An example is that of a coffee shop owner who hands out loyalty stamps to customers each morning when they purchase 9 cups of coffee and receive the 10th cup as a bonus (which is an expense) and the hope that eventually the math will work in your favour
However, now suppose you could actually measure, with precision, whether all the stamps you have issued into the market have brought you better returns than they have cost you not approximately and not by guesses but by a hard real time number telling you just how well your returns are doing it is all fine and it is all okay because what is behind this is the idea so easy to comprehend that it does not even require the use of any of such jargon to appreciate what
■ The Issue With Rewarding People
Similar silent strain applies to every business which pays its customers since money is outlaid on rewards and discounts and cashbacks and free products and points programmes all go out of the business and into the pocket of the customer with the hope that the goodwill generated by the reward will generate increased revenues greater than the cost of the reward
But most businesses never even bother to check that and they run reward programmes based on their intuition and noticing repeat customers and thinking
This issue was solved some years ago in online advertising with a metric known as ROAS or Return on Ad Spend which is a simple ratio in which in case you spent 1,000 on advertising and made 3,000 in sales then your ROAS became 3 and it is straightforward and measurable and actionable and Pixels followed the same tradition and applied it to rewarding players in their gaming ecosystem and they called it RORS Return on R
■ What RORS Measures
The question that RORS is answering is straightforward: given any amount of reward tokens given to players the question how much revenue the ecosystem receives in fees and economic activity is answered by the value of the reward token sent out so that when ;
RORS = 0.5 then the ecosystem is spending two tokens to get one back and is subsidising its own players and depleting its reserves which is simply not sustainable and when RORS =1.0 then the amount of revenue
Pixels is at the moment at about 0.8 which is pretty much closer to the target than most reward programmes ever get in large part because most reward programmes are not measuring it at all and Pixels is not just near the target but has constructed the target and made it public and is now working across it by designing
■ Why This Is Important Despite Never Having Played a Blockchain Game
Most reward programmes in digital ecosystems be it gaming or otherwise are not sustainable since they lure users with high-reward rates and the rewards rates wear out as the user base expands and you are drilling yourself in to the ground and you are spending money to get more money and you are not spending money to get more people and you are optimising
An ecosystem of games, where rewards are created and cause net-positive revenue, is not a dream, but an engineering problem that Pixels has specified well enough to solve in practice
■ The Bottom Line
Passing RORS 1.0 would imply that Pixels has done something that almost no reward-driven system can ever do namely create a model where the giving of value to players and the creation of ecosystems are the same action and not mutually exclusive and opposite and is not a story about the business model but a story about gaming