A Dossier for Prospective Investors
Intro
Prediction: GameFi will be one of the biggest “themes” in crypto for 2022, and these three diamonds in the rough will be among the most successful projects for their stakeholders.
This article is intended to be a companion article to my previous post, where I recap last year’s developments in GameFi, a shorthand for Gamified Finance products like play-to-earn games. In my previous post I discussed some of the strategies deployed by existing GameFi projects and the key successes and failures to take away from each. By considering other projects using the same framework, I’ve selected three gems that are certain to top the P2E pack. Read on below, and let’s get hype together!
To be completely transparent, all three of my picks are text-based RPGs. I don’t think it will be the only successful genre in the P2E space; there are some mouth-watering projects dropping like Illuvium (SRPG), Cryowar (ARPG), and Imperium Empires (RTS). But I am only interested in gameplay models that are primarily idle. I work full time and I’m already interested in more games than there are hours in the day, so P2E to me can’t be like a second job. I’m only interested in games to fill the down time, and I believe in these models because I think a lot of people share my experience.
Crypto Raiders
Crypto Raiders is “a utility-based NFT RPG game where you raid weekly dungeons for gear & loot.” It has a pleasant pixel art style that suits the genre nicely, and it’s built on Polygon, where transactions are fast and cheap. In this game you recruit raiders, which are stat-bearing NFT characters that can be equipped with modular gear to sup them up even further.
Game Design: Crypto Raiders is a simple dungeon crawler that differentiates itself with PvP ambitions and a roguelite twist. The gameplay model feels like an asynchronous version of Crawl. Raider NFTs can raid three dungeons a week for free, earning the player a chance at loot and AURUM, the game’s earnings currency. Additional raids can be purchased à la carte with AURUM.
In the dungeons, which are more or less an idle experience, raiders encounter other players’ MOB NFTs, which can kill raiders and steal some of their loot. MOBs can be used every day, making them a sort of fixed stake-to-earn NFT, while the raiders are modular in design and can permanently die. The game seems to balance this roguelite mechanic with Darkest Dungeon-esque stoicism: your surviving raiders can bring in fresh recruits once per month. The idea of potentially losing your NFTs is intimidating, but unique, and permadeath conditions seem to be tightly controlled.
Entry Point: At the time of writing, the game’s RAIDER token is trading around $5, well off its ATH at $13.54. The floor price on raider NFTs is .1 ETH (~$330), with MOBs trading higher at a .25 ETH floor (~$825). The game is in very early beta, with no official whitepaper and the MOB portion of the game released only yesterday. RAIDER has a maximum supply of 100,000,000, with less than 6% in circulation. RAIDER is trading up 12% over the last 24 hours, presenting a clear “last chance to get in cheap” signal.
Tokenomics: Many games are following this extremely dilutive model and I have mixed feelings about it. Games need a way to incentivize early adopters to their ecosystem, and I do mean early, before alpha builds are finalized even. Allocating a substantial portion of the governance token supply for LP farming rewards accomplishes this, but high emissions also has a negative impact on price action.
Super-dilutionary tokenomics presumes that growth of the user base will create more buying pressure faster than the game’s early incentives create selling pressure. This is an extremely delicate balance to tread; anyone who’s prospected on some fresh DEX tokens can tell you how quickly high emissions can cause a liquidity cascade. DeFi Kingdoms attempts to solve this problem with a carefully calculated non-linear unlock schedule for their farms. How Crypto Raiders plans to manage these risks remains an area of uncertainty for me, despite how bullish I am on the project.
I think it’s far too late for the team to lack a published whitepaper, but an unofficial rendition of the game’s planned economy is reproduced below. It looks promising, with multiple planned revenue streams and a simple two-token model to help enable price manipulation. Raiders are only purchaseable on OpenSea with MATIC right now, which is unhealthy for the game’s feedback loop, but an in-game auction house is launching soon that I presume will enable purchases with AURUM.
On the whole, I’m heavily interested in this project. There are a few question marks I’d like to see resolved, and its P2E economy needs some work before it reaches the simple perfection of Crabada’s, but it’s healthy enough to support the project at this juncture and I think Crypto Raiders has a huge 2022 ahead.
DeFi Kingdoms: Crystalvale
Wait a minute, DeFi Kingdoms (JEWEL) is hardly an obscure gem, the game’s FDV is almost $7 billion! I’m not a JEWEL Maxi but there are several reasons why I think this game is nonetheless severely undervalued at the time of writing.
Game Design: DeFi Kingdoms: Serendale is a text-based RPG in which players purchase hero NFTs and use them to perform quests, earning the game’s native JEWEL token. The game runs on Harmony, a tiny chain DFK outgrew so quickly the game has almost twice the FDV of the blockchain it’s built on. Heroes are “live” utility-based NFTs that can gain experience, level up, and specialize into professions. Heroes can accomplish simple idle tasks, including “gardening,” a slick thematic UI overlay for the game’s LP farms. They are limited to five quests per eight hours. Heroes have functional stats as well as hidden genes, enabling a “summoning” system for new hero growth that, like Crabada’s, screams of Pokemon.
The game’s been enormously successful already and the gameplay model is proven, even without any of the additional gameplay content in the development pipeline. It’s polished, smooth, and fun.
Entry Point: At the time of writing, JEWEL is trading between $14 and $15, a stretch down from its ATH at $23.36. The floor price on basic heroes is about 40 JEWEL (~$575). Recent negative price action I attribute to a combination of BTC-related market pressure as well as mounting frustration with the Harmony chain’s complete inability to keep up with DFK’s popularity. With its Avalanche fork likely only weeks away, next strong bounce is likely to send JEWEL back to the $20+ region.
