In previous articles we introduced Ruletka’s first Improvement Proposal, Operation Fenix, followed by details about the distribution of AMMO. In this article we dive into the tokenomics of both RTK and AMMO after the latter is fully integrated into the Ruletka gaming platform.
In the following sections we will discuss the current limitations with fixed economic incentives for players, how AMMO will improve the platform by providing dynamic economic incentives and the resulting benefits for holders and liquidity providers of the Ruletka assets.
Current situation: Fixed economic incentives
The application that has been used the most on the platform so far is Pot Shot, an automated game built on top of RTK’s 1 in 6 chance burn mechanism, where burns are called “shots”. In this game players send RTK to the game wallet and the first person to get shot wins the jackpot; every time the jackpot gets below x3 stakes, the game wallet is topped up from the project treasury. We will use the data  produced by this game as a starting point to illustrate the current limitations of the platform and the added value of AMMO as a solution.
Until today, Pot Shot alone has distributed over 150 thousand RTK in prizes, while facilitating the burning of over 30 thousand RTK. Although these are respectable numbers, they have not produced enough deflation to be reflected in RTK’s price and the game volume has remained relatively low over time. As follows we take a closer look into what has been limiting the game volume.
The graph below shows the size of all jackpots won in the game, proportionally corrected to a game version with 100 RTK stakes (the stakes have been adjusted several times due to RTK price changes). The data shows that the average player has behaved irrationally and risked more than he/she stands to win, since the majority of the jackpots has been smaller than the probabilistic cost of winning (equal to 600 RTK, because a player statistically only wins 1 in 6 times); in fact, the average jackpot size has been 527 RTK. This probabilistic cost of winning is currently fixed at 600 RTK and represents the threshold above which economic incentives arise for rational players to participate.
However, the data also shows that when jackpots have passed the 600 RTK threshold the volume has increased considerably, arguably due to rational players coming in when the game becomes statistically profitable to play. The two graphs below show volume data for sets of games with high and low stakes, both also proportionally corrected to a game version with 100 RTK stakes.
In conclusion, the Pot Shot game has been attractive mostly for irrational players (i.e. gamblers), thereby limiting its user base to this group. But there is potential to expand the user base with more rational players, as long as economic incentives are present.
 All the transaction data reported in this article has been obtained from Etherscan.io and is publicly verifiable.
New situation: Dynamic economic incentives
The introduction of AMMO to the platform will allow its users to “add bullets to their RTk guns” in order to increase their chances of winning the games. Each extra bullet will increase a player’s chance of winning by 1/6, thereby lowering the economic incentive threshold to a theoretical minimum of x1.2 stakes, e.g. to 120 RTK for a game with 100 RTK stakes. See the table below for details.
However, AMMO will have a non-zero market price, as is to be expected from any asset with utility that is traded in a free market, and the theoretical minimum economic threshold is therefore not likely to be reached. The lower the price of AMMO, the lower the economic incentive threshold and therefore, the higher the utility. The graph below shows how the economic incentive thresholds change as a function of AMMO’s price in RTK value.
The price of AMMO will determine where the economic incentive threshold lies for loading AMMO into RTK, as opposed to the fixed threshold related to using RTK alone. As long as AMMO is cheaper than RTK, it will be statistically more profitable for players to use it; under these conditions it will also be statistically more profitable to load the highest number of AMMO possible into RTK, as this further decreases the probabilistic cost of winning.
These dynamic economic incentives will self-adjust based on market conditions, which in turn will change as a result of players capitalizing on such incentives, since buy pressure for AMMO should increase when the price is low and decrease when the price is high. This will result in a feedback cycle that will make the games attractive for rational players under different market conditions, thereby removing the need for irrational players to kickstart the games when it’s not statistically profitable to play. The graph below shows how all of the past Pot Shot game rounds could have been attractive for rational players, had AMMO been available to use at the time.
In conclusion, the introduction of AMMO will expand Ruletka’s user base with more rational players due to the dynamic economic incentives to play. The games will have more volume and RTK’s deflation will increase, but without relying on an unsustainable depletion of the project treasury.
Farmers are always going to sell their farming rewards for a profit, that’s what they to, but this is not a bad thing in the Ruletka gaming ecosystem. AMMO’s utility is inversely correlated to its price, with AMMO having maximum utility when its price approaches zero and limited utility when it trades above RTK’s price. The speed at which AMMO’s price reflects its utility is accelerated by the farming program, because sell pressure from farmers will bring down the price as soon as AMMO loses utility for players.
This synergy between economic incentives and market conditions will result in a self-sustainable gaming ecosystem where sell pressure from farmers and buy pressure from players are constantly at odds with each other, which increases the in-game usage of the Ruletka token assets. Consecutively, the increased in-game usage replenishes the farming reward pools, since all the AMMO that is used in the games is fed back into the farming program, and the feedback cycle is thereby proliferated. While this cycle repeats itself over time, the RTK supply decreases in the process and its price increases as a result, assuming that demand is equal to or greater than before; AMMO’s price is also bound to increase on par with RTK due to its inverse correlation to its utility.
When RTK loaded with AMMO is burned in the games, an equivalent number of tokens will be unlocked from the swap contracts and added to the project treasury (see the image below). The team will watch the markets closely and collect data of AMMO’s in-game usage in order to assess the number of tokens required to sustain farming rewards over time and to top up the game wallets; any unnecessary tokens will be permanently burned.
The synergy described earlier will provide trading volume for the official Ruletka pools on Uniswap, fueled by selling farmers and buying players, which will help offset any Impermanent Loss (IL) incurred by liquidity providers. The AMMO/RTK pool is expected to be more volatile while having less IL, considering that the pool ratio should find a long-term equilibrium due to the dynamic economic incentives for using AMMO. The farming rewards are an additional benefit to help offset any IL incurred by farmers.
Due to RTK’s deflationary characteristics its holders will benefit from the in-game usage of the Ruletka assets, be they users, liquidity providers or mere holders. RTK’s value will be influenced by its in-game usage, while AMMO’s value will be linked to that of RTK’s due to its dynamic utility.
We (the team) believe that with this platform expansion RTK will be among a small number of deflationary tokens that address the demand side as well as the supply side and we expect RTK to be one step closer into becoming the first fair deflationary game currency, the value of which is influenced by its in-game usage.
Official website: https://ruletka.fun/
Ruletka telegram: https://t.me/RuletkaToken
POT SHOT telegram: https://t.me/RTKPotShot
Uniswap trades are RISK FREE of getting shot!
RTK token contract: https://etherscan.io/token/0x1F6DEADcb526c4710Cf941872b86dcdfBbBD9211
AMMO token contract: https://etherscan.io/token/0x41D4E9880d6aE03f6E152A52afc3ECF82063A08b
Team liquidity locked: https://etherscan.io/tx/0x656f4e84d54b687080617cfc0d2cb89c2795be4e9ef366f5219e0ee60e754964