Token Analytics: Gods Unchained

EXECUTIVE SUMMARY

Gods Unchained is the trading card play to earn game that was built by ex-Google and Riot Games engineers, funded by the largest gaming investor in the world, and led by the former Game Director of MTG Arena. Token GODS is designed to enrich the Play to Earn loop, being used to craft new NFTs, make in-game purchases, staking and champion user input via governance voting.

Game is launched in Immutable X (the first Layer 2 scaling solution for NFTs) that provides better value to users and products with instant trade confirmation, massive scalability (up to 9,000 trades per second), and zero gas fees — all without compromising security. Since moving to Immutable X in late June 2021 (complete migration), over 650,000 Gods Unchained NFT secondary trades have been made. In contrast, the entire Ethereum mainnet NFT trading volume amounted to 420,577 trades across the same period (source: nonfungible.com). The migration to Immutable X enabled Gods Unchained alone to achieve NFT trading volume that is 1.5 times greater than Ethereum mainnet, while consuming 99% less energy to perform those transactions.

The main potential risk is that seed investors will start to receive tokens at the same period of time as winners of sale on Coinlist.

More detailed information you will find in my report below.

INTRODUCTION

Gods Unchained is the Play to Earn trading card game that offers true ownership and freedom to its players. Collect rare cards, build your deck and sell cards to other players. Once you’ve set up your account, you can download the game launcher and start playing! To start you off, you’ll be given a free collection of 70 individual cards (140 in total) that are sorted into six decks.

As one of the highest-grossing blockchain games of 2020, Gods Unchained has logged millions of matches during its ongoing beta and boasts over 4 million assets. The token launch comes off the back of Gods Unchained’s latest expansion set, Trial of the Gods.

The team is working on an iOS and Android version of the game, and really needs to finetune the touchscreen interface. Normally gamers play Gods Unchained on a computer screen using a mouse. Game designer Chris Clay revealed the progress on the mobile version in their latest development update.

Webpage:

https://godsunchained.com

Whitepaper:

https://images.godsunchained.com/misc/whitepaper.pdf

MARKET OVERVIEW

The Play-to-Earn business model is the latest development in the games industry. It’s a business model that embraces the concept of an open economy and provides financial benefits to all players who add value by contributing to the game world. It’s likely to introduce new game concepts and retention models not yet seen in modern gaming. Business models around video games have evolved as technology became more accessible to the audience. In the late seventies and early eighties, we played our games on arcade machines in local game centers. With a pocket full of quarters gamers would compete to get the high score.

Nowadays we play games on our smartphone when we’re in public transit or taking a moment for ourselves. When we want a deeper experience, we launch a game on our personal computer or home console. No matter the platform, there are business models that suit every player. Consumers need to purchase the right to play a premium game. They do this by buying a license from a digital store, or a physical copy from an online or local shop. The financial commitment is pretty steep, as it’s not uncommon to pay 60 dollars for a newly released game. Even though this is still a huge industry, the free-to-play business model has seen the most growth in recent years.

The free-to-play business model allows gamers to get a game completely free without any financial commitment. Free-to-play or freemium games are always downloadable, and give consumers a limited / constrained experience. Gamers will need to pay to speed-up their progress or to obtain special items. For example, users need to pay for in-game currencies, extra content or special cosmetics for their game characters. Some of the biggest games on the market are actually available for free. Last year Fortnite alone was responsible for 1.8 billion dollars in revenue, even though the battle royal game is completely free. Selling cosmetics to allow more personalized customization is big business. Among the biggest games on the market are titles like League of Legends and Hearthstone, which are basically all available for free. However, each developer has its own ways to make users pay for additional content or cosmetics.

These free games have made billions of dollars in revenue, and there’s nothing stopping them. This just shows that the free-to-play business model has matured, and developers have learned the art of free-to-play monetization.

The play-to-earn business model has many similarities with the free-to-play one. Often a play-to-earn game also uses mechanics seen in free-to-play titles. However, play-to-earn games also allow gamers to make money or earn valuable digital assets.

