Level-Up Coins

In-game - Non-financial - Self-custodial

The Player Credit Problem

The e-gaming landscape is transforming, with players pushing for a shift towards dynamic digital assets tailored for a better gaming experience.

Research shows that a significant number of players deposit money shortly before playing on game platforms where their deposit is converted into in-game assets or playable credits. When finished playing, many players would like to convert their in-game assets back into their local currency while withdrawing it back into their bank account.

While many gaming platforms do not allow this due to technical limitations, on platforms where converting and withdrawing in-game assets is allowed, this is a time-consuming and costly process for both players and gaming platforms.

Many players though have their gaming budget and don't intend to cash out their in-game assets. At the same time they do, however, prefer to be in control of their assets and not leave them with the game provider.

Where possible, the only options a player currently has is to either convert and withdraw the amount in their local currency, or to use cryptocurrencies.

  • The first option is often a cumbersome process and can incur high transaction costs for both players and game providers. On top of that, it can take hours or even days before the player gets their funds back in their account upon withdrawal.
  • The second possibility is to use a traditional crypto currency. This is often limited to a handful of coins or tokens which incur the risk of price fluctuations. Players are also confronted with increasing administrative limitations when using crypto, making it a challenging experience.

Introducing Level-Up Coins



Level-Up Coins (LUCs) are the ultimate in-game, playable credits, designed to elevate gameplay with a versatile digital asset for rewards, upgrades, and seamless transactions.

A LUC is a playable credit that can be withdrawn from the gaming platform onto a blockchain wallet. The LUC never loses its value, as it is an in-game credit that can only be used on the platform that provides it. By adding blockchain technology, however, this credit can now be withdrawn and stored in a self-custodial wallet, owned by the user.

Unlike traditional blockchain-based assets, a LUC is a non-financial asset. It offers a secure, fast, and low-cost way though for players to withdraw their playable credit and store it in their own wallet, similar to how cryptocurrencies work. LUCs cannot be traded on exchanges and only be sent to other registered players (so-called peer-to-peer transactions). Interaction is only possible between whitelisted wallets, controlled by the issuer.

Gaming providers using LUC can offer additional player benefits letting them access exclusive content and unlock new opportunities. The gaming provider has the possibility to let the player redeem their LUC for their local currency in the platform's wallet, or through a third-party that takes care of the conversion, allowing the player to choose their preferred conversion method and currency.

LUCs are designed to redefine online gaming with fast, secure, and rewarding transactions tailored to the needs of both casual and competitive gamers. Whether you're a fan of e-sports or enjoy a casual gaming session, LUCs empower you to seamlessly own in-game assets, level up faster, and even access unique perks, all while enhancing your gaming journey. A digital world requires digital solutions.

Technical Integration of Level-Up Coins


Although LUCs use blockchain technology similar to traditional crypto coins and tokens, a Level-Up Coin comes with specific characteristics that limit the coin to storing the in-game credit in an approved external wallet and the possibility to exchange the credit with selected third-party payment processors, while not limiting the gaming platform to offer additional perks to LUC owners such as exclusive games or in-game bonuses.

To achieve this, the following LUC-specific characteristics are added to the token's smart contract:

  • Sender Whitelist: This list includes addresses that are allowed to withdraw in-game credits to their self-custodial wallets. These addresses can be distributed to players by the gaming platform, linked to a specific crypto wallet, or the platform can allow players to request a certain address to be whitelisted.
  • Recipient Whitelist: This list includes addresses of the issuer, gaming platforms, other players, and fiat on/off-ramp providers. The player can only send their tokens to these addresses, to top up their balance on the gaming platform or to interact with a payment processor.
  • Transfer Restrictions:
    • Users (self-custodial wallets) can only transfer tokens to addresses on the Recipient Whitelist.
    • Payment processors can only send tokens to a controlled set of addresses managed by the LUC issuer.
      • Smart Contract Example 
      // SPDX-License-Identifier: MIT
pragma solidity ^0.8.0;

