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It’s been a ‘typically crypto’ first week of 2022.
NFT prices have spiked, token prices have cratered, OpenSea raised $300 million on a $13 billion valuation, Polygon’s been congested by the popularity of one single idle farming game, and revolution’s afoot in the Pudgy Penguins community.
Volatility is everywhere. It feels great to be alive.
First up let’s discuss the ongoing case of Ethereum PFP collection Pudgy Penguins.
Following an impassioned Twitter thread from collector @9x9x9eth about the behavior of the project’s founders (not for the first time it seems), the community has rallied around to seize control.
The current state of play is NFT drop org Metadrop — together with @9x9x9eth and some others (including ex-SushiSwap lead @0xMaki) — are going to deploy a wrapping contract. This means owners can ‘wrap’ their penguins and all trading revenues will flow to a new community-controlled wallet, not the original wallet controlled by the now discredited founders.
As @0xMaki puts it, “…you don't even need permission of anyone you can just @Wrappedpenguins with your Pengu and understand why decentralization is so important”.
The contract isn’t live yet so we’ll have to see how this one plays out but it’s interesting how this event has galvanized the community. In less than 48 hours, the newly formed Discord has over 500 members and the Wrapped Penguins’ Twitter over 1,000 followers.
This is also reflected in trading activity. The floor price of Pudgy Penguins is up from 1.3 to 1.6 ETH, while the number of daily trades rose from 24 a couple of days ago to 900 yesterday and already over 400 today.
(Disclosure - I was one of them!)
Ironically, in the short term, this means more revenue is going into the original founders’ wallet but I think the momentum is clear — something significant is going to emerge from Pudgy Penguins.
It might not scale in the long term, of course, but it certainly has the potential to become a(nother) pivotal example of how blockchain provides options for concerned parties to formulate a new vision for existing and new community to coalesce around.
Personally, I previously wasn’t interested in Pudgy Penguins but now I feel quite engaged. We’ll see how long it lasts.
Polygon go-slow
As for Polygon, it’s just proving that every successful blockchain eventually gets hit by some sort of over-capacity event which makes it virtually unusable for a time (aka the Jevons Paradox). I’ve not even been able to connect Metamask this week.
In this case, the culprit is Sunflower Farmers, an innocuous idle token farming game that’s been the #1 dapp on Polygon for a week and spiked the gas price.
I haven’t played the game — I can’t get on the network — but it seems fairly innocent, although some people more technical than me have suggested it’s badly designed in terms of how much onchain activity it generates.
I don’t know about that. More generally, any dapp generating 350,000 DAUWs will have some implications for the underlying blockchain as we’ve seen during 2021 in terms of Alien Worlds on Wax, and Splinterlands on Hive.
And in both those situations, the games had to modify how they used the blockchain — Splinterlands took its battles offchain for example — as well as putting formal measures in place to reduce bot activity.
What I don’t understand about the situation is why people are playing Sunflower Farmers; at least this hasn’t been reflected in the $SFF token price, which started at $3, rose to $5 — not a large rise — and now is down to $1.
Probably this means Sunflower Farmers is only a short-term phenomenon but it still has implications for Polygon, just as is the case with Solana’s ongoing issues.
Corporate news
Crypto-heavy browser Brave has announced it’s passed 50 million MAUs, doubling its growth year-on-year for the fifth year in a row. DAUs averaged 15.5 million during December.
Like Opera, Brave has an inbuilt crypto wallet but it also enables users to earn a small amount of $BAT tokens if they opt into adverts. Over 8 million users are now using that service.
Samsung Electronics America is opening a version of its 837 flagship retail store in Decentraland, albeit for a limited time.
Labelled 837X, it features the Connectivity Theater and Sustainability Forest plus the Customization Stage, which will run a mixed reality live dance party hosted by DJ Gamma Vibes from the physical Samsung 837 store.
Of course, there are also NFTs and wearables.
Stonk fave Gamestop is reportedly getting into NFTs. The news it plans to open an NFT marketplace saw its share price rise 22% in extending trading. There are also plans to launch a cryptocurrency.
The stock is still down 62% from its $343 Wallstreetbets-driven peak in January 2021, however.
Sega Sammy may be backtracking on previously announced plans to launch NFTs.
In a financial report from December, which has now surfaced, CEO Haruki Satomi says the company is carefully assessing the situation to “mitigate negative elements”.
He further is reported as stating in relation to play-to-earn, “if it is perceived as simple money-making, I would like to make a decision not to proceed”.
Funding news
UGC PC gaming platform Overwolf has invested an undisclosed amount into Syn City, a blockchain game or as it likes to label itself a ‘mafia metaverse’.
Syn City will eventually operate across Ethereum, Binance Smart Chain and Solana, including features such as Mafia-as-a-DAO (or MaaD). It previously raised $8 million from the like of Justin Kan, Animoca Brands and Spartan Group.
Good news story of the week
22-year-old Brisbane investor Ishan Haque believed in Animoca Brands so much, he bought up cheap company stock after it had been delisted from the Australian Stock Exchange in 2019.
Of course, Animoca has since gone on to become one of the key companies in the blockchain game ecosystem, worth multi-billions of dollars.
Himself now a millionaire, Haque is now looking to raise a $50 million crypto investment fund.