Perion 2023 Strategy Update

To our community,

We hope you’ve all had a great start to 2023 and some time to rest & recover after the eventful year 2022 brought to our industry.

We’d like to use this opportunity to take a look in the rear-view mirror; recapping 2022, taking a look at Perion’s current position and most importantly, our trajectory for 2023.

Contents:

1. 2022 Recap
2. Strategy Update

1. 2022 Recap

Changes in the Play-to-Earn Landscape

At the beginning of 2022, play-to-earn and Axie Infinity were benefiting from positive market conditions and major user growth — in early 2022 Perion’s revenue in play-to-earn was sitting at roughly $250,000 per month, from a combination of breeding meta NFT assets and deploying competitive players.

To the credit of our quality-over-quantity approach in both asset and player selection, combined with our Treasury Team being at the pulse of the market 24/7, we foresaw the signals of economic decline early. Namely a slowing in user acquisition leading to an SLP supply glut, which we had identified as the key risk to Axie Infinity’s model as it stood in early 2022. Owing to this early detection, we greatly lowered our exposure in Q1/2022. This resulted in us being able to exit the majority of our position, and other treasury long exposure, ahead of the market. We protected our assets and minimised losses.

Since that time, we have stayed close to recent developments in Axie Infinity, and have found great opportunities in deploying our best players and assets, in its new competitive tournament landscape with attractive prize pools, over the now redundant scholarship model.

Initiatives and Products

From the inception of Perion, we have focussed on building products that solve actual problems with applied blockchain technology. Initially, these products were Meta Optimisations for use in game economies; including software for tracking and forecasting NFT values, as well as automated breeding systems within Axie Infinity. At the time, these were in-house developed products that resulted in 12x the baseline returns for breeding and 3x energy earning potential for scholarship players. With revenues in play-to-earn gaming decreasing substantially, we’ve actively explored ways to pivot our product vertical in order to solve problems and create value in other areas. Initially, we have looked at our core competencies and how these can be applied in other ways to create value for the DAO. The result was to apply and combine our experience in product management and smart contract development.

This resulted in the development of:

1. A fully smart-contract-based wagering platform, which allows players to bet on outcomes in web3 games (fully developed)
2. 02_State: A platform for limited NFT and Merchandise Drops + Brand Activations (MVP Showcased at our NFT.NYC Activation )

More on these products later!

Investments

The treasury has invested a total of $3,095,000 in fifteen Web3 gaming titles. In applying our understanding of the gaming and crypto landscapes, we believe we have a significant advantage in backing the best Web3 gaming projects, and hold a positive outlook for the majority of our allocations. We have entered all investments in either pre-seed or seed rounds and are committed long-term to the success of these projects, and are managing our positions accordingly.

Public Sale/IDO

On January 21st 2022, our long-anticipated IDO using the open-source Tokemak model was scheduled to kick off. On the day, we woke up to ETH having lost more than 15% in price overnight, causing a major shake up and negative sentiment in the markets. We faced a tough decision, though in the end decided to follow through with the IDO. Unfortunately, less than 5% of the registered whitelist participants committed on the day. Overall we managed to secure $4.7m for the treasury, which provided us with much opportunity to build for the future. In hindsight, we are happy to have followed through with the IDO despite shaky market conditions on the day. One thing we would do differently today — whilst we believe in the Tokemak model as a fairer method of public distribution, it proved itself to be rather complicated for new users, triggering drop-off for a considerable number of whitelisted community members.

2022 summary

Last year was an eventful year not just for crypto, but also for global macro — to say the least. We had to pivot to new revenue streams from one day to the next, and deal with these changes in an overall unfavourable market environment. We’re proud of the things we have achieved; building the team we have today, in what was a very competitive market, becoming at the pulse of what we believe will be some of the best Web3 games in future, and for shielding the treasury from any impacts of the likes of Luna, Celsius, FTX and the entire lending market collapse. In retrospect, there are certain things we could have done differently. We acknowledge there has been a certain lack of direction and focus, as well as execution on certain initiatives.