// Import OpenZeppelin libraries
import "@openzeppelin/contracts/token/ERC20/ERC20.sol";
import "@openzeppelin/contracts/access/Ownable.sol";

contract PolygonControlledToken is ERC20, Ownable {
    // Mapping to track addresses allowed to participate in peer-to-peer transfers
    mapping(address => bool) public peerToPeerWhitelist;

    // Mapping to track addresses allowed to receive tokens (on/off-ramp providers)
    mapping(address => bool) public onOffRampWhitelist;

    constructor() ERC20("PolygonControlledToken", "PCT") {
        // Initial minting or setup logic can be added here if needed
    }

    // Functions to manage the peer-to-peer whitelist
    function addToPeerToPeerWhitelist(address _address) external onlyOwner {
        peerToPeerWhitelist[_address] = true;
    }

    function removeFromPeerToPeerWhitelist(address _address) external onlyOwner {
        peerToPeerWhitelist[_address] = false;
    }

    // Functions to manage the on/off-ramp whitelist
    function addToOnOffRampWhitelist(address _address) external onlyOwner {
        onOffRampWhitelist[_address] = true;
    }

    function removeFromOnOffRampWhitelist(address _address) external onlyOwner {
        onOffRampWhitelist[_address] = false;
    }

    // Override the _beforeTokenTransfer function to add custom transfer logic
    function _beforeTokenTransfer(
        address from,
        address to,
        uint256 amount
    ) internal override {
        // Allow minting and burning without restrictions
        if (from == address(0) || to == address(0)) {
            super._beforeTokenTransfer(from, to, amount);
            return;
        }
        // Check if both the sender and recipient are whitelisted for peer-to-peer transfers
        if (peerToPeerWhitelist[from] && peerToPeerWhitelist[to]) {
            // Allow peer-to-peer transfer
            super._beforeTokenTransfer(from, to, amount);
            return;
        }

        // Otherwise, check if the recipient is on the on/off-ramp whitelist
        require(onOffRampWhitelist[to], "Recipient address is not an approved on/off-ramp provider");

        // If all conditions are met, proceed with the transfer
        super._beforeTokenTransfer(from, to, amount);
    }
}

Key Features and Functionality


Custom Token Setup

The contract creates an ERC-20 token called "PolygonControlledToken" (symbol: "PCT") using the OpenZeppelin ERC20 implementation. The contract owner has the ability to mint tokens as needed.

Peer-to-Peer Transfer Whitelist

Purpose: This whitelist defines which addresses can engage in peer-to-peer (P2P) token transfers.

  • Management: The contract owner can add or remove addresses from the peerToPeerWhitelist, granting or revoking their ability to send tokens directly to other whitelisted addresses.
  • Functionality: If both the sender and recipient are on this whitelist, tokens can be transferred freely between them.

On/Off-Ramp Provider Whitelist

Purpose: This separate whitelist tracks addresses of approved on/off-ramp providers. These are trusted entities authorised to facilitate the exchange of tokens between in-game credits and fiat or other currencies.

  • Management: The contract owner can manage the onOffRampWhitelist, adding or removing addresses as necessary.
  • Functionality: Tokens can only be sent to addresses on this list, ensuring that transfers out of the ecosystem are restricted to verified and authorised providers.

Transfer Logic

The _beforeTokenTransfer function is used to enforce these rules:

  • Minting and Burning: Transfers involving minting (from 0x0 address) or burning (to 0x0 address) are allowed without restrictions.
  • Peer-to-Peer Transfers: Transfers between addresses on the peerToPeerWhitelist are permitted, enabling direct user-to-user token transfers within the ecosystem.
  • Transfers to On/Off-Ramp Providers: Tokens can be sent to approved on/off-ramp providers listed in the onOffRampWhitelist, facilitating secure exchanges outside the ecosystem.
  • Rejection of Unauthorised Transfers: Any transfer that does not meet these criteria is automatically rejected, maintaining the integrity and security of the token flow.

Whitelist Management Functions


Peer-to-Peer Transfer Whitelist

Purpose: This whitelist keeps track of addresses that are allowed to engage in peer-to-peer (P2P) transfers within the token ecosystem.

