# HyperEcon (Hypersomnia Economy)

A proposal for a **Health-based economy** built on a consumable currency with an extremely high elasticity of demand (i.e. quickly becomes hyper-deflationary in response to overabundance of supply).

# Design Goals

- *(Primary)* **Avoid inflation** even though currency can be farmed/looted without limit.
- *(Primary)* Let **market speculation** be a meta-game - a viable strategy for getting rich.
- *(Secondary)* Economy that reinforces **constant warfare**.

## Methodology

- We have to **eliminate NPC vendors** that sell unlimited consumables for a fixed price, like essential potions or ammo.
- Instead, let ALL consumables be traded between players.
- Deep liquidity and volatility are essential for anyone to be able to profit from trading. This is why there should be a player-driven market for the most essential and common goods.
- How cool would that be if merchants encouraged war because of their massive long/short positions on ammunition or weapons?
- Impossible in MMOs where essentials are available at fixed prices without limit.
- People must have a reason to hoard currency when they're risk-averse.

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# Problems with money in today's MMOs

## Fixed pricing of essential goods

- Classic MMOs avoid inflation by having money sinks.
- Multiple NPCs sell essential items like potions - it works because these are always in demand even by high-level players.
- Then, they burn the money they receive from players, taking it out of circulation.
- Con: this sets a fixed price on essential goods, preventing interesting cycles of shortage and glut.
- If essentials like potions/ammo had dynamic prices instead, people could speculate on their prices, giving rise to lively commodity markets, creating a meta-game.
- An obvious solution is to choose one essential commodity and establish it as currency.

In e.g. Tibia, gold coins could anyway be interpreted as commodity! That's because it is *always* exchangeable for other essential commodities at a fixed rate. Point is, it is exchangeable to many, like mana potions, health potions, arrows etc. That is why gold coins have value - because they're *backed* by these.

What if, counter-intuitively, a better currency would emerge if we removed all NPCs and money was always exchangeable for (and thus backed by) only *one* commodity, like health?

# Solution

Let our currency be **Health coins** (**Ħ**).
- 1**Ħ** can be exchanged for 1 HP at any time, even during battle.
- (perhaps with %-based cooldowns between uses, e.g. heal max 50% HP every 3 secs)
- This is the universal healing item, there are no others.
- Otherwise behaves like a normal coin, can be stacked, exchanged etc.
- E.g. the lowest level character will have a maximum HP of 100.
- To imagine how much this is: a standard rifle will deal 33 damage on a body hit.
- This means that **Ħ**1000 will let you completely heal a level 1 character at least 10 times.

# Healing over maximum HP = demand elasticity

You can "heal" yourself beyond the maximum HP with exponentially increasing cost, and thus diminishing returns.

- If your HP is 100/100 now (level 1), you can heal yourself beyond the maximum up to 200 HP for a total of **200Ħ** (**2Ħ** per 1 HP).
- Healing additional 100 HP costs **4Ħ** per 1 HP. If you spend another **400Ħ** now, you can go up to 300 HP.
- Thus, going from 100 HP to 400 HP would cost **200Ħ** + **400Ħ** + **800Ħ** = **1400Ħ** in total, you get the idea.
- Some rich motherfucker could spend **102,200Ħ** to heal themselves up to 1000 HP.
- Note this is a one-time event. This doesn't actually increase your basic maximum HP to 1000. Once you're killed, you'd need to spend another **102,200Ħ** to go back to 1000 HP. This is why levelling up is important because it slightly increases the basic maximum HP, making it way cheaper to heal up to huge amounts.
- Basic max HP also determines the maximum amount of HP healed per cooldown. You still need to level up to be able to heal more than 50 HP at a time. If you're level 1, "buying" maximum health up to 1000 still does not let you heal more than 50 HP per 3 seconds, it's the basic max HP (100) that determines this number.
- This might sound expensive, but 1000 HP lets you survive 10+ headshots instead of e.g. 2. Death is extremely painful due to loss of level, skills and equipment, so if you're rich it makes sense to go overboard.
- Crucially, extra max HP wears off as you receive damage. You'll go back to 100 even if you don't get killed. For example:
- You increase max HP from 100 to 1000.
- You receive 100 damage. Your max HP is now 995, so it's reduced by 5% of the damage received.
- It will eventually wear off during your hunts, especially since you'll experience lots of near-death situations.
- This makes you risk-hungry, as we'll see in a moment.
- *(Note) so that people do not accidentally spend a fortune while maxing HP, we can bind e.g. F2 to always spend exactly 50**Ħ.**, and another hotkey to heal with massive amounts like 300**Ħ**, then you'll just spam it during combat if needed as you can heal with less cooldown if your HP is already at maximum.*

While **Ħ** exhibits low elasticity of demand in times of scarcity - as people need it to heal to reasonable levels to stay alive - the demand will be *highly elastic* in times of abundance, because all surplus will likely be consumed for an additional feeling of safety, keeping inflation in check.

This mechanic is central to our economy, as we shall see:

## Health inflation will lead players to seek warfare

- If **Ħ** becomes abundant, people will use it to heal themselves into absurdly high HP on a daily basis. They will become way more liberal with healing.
- Although, **once you invest into having extremely high HP, it is all for naught if you wear it off during trivial pursuits.**
- You don't want to go fight low-level mobs that can still deal 100 damage on your 1000 HP bar, because it becomes incredibly expensive to bring max HP back from 995 to 1000.
- What do you do?
- You either go fight strong monsters, start difficult quests, or prepare to wage war, the most profitable pursuit of all!

## Risk of war will lead to deflation

What would happen to the markets in case people feared a war is coming?

