The Real Metaverse: Economics & GDP of Runescape and other MMOs | CupOJoseph - Nerite

Hey folks, we're back. Uh, and I'm here with Cupappa Joseph who is about to speedrun the economics and GDP of Runescape.

Hi everybody. Can you hear me?

Hi, Mom. I love you. Uh, all right. Let's see. That's good.

I'm not very tall. Perfect. Okay. Uh, quick show of hands in the audience. Who's ever played Runescape?

Woo. Yeah. Uh, what about other MMOs like World of Warcraft or uh any others? Cool. Almost everybody here at some point in their childhood uh was part of a digital economy and now we're part of a new one, crypto.

All right, so I'm just going to move this over. There we go. Uh I'm Joseph. Uh my Runescape handle is Hojack Borisman and uh I've been contributing to the the digital crypto economy for several years. I've contributed to Ethereum, uh, OpenC, uh, Gitcoin, Raid Guild, Nearite, Consensus, a lot of stable coin projects over the years.

And yeah, so I have a pretty good hold on, uh, you know, the the the digital market for, uh, uh, crypto coins, but also the digital market for Runescape gold coins. And I think that there's some surprising overlaps and things that we can learn about how to successfully grow economies and scale them uh from the history of MMOs. All right. Does this work? Sweet.

So uh recently I made a new API that tracks all of the trading volume of every token in Runescape and how much gold is going through it. and then also tracks the black market IRL uh gold trading uh forum prices of of Runescape gold. And then I can multiply those together to uh see the total volume going through the Grand Exchange, which is kind of like the stock market in Runescape. And the total trading volume of everything uh is the gross domestic product, right? Is the GDP.

So countries have GDPs, but also video games can have GDPs as well. All right. So, in Runescape, there's a grand exchange. There's this MMO economy. There's people buying and selling goods.

Uh, and it actually works exactly the same as the IRL economy. You you have money issued by a government, which is kind of like the publisher of a video game, uh, but with more violence. And you have users, you have citizens in there buying and selling things. So they mostly do that on Runescape through uh a system called the Grand Exchange, but there's, you know, other every other MMO has their own trading system, right? So uh in the agent and on the online economy, um there's actually no distinction.

So I've made Runescape agent and I've made uh like IRL, you know, assistant clawbot agent that helps me uh you know, order packages from Walmart and things like that. The agent makes absolutely no distinction, right? If you have an AI or you have a bot or just it doesn't even need to be very smart. Just any digital uh you know helper or automation. There is actually no difference from making a credit card transaction and making uh some kind of like centralized you know payment between two banks versus making a centralized payment on the server of Runescape or World of Warcraft or you know any other MMO what have you.

So, a uh agents can be trained to do cool things and learn about the real economy from the game economies and learn about game economies from real economies. All right, so uh pulling in the data that we looked at before through all of the total volume going through Runescape uh and all of the gold trading going on illegally. So people buying gold in Runescape for real US dollars. Uh I estimate that depending on how big the black market is for gold that the GDP of Runescape is at a minimum hundred million a year and on the high end about 400 million. So that's actually um uh about a hundth of the uh smallest state in the US.

Uh, and it's going to be, if it keeps growing, it's going to be larger than uh, some Pacific islands, some uh, you know, like smaller micro nations that have really little GDP, right? So, it's it's totally possible to see in the next couple years uh, as digital economies grow, as there's more agents trading between each other, that the GDP of Runescape and other maybe new crypto-powered MMOs is actually larger than existing countries today. All right. So, GDP in a game, it's real. Like, even though the tokens are fake, US dollar is also fake.

So, there's there's gold on the Runescape server, there's US dollars on the Fed server in DC, right? Like there's actually there's actually no difference. They use the same type of database. Like the bank the bank, Capital One, Bank of America, they're like storing your balance. They use the same exact type of database that Runescape and everybody else uh with very scalable large MMOs use this they use the the same type of DB to store balances.

So there's there's functionally no difference. Uh it's actually real GDP. So now we we get into like these these black markets. Um who's ever bought an NFT for more than $1,000? Yeah.

GG. RIP, right? Yeah. Yeah. Uh, so this is a run the there's a black market for Runescape party hats, which is actually rarer than most NFTs.

There's only a couple for sale. The first four for sale for a bit under $2,000, $1,100. A blue the only blue party hat for sale right now is $2,300 like actual USD. It's not even an NFT. It's just inside of Runescape, right?

So like we didn't really come up with NFTs. We didn't really come up with these things. um they're still going on, right? So, this is this is a real economy. This is real money being spent.

So, uh I'm not going to spend a lot of time, but Runescape also sells memberships. They have their own income and they also have microtransactions. So, uh, two years ago, there was somebody who, uh, uh, was written up in, uh, a a few press app publications that they had spent $62,000 in a year on Runescape microtransactions. That's pretty rough, right? Uh, that's that's pretty rough.

That that's there's some psychological manipulation going on there, right? So, yeah, probably probably not the best. So Runescape's making a lot of money on microtransactions. They're making a lot of money on membership kind of uh but it's also expensive to run a real real uh to run real economies and to be a government and provide public services to everybody like keeping the server on, right? So Runescape recently added a 2% convenience fee to using the Grand Exchange.

So this is actually a tax. They just they said it's a it's a basically they baked it into slippage, right? If you trade on AMMs, but it's actually it's actually a tax. So every trade on the Grand Exchange now has a 2% fee. What if that was real money, right?

What if they're if they're trading $400 million a year in GDP and they had a 2% sales tax, you know, that would be like $8 million a year. That's enough to keep all the servers running indefinitely. So you could have a completely autonomous world run on smart contracts and take a sales tax, right? And you could you could completely autonomously create a network economy between different games, between different assets, between different agents and everyone using your digital economy. There's functionally no difference from doing that on Runescape or anywhere else uh and doing that IRL.

And you know, I I think the sales taxes uh like one and one and a quarter% in Virginia where I live. Uh it's the same, right? And they're just doing that to keep the roads clean and build schools and hospitals and you know, the state the state wants to keep commerce flowing and so does your MMO. Uh so yeah, here's here's my my call to action. I'm going to wrap up.

Uh but yeah, tradable any tradable asset is indistinguishable from other tradable assets. So uh buying a coffee is also buying a tradable asset. It's the same as doing it digitally. And I think as we're building more, uh as we're building more agentic systems, we're building more digital economies. The real metaverse is where people care about their online persona and care about their online money more than their IRL cash, their IRL persona.

Uh so as you as you build things as you build financial products or financially adjacent products in crypto uh just remember there's a lot of MMOs that don't use crypto that are real economies too and we can learn a lot from each other uh and build a new financial system that's better than what we have traditionally using the same technology. Uh so hopefully that inspires you a little bit and thank you so much for coming to my talk and uh add me on Runescape and follow me on Twitter. Thank you so much. Love you all.