Original Title: "MVC Research Report | Listen to the Thunder in Silence: Will Game Platforms Bring the Next Alpha to the Long-Silent Chain Game Track?"

Original Source: Metrics Ventures

Metrics Ventures, a secondary fund in the cryptocurrency market, introduces a research report on blockchain gaming:

1. Despite the current market's negative attitude towards Web2.5 games, we believe that Web2.5 games will still attract game producers with their unique advantages in game distribution and user acquisition. The growth of the supply and technology sides will lead to an explosion in demand.

2. In the Web2.5 gaming track, we particularly focus on the gaming platform track, where the gaming platform will have stronger narrative space and lifecycle, and occupy an important position in the supply and demand sides of chain games.

3. According to the business model and token empowerment method, we divide the game platform into four types: strong binding type, medium binding type (public chain type), medium binding type (investment type), and weak binding type. We believe that the medium binding type is a healthier and more horizontally expandable way, which is beneficially bound to the game.

4. We analyze high-quality game platform projects in the industry from three dimensions: strategic narrative, business capabilities, and token economics. After comparison, we believe that Merit Circle is a more outstanding project in this field and has a higher investment cost-effectiveness. Merit Circle has strong strategic narrative ability, product development ability, and game resources, from game guild to game platform to game public chain development. However, its valuation is still low in the industry, which still has strong development potential.

The Beginning of the Story: Why We Are Bullish on the Gaming Platform Track?

Despite the decline of the Gamefi trend, the dominance of blockchain game users continues to decrease. However, we see that games are still the most active part of the entire industry. According to DappRadar data, as of the second quarter of 2023, the number of daily active wallets in the gaming industry is 699,956, accounting for 36% of the total industry participation, which is the lowest level since the third quarter of 2021, but still ahead of other types of applications.

According to the degree of on-chain integration in the game, Crypto Games can be divided into multiple categories.

From Web2 games to fully-fledged Web3 games (decentralized games), there are multiple steps that need to be taken, including asset, transaction, achievement, economic model, and core logic integration onto the blockchain. Currently, many blockchain games have achieved integration onto the blockchain for all aspects except for core logic, and are referred to as Web2.5 Games.

In the recent market, the development and prospects of the whole-chain game have been widely discussed, becoming one of the hottest narratives in the blockchain game industry. However, despite the widespread pursuit of the whole-chain game, we see that the business model of Web2.5 Game still has significant significance for the entire game industry, even if Web2.5 games have fallen to freezing point. Web2.5 games reduce the cost of game distribution and customer acquisition through NFT and token incentives, while breaking regional restrictions, allowing games to have global traffic and global capital liquidity on the first day, and having strong advantages in improving game distribution efficiency.

(The full life cycle of Web2 and Web3 issuance can be referred to in the research by Folius Ventures, original text https://docsend.com/view/4rm9mp56ypr5ae6p)

The customer acquisition cost for game distribution using NFT tends to be close to zero, while in comparison, the customer acquisition cost for Web2 games is relatively expensive: the customer acquisition cost for RPG and SLG games is between 60-150U/person, while the customer acquisition cost for strategy, casual, and midcore games varies between 6-20U (data is sourced from interviews with industry professionals and may have some deviation from actual statistical data).

These advantages will have a strong appeal to traditional game makers. The sustained appeal of Web2.5 games on the supply side will promote the richness of content production in this field, resulting in the emergence of truly playable and sustainable games in the Web3 world. With the development of AA wallets, high TPS, low gas fees on layer1, layer2, and even layer3 application chains, the threshold of the Web3 world will be further lowered, becoming more user-friendly for ordinary users, and gradually hiding the on-chain operations in the game world, bringing a smoother experience. The game content richness brought by the supply side and the user experience optimization brought by the technical side will have an impact on the demand side of Web2.5 games, and may greatly drive the next wave of the entire industry. We believe that this is a unique advantage of Web2.5 games, which cannot be achieved in the short term from either the supply or demand side of the immature full-chain games. Therefore, it is a good timing for layout from a cyclical perspective.

