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What does the data tell you: Will GameFi explode again?

Read this article in 29 Minutes

A good GameFi project requires: turn-out capability, resources, a good long-term economic model, etc

原文标题：《 GameFi 赛道分析 (1) 》

ViewDAO

One, the introduction

Over the past two years, the hottest topic in the cryptocurrency community has been innovation at the application layer:

In 2020 & have spent DeFi Summer2021 & NBSP; NFT Summer (still in progress...) And the derived NFTFi2021 & NBSP; GameFi

DeFi has gradually become the core value capture method in the current blockchain application layer, and there is even the slogan "everything can be DeFi". The reason lies in that DeFi, as a financial instrument, can greatly leverage the liquidity of market funds, promote the substantial increase of the interaction volume on the chain, and further promote the growth of market value. While this also introduces risk, leverage, and a degree of false prosperity to the market, it is a necessary tool in the early stages of the cryptosphere's development.

Here's a look at one of the hottest app tracks coming out in Q2 2021: GameFi.

Ii. GameFi, a flash in the pan?

I remember that at that time, everyone agreed that GameFi was a track with great potential. After all, games had one of the largest audiences on the Internet in the Web2 era, so there was a great wave of GameFi from June 2021-October 2021. Hundreds of GameFi projects were born, among which the leading project Axie Infinity's creative way of making money while playing deeply entered people's lives and became a popular game in the Philippines at that time (many unemployed people even took this game as their source of income). At its peak, Axie's daily revenue surpassed Honor of Kings and topped the world's top game in daily revenue.

Trend chart of users and trading volume of Axie Infinity

AXS Token price trend chart

AXS market cap trend chart

But after a brief boom, I didn't hear much about successful GameFi projects other than the one in the form of a cash plate. Until now, Axie has been a bit of an anticlimactic experience for me, and I haven't really seen its potential. This rapid decline caused many to change their view of GameFi: It seemed like a flash in the pan.

However, we believe that there were too many other factors that prevented GameFi from making a sustained run in a season that should have continued. The main reasons are:

- Influence of the currency circle environment: Since bitcoin hit 60000+ twice, the market has entered a bear market cycle. In the bear market, although there will be local hot spots, the pessimistic situation makes it difficult for the track to stabilize fOMO;

- External environment: the global geopolitical situation, the Federal Reserve's interest rate hike, and the impact of the epidemic have led to a downward trend in the world economy, making it difficult for the currency circle to stay immune;

- GameFi projects at that time were very different in terms of quality and playability compared to WEB2 games, plus the development cycle of GameFi projects was long (the development time and cost of good GameFi projects were much higher than DeFi or NFT projects), As a result, everyone's recognition of GameFi declined rapidly after the first wave of novelty and money-making effect.

So, can GameFi break out again in the future? Let's look at the data

Iii. GameFi Data & NBSP;

3.1 DAPP data

We took data from DappRadar's top 10,000 projects and summarized them as follows:

A breakdown of DappRadar's top 10,000 projects

Here, we exclude high-risk projects, and we get the following figure for GAMES:

You can see:

Games account for 19%, and if GAMBLING is included as games, gaming accounts for 30%.

3.2 Financing data

We have made statistics on financing from January 2021-April 202022 (data source) :

As you can see: Of all the categories (top 30), GAMEING tops the list with 305. This reflects the fact that investment institutions are actively positioning the game space, and speculative institutions are throwing money at an industry that is far from value discovery.

3.3 Hotspot Information

In the current market situation, the incremental capital is insufficient. In most cases, the stock capital is playing the game, so it is difficult to have a wide range of hot spots or increases.

However, the market is not a dead pool, and participants (market makers, hot money, big players, etc.) will also look for or create local hot spots to make the market appear active.

The latest hot topic is GMT and a series of "X TO EARN" items caused by GMT, all of which belong TO GameFi. Therefore, it can be seen that the market still has good expectations and ideas for GameFi.

GMT price trend chart

3.4 Projects to be online

We observe that most aaa games with resources are not online yet, among which investment institutions and production teams are very strong, and there is also deep cooperation with traditional WEB2 game manufacturers, such as &NBSP;IlluviumThese triple-A titles are worth looking forward to.

Therefore:

We believe that GameFi project still has a good prospect. There is no shortage of high-quality GameFi projects with potential in the market. As these projects come online gradually in the second half of the year, there is a great possibility that they will become hot spots in the second half of the year, and even some GameFi will bring increment to the overall market of cryptocurrency.

Iv. Characteristics of high-quality GAMEfi projects

We analyzed the breakout GameFi projects to find common ground for their success, and based on our analysis, we came up with some brief summaries:

Ones with ability(Gameplay, game quality, celebrity support)

GameFi needs to have innovative gameplay in order to attract users quickly (For example, Eat the Chicken was new to most players when it first came out);

The quality of GameFi's games should slowly move closer to WEB2, at least conceptually, in order to improve the quality and experience of the games to meet the needs of users;

GameFi will increase the success rate of the project by reducing the cost of time wear and tear if it has celebrity support to help the game get out of the loop quickly.

Resources (capital, partner)

For the vast majority of projects, the success rate is much higher with the help and support of a good sponsor, and GameFi is no exception. Because the investor is the endorsement and front of the project credit, more importantly - the investor may bring more resources to the project;

Partnering with the best project partners in the game industry is also an important path. A good partner can easily endorse the quality of the project, and it will bring a lot of practical development and optimization to the project.

Good, long-term economic models

In the Crypto circle, a good project without a good economic model is likely to fail. For GameFi, economic model plays a more important role. It needs to be in < Long-term maintenance; And & lt; Short-term incentives & GT; To find the right balance.

