Original title: "In the next bull market, how to find the 'Holy Grail' of the chain game track"

Original source: W Labs

About the "Holy Grail"

01 Cryptocurrency "Holy Grail"

Also in February 2021, Gu Lu, the founder of Bi Hu, the largest Chinese blockchain content platform, shared a wonderful speech in the community titled "Looking for the Cryptocurrency Holy Grail: Bi Hu Founder Gu Lu Analyzes the Potential of Productivity Platforms such as Ethereum", where the Holy Grail can be understood as "popular projects".

Gulu believes that after Ethereum (ETH) transitions to the Proof of Stake (POS) consensus mechanism in 2022, it will experience an annual deflation of about 0.15%, which will mark the beginning of Ethereum's second growth curve. In fact, the current annual deflation of Ethereum is about 0.43%. Currently, EIP-1559 has burned 3,550,364 ETH, and the bull market will accelerate deflation. In addition, Ethereum is the infrastructure of Layer 2 (L2), and the prosperity of L2 means the prosperity of Ethereum. Ethereum's acceleration and rise in the future is just around the corner. Hold on tight and support it!

02 Chain Game 1.0 era "Holy Grail"

The two projects that stand out without question are:

Axie Infinity, with an estimated total revenue of over 400 million US dollars and a highest circulating market value of 10.4 billion US dollars.

STEPN, with an estimated total revenue of over 200 million US dollars and a highest circulating market value of 2.3 billion US dollars.

(excluding token sale revenue)

03 The "Holy Grail" of Chain Games 2.0?

Based on the previous round's performance, let's make an estimate: total revenue will exceed 300 million US dollars. The overall lifecycle will be longer, and if we calculate it on a yearly basis, the first three months will be a low-income period, the last three months will be a decline period, and daily revenue may range from 2 million to 10 million US dollars.

Currently, it is August 2023. Despite the bearish market, BTC has surged from 15500U to around 30000U. There are rumors that top global financial institutions are secretly positioning themselves in Bitcoin, betting on the last bull market in the cryptocurrency industry (as mainstream voices said in the last cycle). The circulating market value of the "Holy Grail" project in the next blockchain gaming sector is estimated to exceed $15 billion.

Game Classification by Chain: Asset Composition

The ultimate goal of this article is to find the "Holy Grail" project. However, even in a bear market, new blockchain gaming projects are diverse and mixed with good and bad. If you analyze each one, you need to be prepared with a quick and effective remedy.

We still need to establish a methodology for finding it, starting with filtering by category from large to small, and then targeting accurately. Let's first talk about categories: there are many ways to classify chain games, and W Labs has detailed classifications in previous articles. This article divides chain games into the following four categories based on asset composition. Let's see which of these four types are more likely to find the shadow of the "Holy Grail":

01 NFT Breeding Games: Axie Infinity, STEPN

These two projects have ushered in the era of blockchain gaming 1.0. They both achieved great success during the previous bull market, with Axie starting at the beginning of the bull market and StepN ending at the tail end. They are also waiting for the arrival of the next bull market, preparing to restart the "Holy Grail" halo, so their products are constantly iterating and improving:

Axie Infinity

Already entered the Apple Store and Google Store in some countries, which helps to introduce more new players of Web2.

Previously, playing games required purchasing three Axies. However, in the recent game update, a free mode has been introduced. Free players can accumulate materials and upgrade gifted Axies through daily and weekly tasks, with the chance of obtaining decently powerful Axies. This helps new users to quickly get started and enjoy the game.

STEPN

Propose the concept of FSL ecosystem, launch DOOAR, mainly used for multi-chain decentralized exchange; launch MOOAR, multi-chain NFT market and launch platform. The studio behind it will soon release a new game Gashero, and also collaborate with multiple games.

Currently, StepN has also been launched on the Apple Store and Google Store, and credit card payment can be used to purchase running shoes. It is also committed to introducing more new players in Web2.

Both of these "top dogs" from the last two rounds come from the breeding category, which shows the charm of breeding. However, behind breeding lies its distinct Ponzi model characteristics. As Guage mentioned in an article on W Labs titled "Why is WEB3 all Ponzi models?", Ponzi models are neither good nor bad (scams are bad things), and they directly hit on the greed and arrogance in human nature.