However, we still need to pay attention to the problems that exist in Web2.5 games and the difficulties they face after the last wave of P2E. The lifecycle of these games is generally short, especially for P2E games, mainly because the lifecycle of their assets is relatively short. The economic system designed within the game is too simple and lacks balance mechanisms. The capitalization process of the entire game is too obvious and too fast, and the monetization is too early. The players who participate in the game have a strong speculative nature.

We believe that the two core logics that Web2.5 games should focus on are:

One is the playability and fun of the game.

Secondly, the advantages of game publishing and user acquisition compared to Web2 games

The previous round of P2E focused too much on the second logic and neglected playability. A healthier and more sustainable Web2.5 game should have both, with richer content, stronger gameplay, and a scientifically designed economic system with a certain level of complexity to avoid early asset structure being too single and capitalization too fast. Under such game design, we believe that the development of the content supply side and infrastructure side can bring about an increase in demand, thereby promoting the development of the Web2.5 game industry. Currently, blockchain games are also moving in this direction.

Overall, we believe that Web2.5 games still have relatively high growth potential and development prospects. As mentioned earlier, there is a certain gap between the current market's understanding of Web2.5 games. The market generally undervalues Web2.5 game projects and is dominated by negative and pessimistic emotions, believing that P2E is dead. Especially in the market environment where Fully on-chain game narratives are widely sought after, Web2.5 games seem to have become the abandoned child of the market.

Listening to thunder in silence, there is a certain gap between our understanding of Web2.5 games and the general market perception. This is precisely why we believe that this field has investment potential and hidden value.

In the development of Web2.5 games, we are particularly optimistic about the game platform/ecosystem track, because:

1. Each Web2.5 game has its own lifecycle. On the one hand, the game itself (whether it is a Web2 or Web3 game) has a lifecycle, and on the other hand, the token economics of Crypto projects also have their own lifecycle. Compared to a single game project, game platforms and game ecosystems have longer lifecycles, are less affected by the lifecycle of a single game, have stronger resilience and risk resistance, and have more trial and error space and time to find truly healthy and fun game projects. Recently popular game project Parallel TGC announced in January 2022 that it will integrate into the Echelon Prime Foundation ecosystem and transform from a single game to a game platform, which is an example of this trend.

2. From the perspective of game developers (supply side): game platforms and game ecosystems have multiple game resources such as funds, Web3 player communities, and incubation capabilities, covering multiple links in the game industry chain, and will become important entry points for new games. In the bear market where the overall NFT market is sluggish, it is more difficult to achieve cold start and obtain early-stage financing and reduce customer acquisition costs solely by selling NFTs through a single game. The resources of game platforms can further reduce the customer acquisition costs of new games, and game platforms will also capture part of the value of many single game projects in the Web2.5 game track through the design of token economic systems.

3. From the perspective of game players (the demand side), the guidance of the blockchain game navigation page is valuable and meets their needs, whether they are Web2 or Web3 users. It helps users find games that better suit their needs. More importantly, the blockchain painless infrastructure provided by the game platform can reduce the loss of users in the process of transitioning from Web2 to Web3, lower the threshold for playing games, and optimize the gaming experience.

4. In order to break out of the P2E cycle, it is necessary to separate content creation and user acquisition, reduce the financial attributes of game content production, and extract the function of customer acquisition as much as possible. This means specializing the Web3 gaming platform and reducing the cost of customer acquisition through a set of token economic cycles that are not directly related to game content. Although the game platform has not yet completely separated the two, this is the most likely direction for the chain game field to develop.

Currently, we believe that the categories mainly included in this track are:

Game production.The translation of the given content is:

Issuance Platform and Ecosystem

后 P2E gaming guild

Overall, from the perspective of business type and token empowerment, we believe that the middle-bound game platform is the healthiest type, with an independent economic and business cycle logic, serving as the infrastructure and service provider for the truly independent Web2.5 Game. Its ecological horizontal expansion ability is strong, and its economic model also ensures that it can directly benefit from the success of the game ecology, forming a benign interest binding relationship.

Furthermore, we will conduct a comparative analysis of the aforementioned gaming platforms from several aspects, including strategic narrative, business capabilities, and token economics. We will also provide our thoughts and judgments based on the project valuation at the end of the article.