As a whole, you can refer to the requirements in the following figure:

You can refer to this article about [economic model article links] (HTTP: / / https://mirror.xyz/ongtutu.eth/VkvCkiexcFrFOZBaZ5XzfyDZNmwB8pL8zc-DIBOMF9o https://airtable.com/shraQiFHFxU7rm7Wv/tblBVGLgh1XQpun1b), we may be able to single open an economic model is introduced

The degree of support and use of the public chain

The public chain that hosts the game is also very important. Since the game is a highly interactive project, the public chain supporting the game needs to meet the two core points of [high speed] [low cost]. Although the current approach is to re-link the parts that involve digital assets, the level of interaction is still higher than other types of projects.

In addition, if the public chain is very supportive of the development of the game on it, it will promote the development of the game, ecological construction and so on, which will promote the emergence of more and more better GameFi projects.

Five, how to invest

This is what we want to focus on in this article, how we should invest when it is clear that the track is promising for the future.

As I pointed out in my last tweet:

Investment and research = investment + research, research is the premise and basis of investment, investment is the practice and verification of research

If we want to find a project with a high probability of success from a large number of projects, in addition to in-depth analysis of the project from the basic dimension, we also need to keep track of the project data.

Continuous tracking means that you need to select some key data for your project and monitor it; In addition to their own resources can filter high-quality games, the average investment institutions or individual investors want to select from a large number of games that have the potential to invest in the time cost is very high. Therefore, we can consider using automated methods to monitor game data, summarize the data change rules of successful games in the outbreak process, and use the rules to find the games about to explode. If this pattern can be found in large amounts of data, it can be better monitored for early warning. (So I've always said that "scientists" in the Crypto circle have an innate advantage)

5.1 looking for

Looking is looking for what are the good qualities in the project? When might the value of the project be discovered? What kind of data reflect this?

For GameFi, we give two data dimensions: < Active & gt; < Heat & gt;

5.1.1 Activity index

According to DappRadar, the main indicators of game activity are: users, transactions, and transactions.

First of all, we conducted a survey of the changes in the user numbers of Axie, Stepn, Splinterlands, Alien Worlds, and Crabada, which are already online and ranked among the highest in market capitalization. The graphs are as follows:

(Data source Dappradar, Stepn is not counted in the website)

Axie

Crabada

Splinterlands

Alien worlds

You can see:

1) The number of users of Crabada shows a trend of steady growth;

2) Axie, Alien Worlds, Splinterlands) started out with a steady increase in user numbers and then grew exponentially over time.

The commonality: games have a phase of steady user growth before they explode

So one possible scenario is:

1) A straight line is obtained by linear fitting of the number of users in the past period of time, such as N days, and then the slope of the line is observed. If the slope is regular, it is proved that the overall number of users in the statistical period is increasing; if it is not regular, it is proved that the number of users is not increasing.

2) in order to make the monitoring result more smoothly, you can choose three short, medium and long time scales to monitor users fitting straight slope (as in the principle of linear fitting, if the number of users more volatile as long as the overall upward slope of the fitting result will be positive, users volatility cannot be considered to be steady growth, so this situation needs to filter out).

3) In order to filter out a large number of projects that are dying or that are growing steadily but only by a small margin, we can set a basic limit on the number of users and the slope of the project.

In view of the above analysis, we selected three different time scales to fit the number of users. 1315 Dappradar games were selected for backtesting, and the games that triggered the rules and their corresponding time points were counted as follows:

According to the statistical results, 34 matches were screened out, accounting for about 2.5% of the total. It's worth noting that high market cap games can almost all be monitored some time before they explode.

5.1.2 Heat index

The indicators of popularity include: Google search popularity, Twitter popularity, website visits, and mobile App downloads.

Search heat we can extract data through such a website:

The number of visits to a website can be counted using SimilarWeb.

Here are the weekly website visits of Stepn according to SimilarWeb (Membership) :

It can be seen that the trend is consistent with the number of users analyzed above. The number of visits to the website shows an exponential growth trend after a period of steady growth and accumulation, which can be monitored and early warning by the above monitoring method.

App downloads and daily user activity data are available from appFigures.

If you need to dig a little deeper: Bring in twitter's social buzz data or Discord's interaction data, which requires a custom analytics tool.

5.1.3 data source

To summarize, the relevant data sources are as follows:

5.1.4 Whole set of monitoring ideas

In fact, our ViewDAO team has preliminarily built a comprehensive, three-dimensional, automated monitoring system for the purpose of discovering potential rising projects. The overall logical framework is shared with you as follows:

ViewDAO monitors the overall system logic diagram

From left to right, the logic of the main body is: the number of game projects in the market is filtered layer by layer through a funnel, and finally the investable projects are filtered out. The discovery dimensions of projects are automatic data monitoring and active input. For automatic data monitoring, models/rules can be obtained by analyzing successful projects in the past, and trigger rules represent manual research. For projects that involve active industry research, Hackson, WHALE, Smart Money, and high quality communities.

At present, we are constantly updating and improving the monitoring model of ViewDAO, and we will timely share the investment projects found by monitoring on Twitter.

5.2 looking for

There's another way to think about it: if you can't pick the best of all GameFi projects, the next best thing is not to look, but to look for the carrier of the game -- the public chain.

Here is an idea for your reference. The dimensions of the selection of the public chain can include:

- low valuations

- The GameFi ecosystem on the public chain has not yet exploded

- High quality GameFi on the public chain is growing steadily

Of course, a recommended approach is still to monitor the relevant data of the public chain, and do continuous tracking analysis.