#7 Deep Dive - Building Web3 Gaming Anew
Let's see how the new wave of GameFi will look like with new foundations being built before our eyes
Welcome fellow investooors! It’s crypto time so let’s dive right in. To access more content find us here on Twitter. Enjoy!
In this edition of the newsletter, I want to circle back to the GameFi niche, which could become a significant entry point for new people into the world of crypto. This is due to innovative solutions that were not part of the previous GameFi hype cycle, potentially redefining the niche and earning the most crucial asset - trust, not only from gamers but also from the wider crypto community.
Introduction
The crypto market is a unique playground where we can experiment with technology, market mechanisms, and various incentives - ways to draw users into our apps or games. It's like the perfect experimental lab, where investment opportunities are lurking around every corner, demanding a sharp eye to spot them. However, to fully tap into these opportunities, we need to understand that we're dealing with projects that grow at different stages of the cycle, with growth phases that can vary, from months of accumulation and steady increases - as seen with PENDLE or SNX, to sudden price spikes triggered by specific events, like with RBN (AEVO) or the memecoin craze exemplified by WIF. Timing is everything, so projects must choose their market moments wisely to maximize gains, often entailing months or even years of preparation for that pivotal moment of market debut.
The crypto testing ground is the perfect place to build revolutionary solutions that have the potential to change and define - or redefine, market sectors, much like EigenLayer did. So today, we want to introduce you to a project that has been working for years to set a new standard in web3 gaming, outpacing the market adoption cycle of most current GameFi projects.
GameFi Problems Today
Axie Infinity showed the world how far the right kind of hype can take web3 games. The success of titles like Minecraft, Roblox, or the Steam and streaming favorite of early 2024 - Palworld, perfectly demonstrates the immense power within the gaming world.
For those wondering 'Why is this such a huge market?', these names might not mean much. And if you're not much of a gamer, grasping the gaming world's allure, often dismissed as 'childish' - a grossly inaccurate stereotype, can be tough. Think of it like Netflix, where there's something for everyone, regardless of age or interests. The entertainment industry must cater to all age groups because everyone engages in some form of leisure, from reading books to running marathons. The diversity in activities is as staggering as the entertainment forms emerging from the gaming world - from simple concept games like chess to complex city-building titles, high-skill games, or socially-focused ones where you team up with friends for a FIFA match or a CoD campaign.
We all consume entertainment in some form, and the gaming world keeps expanding, embracing more ways to spend free time and incorporating gamification.
As I mentioned in a previous newsletter on GameFi, society's evolution and life's accelerating pace reduce the time we dedicate to activities, as evidenced by TikTok's popularity with its brief videos. Similar trends are evident in gaming, where mobile games offer short, sometimes minute-long sessions, pulling us into a whirlwind of competitive engagement. If you don’t recall that newsletter, let me quote a section:
"In short, Casual and Hyper-Casual games offer us quick gaming sessions we can enjoy anywhere, anytime. These games are characterized by simple mechanics, high replayability, and appealing - or for some, addictive, design. It’s no secret that some games consult with or even hire experts to craft game mechanics that subtly hook the player. What some call 'improving player retention metrics,' others might see as optimizing the game to keep players engaged longer and spending more."
Now, let’s think… What was really missing in the web3 gaming market in 2021, and why do many still view mobile games - and certain multiplayer titles, with suspicion and bias?
Trust might not be the obvious answer for many of us, but it's pivotal. Trust in a game or its publisher defines how players approach it, influencing their willingness to stay longer and return. Trust is the most valuable currency a project can earn because it enables survival in the market not just for weeks or months, but for years.
Web3 games in 2021 were crypto projects masquerading as games, where everything boiled down to investing in token farming and selling them in the market. How could such games foster player trust? How were they expected to attract anyone besides crypto degens?
A New Kind of Gameplay
Let’s shift our perspective now and focus on the essence of most games: competition. Imagine you’re spending a Saturday night with a friend, playing a match in FIFA, a chess game, or any form of competition, betting $25 that you’ll win, with your friend matching the stake by taking the bet. The rules are clear to all of you: there’s $50 in the pot, and the winner takes it all.
Here we have a gameplay scenario where the winner takes the prize, the loser can ask for a rematch, there's no need to trust and entrust your money to a third party, and the outcomes are clearly defined, making disputes about the result pointless. Plus, you get the chance to monetize your skills in future gatherings. The difference between this and Axie Infinity, where the more we spent, the greater our chances of winning, is stark. So why haven’t we seen games that build our trust in this way, offering a simple and safe environment to compete with friends? Perhaps it’s because everyone has been focused on creating the next crypto project, rather than delivering a quality product and gameplay experience.
If you think about it, nearly all popular competitive games and sports follow the 'Easy to learn, hard to master' design, not to mention the top mobile games that also adhere to this formula. Football (soccer), chess, and Flappy Bird share the ease of initial rule comprehension since anyone can kick a ball, remember a few basic chess moves, or tap the screen at the right moment. However, what sets these games apart is the long journey from beginner to achieving a truly high skill level, which most people may never reach.
The low entry barrier for such games means millions can try their hand at them, creating a massive network effect, like a snowball growing larger and sweeping up new enthusiasts along the way. Playing a chess match or kicking a ball around seems trivially easy as leisure activities with friends, yet the range of levels attainable in these games is dizzying. In contrast, sports like golf or Formula 1 have high entry barriers and costs, limiting participation and interest, creating a glass ceiling, and making understanding and fully engaging with the sport more challenging.
