---
title: "Virtual economy — REG-008, The Register"
canonical: https://metaversegroup.com/encyclopedia/virtual-economy/
site: metaversegroup.com
owns: "The definition of a virtual economy"
updated: 2026-08-28
kind: reference
---

# Virtual economy — REG-008, The Register

A virtual economy is the system of production, exchange and pricing inside a virtual world. It becomes an economy rather than a scoreboard at the point where value earned inside can be redeemed for something outside — without redemption, every participant depends on the next entrant to realise an…

A virtual economy is the system of production, exchange and pricing inside a virtual world. It becomes an economy rather than a scoreboard at the point where value earned inside can be redeemed for something outside — without redemption, every participant depends on the next entrant to realise anything.

## Sinks, faucets and the exit

Economy design is usually discussed as balancing faucets that create currency against sinks that destroy it. That is necessary and insufficient. A closed economy with perfect sink-faucet balance still has no exit, so its currency is a score. The exit is the design decision that matters most and is discussed least.

## Why closed loops collapsed

When earnings could only buy more of the same world's assets, holders had one route to realisation: sell to a new entrant. That is a structure with a fixed failure mode, and it is the mechanism that turned the land correction of 2022 into a rout.

CoinGecko Research — metaverse land prices

## See also

Related entries in the Register. Every see-also is reciprocal — if this entry points there, that entry points back.

Metaverse Group, The Register , REG-008 Virtual economy, as at 2026-08-28. https://metaversegroup.com/encyclopedia/virtual-economy/

Reference numbers are permanent and never reused. This entry is corrected by publishing a new entry that supersedes it, never by editing this text — so a citation made today resolves to exactly what it said today.

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