Leveling Up NFT/Crypto Games’ Discussions- Are cats securities? And what might come next
Though still at its infant stage, let’s seriously (& also jokingly) exploring concepts and opportunities derived from crypto gaming.
ICOs/Initial Kitties Offerings? Introducing Crypto Gaming Items/Collectibles/NFTs Presales
After ‘Crypto kitties’ officially launched in Nov 2017, there were more & more crypto games/experiments getting shipped and aiming to take over the cats’ throne.
We’ll be initially focus on crypto games that are doing presales in this post.
Many crypto games adopted the presale mechanisms to incentivize users to get in. (They’d provided incentives such increasing its price and higher percentages of getting rare items.)
Some gameplay was also designed to be more deep (especially comparing to games at the market such as CryptoCelebrities/CryptoCountires at the time)
*Eg: Another example of presale/auction going on in April 2018 was Chibifighters. https://chibifighters.io/
These projects who did initial presales are arguably behaving quite similar as projects doing token presales/ICOs. (Some may use the funding to develop the game, and some already have a working product and further use the capital to release new gaming features & extension products).
**There are also many more interesting crypto games with different gaming mechanisms that can review in later posts.
But special shout out to: EtherGoo.
It had became one of very first to successfully overtook the cats and become THE Ethereum game with most transactions & volume. (For more info about this game, @cbwu did a great job in this article: https://medium.com/@cbwu/how-one-developer-toppled-an-empire-for-now-46e90db5b0eb)
And ofc cat race: https://kittyrace.com
Are Crypto ‘Cats’, ‘Celebrities’ on the blockchain count as ‘securities’?
Let’s take the concept of “Crypto collectibles/gaming items that did presales are quite parallel to a crypto project doing presales/ICO” to the next levels:
- Do these projects that did presales for crypto gaming items/NFTs without a working product (aka pre-product) classify as securities or not? (investors did get crypto collectibles/NFTs with no utility value in return)
- Do the highly usable crypto gaming items from a well functioning game be counted as a true ‘Utility token/asset” in this case?
- What is definition of working product for crypto games anyways? Does getting just getting gaming item/NFT count? And What is a qualified gameplay? (eg breeding cats v.s. ‘real’ gameplay)
And recently, with the debate of whether Ethereum should be counted as ‘securities’, many debate that if it achieves true decentralization, it shouldn’t be counted as Securities. This also raises an interesting questions:
What is a true decentralized game design like?
Many of these questions can’t be answered now due to gray, and will likely still need quite some time to be figured out, but will likely be the next
What’s next?
- Will more and more companies/projects raise ‘ICOs’ through issuing ‘cats’ and gameplays? Let’s find out.
- We will need a guideline such as ‘Securities Law Framework for Crypto/Blockchain Games’ in the future if above is true.
Evaluating attempts of “cryptographic tokens, protocols, decentralized systems, and gift card coins” from the past may also be applied to crypto games. (There may have many similarities but also difference need to be consider eg analyzing gameplay and assets instead.)
*Here are also more points to consider:
-If we count the crypto gaming items of a working crypto game as a ‘true utility token’, we may see even more projects wanting to do token sales this way instead. (from a certain crowd who may hope gaming allows faster liquidation).
-If we apply the definition that all tokens are securities and all crypto gaming items/NFTs will not exempted, crypto games may have to do KYC/AML in the future. (And interesting to see if this would affect the ‘traditional’ gaming industry that sells video game items/future DLCs/preorders)
- We’ll need to model best practices for crypto game projects.
In a ‘traditional’ crypto projects, it’s generally encourage to publish: Whitepaper, development roadmap, codes, token-distribution layouts/plans for contributers and team and more as better practices.
Encouraging crypto games to submit their ‘whitepapers’, games, roadmap and token distributions layouts may increase the standards and its health in the future.
- The protocols and products currently in development in the ecosystems for crypto gaming items/ NFTs will be important infrastructure for this future.
If we also apply the assumptions about NFTs/Crypto games from earlier that Crypto gaming items are behaving similar as tokens/securities, a lot of protocols and products that are supporting NFTs may also become important infrastructures.
-Protocols: The benefits of decentralization exchange protocol & peer to peer lending protocol will also be applicable to NFT spaces. Interestingly these protocols had also been looking to support NFTs since CryptoKitties launched.
0x Protocol- Supporting NFTs: https://blog.0xproject.com/sneak-peek-0x-trade-widget-cbd13305407d
Dharma Protocol- Cat-lateralized Loans: https://blog.dharma.io/dharma-code-school-1-cat-lateralized-loans-f61b67a5dd78
-Marketplace/Exchange: Based on assumption of crypto gaming items are like tokens, the trading marketplaces will also kind of be behaving like a crypto exchange in the future too (if not already):
Even existing well functioning decentralized exchanges can be very good places to support cryptogaming items/NFTs:
-Wallet/Dapp Support: Wallet/Dapp supports will also be important:
-More: We also need projects like this to advance crypto gaming https://xlnt.co/
- In the future, there will be professional funds focus investing crypto games (when more and more better projects are designed and it’s more and more clear consistent/high returns can be made.)
More investors/Contributors and professional funds will come if we apply the assumptions that:
A)More and more crypto games will come out and quality will continue to get better over time.
B)More and more clear that these games can generate consistent and high returns as investor/contributor.
We may need investors to curate and fund better crypto games to ensure it grows healthy in the long run. (The projects games that get supported even now may also have huge impact to the space as well)
Announcement?
Because it’s becoming more and more important to be the first in the crypto/ blockchain industry (*Otherwise, why bother right), I would like to (sarcastically) announce:
Meow Capital- the very first crypto hedge fund/venture fund focusing on investing and developing crypto games.
Instead of analyzing token protocol designs & economics, will be analyzing elements such as gameplays , game economics, and gaming item distribution.
Here’s a picture honoring the very first cat from Crypto Kitties, one of very first blockchain game.
In all seriousness, hope this post can be thought-provoking.
We should start thinking the these cryptographic games and its assets/NFTs may be parallel to how we treat tokens now.
We’ll need more ambitious experiments to move this space forward. (And don’t underestimate the crypto games and the cats.)