Giving gamers ownership over in-game assets and allowing them to increase their value by actively playing the game are key components of the play-to-earn business model. By participating in the in-game economy, players are creating value for other players and the developers. In turn they are rewarded with in-game assets. These digital assets can be anything ranging from cryptocurrencies to in-game resources that are tokenized on the blockchain. That’s why the play-to-earn business model goes very well together with blockchain games.

In the play-to-earn business model the game and the developers reward players for putting time and effort into their game. For example, in Axie Infinity players earn Small Love Potions (SLP). Players need these tokens to breed new Axies, but they can also sell the tokens to other players on the open marketplace. Other examples are the resources in League of Kingdoms, or the prizes players can earn in the fantasy football game Sorare.

1. https://www.playtoearn.online/best-play-to-earn-games-with-nfts-or-crypto/

2. https://medium.com/blockchain-game-alliance/play-to-earn-blockchain-games-as-next-step-for-games-industry-cf374b8f02ae

3. https://www.coingecko.com/buzz/7-best-play-to-earn-crypto-games-in-2021

PROBLEMS

The movement that Dapper Labs started with CryptoKitties in 2017 is still finding its feet, and in many ways still experimenting with the best ways to integrate the worlds of gaming and blockchain. As the movement is blockchain-led we are currently seeing a lot of variations on a theme. Blockchain itself is still but a youth compared to the gaming industry, which has already been around for over half a decade. It was always going to take time before the arrival of AAA games with blockchain capabilities, but be assured that they are on their way and closer than ever.

3.1 Low Scalability Ethereum

90% of games are now build in Ethereum. In order to preserve its security and decentralization, maintains a low throughput when compared to traditional databases: between 5 and 15 transactions per second (TPS). The massive growth of activity on Ethereum has therefore resulted in network congestion and slow transaction times. It has also increased the price of gas4 leading to periods where transacting became uneconomical for many users, pricing out developers and traders. Even after the Ethereum 2.0 migration is complete, transaction throughput will be limited and the cost of trading prohibitive for mainstream gaming microtransactions.

3.2 Poor User Experience

Currently, the user experience of games on Ethereum isn’t ready for mainstream adoption. Transactions take minutes or hours to confirm, and often fail to succeed or are frontrun, massively impacting user satisfaction, price discovery and overall liquidity. Existing solutions, or alternate blockchains, improve this user experience only by compromising user asset security or network decentralization. Further, gaming experiences are often confusing, have poor recovery mechanisms, and do not display the necessary information to help users make good decisions.

3.3 Slow Developer Experience

Currently, Game developers spend the majority of their development time building and configuring the blockchain components of their project. This distracts them from what really matters: creating a fantastic and unique experience for their users built around true asset ownership. Developers are required to learn new programming languages and paradigms, and then immediately use them to write security-critical applications. This creates a massive barrier to entry for new projects, and prevents many fantastic gamers experiences from ever being launched.

3.4 Legal issues that can arise

Tokens as Securities — if not structured properly, some tokenized assets (e.g., virtual items in crypto games and crypto collectibles) could run afoul of securities laws. Many companies are offering “digital collectibles” using an ERC-721 crypto token, where the token represents ownership of the item. Some of these companies also are providing a marketplace for users to buy, trade and sell the tokens. Token Marketplaces as Security Exchanges — if token marketplaces permit sale of tokens that meet the test for a security, they might be deemed a security exchange. Gambling — if not structured properly, some crypto games and collectibles could run afoul of gambling laws.

1. https://newsroom.accenture.com/news/global-gaming-industry-value-now-exceeds-300-billion-new-accenture-report-finds.htm

2. https://cointelegraph.com/news/unpopular-opinion-the-problem-with-blockchain-gaming-is-blockchain

3. https://www.sheppardmullin.com/media/publication/1718_Blockchain-Issues-for-Interactive-Entertainment-Companies-Article-0518.pdf

