On-chain game token circulation models can contribute to inflation and user churn if poorly designed. High token issuance rates without sufficient sinks, like burning or staking, flood the market, devaluing tokens and eroding player trust. Speculative models, such as those seen in some play-to-earn games, attract short-term profit-seekers rather than engaged players, leading to churn when rewards diminish. Data shows Web3 games with unbalanced tokenomics often see retention rates drop below 50% within months. Conversely, well-structured models with controlled issuance, clear utility (e.g., in-game purchases), and incentives like lock-up periods can stabilize value and boost retention, as seen in games like Gods Unchained, with a 30% retention increase over traditional games. Developers must balance supply and demand to avoid inflation-driven spirals and foster long-term player engagement.