Functions:

addToPeerToPeerWhitelist(address _address):

  • Description: Allows the contract owner to add an address to the peerToPeerWhitelist, enabling that address to send and receive tokens from other whitelisted addresses.
  • Access Control: Only the contract owner can call this function.

removeFromPeerToPeerWhitelist(address _address):

  • Description: Allows the contract owner to remove an address from the peerToPeerWhitelist, revoking its ability to participate in P2P transfers.
  • Access Control: Only the contract owner can call this function.

On/Off-Ramp Provider Whitelist

Purpose: This whitelist manages addresses of trusted on/off-ramp providers authorised to exchange tokens between in-game credits and fiat or other currencies.

Functions:

addToOnOffRampWhitelist(address _address):

  • Description: Allows the contract owner to add an address to the onOffRampWhitelist, permitting the address to receive tokens for off-ramp services.
  • Access Control: Only the contract owner can call this function.

removeFromOnOffRampWhitelist(address _address):

  • Description: Allows the contract owner to remove an address from the onOffRampWhitelist, preventing that address from receiving tokens for off-ramp services.
  • Access Control: Only the contract owner can call this function.

How It Works


Ownership and Access Control

The contract uses the Ownable module from OpenZeppelin, which designates an owner with exclusive permissions to manage sensitive functions. Only this owner can update the whitelists.

Adding Addresses

When the contract owner wants to approve a new address for P2P transfers or as an on/off-ramp provider, they call the respective addTo...Whitelist function. This action updates the mapping, setting the address to true and granting it the specified permissions.

Removing Addresses

To revoke permissions, the contract owner calls the removeFrom...Whitelist function, updating the mapping and setting the address to false, thereby restricting its access.

Main Characteristics of the Smart Contract


Controlled and Secure Token Movement

The transfer logic ensures that tokens can only move within approved boundaries, reducing the risk of unauthorised or fraudulent transactions.

User Flexibility with Peer-to-Peer Transfers

Users have the ability to transfer tokens to other whitelisted users, enhancing usability while still maintaining regulatory compliance.

Easy Administration

The contract owner can manage both whitelists, allowing for adaptable governance and ensuring that only trusted entities can participate in token transfers.

This setup gives the LUC issuer full control over token transfers while allowing users to withdraw tokens to self-custodial wallets and ensuring tokens can only be moved to approved destinations.

Level-Up Coins Benefits


1.Convertible credit

LUCs are designed to be convertible while still providing maximum utility, allowing players to withdraw their credit and store it in a wallet of their own, rather than keeping it on the gaming platform.

2.Fast, Secure and scalable transactions

Built on Polygon, LUCs offer almost instant and secure transactions that allow players to focus on their love for the game. The blockchain architecture allows players to verify transactions in real-time, without placing their trust in the hands of 3rd parties.

3.Exclusive gaming rewards

Just like digital blocks, LUCs come with additional functionality. Builders have every opportunity to integrate additional rewards and discounts into their LUC functionality. Not only does this enhance the gaming experience, but also increases player retention. LUCs are designed to be tailored towards the specific needs of builders and gamers alike.

4.Cross-platform flexibility

LUCs are designed to work seamlessly across multiple games and platforms in specific countries. It allows players to use the same digital asset for various gaming ecosystems of a certain game provider.

5.Built on Polygon

LUCs leverage all the benefits of Polygon - the leading Indian developed L2 blockchain network. Gamers enjoy almost instantaneous transaction speeds at a fraction of the cost of traditional L1 networks. Polygon's EVM compatibility with other networks allows builders to explore more future utility when using LUCs inside their ecosystems. Combined with unparalleled security and versatility, LUCs are the leading one stop shopping solution for regional gaming communities.

Why LUCs are Vital for the Gaming Ecosystem


For Players

Ownership & Control

With a LUC you'll get easy, fast, and affordable deposits and withdrawals of your player credit.

Seamless Transaction integrations

Builders can easily integrate LUCs into their already existing payment ecosystem to give players more and better options.