(Token mCap and FDV data time: 2023/10/24, source: https://coinmarketcap.com/)

Strategic Narrative and Business Capability: Continuous Development or Stagnation?

Strategic Narrative and Fundamental Analysis

TreasureDAO and Echelon Prime hope to tell a narrative of an integrated gaming ecosystem, with a unified base token and interoperability between games. TreasureDAO has been referred to as the "Nintendo" of the crypto world in multiple research reports.

Specifically, TreasureDAO was born in the Loot ecosystem and later developed into a decentralized gaming ecosystem built on Arbitrum, centered around the MAGIC token. Each project in the TreasureDAO ecosystem is built around the MAGIC token, and each project can launch its own token based on this foundation. As a project that originated from the Loot ecosystem, TreasureDAO had a strong community consensus in its early days. In the later stages of development, it spawned a series of high-quality games by developing developer-friendly development kits. Its ecosystem heat also reached its peak in the short term with the birth of The Beacon's popular game.

Echelon Prime Foundation, which was transformed and upgraded from Parallel, is an ecosystem dedicated to the development of games and P2E business. It will provide infrastructure and a common basic token PRIME for games in the ecosystem. Its aim is to provide infrastructure (including Inb0x for secure communication on the wallet side, end-to-end encryption, bond for creating groups of users across multiple games, dedicated NFT distribution mechanism, oracle, etc.) to support a larger game ecosystem. The structure of the Echelon ecosystem is shown in the following figure.

Echelon Prime originated from Parallel TCG. The game is backed by Paradigm's investment and a group of game development and design personnel. It is currently a hot topic in the blockchain gaming industry, and its upcoming game, Parallel Colony, also features AI game narration. However, it still focuses on P2E narrative logic, which may limit its future narrative space. Currently, there are only two games in the ecosystem, Parallel TCG and Parallel Colony, which still have a high degree of uncertainty in their business. It can even be said that the current hype around PRIME is still about the game's narrative rather than the game platform's narrative.

Gala Games is a game aggregation and distribution platform on Ethereum, and it is also the leading platform in the last round of bull market for blockchain games.

The ecosystem mainly includes five parts: game platform, game, database, random algorithm, and node network. Among them, the decentralized node network is the foundation of Gala Games. By holding Gala Games' Genesis Nodes, users can vote to decide which games Gala Games will launch and receive income from Gala Games and games. According to official website data, there are currently a total of 44,433 online Genesis Nodes. In addition, NFTs of games on the platform are airdropped to Genesis Nodes as rewards through a random allocation algorithm. Gala Games obtains development funds through the sale of Genesis Nodes, without financing to obtain project start-up funds. On September 4th of this year, it was announced that the Gala platform will be fully migrated to GalaChain by the end of the year. The subsequent progress still needs to be observed, and the ecological progress on its platform is also relatively slow, and the subsequent business capabilities still need to be observed.

Xterio is a platform for game production and distribution, providing painless tools and infrastructure for developers and players to promote the production and distribution of blockchain games, committed to building a GaaS platform.

Xterio's technology includes CPDM (using ZKP technology to achieve interoperability and privacy protection of NFTs across different games), AI (collaborating with Palio to integrate AI into games and provide AI toolkits for developers), etc. Xterio has its own game development team and also publishes and supports third-party games, including investments in Web3 game studios Overworld and GamePhilos, and has game resource support from FunPlus, Com2us, and XPLA.

Game public chain is an important category within the game platform, and the narrative at the public chain level also gives these projects a higher valuation, providing a soil for games with high TPS and low gas fees. Technically, it includes L1, Ethereum L2, Avalanche subnet, and the developing L3, but the ability to master and attract game resources is the protective moat for its development. We take stock of the game public chains that are currently developing well.

Wemix and Oasys are gaming public chains respectively from South Korea and Japan.