Here's an additional note. The widely defined Ponzi scheme is also common in real life: many internet companies in recent years have started using massive subsidies to attract users, which is also a type of Ponzi scheme. The recent popular domestic fantasy epic "Fengshen Bang 1" also used a similar model in the end, with the most shocking scene of the entire drama being "The Prime Minister returning to court with the Four Heavenly Kings", which fully aroused the audience's infinite imagination and laid the foundation for the box office of the second part. This can be considered a clever and elegant Ponzi scheme, and is at the level of "Ponzi within Ponzi".

However, whether this category can continue to shine in the next round is a big challenge, considering the cryptocurrency industry's emphasis on "speculating on new, not old". Users need to see a different new narrative, which is very challenging.

02 NFT Mining and Defi Combination Game: MBOX, Tiny World

During the era of blockchain gaming 1.0, MBOX achieved great success and was once the leader in blockchain gaming on BSC, with a highest circulating market value of 1 billion US dollars. Following in its footsteps is Tiny World, which has a similar model to MBOX and has a highest circulating market value of around 150 million US dollars (with 50% of tokens burned, which is not included in the calculation).

However, only Web3 users and advanced users can understand and play with the Defi part, and novice users are easily discouraged. It is also difficult to attract Web2 users in the short term.

Those who are not successful in the industry may find it difficult to succeed. Currently, in this category, the likelihood of "Holy Grail" appearing is even smaller than the first category.

03 Full-chain Game: Dark Forest, Loot

Recently, full-chain games have become very popular. These are games where the rules, calculation logic, and data storage are all completed on the blockchain. To expand further, full-chain games do not require permission on the blockchain and assets can be freely combined. It was only gradually mentioned earlier this year and received widespread discussion on Twitter in June and July.

We have always believed that the current full-chain games cannot be classified as games, but can only be classified as special categories similar to DEFI, because the current user group is not the same as ordinary game users, but basically a group of WEB3 builders and believers. However, full-chain games have the seeds of orthodox encryption genes. For example, Dark Forest, which was written by Brian Gu alone in 2020, when he was still working at the Ethereum Foundation and found ZK interesting during his research process, and happened to want to make a game, so the experimental product was born. New technology was tried: zero-knowledge proof, to solve the problem of war fog in the game. From that moment on, full-chain games began to have a bit of a game-like appearance.

However, we must persist in supporting and encouraging the advancement of such products, as this is the hope for WEB3 to potentially replace WEB2 in certain areas, such as the application of zero-knowledge proofs in WEB3 Texas Hold'em. Traditional online Texas Hold'em in WEB2 is generally not safe to play, especially after watching "The Bad Kids" where we all know that Wang Chuanjun ("sleeping on the floor today, sleeping with the boss tomorrow") can manipulate the system and deal any card he wants. However, if zero-knowledge proofs are used in WEB3 Texas Hold'em, the dealing mechanism can be made public and transparent.

The whole-chain game utilizes the characteristics of blockchain, but currently there are many limitations that are not conducive to the design of complex logic and rules in the game. Therefore, it is currently mainly in the stage of building infrastructure and exploration, and the product experience for ordinary users is not enough. It is unlikely that the "Holy Grail" project will appear in the short term.

04 Only games with high playability and core assets on the chain

The highly anticipated Chain Game 2.0 era was derived from the idea that there will be another bull market based on WEB3. The necessary condition for the next wave of bull market is that there will be a large number of new users and institutions entering through certain new opportunities in the WEB3 track. These novice users need applications to play with, and this category is focused on this goal:

Focus on playability and allow new users to get high;

Focus on product experience, not pursuing full on-chain at this stage, just need to put core assets on-chain;

Focus on the construction of the user ecosystem, bring the project closer to the users, and ideally make the users feel like they are also a part of the project.

This category of games is, in our opinion, the most likely to reach the Holy Grail in the next bull market, and it is also the category that W Labs has designated as the most important research focus from last year to this year. There are several characteristics:

The production team is mainly composed of excellent teams from WEB2 games. They have standards for the playability, completeness, and aesthetics of the game. After all, Chinese games have led the mobile game industry for ten years, and there is a wealth of experience and talent accumulated.

The playability of the product is significantly higher than that of native games in WEB3, and it also understands the preferences of ordinary users for the product (this is the most important point);

The deep-rooted WEB2 mindset and insufficient operational thinking of WEB3.

So how do we pick out the "Holy Grail" project in this category? The definition of playability is completely subjective, and everyone has their own preferences. You may love MOBAs, while I prefer SLGs, and someone else may play mahjong every day. Therefore, this article sets a standard: as long as a certain WEB3 chain game inherits the essence of a global hit WEB2 game, or even directly copies it, its playability has been verified by a large number of ordinary users. We will analyze the Holy Grail project from these projects.

