Original Article Title: Closing Fantasy: Notes from 2.5 Years in SocialFi
Original Article Author: 0xKipit
Translation: Peggy

Editor's Note: Fantasy Top has announced its closure after two and a half years of operation, with full refunds to pre-seed and seed round investors. Despite the team's statement that Fantasy never touched investor funds, instead relying on its own revenue to sustain operations and returning approximately $20 million to the community, this once highly anticipated crypto social game ultimately failed to find a sustainable growth path.

What truly stands out in this article is the team's reflection on the reasons for failure: when a product is financialized from the start, it attracts not users or fans, but speculators. Fantasy attempted to overlay crypto mechanics onto a trading card game, but card prices, airdrop expectations, and asset attributes, in turn, limited gameplay iteration. The team was no longer just "making a game," but managing an economy driven by price and expectation.

This dilemma is not unique to Fantasy. The article further extends this lesson to SocialFi, social tokens, and early token issuance: if a project introduces tokens or financial incentives before product-market fit, the team, users, and community all revolve around price prematurely, overshadowing the product itself.

The end of Fantasy Top is more like a failure note written to those who come after. Crypto TCG in its current form and social products that start with financial language indeed face a clear glass ceiling. However, this does not mean that the experiment has no value. The real issue is that the next generation of SocialFi can no longer just overlay crypto onto Web2 products but must redesign the relationship between users, incentives, and product experience.

The following is the original article:

After two and a half years, we have decided to close Fantasy Top.

TL;DR

All pre-seed and seed round investors will receive a 100% refund, returning every dollar invested.

Over the past 2.5 years, Fantasy has operated solely on its own revenue and has returned approximately $20 million to the community.

The core lesson we have learned over 2.5 years is this: when a product is primarily a financial product before anything else, it will attract speculators first, not users. We learned this the hard way on a trading card game (TCG), but the same pattern also explains why most social tokens and early token issuances struggle.

This decision was not made overnight. We spent several months examining all remaining options, communicating with people we trust, and thoroughly exploring a pivot, ultimately coming to a clear conclusion: we no longer have enough belief to continue. Therefore, we choose to do the responsible thing and wind it down properly.

This post is more like a set of notes: what we did, why it didn't succeed, and what we've learned in social products, cryptocurrency, and tokenomics. We were not the first to try, and we will not be the last. If anything here can help the next team avoid the walls we hit, then this experiment was worth it.

What We Did

Over the past two and a half years, Fantasy has been entirely self-sustaining through its own revenue. Although we completed a $5.6 million funding round led by DragonFly, investor funds were never used for day-to-day operations. Few companies in this space accomplish this. We did, and we are proud of it.

Numbers are more persuasive than anything we could write:

2,665 ETH distributed to players, approximately $8 million;

1,078 ETH distributed to heroes, approximately $3.2 million;

Combined distribution of $12.2 million worth of BLAST to players and heroes;

If Blast rewards are included, 86% of players ultimately achieved a net profit.

What Fantasy gave back to the community far exceeded what it received from the community. This is the legacy we leave on paper.

In addition to revenue distribution, we also created one of the most virally engaging products in the crypto-social space. We pioneered some new mechanisms: Mindshare Ratings, social graph-based prediction markets, and a lighter free-play model. We experimented intensely and delivered rapidly.

But it still wasn't enough.

Why Fantasy Didn't Succeed

The core reason for our failure was singular: we tried to overlay crypto mechanics on top of a pattern not originally designed for crypto.

Collectible card games are venerable in their own right. Magic, Pokémon, Yu-Gi-Oh—some of the largest, most enduring global entertainment IPs. People love them, collect them, trade them, and can play them for decades.

But all crypto TCGs have failed. TopShot, SoRare, and now us. This is not a coincidence but a structural issue.

The greatest TCGs in history were first and foremost games, with assets being secondary. People bought Magic cards to play Magic. The financial value of the cards was a result of gameplay quality and community depth, not the starting point for user entry.

When you build a TCG in the crypto world, this order is reversed. The cards are seen first as financial assets, with everything else coming afterwards. You attract not lovers of the game but individuals looking to profit from the cards. These are not the same group of people.

Once an economic system is financialized from day one, every decision becomes harder. You can't freely iterate on gameplay because every change affects card prices. You can't try new modes because they will reallocate value. You are no longer making a game; you are managing an economy. This is the trap, and we walked right into it.

We saw this trap and tried to escape it. Arena removed the friction of ownership; Clout was a softer user acquisition funnel; F2P provided a free entry point into the Fantasy world. Later pivoting to a prediction market was to preserve the social gaming aspect while completely stripping away the NFT layer. Every adjustment was an attempt to return to a "game-first" approach. Yet, none were sufficient to truly change the situation.