The development company Immutable, which develops the chain game Gods Unchained, has developed two Ethereum Layer2 solutions for NFT and Gamefi projects, namely Immutable X and Immutable zkEVM. Immutable X uses StarkWare's solution and ZK-STARKS for Ethereum Layer 2, while Immutable zkEVM is a game-specific chain that provides EVM compatibility, low cost, and high scalability. It will launch a testnet in mid-August 2023 and is built on the Ethereum ZK-Rollup Layer2 using Polygon Edge.

Merit Circle's strategic direction has undergone a huge transformation since the last Gamefi bull market, from a guild with an unviable business model to a gaming platform that combines investment business and game public chain. Its narrative transformation is resolute and decisive, with clear strategic development planning and high execution power.

Merit Circle's current main business line includes four parts: Investments/Gaming/Studios/Infrastructure, covering multiple links in the game industry chain from incubation and investment to infrastructure. It has also announced the complete closure of its scholarship program, demonstrating its strategic determination to shift from a game guild to a game platform.

Investment is the most important business of Merit Circle, which includes tokens, NFTs, equity, and staking operations. Studios is dedicated to incubating and promoting innovative projects with breakthrough concepts. Gaming is an aggregation platform for games, providing incentivized community activities, member education, and practical tools. Infrastructure's core component is the recently launched Beam subnet, and Merit Circle has also approved a proposal to exchange MC tokens for BEAM tokens. The narrative of the gaming chain will become its main strategic direction in the future.

YGG and GuildFi have transcended the initial limitations of gold farming guilds and continue to maintain the narrative of gaming guilds, focusing on game project investment, collaboration, and incubation, as well as player education, guild member and community network expansion.

YGG, in addition to its scholarship program and cooperative incubation game projects, has also partnered with the creator education platform Nas Academy to establish the Web3 Metaversity. This allows YGG guild badge holders to learn new skills and discover income and career opportunities. The launch of the Guild Advancement Program (GAP) is also committed to motivating and uniting guild members, while developing the gaming community through the expansion of SubDAO and the development of esports. GuildFi, which originated from Thailand's largest gaming community and guild, currently offers achievement systems and Metadrop Launchpad in addition to investment business to encourage player participation. The resources and industrial chain positions of the two gaming guilds in the chain gaming field are still very important, especially YGG's leading position in chain gaming cannot be underestimated. However, as analyzed earlier, the narrative and business of the two projects are not directly related to token empowerment, and whether their business growth can drive token prices is an important consideration factor.

Business Capability Analysis

This article compares the business capabilities of gaming platforms based on the number and development of their gaming ecosystems. For investment platforms such as Merit Circle, YGG, and GuildFi, their returns and risks are greatly influenced by the stability of national treasury funds. Therefore, we need to further compare their investment returns and national treasury management capabilities.

2.2.1 Game Ecology Development

Currently, the number of games within each project's ecosystem is shown in the table above, with a detailed analysis as follows.

TreasureDAO's official gaming platform showcases a total of 27 games, including popular titles such as The Beacon, Realm, and BattleFly. The ecosystem's infrastructure includes Bridgeworld, Trove, MagicSwap, TreasureTag, and an achievement system. TreasureDAO emphasizes cross-game connectivity within the ecosystem, with MAGIC serving as a common underlying token. More advanced efforts to connect multiple games, such as the integration of The Beacon and Knights of the Ether into Bridgeworld Harvester, are currently limited.

The daily active users of TreasureDAO significantly decreased after the hype on The Beacon, with only around 10,000 MAU in July, compared to around 90-100k at the end of 2022. The monthly data of Marketplace Volume was around $1M in July, indicating that popular games did bring a large number of users, but the lifespan of the games was extremely short and their expansion capabilities were limited, resulting in rapid user loss.

Echelon has only two games in its ecosystem, Parallel TCG and Parallel Colony. Currently, TCG is in the beta testing phase, while Colony is still in the development phase. Parallel TCG is a sci-fi NFT collectible card game based on the ETH chain. Players can purchase and collect cards, and use different cards to flexibly combine decks that comply with the rules to play and earn rewards. Parallel Colony is a narrative game that combines artificial intelligence, ERC-6551, and simulation of life.