We have selected three representative WEB3 chain game projects, "Matr1x Fire", "Seraph" and "Oil War", from the project database of W Labs as case studies. We will analyze them one by one, which demonstrate different game types, different WEB2 benchmark projects, and different development stages.

Case Study: Fierce Competition for the "Holy Grail"

01 Matr1x Fire: WEB3's CSgo

Friends who have played CS are getting older, influenced by shooting games since childhood. Just like 30 years later, friends who play PUBG are no longer young, starting from a young age with the phrase "Winner winner, chicken dinner".

Matr1x Fire will take action in the market starting from Q3 2022. W Labs conducted a background check on the team and sent people to experience the game on site from the very beginning. It is indeed a team from a big or well-known company with years of experience in FPS research and development, and has financing with good fundamentals. Our style is to prefer to invest in losses rather than invest wrongly; we would rather be cautious before birth than have a grand funeral.

After confirming that it can be continuously followed up, a dedicated discussion channel was opened in the Guatian community WGGDAO. Guayou were also called upon to pay more attention to Matr1x and actively organize registration for both the first and second tests. Currently, Matr1x seems to be the most promising "Holy Grail" project in the first half of 2023, at least in terms of the price of the main NFT2061 (from Mint Price0.1E to the current 1.3E), which reflects the user's trust in the project.

Introduction to Matr1x project: Matr1x Fire is a Web3 FPS shooting game that borrows the mature business model of CSgo and combines it with the innovation of issuing assets on the chain, integrating NFT art, esports events, and millions of words of novels to create a Web3 brand. The team members have more than 8 years of experience in game development and publishing, and the founding team comes from major game companies, participating in the development and publishing of more than 10 large-scale games, with a total revenue of more than 3 billion US dollars and nearly 100 million active users. They have also accumulated rich experience in global market product distribution, with team members distributed in Korea, Japan, the United States, Singapore, Hong Kong, and other places. Matr1x successfully completed a Series A financing of $10 million in 2022, with investors including the second largest financial group in Korea, Hanwha Financial, early investors in Ethereum, Hashkey Capital, Amber Group, and Seven X.

In Matr1x Fire, players can not only experience traditional shooting content such as various game modes, multiple game maps, support for small-scale competitions, team esports, and hosting events, but also obtain loot boxes through the game and spend a certain fee to open them to get NFT-formatted item skins. These loot boxes and item skins can freely circulate and be traded on the blockchain.

We can take a look at its counterpart in the WEB2 gaming industry, CSgo. On March 25th of this year, the number of concurrent online players reached a new high, exceeding 1.5 million. The number of opened boxes in March increased by 17 million compared to February, and the estimated revenue for March is at least $100 million. The company is still going strong.

Actually, the treasure chests, keys, skins, props, and other items in shooting games can naturally be made into independent NFTs with high compatibility. In the Web3 business model, the project party can issue more NFTs to help complete the early stage launch and community cohesion, establish consensus, which is also the reason why Matr1x assets are becoming increasingly popular.

YATC Trophy NFT, reflecting the value of champions, can help establish attractive events in the early stages;

MAX Token, which embodies the value of the entire ecosystem, can connect more resources and continuously absorb resources for the ecosystem.

2061 NFT, rewarding early supporters, reflecting player value, and accurately targeting FPS players in the early stages.

Role NFT, raising the threshold for game gold farming without conflicting with free users, mainly to prevent mass farming by secondary accounts;

The project team has explored the incremental market by finding players who enjoy FPS games, tirelessly conveying a shared vision, and painting a blueprint for the Web3 version of esports. They have also solved many long-standing problems faced by Web3 projects, such as how to attract new users when the number of Web3 users is too small, how to break the spiral of asset death, and where to find the first wave of seed users for the product.

Matr1x Fire is walking on the road to the "Holy Grail". The circle-breaking actions in operation in August made people feel that it is breaking through the embarrassing situation of the small stock market of Web3, and the playability and economy cannot be both achieved. The direction of the Win to Earn model also lengthens the cycle of the death spiral in its nature. The team's skillful financing also makes users feel that they can at least survive until the next bull market. Within W Labs, we often use the term "hexagonal warrior" to describe Matr1x.

I seem to have heard that a new friend said that Matr1x is now a blue-chip chain game project. What if we missed the opportunity during the launch? Don't worry, this is why we have analyzed three cases. Matr1x was one of the earliest to start, so let's take a look at the others and learn the analytical logic.