The Blast phase made things even harder. During Blast, with immense hype, a surge of users flooded into Fantasy, investing in the vision of airdrops imagined to be worth billions. Around 70% of our historical revenue happened in the first month post mainnet launch. The starting point was too high, making everything afterwards seem like a downturn. We weren't managing a product with steady growth but overseeing a tide going out.

Financialization will alter who comes into this product

The same pattern has repeated itself throughout the crypto industry.

Social tokens were meant to reshape the relationship between creators and fans. However, every attempt so far has failed. The reason is the same: true fans did not come to earn first. They came for the artist, the team, and the community. Placing a price chart between fans and what they love will transform that relationship into something else. The most active "holders" are no longer fans but traders.

This is not a minor issue but a fundamental one.

Cryptocurrencies excel at creating incentive mechanisms and coordinating participants. This is their core strength. However, we have taken things from Web2, gaming, social media, and communities and assumed that simply overlaying financial primitives would make them better. This is not the case. It doesn't make them better; it just makes them something else. In most cases, it weakens what they were originally meant to be.

You can't just slap a crypto mechanism onto a Web2 product and expect the experience to naturally expand. The financial layer is not a feature; it will rewrite who comes into the product and why.

About Tokens

The same logic applies at the level of going from a product to a company.

We have never issued a token. We've thought about it many times but have never done it because we have never reached a milestone where we could honestly issue a token. So-called Rugging is when you know a token will go to zero like 95% of tokens but you still choose to issue. We refuse to do this.

But stepping out of Fantasy, the more I observe token issuance in this cycle, the more I feel the mechanism itself is broken for most companies.

Allowing any project to issue a token at any time, especially before there is a product or a market, is a bad idea. I used to think traditional financial regulation was overboard. Now I understand it more. Those rules exist to protect retail investors, preventing them from funding companies not ready to take on public capital. The crypto industry completely skipped this filtering layer, and the entire industry is paying the price for it.

Issuing tokens before product-market fit is almost like poison. Every employee starts focusing on the price. Every user starts focusing on the price. You're no longer building a product; you're managing market sentiment. Even Across Protocol, a great company with real revenue and real growth, publicly concluded: tokens have hurt them more than helped. This should be taken seriously enough.

Tokens that have performed well in this cycle are the exception, not the rule: Hyperliquid, Pump, Jupiter. These are real businesses with real revenue and engaging in buybacks. They built a business first before earning the right to issue a token.

DePIN may be a structural exception, but most early DePIN projects were issued at valuations today that are no longer possible and we still haven't seen a definitive long-term success case.

Tokens, like securitized assets, when introduced too early, can lead to a vicious cycle. They can lock you into financial expectations that harm what a young company needs most: the flexibility to find the right direction.

Returning Investor Funds

All Fantasy pre-seed and seed round investors will receive a 100% refund. For every dollar invested, one dollar will be returned.

We are able to do this because we never needed to use that money to sustain operations. The business itself has been self-sustaining. Investors entrusted us with capital to build something that truly had a shot at becoming a billion-dollar company. Fantasy will not become that company, and we did not have enough conviction to spend that money on a pivot we didn't fully believe in.

We hold that trust too sacred to burn it on a bet we don't believe in ourselves.

To Our Heroes

Thank you. When nothing was proven, you allowed us to build a game around your names and reputations. You collectively received over $3.2 million. We hope you feel that taking a chance on us was worth it.

To the Community

It is you who made Fantasy what it is. Without you, none of these numbers would have happened. We tried to bring you the most engaging social game in the crypto world, and for a while, we did. Thank you for showing up week after week, hand after hand, match after match.

Unfortunately, we were not able to deliver the outcome some were hoping for. We understand that disappointment and will bear it seriously.

For those who still believe in the billion-dollar idea within Fantasy, please go for it. That space is still open. We are willing to share everything we've learned with anyone serious about giving it a go. We've hit some fundamental walls that you don't need to rediscover in the same painful way. Approach from where we got stuck, learn, and then do something better than us.

What we hope this post becomes is not a goodbye letter but a set of notes to those who come after.

Existing crypto TCGs have a hard ceiling. Social products that start with financial jargon will only attract speculators, not fans. Issuing tokens before product-market fit is mostly poison. These are not just our problems; they are industry-wide issues. They can be solved, but not by retracing paths already taken.

We are not the first to try, nor will we be the last. The best time for cryptocurrency is still all about experimentation. And the number of times an experiment has failed is often more than the times it has succeeded. But that doesn't mean the experiment itself is not worthwhile.

Thank you to everyone who has believed in Fantasy.

[Original Article]

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