Which gaming association positioned itself best for the bull market? – Cointelegraph Magazine

During the blockchain gaming bull run inspired by Axie Infinity last cycle, gaming guilds collected huge hoards. But how did they survive the bull market and turn their treasury around and set themselves up for the bull market?

And most importantly, which one will take advantage of the big opportunities expected this year?

Gaming groups – organized groups of supported players – were the hottest Web3 business model of 2021. Popular blockchain games, especially Axie Infinity, require expensive NFTs to play and “scholarships” allow players to get resources to learn and play. Via Playgroup.

In the year Projected as cash cows in 2021, gaming teams have been the mainstay of customer acquisition, with players in developing countries hit by unemployment due to covid lockdowns.

The union became very profitable. There were believed to be over 20,000 including micro guilds. There were 800 groups in the Philippines alone. The Merit Circle Guild has raised $100 million and the Avocado Society has raised $45 million by 2021. Merit Circle has raised more than $100 million by November 2021 and YGG is valued at more than $10 billion for a concept that suggests its revenue will continue indefinitely.

Then Axi Infinity, the game where most of the team members built their economy, dropped.

Mitch Penman-Allen, founder of the Perrion Game Society, told the magazine:

“By the end of 2022, we were convinced that the Axi ecosystem would not be sustainable. We have reduced our exposure to equities and improved our business model. We started planning and planning a roadmap for the future, but the downfall came sooner than we thought—the $620 million Axie Ecosystem hack.

And so the association had huge treasuries and a desire to flip them. But to what?

As the bear market eroded user base, revenue and demand, some guilds moved to develop and invest in new games in search of new success. Others, like the guys in this story, Perion, CGU, and YGG have started different efforts focused on building the infrastructure of the gaming community with their big additions. Some are dead.

With the new Bitcoin ETF fueled bull market on the horizon, have the battered and bruised gaming groups developed a clear and intuitive strategy to take advantage of it?

There is at least one clear theme, gaming associations have all led to online popularity building in various forms.

But first, how did we get here in three short years?

Originals and Copies: How Gaming Guilds Began

Gaby Dizon founded YGG, the first web3 gaming group in 2020. He told the magazine: “The key lesson from that time was that some organizations were focused on making as much money as possible. My ultimate goal was to grow my user base.

crypto Long ago, Dizon was a pioneer in the Philippine gaming industry in 2003 as part of the team that released the first Filipino-made game, Anito: Land of Fury, and since 2014 he has been running his own Manila-based game studio, Elevation Games.

Continuous tokenomics

He learned about blockchain and liked the fact that “smart contracts can transfer value and Ethereum can set value in virtual economies.” But blockchain's financial applications have left it cold. Cryptokitties became excited when he saw the idea of ​​NFTs being popularized for gaming applications. In 2018, Axis acquired an online blockchain-based game from Vietnamese studio Sky Mavis. As covid gripped the world, in 2020 things started moving towards the idea of ​​earning tokens from gaming in the hobby community.

While playing Axie Infinity and breeding Axies, you discover that it is possible to lend Axie NFTs without giving away your private keys. This was the founding idea for YGG, the first guild concept to scale. A seed fund led by Delphi Digital quickly raised $1.25 million.

The affiliates became a way to profit from property rentals but relied on community managers, especially in the Philippines, where Axie was the first to adopt and had the largest user base.

Axis Infinity became the most successful game of 2021, thanks in part to the large Filipino community borrowing Axis from guilds to play the game and earn extra income during the Covid era.

Dizon just raised its token sale by $12 million. As he explained to the magazine, the support associations were inevitable – and the height and madness of the market threatened him.

“Some people raise $100 million for their teams, but the reality is that there are a lot of expectations out of money now.

Now everyone is scrambling to make sure they are building something of value to their Web 3 game and scholarship community.

Does the association have an important role in building a user name?

Dizon initially used YGG's treasury to rehybrid Axies (creating new NFTs) and buy other NFTs to invest in upcoming games. Today, he's focused on the same mission since day one: improving gamers.

In the year By the end of 2021, using YGG treasury funds, he started to build a query and success platform. It allows players to earn achievements in various games and increase their reputation on the chain. Reputation will be one of the most important things to build in Web 3, he told the magazine.

The YGG Guild Advancement Program, or GAP for short, is an exercise in which players undertake in-game and community-based missions to demonstrate their potential and contribution to the wider community.

