What to expect from GameFi and Metaverse in 2022
AVentures thesis series: Interview with Sevan
Giants are coming to Metaverse
Not so long ago, Facebook changed its name to Meta, Twitter implemented verified NFT profile pictures, and Microsoft purchased Activision Blizzard while paying a 45% price premium. Samsung is planning to sell NFTs on their web platforms and TVs. Grayscale’s projections show that Metaverse will become a trillion-dollar industry, which explains the appetite of the giant companies towards Metaverse. DeFi protocols are shifting their focus to Metaverse, such as the Maker DAO and Sandbox partnership. Both microtrends and macro trends are pointing towards a Metaverse dominated Web3 experience.
GameFi projects can bring the crypto user adoption
Although we expect the Metaverse to expand in several directions, blockchain games will be the top performers in 2022. The 3 billion gamers spend over $180 billion per year in off-chain games, whereas blockchain games have not even attracted 1% of these numbers yet. However, GameFi will light the fuse this year, and we will see explosive growth in Play-to-Earn games for years and decades. GameFi space is evolving fast, and many DAOs and VCs think real user adoption will come with GameFi. We at Aventures DAO are already seeing the development of several top-tier gaming projects, which will deploy on Avalanche within the next six months.
Building blocks to the Metaverse
NFTs are an unavoidable, immutable and irreversible part of the Metaverse. It is why I think the NFT market and the Metaverse will be huge. Contrary to what most people believe, NFTs are not just an art form. NFTs have several use-cases, such as art, collectables (e.g. football cards, stamps, comic books), gaming (e.g. game characters, artefacts and lands), music, digital identity and more. The non-crypto equivalent of these markets reaches a trading volume of $0.5–1 trillion per year, where collectables (>$400B), gaming (>$180B) and music (>$20B) are some of the must-mentions. NFT sales volume was around $25 billion in 2021, and there is still so much room for growth.
Look for unique and scarce NFTs while avoiding profile picture NFTs with a single-use case. Buy NFTs with multiple utilities from verified projects supported by a strong team. It is even better if you can find NFTs with intrinsic value (a rich treasury devoted to the project or NFTs directly backed by other crypto assets).
Be cautious while purchasing NFTs closely associated with real-world fungible assets. If an NFT gives you ownership of an asset (e.g. a house or a car), then there is the risk of regulations, legal matters, tax issues as it is effectively an investment contract. Even if all these issues are somehow solved, the price of the NFT can still be anchored to the real-world asset, i.e. no huge upside. The real-world ownership NFTs will have a significant role in the future, but it is too early to jump into this train for many of us.
Before getting advice on NFTs from anyone, check if they have skin in the game. So far, AVentures DAO purchased the most expensive NFT on the Avalanche ecosystem for $500,000, a Majestic Tier Craftsman NFT of the FEIF.
Gaming Tokens
Do not buy them as an investment if you are not going to play the game. Of course, it is possible to make some profits if you catch the hype, but Play-to-Earn can offer much more than this. Active users will profit by getting additional in-game reward tokens, even if the token price decreases. There will be a limited upside if you want HODL gaming tokens but a significant downside.
If you want to buy gaming tokens to play the game, do your research. Avoid the price discovery phase where bots and inexperienced users will purchase immediately, causing the token price to skyrocket within minutes after TGE. Alternatively, you can also get tokens through Rocket Joe, Dexalot Discovery or similar protocols at a reasonable price. Waiting for a few days can be a better choice, especially if the game is not ready to play at the time of the TGE.
If you are seriously thinking to monetize on GameFi, join a guild. It is impossible to catch up with all new coming projects as an individual. We learned in crypto so far that “timing matters”, and a strong guild or a team will save you time.
Ingredients of a robust blockchain game
Look for fun! Metaverse and GameFi projects must have the entertainment factor; otherwise, the liquidity will flow away and find a better investment. Boring and profitable games will eventually become dull and less profitable, and the users will find a better alternative. Beyond the fun factor, the other important concepts to consider are:
- accessibility (determines the number of users);
- robust tokenomics (so the game can stay profitable for everyone);
- the power dynamics (both small-capital players and whales can acquire power by investing time or money and enjoying the game); and
- the team’s vision.
A game needs backend developers, frontend developers, graphic designers, and other gaming experts to support and shape the story. In addition to these, a gaming project must have strong marketing, business developers, legal support, blockchain experts and game testers. Therefore, a small team can easily miss the expertise in these fields mentioned above and the project partners and advisors play a crucial role in many GameFi projects. Investment DAOs, such as the Aventures DAO, can support and advise projects on these vital subjects, so the project team can stay small and purely focused on the gaming. A small team will have a low running cost, a low market cap and a huge moon potential.
Avalanche will provide a great GameFi and Metaverse experience
From the tech perspective, Metaverse and GameFi pose a huge challenge for all blockchains, which do not want to compromise the user experience with slow transactions or low security. Avalanche is ready for this challenge with its subnets and aims to provide a scalable solution for its users with low fees and fast transactions.
About Sevan
Sevan (PhD in Electronic Engineering) is the head of a research centre in a UK university. He has been providing technical consultancy for companies and start-ups for over 10 years. He has presented his work in several invited talks and seminars, including the UK parliament.
Sevan is a co-founder of Aventures DAO, an early Avalanche user and an investor. He provides technical advice and strategic insight for projects while working on stochastic modelling and data analysis. He is a DeFi enthusiast and believes in the future of a better economic system through cryptocurrencies.
About Aventures
AVentures is an investment DAO comprised of OG Avalanche community members on a mission to support the ecosystem. The team boasts multiple successful blockchain developers and project owners, content creators, advisors and domain experts that have come together to channel our expertise to support the Avalanche ecosystem.
AVentures DAO:
* Provides advisory and marketing support to new Avalanche projects
* Supports Avalanche projects by investing in seed/private rounds
* Incubates new projects via mentoring
* Publishes technical analysis on DeFi projects
