Decoupling Speculation from Merit: The Identity-Bound Asset Integrity Model (IBAIM) for Sustainable Web3 Gaming

2026-04-23 · Source: cs.MA updates on arXiv.org · Field: Technology & Digital — Artificial Intelligence & Machine Learning, Blockchain & Distributed Ledger Technology, Gaming & Interactive Media · Depth: Expert, extended

Summary

This paper introduces the Identity-Bound Asset Integrity Model (IBAIM) to address the rapid collapse of decentralized game economies in Web3 gaming, often characterized by "death spirals" due to unchecked speculation. It establishes three necessary and sufficient conditions for sustainable open game economies: Anti-Sybil Resilience, Anti-Capital Dominance, and Anti-Inflationary Saturation. IBAIM utilizes Zero-Knowledge (ZK) biometric hashing and Account Abstraction (AA) to anchor asset utility to unique human identities through a privacy-preserving and regulatory-compliant architecture, employing Zero-Knowledge Proofs of Identity (zk-PoI). Furthermore, it decouples financial speculation from in-game merit by implementing an Asymmetric Utility Decay (AUD) engine, which imposes a 50% utility cliff upon secondary transfer, and an entropy-driven thermodynamic degradation mechanism. Empirical analysis of prominent GameFi failures like Axie Infinity, StepN, and CryptoMines demonstrates that their collapse resulted from violating these core economic constraints, validating IBAIM as a viable path toward long-term economic viability in decentralized virtual worlds by trading asset liquidity for system integrity.

Key takeaway

The Identity-Bound Asset Integrity Model (IBAIM) addresses Web3 game economy collapses—driven by Sybil attacks, capital dominance, and asset inflation—by decoupling speculation from in-game merit. It uses Zero-Knowledge (ZK) biometric hashing and Account Abstraction to anchor asset utility to unique human identities, implementing a 50% utility decay on secondary transfers and dual-factor thermodynamic degradation. This ensures long-term economic viability and a meritocratic system, requiring a strategic trade-off of asset liquidity for systemic integrity.

Topics

• Identity-Bound Asset Integrity Model
• Web3 Gaming Sustainability
• Zero-Knowledge Biometrics
• Asymmetric Utility Decay
• Anti-Sybil Resilience

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Editorial summary, takeaway, and curation by AIssential. Original article published by cs.MA updates on arXiv.org.