“So, for example, if an individual can pass certain missions, it can be verified by a non-transferable NFT, Soulbound Token or SBTs on the chain. These are the proof of their achievements in Web 3. The combination of all these SBTs tells the story of the individual. And based on that, the holders can, for example, access other games or communities. They can,” explains Dizon.

The non-transferable nature of SBT is very important because it means that the earned record cannot be bought or sold and can only be earned through the efforts of the wallet.

Another major part of YGG's quest program is Superquests, a partnership between YGG and Axie Infinity earlier this year. It allows players to develop new skills in an educational program delivered with short video content created by top community influencers and YGG Champions. And while it's for group community members, it's not a closed shop and new members are welcome.

“In 10-15 years, I want people to match their skills with virtual economies. In crypto, it is a critical currency for reward for effort.

Dizon suggests that the ERC-6551 token standard, or Token Bound Accounts (TBAs), will impact blockchain gaming, and developers are already using it to embed AI into games.

TBAs are a class effect that allows NFTs to own other NFTs. So you can have TBA which is non-transferable Soulbound Token (SBT).

Dizon In the future metaverse, virtual economies will one day rival small countries in terms of GDP. The emergence of AI will send us there faster than you think and popular tools will become even more important.

On-chain missions can be verified with virtual world reputation through wallet history, proof of contribution with SBT achievements and associated metadata. These Web3 tools show what someone really does and who they are.

“This is very important because I think the next level of crypto is going to be on people's website 3 reputation. In things like product farming, we don't distinguish between useful people or people who are just out to make money. I think reputation in groups and other communities. I think it goes a long way to identify what is most important,” Dizon said.

“If you are a wallet address, what have you contributed to society?”

Strava for gaming

Perion DAO also built a player name tool, using their precious treasury along with many other things in the bear market. There is 2-State, a platform that allows users to trade and buy NFTs backed by a limited sneaker. ZBET is a prototype platform that allows users to place social bets on Web3 games and will be licensed in January.

They have also previously invested a portion of their funds in gaming VC plays, partnering with 200 gaming firms and investing in 15 in equity, tokens and NFT offerings. In the year They stopped investing in games in 2022, deployed several delta-neutral strategies to achieve strong returns on DeFi, doubling their leverage in around 5 years, 90% of which is now allocated to internal production. Development.

Co-founder Mitch Penman-Allen notes the climate facing the guilds as a bear market emerges in 2022.

“This is not the death of the Web3 gaming market. We were convinced that Axie was the first attempt to implement Axie into a game, which failed and quickly died in a market where popularity exploded overnight. The hook was there, we saw the potential. We just need to find a long-term use case.

The team still believed gaming would be big enough to get users into crypto, but the games weren't there yet.

“We know that strong teams are working on blockchain applications in AAA games, but building a good game takes time. Therefore, we decided to go back to our experience: building high-growth products. We decided to focus on introducing the often skeptical web2 players to the value of in-game web3 applications.

Another issue is that major players' skepticism towards blockchain games is another way for companies to fleece players.

“Gamers have seen it cost $1000s to play Axie Infinity. They consider the sanctity of gaming money management. And this comes after years of predatory monetization tactics like microtransactions, subscriptions, and game price increases from non-Web 3 game studios.

So if money management wasn't the hook, what was? Rewards for a job well done. Like YGG, Perion also focuses on online reputation building, but generally targets the most popular games for gamers, such as Fortnite.

They're working on XP, which is a sort of Strava for gaming – a fitness tracking app to brag to your peers about how fast you run or complete a mountain bike trail, etc. Early market testing looks promising. Guild's game reputational leaderboard XP.gg means players can see how they stack up against their favorite players or friends. Localized leaderboards can put a new spin on poker nights.

Penman-Allen explains, “XP is a logical step for us. Combining traditional gaming ecosystems with proven models for rewards, incentives, competition and ultimately real benefits for the end user.

“We don't want to go down into the dark corners of the Internet, so they don't plan to play for money,” Allen Penman said.

This product could be a natural evolution of Play-to-Earn Guilds. Before, NFTs in particular were like a poker buy-in ticket to get a seat at the gaming table. But because their prices were high, guys came to rent NFTs to players. Now game leaderboards can give studios a different strategy to motivate players.

Play groups and work to earn

Elsewhere, some gaming guilds “are true to their Axie Guild roots by building gaming products or creating ways for developing countries to play or work,” said Gaming Guild CGU founder Raman Nambia.

“Axie has created a community that engages and finds these jobs, and suddenly there's no way forward to enable a productive workforce.”