- They would absolutely stock up on **Ħ** as much as they can, possibly selling other goods for it.
- They would immediately consume it to increase their chances at survival, taking massive amounts of **Ħ** forever out of circulation .
- If the maximum health was capped instead, you would just keep a moderate amount of **Ħ** and hold it ready to use in your equipment - you could get shot quickly though, and your enemy would loot **Ħ** keeping it in the economy.
- Notice this makes weapons and ammunition incredibly cheap in terms of our currency.
- Aggressive players, having seen their **Ħ** dramatically appreciate against ammo, would buy it for cheap and go to war without healing themselves much, becoming glass cannons. **Fear of war further reinforces warfare by making tools of murder cheaper**. *A self-reinforcingly warmongering economy* 😈
- In a classic MMO, this would only cause people to *spend* their money on ammo and potions, completely inflating their savings. Unless, of course, there are NPCs with infinite supply of them, but then you cannot profit off speculating on them
- Rare and truly valuable ammo types are however rarely available at NPCs even in these games.
- In times of incredible health demand, looting even the weakeast mobs might become so profitable that high-level players might kill each other over occupying even the lowest-level hunting grounds.

The idea with healing beyond max HP is particularly interesting because it will make all the rich guys chug **Ħ** into oblivion and **Ħ** price will immediately respond to people's current perception of risk.

# Addendum: what is a prediction market?

People could make bets in **Ħ** between each other on various events, e.g. whether Resistance will breach Metropolis gates - thereby commencing war - until the end of 2023. If the market deems this event to be very improbable, you could essentially buy some very cheap insurance against such a catastrophy.

Let's see why such insurance would be incredibly useful to risk-averse players.

# Hardcore PVP mechanics during wartime

Now here's an idea that will destroy pro gamers' families.

Suppose Resistance breaches Metropolis gates, starting a war event.

- You *have* to be online during a war event or your offline character **starts bleeding HP**.
- If you're offline long enough, your character appears dead where you last logged off - and your equipment can be looted by enemies.
- Invaders see "ghosts" where Metropolis players last logged off.
- They can see how long till their HP bleeds completely, as well as their level.
- These spots essentially become scenes for a "Domination" game mode, especially high-level "ghosts" with valuable loot, as well as groups of logged off players.
- When you log in you can see what happens around your ghost and can choose at any time whether to spawn your character there or stay a ghost and continue to bleed until your allies make it secure for you to spawn your character.

How does this change player behavior?

- You cannot just say "oh idc about war because I'll just log out and wait it out".
- But hey, you can spend exponential amounts of **Ħ** to heal yourself enough that your character will survive the offline time just fine! But then it forces you to hoard these **Ħ** for such an eventuality... figure out yourself what happens to **Ħ** price on the slightest rumor of war, and how dynamically you can trade it.
- *(Note) So that you do not have to keep your character at ultra-high HP every day to be insured against war, we can have a **war insurance account** that activates and heals your offline character once a war event starts.*

Note you **cannot** spend additional **Ħ** to heal yourself **while you're logged off**.
And, after spawning, you cannot log off for at least a few minutes if war already begun.

Therefore, logging off with redundant HP is an **insurance against being trapped in a war**, and average health with which people log off as well as **Ħ** price against commodities is itself an efficient prediction market for whether war will occur any time soon.

We might allow waging war only on weekends though, so that there's at least a period of respite during the week.

## On a more funny note

I can imagine the frantic text messages flying through phones:

"Kurwa wojna jest loguj sie szybko"
"Ja uciekam do depo żre hp i wylogowuje sie, bo mnie stać!!!"

# Making sure players adopt Ħ as currency

Prediction markets are an excellent way to encourage people to adopt a particular currency **without backing it by an infinite supply of consumables at NPC vendors** - and thus without going the socialist way of forcing a fixed price on essential potions, ammo etc.

Why?

- Prediciton markets are the only system of settling bets on in-game events in a trusted manner, and the game can allow people to only make bets in **Ħ**.
- The same goes for options and futures contracts, or any derivatives for that matter.
- For example: while players can exchange item A for item B on their own, they cannot safely trade contracts on those items. The game however can provide a centralized exchange that enforces options contracts, but where both the strike and the option price for any commodity are denominated in **Ħ**.

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Derivatives markets (options, futures, prediction markets etc.) are an excellent way to force people to use a particular currency without backing it by an infinite supply of some consumable at an NPC vendor, and thus without setting a fixed price on that consumable.
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## Why would people trade derivatives on commodities?

Here's the twist:

Your *depot chest* won't allow you to store unlimited amount of ammunition and other essential consumables. Similarly how people don't buy tons of vegetables in real life and keep it for eternity - your fridge has limited space.

To boast your wealth by means other than **Ħ** (which weighs nothing),
you need to exchange your items (e.g. armors and guns) for increasingly more expensive counterparts that take up the same amount of space.

So what do you do if you want to diversify your wealth into ammunition and other common consumables?

You buy *futures contracts* on them on a player-driven exchange.

The mechanics of this are yet to be worked out, but the point is that the game will only allow the futures contracts between players to be settled with **Ħ**. If there's enough volume on these contracts - and there will because this is *the only way* to practically buy and store tons of ammunition in bulk - **Ħ** becomes *backed* by these essential commodities whereas the player-driven market still determines the *true value* of these commodities.

Compare it to other games that'd encourage adoption of **Ħ** just with vendors where I can always get e.g. 1 Steel Bullet for **0.3Ħ**, and this would unfortunately set a fixed upper limit of **0.3Ħ** on these bullets, preventing speculation and ruining the fun for market-oriented players.


(this could be the Metropolis Commodities Market)