the time of sale*. This is a price for which anyone can buy that NFT, the catch being that that purchaser then begins paying a tax on that price to the original minter. This prevents people from inflating the value of their NFT and also ensures that NFTs remain in circulation. 

The Harberger tax has recently been coded into NFTs, most famously by Simone de la Rouviere, who writes about it in [Patronage As An Asset Class](https://blog.simondlr.com/patronage-as-an-asset-class). There are additional links in this article as well as many great YouTube interviews of Simone de la Rouviere. It would be difficult to recommend just one or two. While the Harberger tax in the NFT space has been primarily applied to artwork to provide an income stream for artists, there's no reason not to use it to benefit the minters of hard-won commemorative NFTs, especially those with increased functionality `such as the Agave NFTs will be created to have.`


Axie supports players through a different model, renting out characters. [This CoinDesk article](https://www.coindesk.com/business/2021/05/11/for-filipinos-axie-infinity-is-more-than-a-crypto-game/) discusses Axie's popularity in the Phillipines, how Axie players support new players by renting characters, and what some of the drawbacks as well as advantages are. [Ready Player DAO](https://medium.com/@readyplayerdao/ready-player-dao-533c16dacf2f) is also providing scholarships for players to get started earning an income with Axie.
 
What if the design of the game supported players from the outset?
The characters could be minted with Harberger tax coded in. That way if circumstances force a player to sell that player will at least continue to collect an income from that character, and also the buyer will not be able to set the price prohibitively high to prevent buyback or further sale.  Even though it is still possible buy a character to retire it, with a Harberger tax the original creator still benefits.

It should even be feasible to integrate NFT buybacks into the platform.
If there were a minimum price per skillset, and the characters could be sold back to the game. This could provide an income stream for players of a certain skill level. They could *raise* characters for resale to people who maybe don't have the time or the skills to bring their own NFT battle group along.

creators of game characters as well, especially in games where characters evolve and gain skills and experience, changing their value. I guess ideally the receiver of the tax should also be transferrable, or the skills gained be tied to wallets along the way, so that each person who builds a skill on that character receives a part of the future tax. That's getting well ahead of where we're at at the moment, but it's certainly fun to think about.