Gala Games has a total of 18 games, but currently only 6 are live, with the remaining 12 in the development stage. Compared to other game ecosystems, Gala Games has been slow to expand, with no continuous release of new games or any well-known hit games. In February 2022, Gala Games announced the development of their own game Layer 1 Project GYRI, also known as Gala Chain, but there is currently little information available about the project's progress.

Xterio has announced a total of 25 projects, including 4 self-developed projects and 21 collaborative projects. Most of the games are currently in the pre-registration and development stage. In particular, all 4 self-developed projects have not been fully released and require further market testing.

Oasys ecosystem has a total of 6 Verses, which are Layer 2 for deploying Dapps. There are a total of 31 games, and 17 of them are currently playable.

The game ecosystem of Immutable is developing rapidly. Immutable has established partnerships with GameStop, Warner Games, iLogos, Mineloader, and Secret6. There are a total of 150+ NFT and game projects within the ecosystem, with 74 listed on the official website. Some of these are new projects that were established after the launch of Immutable zkEVM and are not yet open to the public. In addition, the ecosystem includes popular games such as Illuvium and Gods Unchained. According to Footprint data, game transactions on ImmutableX have maintained a stable lead in the past three months. With the introduction of Immutable zkEVM, the Immutable ecosystem will further expand.

Ronin currently still resembles an Application-specific chain for Axie Infinity. The official website only showcases 6 games including Axie Infinity, but according to DappRadar data, only Axie has relatively high UAW. With the huge traffic from Axie, Ronin's transaction volume still maintains a good position among gaming public chains, but new gaming public chains are squeezing Ronin's space. Without the introduction of new projects, Ronin will also face a lack of development in the future.

Wemix's ecosystem currently includes 47 projects, including 32 gaming projects, 5 DeFi projects, and 9 NFT projects. In addition, the WEMIX PLAY platform has over 30 gaming pipelines.

Merit Circle currently covers 78 game projects for token and equity investment, including single games, game infrastructure, and game platforms, with projects endorsed by major institutions such as OhBabyGames, Gameplay Galaxy, Delabs Games, and Roboto Games. It is worth mentioning that Merit Circle recently released product details for its Avalanche game subnet Beam, which collaborates with Openfort to develop account abstraction and launches the Beam Companion mobile app to help users manage in-game assets, as well as the Sphere NFT market for NFT transactions within the ecosystem. At the same time, Beam SDK is provided to help developers quickly build on the ecosystem. A series of painless infrastructure is of great help in introducing game developers, improving the gaming experience of players, and achieving user retention, providing a foundation for the ecological development of the Beam subnet.

YGG currently has established partnerships with 83 projects, including 57 games, 17 P2E infrastructures, and 9 game guilds. It is worth noting that as of June 30, 2023, the share of game guilds is the highest and has brought the highest return ratio to YGG.

GuildFi has not disclosed the specific number and details of its early investment and strategic cooperation games, but only lists 25 games on its Games Portal, most of which are earlier projects. Compared to other projects, its ability to cooperate externally and expand its ecosystem is slightly inferior.

Merit Circle, YGG, GuildFi Investment Capability Comparison

Regarding the investment capabilities of Merit Circle, YGG, and GuildFi, we conducted a horizontal comparison among the three investment platforms.

From the perspective of national treasury fund distribution and national treasury management capabilities, Merit Circle has a large amount of national treasury funds ($94.1m), and has detailed the distribution of its national treasury funds in the Dashboard. As of June 23, 2023, AUM has decreased by 25.49% from ATH, which is a relatively low decline among many game guilds. Currently, stablecoins account for $38.1m, accounting for 40.49% of the total national treasury funds, while the rest are mainly first-level investment equities. According to Defillama data, as much as 94.05% of the tokens in the YGG national treasury ($123.77) are YGG, and its ability to resist risks is very poor. Also, due to the significant drop in the price of YGG, the AUM of the YGG national treasury has decreased by more than 90% from ATH.