On the bright side — we have an incredibly strong foundation to win in 2023. We have a total treasury balance of $10mm (as of 01/02/2023) and have built an incredible team that is setup for success and has begun to execute (e.g. PERC native staking was released in four weeks end-to-end). We have started the year 2023 fresh, with a focus on strategic planning. We’ve done helpful analysis like an end-to-end Retro, SWOT, PESTELE, formed Mission and Vision and had detailed discussions with our advisors. Lets dive into the outcomes and strategy below.

2. Strategy Update

Let’s put the most important part first: Perion started as a gaming organisation. In the last year we’ve tried to branch out at times — into betting and fashion in particular, which both became a focus area. We looked at these areas because they presented opportunities and because we identified problems in these areas we were confident we could solve. Diving into our strategy sessions in January we came to one clear conclusion: Yes, there are opportunities, in fact there are many opportunities everywhere — but are they the right opportunities for us? What does Perion at its core stand for and what is the mark we want to leave in the world? Our mission statement can describe this better than anything:

“Perion’s Mission is to accelerate the shift to web3 gaming by building and backing its best teams”.

We are gamers, we started this organisation for gamers and we believe that Web3 gaming will be the biggest on-ramp to get the next billion people to use blockchain in some shape or form. We know that we are still very much at the beginning of this generational shift — and that is exactly the place we want to be. Growth is captured most at the beginning of the S-Curve. We are in this space to accelerate this shift, and to do this we have come up with three key objectives for the year:

1. Launch a product or service that onboards web2 gamers to web3 at scale

We are a team of seasoned product and software engineers, having been in the founding teams of companies that released products used by millions of users. We are problem solvers, and are now in the position to have the processes, time and resources we need to build a winning team. By the end of this year, we will release a revenue-generating product or service which will create utility and demand for our PERC token.

To provide an update on the existing products:

• Wagering platform: We are in active talks with a few parties to sell the platform- creating immediate value for the treasury, or partner with a licensed operator- securing a stake in the platform’s growth and an ongoing revenue share for the DAO treasury.
• 02State: We have come to the conclusion that fashion is not our area to play in. We are currently scoping routes to re-skin the existing prototype to solve a big problem in the gaming space — stay tuned for more info on this soon.

2. Create sustainable value for PERC holders

PERC is at the core of everything we do. We are committing to focus on creating sustainable value for its holders through a variety of initiatives, key parts are in particular:

a). Launch the DAO Governance, in order to enable PERC holders to contribute To the Perion ecosystem. This will be rolled out in the next 8 weeks

b). Launch Native Staking on Perion.gg for both single-sided and LP staking (Launched)

c). List PERC on more Exchanges (Launching on two more exchanges in Q1/2023)

d). Incorporate PERC utility into future products/services we are releasing this year

3. Expand the reach of web3 gaming by drawing in a wider audience of gamers

To achieve our Mission, it is critical for us to underline the value of web3 gaming to any gamer. Hence, we will focus on relating content, channels and with that expand our reach into segments that have not yet been convinced of the advantages of web3 elements in gaming. We will keep fostering our existing pro teams and grow our brand as a gaming organisation. The piece you will first see coming out of this initiative will be a content overhaul on our website — so that everyone can understand immediately what Perion actually does and what we stand for.

In summary, 2022 has been challenging — but also a year full of growth and learnings. We have built a rockstar team, have found our sweet spot and are ready to execute in 2023. We know where we are going to play, and we know where we are going to win.

— Perion Team

Stay connected

2023 promises to be an exciting year for all of us at Perion, stay connected with our social channels, to keep up with our regular updates.

• Web: https://perion.gg
• Discord: https://discord.gg/perion-gaming
• Twitter: https://twitter.com/PerionDAO
• Medium: https://medium.com/@PerionDAO