Mitigating Volatility in P2E through Allowance Verification in Decentralized Platform
DOI:
https://doi.org/10.13052/jwe1540-9589.2575Keywords:
P2E, AMM, Tokenomics, Swap allowance, Merkle rootAbstract
Play-to-Earn (P2E) game economies integrated with Automated Market Maker (AMM) protocols face persistent sustainability challenges driven by whale-induced price volatility and the absence of effective token-burning mechanisms. These issues erode economic fairness and discourage long-term participation within web-based blockchain gaming platforms. This paper proposes EG-AMM (Epoch-Guarded Automated Market Maker), a software engineering framework that adds a governance-aware volatility protection layer to existing AMM-based P2E infrastructures without modifying the underlying pricing model. Inspired by circuit breaker mechanisms in traditional finance, EG-AMM enforces per-epoch dynamic swap allowances for individual players, computed from price impact tolerance and configurable through Decentralized Autonomous Organization (DAO) parameters. The framework employs Merkle-proof-based cryptographic verification and on-chain accounting to ensure allowance limits are transparent and tamper-resistant. Unlike existing pool-level approaches such as static transaction caps or dynamic fee schedules, EG-AMM operates at the individual player level, curbing whale dominance while preserving equitable market access for ordinary players and newcomers. Preliminary analysis and game-theoretic simulation confirm improvements in price stability, participation fairness, and economic resilience, offering a practical and deployable path toward sustainable token ecosystems in blockchain-integrated gaming applications.
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References
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