GuildFi's treasury AUM is $92.68M, with a total stablecoin and BTC/ETH/LP position of up to $71.89M, accounting for 77.57% of the three guilds' holdings of stablecoins and blue-chip crypto assets. According to its disclosed wallet address and Debank data, GF tokens account for a relatively high proportion of its total tokens. Therefore, Merit Circle's treasury management ability is slightly better than the other two, with a more reasonable allocation of stablecoin reserves and investments. YGG's treasury holding of over 94% of YGG tokens is obviously unreasonable, while GuildFi's high proportion of stablecoin allocation, although extremely low-risk, raises concerns about its game investment and external cooperation capabilities (the following are the treasury reserve situations of Merit Circle, YGG, and GuildFi, respectively).

From the perspective of investment mechanism and risk control, Merit Circle has made clear efforts in this regard. MIP-6 has established a de-risk evaluation mechanism so that DAO can exit investment targets under certain conditions, such as when the target reaches 10 times, by directly selling the principal share of assets to control risk. YGG and GuildFi do not currently have similar mechanisms.

From the perspective of investment returns, the latest financial report released by Merit Circle shows that the sum of purchase value of its Tokens&equity investments is $28,045,486, currently valued at $45,471,587, with a floating profit of 62%. The sum of purchase value of its NFT investments is $4,834,000, currently valued at $3,404,852, and is in a loss state. The overall floating profit from the two is 48.65%. YGG's current sum of purchase value for investments is $18,369,599, currently valued at $27,247,536, with a floating profit of 32.58%. The guild's investments and game tokens have brought good returns. GuildFi has not disclosed specific revenue data and investment targets. Therefore, Merit Circle's rate of return is slightly better, but in the overall environment of the chain game track, the overall situation of investment returns for various projects is not too different, and they have all suffered losses in NFT investments. Therefore, we still value their investment ability and potential, such as treasury management ability, risk control ability, and game ecological accumulation.

Token Economics: How to Get a Piece of the Pie from the Success of Games?

(Data time: 2023/10/24, Source: https://coinmarketcap.com/)

From the perspective of token circulation and future unlocking, currently only TreasureDAO and Merit Circle have a relatively high circulation rate, while the circulation rate of most other projects is below 50%. Considering the potential selling pressure brought by future unlocking, Merit Circle and TreasureDAO face lower downside risks.

Regarding the supply method and empowerment scenarios of tokens, for the game ecosystem and game public chains, the supply and empowerment methods of their tokens are basically the same: users obtain tokens through mining (public chain staking or game mining), and tokens are further used as payment media within the ecosystem (NFT transaction basic currency or on-chain gas fee) and spent on game consumption. Some tokens re-enter the circulation system after being consumed (such as PRIME, which is reissued in the reward distribution contract after consumption), while others are burned (such as GALA, WEMIX, etc.). Among them, TreasureDAO's game ecosystem has a stronger binding with tokens. The MAGIC token will be directly distributed as a reward for some games, and it is also a basic condition for participating in multiple games. MAGIC is also a core resource that various game projects need to compete for.

The token economics of gaming guild platforms have slight differences, and Merit Circle, as a gaming guild that has undergone a major strategic transformation, has more diverse token empowerment methods. Its main consumption scenarios include the following four:

Governance: Any user holding MC tokens can propose and vote on MIPs. It is worth mentioning that Merit Circle has a very high level of DAO governance. Currently, there have been 29 MIP votes, mainly used to determine the strategic direction of Merit Circle, and these MIPs represent key milestones for multiple core businesses of Merit Circle. MIP-2 established an investment committee and investment authorization to manage investment business, MIP-6 created a structural approach to reduce risk when early token and NFT investments become liquid, MIP-4 decided the development of game platforms and NFT markets, and MIP-17 carried out a restructuring of the DAO. The recently completed MIP-28 and 29 passed proposals to convert MC tokens to BEAM tokens.

Investment Buyback and Burning: Merit Circle will repurchase and destroy MC tokens with investment profits, reducing the market circulation of MC. Currently, a total of 368,707,273 tokens have been removed from circulation.