02 SERAPH: The Big Pineapple of WEB3 (Diablo)

Seraph is another hot project that has been in closed beta testing in the past few months: it has undergone two closed beta tests in April and July this year, with good test results. According to information obtained from the project's AMA, there were 3500 and 4200 players respectively participating in the tests (not addresses, but accounts), with an average online time of 4 hours and considerable user retention data.

The game type is ARPG, which means the main idea is to kill monsters, collect equipment, and make money, leading to an increasing level of "grinding" in the game. It must be said that this gameplay of grinding for equipment sets still has many loyal fans.

Seraph's basic introduction: Seraph is an APRG game that imitates Diablo, developed by Actoz Soft, a Korean game company that has launched well-known works such as "Millennium", "Legend", and "A3". The overall tone and operation of the game also follow the Diablo style, with the background set in a dark era, a time calling for heroes. There are a total of 5 heroes to choose from (currently only Barbarian, Mage, and Valkyrie are available), and then embark on an adventure journey, constantly killing with the mouse and keyboard. The main assets of the game are equipment, as well as embeddable items such as gems, jewels, and runes. After the hero levels up, different skills and magic can be learned by allocating skill points. After completing the basic exploration, players can unlock Chaos, Void Realm, and Abyss modes by meeting various conditions, which drop different types and levels of items and equipment. In the web3 part, it mainly empowers the production of Soul Spar through special NFT (Unique NFT), which is used to further upgrade NFT and obtain tickets for Chaos mode. The core token $SRF is mainly used for NFT identification, equipment forging, and governance participation.

Seraph is the WEB2 game that is comparable to the Diablo series. Diablo 4 was released in June this year, and let's take a look at the data: it sold nearly $700 million, and the first season that started in July had 7.1 million characters. Sounds good, right? But players have been complaining, especially after the patch before the season, the rating dropped to 2.6. In fact, criticizing Blizzard has become a daily social behavior for Blizzard players, haha.

The fierce user base of games like Seraph cannot be concealed, even if these games are criticized. This was demonstrated by the two internal tests of Seraph. However, up to now, the operation of Seraph has been lackluster, and the community has been quietly conducting some joint promotion activities, even announcing a reward activity of 500,000 U on Twitter, but there has been no dissemination in various web3 communities. At the same time, the total transaction volume of the previously released NFT "Seraph Priority Pass" is only 31 ETH, and everyone does not know how this NFT is empowered. We are more inclined to think that the overall operation plan has not been launched yet, and the project party is currently only laying out. We hope that the project party can spend more effort on researching the operation steps and nodes.

Overall, the product quality of Seraph is excellent. Through the wave of nostalgia brought by the Dark Souls crossover, it has provided a true gaming community for players who are bored in the bear market. In addition, the economic model revealed in the project's AMA will be based on "equipment NFTs", which is also worth looking forward to. We will keep an eye on whether Seraph has the ability to touch the "Holy Grail".

03 Oil War: WEB3's Oil Tycoon

I have a special fondness for simulation business games. A few years ago, I played the game "Turmoil", an oil tycoon game in WEB2, and I never tired of it. Recently, while organizing the newly launched chain games, I accidentally discovered "Oil War", a game about the oil industry. I downloaded it and spent 10U to try it out immediately.

For the current user base of chain games in the WEB3 community, hardcore gamers are still a minority, and most players tend to be more casual. Therefore, management and development games are naturally more suitable for current chain games. The previous bull market's Farmer World and Sunflower are proof that what's the point of killing every day? Planting flowers, building buildings, fishing, stealing vegetables, and earning tens of U every day. The low threshold and strong social nature of management and development games have become two characteristics of chain games. At the same time, these types of games are also very suitable for Ponzi models in terms of token flow.

Oil War Basic Introduction: This is a Web3 simulation business game that simulates the entire process from oil extraction to sales. Let's take a look at the background of the game. The game developer is MetaSensor, and the publisher is Surf Guild, a chain game studio with a background of 8 years in traditional games. The seed round raised $1 million and has cooperated with well-known partners such as Wemade, Blockchainspace, and Playmining.

Similar to Matr1x and Seraph, Oil War is also an imitation and continuation of the classic web2 game "Oil Tycoon". Traditional games such as QQ Farm or SimCity, which are cultivation and management games, are very good at attracting users. Currently, blockchain games lack users, and it is hoped that Oil War can highlight this feature of the game itself.