SOLUTIONS

4.1 Scaling with Immutable X

While Ethereum’s security tech provides the perfect foundation for Gods Unchained, its ability to scale is hampered by a few critical issues. Previously, NFT projects and developers have struggled to grow due to the limited capacity of the Ethereum blockchain (known as Layer 1). Long transaction times and high gas fees held games back, providing an environment that meant NFT trading was unable to thrive. That’s why we chose to use Immutable X, the first Layer 2 scaling solution for NFTs that solves critical problems within the NFT space. The platform provides better value to users and products with instant trade confirmation, massive scalability (up to 9,000 trades per second), and zero gas fees — all without compromising security. Since moving to Immutable X in late June 2021 (complete migration), over 650,000 Gods Unchained NFT secondary trades have been made. In contrast, the entire Ethereum mainnet NFT trading volume amounted to 420,577 trades across the same period (source: nonfungible.com). The migration to Immutable X enabled Gods Unchained alone to achieve NFT trading volume that is 1.5 times greater than Ethereum mainnet, while consuming 99% less energy to perform those transactions. Thanks to Immutable X it is economically and technologically feasible for players to conduct high volume transactions of low value NFTs. All Gods Unchained NFTs are designed to live on Immutable X, providing fast, affordable and secure trading. This ensures Gods Unchained is hyper-accessible to all players and collectors, removing the frictions and barriers that previously plagued blockchain products to truly unlock the growth potential of Gods Unchained.

4.2 Non-fungible tokens (NFTs)

Non-fungible tokens (NFTs or ERC-721 tokens) are unique digital assets that can be owned, sold, or traded. Ownership is tracked via the Ethereum blockchain, ensuring trustless asset security. In Gods Unchained, this technology is applied to select in-game cards and items. Like a bridge between the virtual and physical world, NFTs provide us and our users with a transparent and immutable way to assign, verify, and maintain ownership. The result? The ability to create a vibrant game that rewards both the developer and the player, building functional relationships between game and player that were not previously possible.

4.3 Play to Earn economy

In layman’s terms, Play to Earn means you can earn money, or assets with meaningful utility, just by playing the game. In Gods Unchained, this is seen through the ability to earn in-game items that you can sell for real-world cash, or use to help you become more competitive in-game. Providing players with assets they can own, places they can trade, and rewards for their time is — to us — the natural future of gaming. NFTs and virtual currency tokens have provided us the tools to pave the way for this future, and Immutable X the means to scale it, the final piece of the puzzle is to implement truly rewarding and sustainable Play to Earn mechanics.

1. https://images.godsunchained.com/misc/whitepaper.pdf

2. https://godsunchained.com

TOKEN UTILITY

The new digital asset to sit at the heart of Gods Unchained, $GODS tokens are ERC-20 tokens created, issued, and distributed by Gods Unchained Corporation. As the core currency within Gods Unchained, $GODS is designed to enrich the Play to Earn loop, being used to craft new NFTs, make in-game purchases, and champion user input via governance voting. $GODS will also be distributed as a reward through quests, matches and active staking, rewarding players for staking their tokens while incentivizing them to play more.

There are currently three core uses for GODS:

5.1. Crafting new NFTs that are playable and tradable

The Forge in Gods Unchained allows players to craft new NFTs that can be used in-game or traded on the marketplace. At a basic level, players with two identical “plain” cards (ie. non-NFT cards) can combine them together to create a “Meteorite” version of that card, a process that mints the asset onto Immutable L, creating a new card with real world value. This is called “fusing”. In the future, we plan on introducing further upgrades to this process, providing options to craft a wider variety of NFTsS K A combination of $GODS tokens and in-game assets will be required whenever a user uses the Forge to craft a new NFTS K $GODS tokens consumed by The Forge will be allocated to the $GODS Staking Rewards Pool. These tokens will then be distributed to all users that qualify as active stakers (see: 3. $GODS Staking Rewards Pool).

5.2 Purchasing items

The Gods Unchained store is the first point of contact when new NFT expansion sets enter the ecosystem. The cards from these sets are then traded between users on marketplaces that utilize Immutable X’s Layer 2 technology. Involving the $GODS token in these functions is a key factor in giving the token meaningful utility, which is why 20% of all primary sales and 20% of secondary trading fees in Gods Unchained will be paid for in $GODS. Purchasers will be able to choose whether they want to spend their own $GODS on a purchase to save some ETH/USD, or whether they would prefer to save their $GODS for a different use. If the user opts not to use $GODS for a payment, or doesn’t have enough tokens to cover the fee, the 20% fee will automatically be swapped on the open market.