Gas consumption of Beam subnet: Beam is a subnet focused on gaming ecology developed by Merit Circle on Avalanche. It will use MC (BEAM) as the token for gas consumption, which greatly increases the empowerment of Merit Circle. While its investment business is progressing well, it also gives it the ability to tell stories on the gaming public chain. Currently, MIP-28 and 29 have decided to convert MC to BEAM tokens at a ratio of 1:100, increasing the narrative empowerment of the MC ecosystem on the public chain.

Compared with YGG and GuildFi, which are also originated from gaming guilds, their token economics are relatively weak. The main application scenario is to obtain token rewards through staking. YGG Reward Vault is the core empowerment of YGG token. YGG members with Guild Badge can stake YGG tokens and receive game token rewards, including LOKA, THG, GHST, and RBW. GuildFi rewards LP staking.

Next Alpha in the Game Platform Race

Here we summarize and evaluate the above projects comprehensively. From the perspective of token empowerment and business model, we prefer the sustainability and healthiness of the middle-bound gaming platform. Within this scope, Gala's game ecosystem expands relatively slowly, and the migration of Galachain still needs further observation. The team's controversial events have also caused considerable damage to investor confidence, similar to the situation with Wemix in the past. Oasys has a good background of game resources, especially traditional game giants, but has not yet developed a popular game. Its game ecosystem still needs further observation, and its token circulation is only about 10%, with a certain potential downside risk. Immutable has established two Layer2s based on Ethereum, with more than 150 game collaborations in its game ecosystem. Its daily trading volume has a leading position in the game public chain and is currently one of the projects with relatively rapid development in the game ecosystem. It also has some star projects, but undoubtedly has the highest valuation, even about twice as high as similar projects. Ronin's game ecosystem expands slowly and still leans towards Axie Infinity's dedicated chain, without breaking out of the single game narrative logic of Axie Infinity.

Based on the above analysis, Merit Circle is a more promising project in this field and also has a higher investment cost-effectiveness.

From a fundamental perspective, Merit Circle has a clear strategic development plan and high execution capabilities in transitioning from a game guild to a game platform and game public chain. It has a narrative space for both investment and public chain projects, and has extremely high business scalability. Its performance in game ecology, treasury fund management, team strategic direction, and DAO operational capabilities are commendable, leading similar projects. Currently, the construction of the Beam subnet has become the main narrative of Merit Circle's next round of development, as can be seen from the migration of MC tokens to BEAM tokens. Beam is the focus of attention in the Avalanche ecosystem, and with Merit Circle's game resources, it is easier to attract project parties to settle in and complete the initial launch compared to other game application chains.

Secondly, in terms of project valuation, MC's current FDV is **$317,879,400,** which is still relatively low compared to other gaming platform projects. Considering its fundamental narrative and business capabilities, it is relatively undervalued and has a good investment cost-effectiveness.

Thirdly, in terms of the token's chip structure, the current circulation of MC is relatively high, and the subsequent unlocking and selling pressure is relatively small. According to on-chain data, the number of holders has been rapidly increasing since the end of 2022, and currently stands at around 12,000, which is twice the number at the end of 2022. The number of holders is still growing steadily, and the holding time of almost all chips exceeds one month. Long-term holders account for a high proportion, and 85 of the top 100 addresses that entered early still maintain their holdings. In terms of chip structure, the top 5 holders account for a relatively stable proportion of about 25%.

Overall, we believe that Merit Circle is a project worth investing in and paying attention to in the Web2.5 gaming platform and even the entire Web2.5 gaming industry.

In addition, in other types of projects, the game ecology represented by TreasureDAO has strong crypto native properties. With the help of The Beacon, it has become the largest game ecology on Arbitrum. We will continue to pay attention to its subsequent ecological expansion. As a game platform, Echelon Prime is still in its early stages, but it has supported FDV comparable to other platforms with a card game narrative. Xterio has certain technological advantages and game resource backgrounds. Currently, its primary valuation is relatively high, and we need to continue to track its economic model, secondary market performance, and game development after the release of XTER. YGG and GuildFi, as veteran game guilds, have been exploring the construction of game communities and still have deep accumulation in the industry chain. It is worth continuing to pay attention to their expansion in token empowerment, which may bring about an increase in token prices.

This article is from a submission and does not represent the views of BlockBeats.

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