Unlike oil tycoons, Oil War offers more than just basic PVE mining maps, challenges, upgrades, and money-making. The game also features unique gameplay such as team tournaments, item systems, and land management. The consignment function allows players to engage in free trade, while integrating the game with web3, providing opportunities to earn rich crypto assets.

Players can earn game tokens, oil coin, by completing daily tasks, achieving honors, ranking in teams, developing and managing land, etc. These tokens can be exchanged for governance tokens, OT, at a fixed rate of 1000:1, and further exchanged for other on-chain assets for cashing out. Currently, the game only offers PVE and tournament gameplay, but we look forward to opening up other advanced gameplay in the future. It will be a great management and cultivation work.

The game economy model of the oil war is a typical fusion model of web2+web3. The game will be launched on GooglePlay and AppStore, with traditional in-app purchase mode, and players can enter gold through traditional channels. At the same time, the project party has developed a Compass game service platform specifically for web3 (similar to wemix of Yumeide, with a bit of ambition), which is used to trade game virtual assets (NFT assets, governance tokens OT, etc.), and can also be linked to mainstream games and web3 assets for NFT and coin-to-coin transactions, linking to a broader web3 world.

From the construction framework of the Compass platform and its ecosystem, it can be seen that the project party's layout for web3 is relatively pragmatic and long-term-oriented - leveraging the resources and leverage of web3 through Compass as the entry point, filling the platform content with its expertise in game development, and integrating Web3 and community resources through DAO platforms such as Surf Guild. This three-round layout of development, trading, and operation is a complete ecological closed loop. If it can be set in motion, it will generate a powerful wheel effect, providing the project party with a continuous source of expansion momentum.

There is one point that must be emphasized, which is that from the preview of the next version update of the game, it was found that the product will soon add an advertising SDK interface. Did the project party find an advertiser? If so, that's awesome. We have always emphasized that external income is one of the best ways to solve the death spiral, rather than the project party and players cutting each other. This game also involves oil. Did it get sponsorship from the Middle Eastern sheikhs wearing headscarves? Haha.

Compared to the already popular Matr1x and the officially tested Seraph, Oil War is in an even earlier stage, which may be more suitable for players who hope to get in early. Currently, Oil War is still in the early testing phase and the community is also in its early stages. Interested players can try this style of game, which has excellent graphics and will support more language versions in the future (including Chinese).

Summary

We believe that in the rolling wheel of web3 games, there are always excellent projects emerging, some lasting for a long time, and some just a flash in the pan. The length of a game's lifecycle is not only determined by its economic model, but also by its content, quality, and the success of its subsequent operations.

From the perspective of users, how to find blockchain gaming projects that may become the "holy grail" in the next bull market? This article presents one approach:

First of all, the next bull market in the encryption industry still relies heavily on a large number of new users; secondly, new users will not immediately enter the high-threshold full-chain games or Defi games. They are more accepting of products that are similar in playability and product quality to the WEB2 games they are familiar with. Therefore, in the category of chain games with high playability and core assets on the chain, the most likely to emerge as the "Holy Grail"; thirdly, find some WEB3 products that imitate traditional popular games and analyze them from various aspects to verify their potential to become the "Holy Grail".

This article lists three cases, among which Matr1x is the earliest and the most outstanding. The whole team, from the founder to the community members, is deeply impressed with the idea of putting players and communities at the center and spare no effort in promoting the game.

Seraph is a high-quality work based on the quality of the game and the data from the internal testing. We look forward to seeing the project team's actions in operation and community, so that they can make good use of the previously accumulated momentum and truly take off on the runway.

Oil War, the oil war, is obviously still in the early stages of gathering momentum, but from the layout of the project (game development and download, Compass trading platform construction, and Surf Guild community), one can vaguely glimpse its ambition in the web3 space. It will also be an excellent web3 gaming ecosystem product that prioritizes quality and puts players at the center.

Finally, it should be emphasized that the "Holy Grail" project is hard to come by. Only two were born in the last bull market, and hitting one means a hundredfold return. Therefore, it is necessary to conduct in-depth research on every aspect. We have delved into the growth process of the previous two "Holy Grail" projects, which was a thrilling journey that turned the entrepreneurial team into invincible warriors in a short period of time. As the saying goes, "many skills do not burden the body," and even if you draw a blind box with Xiaolongnü, you can still mint out Madam Ma (why did I suddenly say this strange sentence?).

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