In January, Limit break introduced a new programmable digital asset standard known as Apptokens. Shortly after, Pixels became one of the first games to implement this system, using it to introduce vPIXEL, a spend and stake-only token backed 1:1 by PIXEL. Unlike standard PIXEL withdrawals, vPIXEL can be withdrawn without incurring fees and can also be used in partner games such as The Forgotten Runiverse.

The design of vPIXEL disincentivizes players from immediately withdrawing PIXEL to external markets, aiming to reduce sell pressure, promote staking, and encourage spending within the ecosystem. Over time, these mechanics are intended to foster a more sustainable and balanced token economy. In this article, we will summarize a report by Oscar Memento - "Apptokens: The Answer to Solving Broken Incentive Structures?" - summarizing the main findings. 

 vPIXEL Apptoken Mechanism

Saving Crypto Gaming

The crypto gaming sector has faced a consistent pattern of rapid token value decline following token generation events, particularly since early 2024. Many tokens, including PORTAL, MAVIA, NOT, MOCA, SAGA, CATI, and even PIXELS itself, reached their peak value on or shortly after launch, followed by steady declines. Early 2025 has shown similar trends, with tokens like GUN losing significant value in just the first week. Analysts suggest several reasons for this phenomenon, including weak underlying products, lack of real utility, inflated pre-launch valuations, and the waning speculative interest in gaming tokens. However, at its core, the issue is often a simple imbalance between the number of sellers and the number of buyers.

Some studios have attempted to address the situation by launching tokens with very low circulating supplies, aiming to reduce initial selling pressure. However, the long-term effectiveness of this strategy remains unclear. The lack of committed retail buyers continues to be a significant obstacle, with many airdrop recipients motivated to sell immediately rather than hold. In this context, Apptokens offer a potential way to introduce greater control over how tokens are used after distribution, which could help address some of the sector's systemic challenges.

Web3 Gaming Tokens

Solving Incentive Structures with Programmable Control

Apptokens provide developers with the ability to define how tokens can be bought, sold, or spent directly at the smart contract level. This functionality allows for the creation of tokens that can be staked or spent but not freely traded unless specific conditions are met. Such conditions could include completing in-game tasks, linking accounts to web2 infrastructure, or maintaining a minimum level of activity within the application.

This level of programmability offers a response to the problems that arose from Play-to-Airdrop (P2A) campaigns, which became widespread in early 2024. While these campaigns were effective at distributing tokens, they often attracted users who had little interest in long-term engagement. Apptokens can help to filter for more committed players by requiring them to meet certain conditions before they can fully utilize their rewards, potentially leading to healthier ecosystems.

In addition, Apptokens could enable studios to set price floors or ceilings for tokens earned through specific activities, further stabilizing token economies. By ensuring that airdropped tokens are spendable or stakeable but not immediately sellable, developers can encourage deeper engagement and limit the extraction of value by users solely interested in short-term gains.

Expanding the Design Space for Token Economies

The possibilities introduced by Apptokens go beyond simple spend-only models. They open up a broader design space for what is referred to as "token liveops." In the past, token liveops primarily involved creating token sinks through in-game events, cross-game collaborations, and various incentive programs. With Apptokens, developers can now build app-centric token economies that operate primarily within the context of a single game or ecosystem, ensuring that most token-driven activity benefits the application directly.

This approach allows creators to retain more of the speculative value and user acquisition effects generated by their tokens, rather than losing that value to external secondary markets. It also gives developers the tools to guide player behavior in ways that promote retention, progression, and in-app monetization. For example, promotional token pools could be distributed to content creators within a game's creator program, who in turn can engage their audiences by giving out tokens that must be spent within the game.

Such innovations could shift gaming business models from being heavily reliant on token speculation to being more volume-driven and player-centric. This transformation could create more sustainable ecosystems where token demand is tied closely to in-game activity rather than external trading.

AppTokens ("ERC20C") and TokenMaster

Weighing the Risks of Increased Control

While Apptokens offer several promising solutions to persistent problems in crypto gaming, there are notable risks associated with their adoption. Imposing restrictions on how tokens are used could lead to player frustration and alienate users who value the open, decentralized ethos traditionally associated with crypto projects. In some cases, reducing the speculative appeal of gaming tokens could also limit their market potential.

Since Apptokens represent a relatively new design space, widespread experimentation will be necessary to discover effective models. This process will inevitably involve some poorly designed implementations, which could damage player trust if not carefully managed. Studios will need to prioritize clear communication with their communities, aligning expectations before implementing restrictions that could be perceived as heavy-handed.

It is also important to recognize that Apptokens might not appeal equally to all audiences. Some players may view them as an unwelcome move toward centralization, potentially driving a wedge between traditional crypto users and the new generation of blockchain gamers.

A Wait-and-See Approach

The introduction of Apptokens represents an important development in the evolution of web3 gaming. By providing developers with greater control over how tokens are used and circulated, Apptokens could help address the widespread issue of rapid post-launch token devaluation. However, the technology also introduces new challenges related to user perception and system design.

As more projects begin experimenting with Apptokens, particularly on platforms like the Ronin Network, the broader industry will gain a clearer understanding of their potential impact. Whether the benefits of greater control will ultimately outweigh the risks remains an open question. For now, Apptokens stand as a promising, if still unproven, tool for building more resilient and engaging crypto gaming economies.

Source: Oscar Memento