Rewards & Incentives

LUCs are designed to be integrated with any reward or bonus program, allowing players to enjoy far better rewards and gaming experience.

For Developers & Platforms

Seamless integration

Game developers can rely on level-up coins for in-game experiences, improving your player retention. More happy players means more frequent players.

Cross-platform capabilities

Builders can leverage their LUC blockchain architecture for integration into multiple decentralised platforms - allowing players to experience full utility of the on-chain world. In other words, a LUC is already future-proof out of the box.

Community engagement

LUCs helps builders and platforms boost player engagement by offering unique, custom designed rewards and incentives. Players have full access, control and management of their LUCs at all times.

User acquisition

LUCs provide a strategic advantage in user acquisition for gaming platforms. Since players who wish to use LUCs must first register for an account with the gaming provider, this requirement serves as a natural gateway for onboarding new users. By encouraging registration, platforms can efficiently expand their user base and introduce players to their ecosystem. This initial interaction not only grows the community but also offers an opportunity to present the platform's features, unique games, and offerings, making players more likely to engage with and explore the platform further.

User lock-in

Additionally, LUCs create a form of user lock-in, as players become invested in the platform's ecosystem. Since LUCs can only be used on the gaming provider's platform or sent to approved on/off-ramp providers, players are incentivised to continue participating in the ecosystem. As players become familiar with the platform's functionality and features, they are more likely to return, increasing retention and overall engagement. This lock-in effect ensures that players remain loyal and encourages long-term use, giving platforms a competitive edge in a crowded gaming market.

How to Get Started with LUCs


For Gamers

Download any EVM compatible Web3 wallet

LUC tokens are supported by any Web3 native EVM compatible wallet such as Metamask and Rabbi. Players can add their LUC and start using it in a matter of minutes.

Buying a LUC

Obtain the In-game LUC using fiat or cryptocurrency (as provided by the gaming platform) to start using it for your gaming needs.

Play, Earn, Manage

Your LUC is truly yours. Stored safely in your native wallet your in-Game credit is safe and always at your disposal.

For Builders & Platforms

Integrate a LUC

Game developers can expand their LUC functionality into anything that fits their needs. Your players deserve the best. LUCs makes it possible.

Offer exclusive content

Use LUCs to create exclusive in-game content or rewards for your player base, boosting engagement and retention.

Grow Your Ecosystem

By adopting a LUC, developers can expand the community to include gamers who value reliability, ownership, and flexibility.

Join the LUC Gaming Revolution.


LUCs are more than just a level-up coin — it's the future of gaming. They empower gamers and developers to create and own in a player-driven economy by offering fast, secure, and scalable transactions. Whether you're looking to earn rewards, or take control of your in-game assets, LUCs are your gateway to the next generation of gaming in your region.

CryptoSeed DAO: Comprehensive LUC Minting and Distribution Services


CryptoSeed is a not-for-profit DAO dedicated to supporting the gaming industry through innovative blockchain solutions. It operates by receiving grants from gaming providers in the form of tokens and cryptocurrencies, which fund its operations and enable it to deliver a wide range of services. CryptoSeed's mission is to empower gaming platforms by providing secure, efficient, and community-driven tools for in-game asset management and distribution.

1. Customised Minting and Initial Distribution

CryptoSeed DAO provides tailored minting services for Level-Up Coins (LUCs) on the blockchain, specifically designed for gaming companies. The minted LUCs can be distributed through a well-structured initial phase, which may include a preceding token sale. If requested, CryptoSeed manages the token sale efficiently, ensuring transparency and engaging the gaming community to support project development.

2. Fiat On/Off-Ramp Partnerships

To facilitate easy and secure financial transactions, CryptoSeed DAO assists gaming companies in partnering with reliable fiat on/off-ramp providers. These providers enable seamless conversion between LUCs and local currencies, ensuring that players can easily cash in and out of the gaming ecosystem. CryptoSeed ensures these providers are compliant with regulatory standards, enhancing the overall user experience.

