#844 Pixels' latest hypothesis
The road to ecosystem sustainability
Top 300 Web3 Games Index: ↓2% today, ↓52% YTD
Ronin Games Index: ↓1% today, ↓73% YTD
Immutable Games Index: ↓2% today, ↓56% YTD
AI Gaming Agents: ↓10% today, ↓48% YTD
Jon’s TX Games Index: ↓2% today, ↓56% YTD
Jon’s 2025 Reboot Index*: 0% today, ↓48% YTD
*Definitely not investment advice
Making web3 games sustainable in the long term has been — and remains — the fundamental problem the industry is trying to solve.
Of course, giving away crypto tokens has certainly proven to be a successful method of building peak audience in the short term, but it’s become increasingly clear that the vast majority of such audiences do not hang around once the rewards run out.
Axie Infinity, Alien Worlds, Splinterlands and now Pixels are examples of games that have lost over 90% of their peak token values as well as 90% of their peak audiences. But this isn’t what makes these games significant. Many more blockchain games have performed similarly.
But what makes the likes of Axie Infinity, Alien Worlds, Splinterlands and Pixels significant is these games have continued to operate despite these circumstances, experimenting with different methods to become sustainable despite their historic declines.
As they say, startups don’t run out of money. They run out of hypotheses to execute against.
Not that this appears to be the fate Pixels will be succumbing to anytime soon. For — as detailed in Blockchain Gaming World #197 — it’s attempting its most radical rebuild yet.
Over the past year, it’s been working to better target the players to whom it gives PIXEL token rewards; 28 million tokens per month. Initially, the distribution was wide — too wide — so the process has been all about narrowing that largesse in order to get to the stage of generating a positive net spend in-game on the tokens given away.
The equation is very simple:
Give away N tokens to players every month
Generate net in-game spend from these players of N+1.
But maybe Pixels can’t fulfil this vision. That’s where the Pixels ecosystem comes into play. The first game to also use the PIXEL token was Pixel Dungeons, while Forgotten Runiverse will be the second.
So the big news from Pixels is that it’s going to enable lots of new games to distribute a share of its 28 million monthly shower to their playerbase by means of a new staking system, which will see players receiving a new vPIXEL token, which can only be spent in supported games or staked into these games’ staking pool.
The games with most vPIXEL staked will receive the largest amount of rewards monthly to distribute back to their players with the crucial proviso that these vPIXEL rewards can’t be extracted and sold outside of the ecosystem unless users pay a 50% fee, which is redistributed to stakers.
Sponsored by Hiro Capital: investing 📈 in the future 🔮 of gaming 🎮
In this way, Pixels’ CEO Luke Barwikowski hopes to both better target non-extractive users as well as expanding the ecosystem of Pixels games in the hope that one or more of them will generate net return on rewards and hence kickstart what will effectively become a perpetual motion machine rewarding committed users.
Notably, this sort of token mechanism isn’t simple to create. Indeed, it’s not been developed by Pixels but by Limit Break, which previously worked on the ERC721C standard for enforcing NFT royalties and is now launching its ERC20 standard as the Apptoken protocol.
This means the PIXEL-vPIXEL system and the staking and 50% fee swap system are fully onchain — handled by smart contracts — and once launched will be simple for EVM-compatible partner games to integrate.
Of course, this approach still may not work. Maybe sustainable web3 game design can not best our human self-serving reflex to beggar our neighbor. Nevertheless, I think it’s the best attempt we’ve seen thus far.
Calendar
Sangokushi Taisen - Battle of Three Kingdoms launches — 30th April
Abstract’s mini-games tournament ($20 entry) starts — 5th May
The Sandbox’s latest land NFT sale ends — 7th May
Revolving Games’s mobile game War of Nova launches — 8th May
Abstract mini-games tournament ends — 9th May
Deadline to link EVM wallets to Delabs’ Mini App platform — 16th May
The Sandbox Alpha 5 Season ends — 17th May
Moonfrost launches early access — late May
Last game of Soccerverse Season 1 — 28th June
Attempted Graph Of The Day
In BCGW #197, Luke Barwikowski also spoke about the spectrum of web3 gamers, which ranges from bots and farmers to true enthusiasts, including the zone of uncertain benefits.
Maybe something like this?
🔗 Additional Links 🔗
This week, I got $4.55-worth of IMX from Immutable’s perpetual rewards program. That’s down 63% compared to last week, but still $67 in total over the past three weeks.
Off The Grid has migrated its first 1,000 users from testnet to the Gunz mainnet.
1kx and Blockchain Capital have invested an undisclosed amount into LINE-aligned blockchain Kaia.
Flappy Bird has been rereleased via the mobile version of the Epic Games Store for Android. No web3 this time though so it looks like 2024’s TON/Telegram version has been canned.
FIFA is migrating its Algorand-based FIFA Collect blockchain to its new EVM-based FIFA Blockchain.
🤖 AI-ditional Links 🤖
The marketcap of AI agent tokens is back up to $9 billion.
An NBA-focused AI agent has gone live on BNB.