CGU plans to go from Play to Earn, finding jobs in developing countries, especially in Africa. Another name for getting a job is “work”. “Our primary mission is to protect — putting people in developing countries to work and paying people for their work using crypto,” he said.

CGU has a username building system in the form of Talent Management System (TMS). “This became a ‘Skills Map' system, which was derived from our player management system by tracking player income and participation, and where we identify what skills our community has and prepare job opportunities for them based on their skills, courses they have. They have completed their previous works,” he says.

CGU mostly pays African Internet users for small tasks. This means playing games, now writing posts, following social networks, data logging and data cleaning activities. They have made progress in teaching ChatGPT as well as social media AI tools. For Nambiar, “This is true to the core gaming team's mission.” Although maybe not that fun. Therefore, CGU is now a microservices provider, often offering services to feed AI models.

“Initially, there was one employer, Axie, then Axie was cut and the mission was to find alternative employers. All the games have crashed with the crypto markets, so we've been trying to find the right employers for these people, but they need to understand AI to do these jobs.

Crypto payments make sense in Africa. Without an account or facing high transaction fees, millions are unbanked and may miss out on internet services. So for CGU, “another revenue stream was figuring out mobile money and how to pay in those countries.

“Internet is difficult to access or set up in places like Africa or remote islands in Southeast Asia. We disrupt internet services as a business by trying to provide the best way to connect with the digital economy.

Nambiar is providing Web3 services to Web2 companies by creating NFTs, Wallets and Metaverses on mobiles and laptops.

“By combining basic social media skills, software development and design fundamentals with exposure to AI tools, we can help employees compete in the digital workforce.”

One of the biggest reasons for Axi's failure is unsustainable Tokinomics, and various projects are trying to learn from the mistakes.

After launching as an association in 2021 (and raising a US$5.6 million token sale), Balthazar Dao and experimenting with NFT asset management and marketplaces, Balthazar is now designing its own games.

They recently created Wallet Wars, a Space Invaders-like game where you can shoot down the biggest crypto wallets. It's a play on the idea that players can be the good guys in a world full of crypto bad actors.

“Through Wallet Wars, we aim to restore trust, unity and hope in a troubled community,” Balthazar DAO co-founder John Stefanidis told the magazine.

“To showcase our technology, we've developed a crowdfunded, web3 arcade shooter that combines a variety of winning mechanics where players share in a prize pool. It's called Wallet Wars, where you face liars and challenges, including the cheated, the ruthless, the hacked, the weak, the needy and the weak.”

Stefanidis said the game was originally intended to showcase Web3 technologies, but a completely new financial model was created for NFT games. The first has resonated with the crypto community as it was sold in minutes on October 19, and the opening season will begin in early December.

Wallet Wars offers two tokens. raW Pass NFTs, are ERC-721 NFTs on the Ethereum blockchain and include unique DAO benefits such as monetization, management of BZR points (reward system) and units. The second token to play the game on zksync is raW Ships. Stefanidis explains the sustainable tokonomics model as follows:

“Players need a code from one of the raW Passes to purchase raW Ship NFT, which gives raW Pass holders a commission for every sale using their code. Most of the revenue goes into the prize pool, and never exceeds the revenue, which ensures sustainability.”

It is important to remember that part of Tokinomics is cold impersonal pure mathematics. Zero consideration of human interaction. So a RAW token could theoretically be good. Unless the DAO starts adding utility to the token or recycling it, it's hard to do. or if operating costs increase for the business. So while Tokinomics may be financially sustainable, that doesn't mean the business is still there.

But if Balthazar DAO is able to develop a sustainable Tokenomics model for Web 3 games, this spells a dangerous situation for the Web 3 gaming industry.

Web3 gaming surpasses the heights of Axie Infinity?

The guys were a huge customer acquisition tool, taking advantage of the opportunities created by Covid and unemployment in developing countries. Their new directions in 2024 give us an insight into where Web3 Games and their free educational clubs will go in terms of building a clear theme.

Teams may have high hopes for the next bull market, but it remains to be seen whether games will emerge that offer the same opportunities that Axi once did and attract more players.

For now there is still a lot of experimentation, but YGG Dizon's idea says: “It's still early days for teams, but we welcome people to build digital communities, which are the prerequisites for future digital economies.”

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Max Parasol is an attorney at Gosai Law, a Web3 firm. He worked as a crypto and AI researcher at the RMIT Blockchain Innovation Hub, where he was part of an early-stage crypto startup with private equity and over-the-top ambitions.

Follow the author @maxparasol