5.3 GODS Staking Rewards Pool

Staking rewards will be distributed to all users that qualify as being active stakers. These rewards will be distributed from the Staking Rewards Pool, which consists of $GODS tokens funnelled in from acquisition actions made in the Gods Unchained store and the Forge. Rewards will be claimable by all users who qualify at regular 7 day intervals

TOKEN SUPPLY

$GODS tokens have a fixed total supply of 500,000,000, provisionally allocated to the following areas:

Play to Earn Rewards

170,000,000 $GODS tokens (­34% of total) are reserved for the Play to Earn Rewards pool. This is the largest allocation as Play to Earn is the key value proposition of Gods Unchained. With this rewards pool, we aim to attract a large group of active players to participate in the Gods Unchained ecosystem. A fixed amount of $GODS tokens will be allocated to a variety of Play to Earn campaigns

Community & Ecosystem Fund ‌

102,500,000 $GODS tokens (20.5% of total) will be set aside as a rewards pool to foster community engagement. The purpose of the pool is to reward activities which are difficult to quantify but add significant value to the game and game economy. Part of the monthly allocation will be distributed to the community at the Foundation’s discretion. Another part of the monthly allocation will be distributed according to what’s decided via monthly governance proposals.

Gods Unchained Reserves

125,000,000 $GODS (25% of total) tokens have been allocated to Gods Unchained Pty Ltd, the team behind the Gods Unchained game (a subsidiary owned by Immutable) for the development of the $GODS token. Tokens will unlock over 48 months with a 1 year cliff after a successful token sale. No individual team members, board members, or founders will be allocated any $GODS tokens from this pool. This is strictly a reserve that’s allocated to Gods Unchained Pty Ltd.

INVESTORS

Coinbase is the biggest exchange in the US market. Apex Capital, Galaxy Digital and Naspers capital are respectful crypto funds.

TEAM

Gods Unchained is created and developed by Immutable. Having raised $77M from its backers, the company also developed Immutable X, the first Ethereum layer 2 designed for NFTs and will be publishing Guild of Guardians — a Play to Earn mobile RPG. Immutable X has more that 100 employees in a LinkedIn page. Within Immutable, there are over 50 full-time employees working on Gods Unchained.

The Gods Unchained team consists of world class engineers, entrepreneurs, and game and economy designers from top tier companies including Google, Atlassian, Riot Games, Electronic Arts, Goldman Sachs, and many more.

SALES OPTIONS

TOKEN EVALUATION

Solution

8

Gods Unchained is a steady growing game with more than 450 000 players. It has few advantages: Play to Earn economy, NFTs and Immutable X will help to avoid long transaction times and high gas fees. Game back plans to reward active participants of the platform with their token and have a decentralized governance.

Token Utility

8

Token utility is clear and token will be used by people for crafting NFTs, rewards, staking, fees, governance and can be hold as a store of value.

Token Distribution

5

Options: 50% of tokens become freely transferable after a 90 days cliff, the remaining 50% unlock linearly over 12 months and unlocking after a 90 days cliff and will be unlocked over 12 months

It is an opportunity to sell tokens earlier than team, but seed investors will start to receive tokens as well as winners of sale.

Token Metrix

8

Seed investors bought tokens for $0.24. Their tokens begin unlocking after a 90 days cliff and will be unlocked over 12 months.

Team will have 25% of all tokens, that is really high. The good thing is that they will have 1-year cliff and 5 years unlocking period.

Investors

9

Coinbase is the biggest exchange in the US market possibly will list a token. Apex Capital, Galaxy Digital and Naspers are famous crypto funds. I suppose Coinbase and Okex can list a token in the nearest future (1–2 years).

Team

9

Team is working with in this area since 2006 and director has successfully launched famous game Magic. The Gods Unchained team consists of world class engineers, entrepreneurs, and game and economy designers from top tier companies

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Ivan Maltsev

Ivan Maltsev

Partner at 3xcapital.fund. Managing portfolios in crypto since 2017.