Even leaving aside my ongoing fascination with DigiDaigaku — no more mentions today — there is so much going on in the NFT and blockchain gaming sector, it’s impossible to cover it all, let alone find the time to understand how it all works.
Much of this is due to current crypto sentiment. People are much happier trading with ETH at $1,600 and rising than ETH falling through $1,000.
More significant, however, is specific NFT market sentiment. To trade anything, traders need to also have confidence in a project — mainly its liquidity — but not necessarily for the long-term, just in the immediate horizon.
This is certainly the case for Yuga Labs’ Sewer Pass, which has now done over $68 million-worth of lifetime trading volume; something which has seen the floor price of this free mint rise to 2.6 ETH ($4,300).
Traders have been happy to trade an NFT collection from the #1 NFT project ever during a period of time-restricted high demand because the Sewer Pass gives access to the Dookey Dash game, which itself offers the promise of additional rewards.
It will be fascinating to track following the closing of Dookey Dash on Wednesday 8th February, which will trigger a further week of NFT trading, this time of Sewer Passes and their hardcoded high scores.
I think (hope) this should result in a floor price drop for the lowest high scores and a crazy bidding war for the top score, but this involves an assumption about the value of the mysterious energy material that will act as the reward for this project, as well as a stepping stone to whatever Yuga Labs is cooking up next.
There’s a similar vibe at work with Checks VV, the super cool Twitter-themed art project from Jack Butcher, which started out as a ‘free mint’ — technically $8 — and is driving engagement and price velocity with its game theory around burning NFTs to generate rarer versions.
That functionality is still to go live, but the ultimate goal will be to create a one tick-check artwork; something that will require burning 4,096 entry-level 80 tick-check NFTs.
The fact that the entry-level floor price of 2.34 ETH means such a one tick-check artwork would be the most valuable NFT piece of art ever suggests the market is somewhat over-heated, especially as there’s the potential for the 16,027 total supply of Checks to concentrate down to three of these ultimate one tick-checks.
As discussed in the Proof podcast in the context of the markets being ‘a voting machine in the short-term but a weighing machine in the long-term’, the NFT market is super-hot for voting at present, just as long as there’s a decent narrative and solid short-term trading liquidity.
Even the Donald is pumping: Trump Digital Trading Cards is the top trading collection on Polygon with a floor of $900. Not bad for a 45,000-strong collection, which minted at $99.
As for who’s buying them, my question would be does it matter?
Of course, to some extent it does matter, especially when the market flips into weighing mode. In particular, decentralized markets are ideal for disciplined manipulation as highlighted in this recent expose of NFT collection bot influencing.
But the vast majority of those collections were obviously shilled, also from non-doxxed teams and driven by light liquidity from traders out to make a quick buck. And while these players are certainly active in today’s deeper markets, they are secondary influences when it comes to the success of legitimate teams such as Yuga Labs, Jack Butcher and even Donald Trump.
And it’s good to see blockchain games getting into the action too.
This week, Boomland (disclosure: I’m an advisor) has enabled the burning of the 1,500 Genesis Chests for its forthcoming game Hunters On-Chain that it released in a free mint on Polygon last week.
Combining trading on the released Hunter characters — floor price $80 — and the Chests — floor price $135 — the game ranks #2 on most traded Polygon NFT chart.
Early days for sure but with a roadmap including a paid NFT mint, followed by early access to the game in February and culminating in an open free NFT mint and full game launch in late March, I think it’s demonstrative as one of the projects highlighting that games will be one of the key trends in NFTs and crypto during 2023.
One of the most significant elements compared to pure NFTs is the different price dynamic around games. Because gaming NFTs have utility and games are designed to be mass market products, they don’t — and likely won’t — attract NFT traders.
Even at its height, PFP collectors didn’t collect Axie Infinity Mystics — limited to around 1,000 NFTs — because they didn’t enjoy the attentions of play-to-earn scholars. The community wasn’t blue chip enough.
This is both the strength and weakness of blockchain games in the short-term. They offer relatively cheap assets and potentially will be able to onboard a lot of users. That’s the opposite of the most popular NFT collections, which prefer fewer and more expensive. It’s the scarcity model that enables fast price inflation.
For traders, it’s much harder to make $50,000 selling 100 $1,000 assets compared to one $100,000 asset.
And yet this ‘cheap and more’ approach will also be the strength of the most popular blockchain games as they bring that weight to bear over the long-term through their live ops because at some point the market will flip. It always does.
This Substack is sponsored by Hiro Capital: investing in the future of games
Funding news
When startup Xterio announced a $40 million funding round lead by FunPlus and FTX Ventures in August 2022 to build a web3 gaming platform, there was something odd I couldn’t put my finger on (and — no — it wasn’t FTX’s involvement; I’m not that prescient).
But it could be that such events since have forced a reassessment of Xterio’s plans: if nothing else, FTX’s collapse must have impacted its working capital to some degree.
Nevertheless, the Sainted Dean suggests the platform business is operating at per usual with offices in Switzerland and Singapore and a headcount now into triple figures.
What is surprising about the news that Xterio has invested $2.5 million into new entity Overworld, is that Overworld is staffed by the likes of CEO Jeremy Hall, CTO Yitao Guan, creative director James Hall and veep of tech John Harris, all of who were also listed as senior Xterio co-founders.
Even assuming these people are working really hard, to me that would seem to leave Xterio rather light on leadership. I’m guessing FunPlus is likely stepping up and leading the project more formally that it previously was. In the original press release, Xterio was labelled as FunPlus’ exclusive partner so there have always been strong links between the two companies.
As for Overworld, it’s a distributed company, headquartered in Florida, which is building a “cross-platform F2P multiplayer RPG” that will operate on the Xterio platform. It hopes to roll out its closed alpha before the end of the year and will also launch its genesis PFP collection in Q2 2023.
Bye-bye EtherOrcs news
Innovative on-chain game EtherOrcs has announced via a long Twitter thread that development has been halted. Dev Poof_eth stated that the team struggled with a “shoestring budget” — it was free mint — and due to its philosophy it wasn’t a good fit for VC investment.
In this context, the art and contracts will be opened up under a CC0 license, giving the community the opportunity to take the game forward, and for other developers to use the code etc.
There’s another good analysis of the ambition of the project from B33f on Medium.
But personally I do wonder if someone in crypto or DAOland won’t pick up this project somehow and reboot it.
Ronin Liquidity Rewards news
Sky Mavis has launched the new liquidity rewards for tokens on its Ronin blockchain. These are designed to improve the liquidity of the RON token so additional rewards for the SLP/WETH and AXS/WETH pairs have been removed.
Instead, RON rewards have been directed to the following new pairs: RON/AXS, RON/SLP and RON/USDC. The old RON/WETH pair still gets its rewards.
As with all such changes, there’s an opportunity for some alpha as the new pairs are currently under-capitalized, which means - for the present — they offer triple digit APR, at least until more liquidity flows into them.
Additional Links
Sequoia Capital has restructured the majority of its assets into a single long term “permanent fund”, which is valued at $13.6 billion. Meanwhile, SoftBank announced the value of its assets under management dropped by $5.8 billion during the past quarter to $37 billion.
There could have been four crypto ads in the Super Bowl, but apparently post-FTX, those deals fell through. Gabe Leydon must be feeling very happy.
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