Tokenomics: JEWEL has a maximum supply of 500,000,000, with less than 13% in circulation. As discussed indirectly above, the token’s heavily dilutive model is intended to be tempered by the game’s “locking” mechanism, in which early emissions are predictably high but the majority of earnings are vested for later unlock. There are separate, overlapping formulas for the JEWEL unlocking and emissions schedules, which makes the tokenomics pretty esoteric. The purported idea is to both incentivize early adoption with thicc emissions but also scale the playing field so that later adopters aren’t priced out. It’s a little unproven, but I think it’s a well considered strategy, when considered in conversation with the game’s biggest boon.
Multichain Operations: Overall, DeFi Kingdoms’ universe and whitepaper are already extensive, with a pleasant amount of theorycrafting to be had, spurring some elaborate fansites with great information dumps. The team has a detailed roadmap for future development, beginning with the launch of a new fork on Avalanche blockchain in the upcoming weeks called DeFi Kingdoms: Crystalvale. Crystalvale will be a snow-themed realm, analagous to Serendale but with some unique collectible perks. The game’s roadmap hints at additional planned multi-chain expansions, the next perhaps as early as 2022.
I think being one of the first GameFi projects to the multichain space is going to be the project’s saving grace. Everything about the game, its model, tokenomics, etc. are ambitious but sustainable, provided the game keeps growing. DFK’s greatest critics, I think, suggest that Harmony’s liquidity “black hole” has left the game with an inflated valuation for its current size and scope. I think that criticism is valid, but DFK intends to play the long game, and the game’s FDV is far more palatable for investors when spread across multiple blockchain ecosystems. Being one of the first GameFi projects to the space is likely to keep steam in DeFi Kingdoms’ engines for a long time. After all, the future is multichain.
The Legend of Aurum Draconis
The Legend of Aurum Draconis is a text-based RPG in development on the Avalanche blockchain by Dragon Crypto Gaming. At first glance, it’s basically a DFK-alike, in which player Hero NFTs can be recruited, trained, and specialized to complete different in-game quests. I don’t think that’s necessarily prohibitive, there is room for more than one Crystalvale on the chain and the possibilities for future collaboration between the two teams are mindblowing. In any case, The Legend of Aurum Draconis and its native token DCAU have some differentiating factors likely to help them stand out.
Game Design: This game is in alpha and limited features have been leaked. One interesting feature is that the cost of recruiting new heroes is permanently pegged to $100. I think that is a crucial, insightful step to maintain accessibility to new users, especially when your platform’s built on what will be a three to four figure token. Experienced heroes can be sold aftermarket for more, But this is an ingenious idea for an NFT-based project to maintaining scalability as its market cap grows.
Entry Point/Tokenomics: DCAU is trading between $140 and $180 at the time of writing, which unfortunately for prospective investors marks a 3,000% increase over the last month. Despite the game’s recent meteoric gains, I believe there is solid evidence that it is still early for the project. With a market cap of $23M at the time of writing (and all 155,000 DCAU tokens already in circulation), the Legend of Aurum Draconis is the lowest market cap in our trio.
Multi-faceted Organization: The Legend of Aurum Draconis benefits from membership in a larger ecosystem, Dragon Crypto Gaming. The organization is working on a suite of dragon-themed products, including Tiny Dragons, a collectible NFT auto-battler. The floor price on those has gone from 4.5 to 9 AVAX in the last week. Additionally, although DCAU is earned by questing in game and can be used to purchase new heroes, making it a closed feedback loop, the team also has plans to release a second currency DCAR. DCAR is intended to provide staking and governance functions, probably in ve(3,3) format. This seems well considered to me, since DCAU is very limited and only 15% of the supply is reserved for team and in-game rewards functions, making it ill-suited to lock the majority of the tokens.
The Legend of Aurum Draconis’ complete suite of products look like a promising, multi-faceted approach to P2E gaming. The team has confirmed that participation in each game and aspect of their ecosystem will have special rewards, abilities, or perks earmarked in the other games, building internal infrastructure. The game is going places.
BONUS: Knights of Cathena
Three P2E gems promised, three delivered. Now here’s the true alpha: this fourth game was just announced today, has almost no information available, and is probably the biggest opportunity of the four. GET HYPE.
What is it? Knights of Cathena is a turn-based strategy PvP game with RPG elements.
Why is it such an opportunity? This game is building on the Elrond (EGLD) blockchain. Elrond is a light, scalable, and highly efficient blockchain with over $3 billion in value and absolutely no use cases. The chain is mechanically an absolute all star; it’s carbon negative, has advanced sharding mechanics, a newly developed stablecoin, and massive scalability. Elrond’s a hero without a cause.
It cannot be overstated how awesome this chain is and how little there is to do on it. Elrond’s first DEX, generously packed with EGLD, a DEX token, and one other, is the literal only thing to do on the chain and has been hemorrhaging value to emissions since its inception last Fall. This network, which is otherwise doing everything right, is being crippled by a complete absence of content to create buying pressure.
In a year in which experts are calling for GameFi to catalyze mass adoption on a global scale, KoC could be just the catalyst Elrond needs on its own shores. Plus it’s abbreviated KoC. The meme value is endless 🍆.
Conclusion
There you have it folks, my t̶h̶r̶e̶e̶ four GameFi gems to retire on in 2022. See you at the PvP!