This mechanism applies to digital games as well. Countless people might be put off by the complex nature of games like StarCraft or Europa Universalis IV, while anyone can have fun playing Mario Kart or the well-known Angry Birds.
Now, combine these accessible ‘Easy to learn, hard to master’ games with a model for safe betting against an opponent and monetizing skills, and we have a completely new type of gameplay that the web3 world has yet to see. Honestly, this model is still quite niche even in the broader gaming and esports world, where many players can't monetize their skills despite a seemingly developed market.
But here comes a project that has been quietly building the infrastructure for over four years to bring such gameplay to life, laying the foundation for a new kind of web3 games, regardless of the ecosystem in which they are developed. Are we on the verge of a GameFi revolution in the coming months?
What is Elympics?
The goal of the web3 gaming market is to create an infrastructure for games that are indistinguishable from the typical mobile games found on the App Store or Google Play. Just as we download Flappy Bird or Candy Crush Saga without thinking about the underlying technology, we’ll download web3 games without realizing we’re playing projects built on blockchain technology.
This is where Elympics steps in, providing the full infrastructure needed to create blockchain-based games regardless of the chain or ecosystem they’re developed on. This makes Elympics a meta-layer project that is also chain-agnostic, not confined to any single ecosystem. And as we know, in a gold rush, it's the tool sellers who often make the most profit, right?
Add to this a new kind of game, free from 'pay-to-win' mechanisms seen in Axie Infinity, or other capital advantage systems, token farming, etc., like in other projects where 'mercenary capital' jumped in, injected massive liquidity, farmed tokens, and dumped them on the market, crashing the game’s economy and token value.
*A side note – Elympics’ tokenomics are not yet revealed, but I assume they will avoid 'farming' mechanisms that could negatively impact development or drain the system of liquidity.
Alright, we know what kind of project Elympics is and what they are creating, but what's happening in the project right now, and what stage of development are they currently in?
Recent weeks of hype focused on the Telegram ecosystem and the upcoming listing of Notcoin on April 20 show the tremendous potential within this ecosystem where millions of users can be relatively easily converted into players. A few weeks ago in the Newsletter, I wrote:
"While Telegram indeed has huge potential to house a wave of casual and hyper-casual games, the question arises whether we will see monetization possibilities as developed as in the current crypto market. Will the vast reach translate into financial success for both projects and players, or will it end in a lackluster airdrop, and we all just go home? We still need to wait to find out. Even if that happens, the direction in which the current GameFi world is heading seems obvious – to provide players with experiences similar to those offered by mobile games because it’s the short gaming sessions spent on incredibly simple games/apps that will activate the entire crypto world. And it's worth adding that our world is full of people looking for immediate, repeatable gameplay outcomes, enhanced by the thrill of a leaderboard where one can easily compare with other players."
The question was about the Telegram ecosystem and the ability to entice users to engage with its web3 solutions. However, what I hadn’t considered then was that Elympics is also heading to Telegram, planning not just to establish its own games there but also to provide infrastructure for others to create games on the Telegram ecosystem. This is crucial as Elympics, as the main infrastructure project for onboarding games, will profit from games built on their technology—just as game creators will profit from their own creations.
In summary, we're soon going to see web3 games where we can earn based on our skills. Games where only our skill counts, not the size of our wallet or purchased upgrades that allow buying victories and top leaderboard spots. Remember the success of Notcoin, which attracted over 35 million users, with over 2 million reaching Diamond rank or higher. How popular do you think a Telegram game would be, where you could play and earn a few dollars in your spare time?
Summary
After the initial surge of interest in web3 games in 2021, where quality was scarce and trust in web3 games was nonexistent, we're now entering a period of gradual maturation of the market, punctuated by bursts of interest that align with market sentiments. Thanks to that first wave of hype, we identified gaps, pinpointed directions unworthy of attention, recognized major mistakes made by gaming projects, and isolated a whole list of lessons from which we can now draw knowledge.
A large part of the entertainment world, as well as the realms of sports and esports, is built on competition, an inherent element of our lives. Therefore, those projects that allow us safe competition with others, whether staking our resources or not, will stand out in the web3 gaming market, gaining the trust of players, investors, and managing to survive market downtimes.
If you want to learn more about Elympics, it's worth reading articles on their blog and checking out their Galxe profile because you can collect some badges there that might prove valuable in the future—as has been the case with many other crypto projects that considered Galxe campaigns for airdrops.
Above all, keeping an eye on Elympics’ social media is crucial, as the project has not yet issued its token, nor conducted airdrop campaigns, and some of the information I’ve shared today is not yet public. So, it's wise to follow their progress, especially with the halving just around the corner, suggesting that it's time to reveal the cards as we move into the next phases of the cycle. 😉
See ya!
Twitter:
Galxe:
That’s all for today, thank you all for reading this week’s Deep Dive and see you in two weeks time! To access more content find us here on Twitter. See you there!
~ ModernEremite & Crypto o’Clock Team
This newsletter is provided for educational purposes only and does not constitute investment advice. It is not intended as a solicitation to buy or sell any assets, and readers are strongly advised to conduct their own research and seek independent financial advice before making any investment decisions. The authors and publishers disclaim any liability for any direct or consequential loss arising from any use of the information contained herein.
 | A guest post by
|