LatteSwap’s updated direction: Announcing our entry into the GameFi space

Dear Baristas,

We understand that many of you have been waiting for the updated direction for LatteSwap. The wait is over. In this article, we are going to outline for the community where we’re heading next.

Background and the current situation:

As everyone is aware, LatteSwap platform hasn’t been doing well over the past quarter. To be perfectly honest, our team has put tremendous effort into every new feature development especially with $FLAT, and had hoped that it would be our killer feature that would set us apart from the competition. Unfortunately, $FLAT was not as well-received as we had expected.

In addition, we have been fighting against many headwinds including the wider market drawdown from adverse macro factors such as the impending interest rate hike by the Federal Reserve, and most recently the conflict in Ukraine. A lot of high risk assets have sold off as investors went into risk-off mode.

BNB Chain (then Binance Smart Chain) as a platform also lost significant market share to competing L1 chains over this time period, making it less attractive for new projects to launch on it. Combining this with the “bear market”, it has become very challenging for us to execute our partnership program, DripBar.

Our BD team has reached out to over a hundred potential partners over the past several months, but weren’t able to secure any deals due to many protocols being reluctant to spend in this market condition. DripBar was supposed to be a vector to bring in new users and generate buying demand for $LATTE token to stake for yields from partners’ rewards. When this didn’t happen, the token price suffered.

We are not the only protocol that faces challenges in this situation. During the past three months, we see other DEXes tokens on BNB Chain such as ApeSwap and BiSwap losing over 85% of their token value and 60–80% of their TVL. Liquidity tends to concentrate, and with little to no new DeFi users, old users flock back to the leading incumbent — PancakeSwap, who still lost around 45% of its TVL.

Given the current broader situation in the ecosystem, we had been conducting heavy research into many fields within the blockchain to find our strategy to survive the current storm and flourish when it subsides.

What have we been thinking:

For the past months, the team has been conducting a significant amount of research, thinking hard and strategizing on what the next step could be for LatteSwap. We had explored and considered many potential features ranging from stableswap AMM, NFT marketplace, 3,3 token emission model, bonding, and many other features.

While many great ideas have surfaced in the past months, we believe that given the stagnating market condition, releasing more “slightly improved” or “forked” features would be difficult and would only gain little traction, of which the launch of $FLAT, which we believed was a very unique and innovative feature, was the case-in-point. We want to avoid being in that situation again.

In order to turn things around, we believe that we must take on a completely new direction. After careful consideration and a long discussion among the team members, the team has decided that we will be pivoting away from DEX / DeFi and will prioritize the development of a play-to-earn GameFi.

Our decision for the pivot came from the following reasons:

• DEX has become very competitive and to survive in 2022 and beyond. We have to compete with the likes of UniSwapV3 and CurveV2 which will be challenging and we will be playing a catchup game to offer feature parity with these protocols
• “Don’t fight the Fed” has been a common saying in the past few years and it’s something that we can take great lessons from. The Fed has expressed strong intention to hike the interest rate, which will hurt all the financial sectors (including DeFi), so in the short — medium term, we don’t think the prospect will be bright for the sector. This makes for a very tough environment for a new challenger in the space like LatteSwap. Meanwhile, the gaming sector could potentially decouple from everything and flourish in any environment, as driven by its strong adoption.
• With Meta’s recent rebranding and push into the metaverse, this space will get a lot of attention, investment, growth, and users. While we believe that a successful protocol requires a great team and a great product, we also believe that being in the right sector will already win us half of the battle.
• While we have seen a lot of GameFi protocols last year, we believe good ones are few and far in between. There is still room for quality projects to succeed, and there are many game genres waiting to be explored. We will take this opportunity to develop a new game, which we hope will be the new growth engine for our protocol.

What it means for the DEX:

Our development team will shift its focus to working on the Game. We are currently already in discussion with multiple game development team/studios/dev to hire/partner with us on the development and have been considering different deals on partnership. For the moment, we are not planning to release any major new DEX’s features during this time (unless the market situation changes and we spot an opportunity to capture.)

Our dev team will still allocate resources to maintain all the existing products and features for LatteSwap and there is no plan to discontinue any services. If you run into any technical issues, we will still be there to support you. Our BD team will still be active and continue to reach out to projects for partnership programs such as Drip Bar and explore other cooperation opportunities.

Timeline:

As with any development effort, a quality product takes time. This is especially true for GameFi. Our intention is to build a good game with good tokenomics that has a fair chance to be successful and not just a pump-and-dump, “click to earn’’ that lasts for less than a month.

At this stage, we still don’t have a definite timeline of when the game will be ready. Our best estimate is around Q4 of this year. However, we will be making an official bi-monthly, which will function as a structured update to keep the community informed on the progress of the game. The first update will be provided on the 30th of April 2022. As we have more details and closer to the launch date, we will make more updates as appropriate in addition to the structured bi-monthly update.

Closing remarks:

We thank you for your patience and appreciate your support. We hope this article was able to provide you with some clarification that you have been looking for.