What is circular economy in real life and in OpenWorld ?
What is circular economy in real life ?
In human society, circular economy is a model of production and consumption with relationship amongst three main dimensions: society, economy and environment. That aims to create an economy with less effects on enviroment, with best production from same inputs into a local, national or global economy.
With circular economy, all components involve in will mutually interact with each other and support each other. Without one component, others will struggle to exist and grow up. They need each other for their survival and growth. Such economy will be self-adjusted and self-balanced that makes the whole economy is very sustainable and healthy.
How many components are there in one national circular economy? All professions, occupations, economic agents or economic activities, contribute to the economy. Consumption, saving, and investment are variable components in the economy that determine macroeconomic equilibrium. There are three main sectors of economic activity.
To name all of them, we can’t but let’s say a few for examples: Industry, entertainment, finance, etc. Each of such needs to have inputs in order to get outputs and most important, they interact mutually and need each other to exist. It does not mean that one componential element must exist forever, it can fail and disappear but others will appear to replace it. To survive, it must be a good and strong one, else it will be tailed off over time and will be replaced by better ones. Fortunately, the whole circular economy will continue to exist and keep runing well with time, by self-adjustment and self-selection.
In aspect of enviroment, decades ago, it is not a big matter but now, because of climate change and tremendous effects on human civilization, its importance is on the rise. More important and vital than ever before. Consequently, at global scale every industry have to adapt to local and global changes in climate change adaptation policies. They have to obey more strictly laws on environmental friendly productions and have to upgrade their infrastructures for greener operations.
What is circular economy in OpenWorld ?
Let’s get started by explaining what is OpenWorld
OpenWorld is a blockchain enabled open metaverse with a sound circular economy based on real monetary flow. It envisions to open a new dimension for everyone to connect, play, express themselves, and find happiness.
In formula, it looks like this
OpenWorld = (Digital experience + Social + Finance) * Blockchain
Here we will talk about Blockchain and Finance.
In terms of Blockchain, OpenWorld uses Smart Contract on Binance Smart Chain initially, then we switch to Harmony chain. Why do we choose Harmony chain? Because it gives cheaper transaction fee that is good for all in OpenWorld and better experience for users with less congestion, faster confirmation, less lag effects like what we experience on Binance Smart Chain.
Regarding to environmet, these chains are both running by smart contracts that are environmental friendly than Proof of Work and hybrid between Proof of Work and Proof of Stake. Moreover, with Smart contract, things are very transparent and verifiable.
The next one is Finance. You know that we change product from GameFi to Metaverse so what are reasons behind this big decision?
The finance model behind GameFi is one-sided, weak and unsustainable. One-sided means there is no circularity inside GameFi economy. Developers mint token from smart contract, gamers spend money for investing into tokens and buying NFT items for playing. They can play forever and earn forever by design of GameFi.
Do you think such model can work?
To have reward for Play-to-Earn gamers, should developers mint more tokens and create hyper inflation in their token circulation suply?
They should not, but even they don’t do that, gamers will still sell their earned tokens on the market. Because after gamers reach to an expected break-even point, there is no reason for them to stay in the game and most of them will cash out at whatever price. Selling pressure is huge and price will be dumped then death-spriral comes and it is unstoppable. Gamers want to retrieve their capital and exit as quickiest as possible. The concept is broken and can not be fixed. Gamers are not investors and they are lack of educational insights about cryptocurrency and investment so we can not ask them to stay in one project too long. We can not blame it on gamers volatility of crypto market and lack of crypto education that is necessary for crypto investors.
Now, let’s return to OpenWorld. What we want to build is a circular economy in which there are multiple components in the digital world and these components will be mutual-interacting inside and together they will make a circular economy.
There are many industries in OpenWorld: Mining, Fishing, Supplier, Blacksmith, Builders, Health care services, etc. In the first version, there are three professions: Openian, Supplier and Blacksmith. Their roles and interactions will be described in below diagram.
Openians have two skills: Mining and Fishing. After fishing, they can sell fishes to Suppliers and Ores from mining to Blacksmith. Openians have to own hammers to mine ores and they have to buy hammers in Workshop.
Hammers are forged by Blacksmiths but they must to buy ores from Openians as resource for forging.
Both Openians and Blacksmiths have to eat Sushis to maintain or increase health points and so on.
Where do they buy Sushis? From suppliers. Suppliers have to buy fishes from Openians to produce Sushis that in turn can be used by Openians and Blacksmiths.
It’s for version 1, in later versions, there will be more professions and other components that will expand the OpenWorld’s circular economy further.
With this approach, the OpenWorld economy will be sustainable and healthy. Even without new flow of capital, players, investors, it will still operate healthy as expected.
You can look beyond the crypto market, where is the source of capital flow into cryptocurrency space?
It certainly comes from other industries in our society but even without new capital flow, inside the crypto space, there is circular economy already. It is vital for cryptocurrency industry to exist and goes through ups and downs, blackswan events. Each four years, with hype around Bitcoin halving and support from social media, there will be new flow of capital into crypto space. Cryptocurrency market can not exist too long if in society, there is no other industries. Because small or big, sooner or later, capital from other industries will flow into and out of crypto industry. It is how social circular economy self-operates, self-adjusts and maintains its momentum.
We strongly believe that with our design for OpenWorld circular economy, our project will be strong even in bear market and times prove that projects pass through bear market will achieve higher highs in next bull market. Our vision is to build up a project which will be long-lasting and sustainable for everyone who engage with it.