3. Treasury Management and Governance

CryptoSeed DAO offers optional treasury management services for token issuers, optimising the allocation of funds raised and ensuring sustainable growth. Additionally, the DAO provides voting mechanisms that empower stakeholders to participate in governance decisions, fostering a decentralised, community-driven approach to managing the token ecosystem.

4. Grant Programs and Token Distribution

For companies looking to drive community innovation, CryptoSeed can establish and manage grant programs. By distributing LUCs to grant winners, CryptoSeed supports projects that align with the gaming company's vision and promote engagement within the ecosystem. This service ensures the effective allocation of resources to foster growth and creativity.

LUCs and Compliance


The concept of Level-Up Coins (LUCs) has specific design features that can help avoid several regulatory hurdles commonly associated with traditional cryptocurrencies and in-game credits. The following information is not legal nor financial advice though, but merely a positioning overview of LUC characteristics versus common compliance requirements.


Companies using LUCs are advised to seek legal counsel as the interpretation of how a LUC should be classified can vary depending on the region and jurisdiction in which the LUC is issued and used. Here's how LUCs could address key regulatory concerns:

Potential Non-Financial Asset Classification


Can avoid Classification as a Financial Asset

LUCs are explicitly designed as 'non-financial' assets used for in-game purposes only. They cannot be traded on exchanges or used for financial speculation, which can help avoid classification as securities or commodities, potentially reducing oversight from regulatory agencies.

Possible Simplified Licensing Requirements

Since LUCs are not designed to be a form of speculative investment, the issuer is less likely to require licenses typically needed for financial services, such as broker-dealer or exchange licenses.

Restricted Transferability


Limited Peer-to-Peer Transfers

By restricting transfers only to whitelisted addresses (such as the gaming platform, other players, or fiat on/off-ramp providers), LUCs can avoid certain regulatory issues related to money transmission and anti-money laundering (AML) compliance that are more complex for cryptocurrencies allowing free peer-to-peer transactions.

Controlled Flow of Tokens

The inability to send LUCs between players ensures that these assets are used solely within the defined ecosystem, further reducing the risk of the tokens being treated as currency substitutes.

Potentially Reduced AML/KYC Requirements


Limited Use Cases

Because LUCs are not tradable and can only be redeemed through controlled channels, the AML and KYC requirements can be simpler. The issuer can work closely with fiat on/off-ramp providers who typically handle KYC, streamlining the compliance process.

Avoid Currency Classification

Since LUCs are not used as a medium of exchange beyond the gaming ecosystem, they are less likely to be classified as virtual currencies, avoiding stricter regulatory scrutiny related to virtual currency services.

Consumer Protection and Fair Use


Transparent and Predictable Value

Unlike traditional cryptocurrencies, LUCs do not fluctuate in value, making them more transparent for users. This can help mitigate regulatory concerns related to consumer protection.

Defined Redemption Options

By allowing redemption for local currency only through the gaming platform or regulated partners, LUCs ensure that players have clear, regulated methods for cashing out, which regulators favour to protect consumers.

Reduced Tax Complications in Certain Countries


Non-Financial Nature

Since LUCs are likely not considered investments, the tax implications for players can be simpler in certain jurisdictions. They are treated more like in-game credits rather than taxable financial assets, potentially avoiding capital gains taxes on transactions in some countries.

Summary


LUCs are structured to minimize exposure to financial regulations related to securities, commodities, and currencies. By focusing on a non-financial, in-game credit model with controlled transferability and usage, the concept is set to avoid many complex legal and compliance issues associated with more traditional cryptocurrencies and tokens. However, working with legal experts to ensure ongoing regulatory compliance, especially in different jurisdictions, is still advisable for platforms that want to use LUCs.

Glossary of Terms


Blockchain & Technical Terms

1. Self-Custodial Wallet: A blockchain wallet where users have full ownership and control of their private keys, ensuring they are the sole custodians of their assets without reliance on third-party services.

2. Whitelisted Wallets: Blockchain wallets that are pre-approved by the issuer, enabling controlled access to transactions involving Level-Up Coins (LUCs).

3. ERC-20 Token: A widely-used standard for fungible tokens on the Ethereum blockchain, ensuring compatibility across various platforms and tools adhering to the ERC-20 protocol.

