Blockchain game token performance in 2018
Decoupling the value of use and utility
Given imploding market sentiment in 2018, and especially during Q4, it should be no surprise the 33 tokens (or cryptocurencies) of blockchain games and projects tracked as part of Game Token Watch all experienced significant declines in their USD valuations.
The average decline was 88%, and of the seven tokens that didn’t decline by at least 75%, two of them — BitGuild’s PLAT and XAYA’s CHI — were only listed on exchanges in December, hence not experiencing a prolonged blast of crypto winter.
Of course, given such circumstances it could be seen as myopic to come to any conclusion other than the entire sector is (or indeed all altcoins are) finished. However, at this stage this (imho) is to misconstrue the correlation between blockchain games and projects and their associated tokens.
As with 2017, one of the conclusions of 2018 has been that we must take a more nuanced approach to game/project value and token value.
The prime example is WAX, which despite boasting some of the highest level of daily blockchain transactions (it’s a fork of EOS), doesn’t encourage the use of the WAX token within its own ecosystem. Instead WAX is currently uses fiat-based credit card payments. This may change when the WAX mainnet is live, as expected in Q2 2019.
But until that point the value of the WAX token should be viewed as purely speculative, hence its 97% decline during 2018.
In comparision, the 56% value decline experienced by Decentraland’s MANA token — compared to 75% for BTC and 87% for ETH — could be seen as reflecting MANA’s utility as the currency used to purchase land (a non-fungible token) within the user-generated content world.
Similarly, Loom Network’s LOOM token is required for those who want to run validator nodes for its Ethereum sidechain technology. Loom was down 54% in 2018.
In this context, 2018 should be viewed as a welcome reality check for Game Token Watch, which — as I’m at pains to point out — is an intellectual process (albeit honed by a sub-$500 spend) to try and better understand how this nascent market sector is developing and creating (and storing) value.