4. Smart Contract: A self-executing digital agreement embedded within blockchain technology, where the terms of the agreement are written into code, enabling automated and tamper-proof execution.

5. On/Off-Ramp Providers: Services or platforms that facilitate the conversion of cryptocurrencies into fiat currencies and vice versa, allowing seamless integration between blockchain ecosystems and traditional finance.

6. Layer-2 Blockchain: A supplementary protocol built on top of an existing blockchain, designed to improve scalability, reduce transaction fees, and enhance performance while leveraging the security of the underlying blockchain.

7. EVM-Compatible Wallet: A cryptocurrency wallet that supports blockchains compatible with the Ethereum Virtual Machine (EVM), enabling interaction with various blockchain networks, including Ethereum and Polygon.

8. Whitelist Management: The process of adding or removing wallet addresses from a predefined list that governs their permissions for specific transactions or functionalities within the ecosystem.

9. Peer-to-Peer Transfers: Direct transactions between two user wallets without the involvement of intermediaries, providing decentralised and efficient asset exchanges.

10. Token Minting: The creation of new blockchain tokens and their addition to the blockchain, often managed by a governing entity or smart contract.

Game and Player Ecosystem Terms

11. In-Game Credits: Digital assets or points used exclusively within a gaming platform for purchases, rewards, or upgrades to enhance the player experience.

12. Convertible Credit: A form of in-game credit that can be redeemed for fiat currency or other assets under specified conditions, providing flexibility for players.

13. Exclusive Gaming Rewards: Special incentives offered to players using LUCs, including access to premium content, unique features, or enhanced in-game functionalities.

14. Cross-Platform Flexibility: The capability of LUCs to be utilised across multiple games or platforms provided by the same gaming company, enabling seamless integration within an ecosystem.

15. Player Retention: Strategies employed by gaming platforms to keep players engaged and returning, such as through rewards, incentives, or exclusive content.

Regulatory & Compliance Terms

16. Non-Financial Asset: An asset that is explicitly designed not to be classified as a financial product (e.g., securities), thereby avoiding stringent regulatory oversight.

17. Stablecoin: A type of cryptocurrency designed to maintain a stable value by being pegged to a reserve asset, such as fiat currency, to reduce volatility.

18. KYC (Know Your Customer): A compliance process where businesses verify the identity of their customers to ensure adherence to regulations and prevent fraudulent activities.

19. AML (Anti-Money Laundering): Measures and processes aimed at detecting and preventing the use of financial systems for money laundering or other illicit activities.

20. Regulatory Oversight: The supervision and governance of financial or gaming activities by regulatory authorities to ensure compliance with laws and standards.

21. Treasury Management: The administration of financial resources, including funds allocation, liquidity management, and compliance with regulatory requirements.

Governance & Organisational Terms

22. CryptoSeed DAO: A decentralised autonomous organisation dedicated to supporting the gaming industry through innovative blockchain-based solutions, funded by grants and community contributions.

23. Governance Mechanisms: Processes that allow stakeholders to participate in decision-making within a decentralised ecosystem, ensuring transparency and community involvement.

24. Grant Programmes: Initiatives to distribute funding or tokens to developers or projects aligned with a platform's vision, fostering innovation and ecosystem growth.

Token & Ecosystem Terms

25. Level-Up Coins (LUCs): Blockchain-based in-game credits tied to a specific gaming platform. LUCs are non-tradable and designed for secure, scalable, and seamless transactions.

26. Token Flow: The movement of tokens within the ecosystem, including transactions between wallets, gaming platforms, and on/off-ramp providers, governed by smart contract rules.

27. Controlled Token Movement: The restriction of token transfers to pre-approved destinations, ensuring compliance and preventing unauthorised use.

28. Redemption Options: Methods available for players to exchange LUCs for fiat currency or other assets, typically through the gaming platform or authorised partners.

29. Value Stability: The characteristic of LUCs maintaining a fixed or predictable value within the gaming ecosystem, unlike volatile cryptocurrencies, to ensure user trust and consistency.