Original author: Scarlett Wu
The roller coaster of YGG prices in the past two weeks has refocused the markets attention on the game guild track. At the beginning of the rise, the author once shared on Twitter a summary of game guild observations from the perspective of the treasury Game Guild Treasury Comparison Valuation Summary: YGG , MC GF, whose valuation is more reasonable? , the most promising MC at that time, the price has risen by 50% now, while the price of YGG has doubled and then dropped sharply, returning to the price before the summary was written. This article is the revision and expansion of the summary, and it conducts a complete inventory of the game guild track from four perspectives: business ability, investment ability, risk control ability, and valuation.
Many game guilds, Quest platform, game information collection platform, and use now, pay later NFTfi protocol are actually subdivisions of the same service. Because the game project has only three requirements:
1. Pull new
2. Promote activation
3. To promote in-game consumption
Web3 players only have 2 requirements:
1. Have a sense of companionship
And due to the demand for advance capital investment brought by ponzi at the beginning of 20-22 (for example, when the price of Axie is thousands of dollars, the guild buys NFT and rents it to Southeast Asian players, and takes a cut from the users subsequent income), and the crazy expansion of the economy The wealth-creating effect generated by the system makes people mistakenly believe that the drumbeat of spreading flowers will never stop, which has given rise to another important function of the Web3 Game Guild:
2. Advance principal
The premise of generating companionship demand is that users will spend enough time in the game, which is basically not satisfied by all non-Ponzi Web3 games. The guild invests in the purchase of shovel NFTs and rents them to users, and it needs a Web3 game with a continuously expanding economy-if the principal invested two weeks ago has already begun to lose money, any institution that advances the principal will have to worry about it. But the fact is that, except for Axie Infinity, the originator of crypto game ponzi, there is no game in the industry that has continued to grow its users for more than half a year. Given that the premise of ponzis profitability is user growth, guilds willing to advance the principal need to spend two months to find a game that can make money stably and observe this game can indeed make money stably in two months. After implementing the plan for two months, they You will be disappointed to find that the principal you advanced cannot be recovered, because the scholars (the guilds name for its players) may not be able to get back their capital even after playing for ten years.
The guild obviously realized this problem earlier, because every Ponzi cannot reproduce the popularity of Axie, and the demand for a sense of companionship in every game is not strong enough to charge through live broadcasts (traditional game guilds’ source of income) Driven by the drive, the guild has transformed from serving players to serving project parties: on the one hand, the guild holds a large number of player resources (this is actually doubtful now, and will be discussed below), on the other hand, the guilds treasury There is also a large amount of funds (although the liquidity is likely to be doubtful, which will also be discussed below), which can enjoy the growth dividend of the Web3 game track through investment. Of course, there are also examples such as Merit Circle, which cooperates with Avalanche to create sub-chains that use the narrative of game public chains to enhance valuation imagination.
1. Comparison of business data: YGG and MC are still active, but GF has fallen behind in terms of volume.
At present, the traffic positions of several major guilds are mainly:
1. Quest system
2. Twitter
3. Discord
Among them, Discord is very deceptive. Even in the DC group chat with 70,000 people in YGG, without hot games/tasks, there are only more than 100 messages in General Chat every day, half of which are gm and hi, and the other half are team Provide Medium/official website links to answer members’ questions.
And Twitter can find out through the number of views. Even if YGG has 180,000 Twitter followers, Merit Circle has 100,000, and GuildFi has 120,000, the number of views of YGG’s Twitter content is stable at a few thousand-tens of thousands, only major updates There are only 40,000 to 50,000 views; Merit Circle is slightly inferior, with about 5,000 daily content views, and tens of thousands of major updates; There are only ten thousand. In contrast, the tweets posted by the author with more than 2,000 followers have at least a few hundred views, and a little in-depth summary can have tens of thousands of views-under the transparent data display of Twitter, the game guild The data moisture has nowhere to hide.
As for the Quest system, you can find out more about the project situation and incentive situation:
YGG Guild Advancement Program
Recently, YGG launched Guild Advancement Program Season 4. Players can share the prize pool of corresponding tasks by completing tasks and uploading certificates. Among them, Axie’s reward still dominates, with a single reward of up to 2,700 YGG (about $900 at the current YGG price), and the single reward of other games ranging from 30 YGG (that is, $10) to more than a thousand YGG varies. For players who are still able to compete for the Axie Infinity prize pool, the official rewards given by Axie are undoubtedly more attractive (with a maximum value of tens of thousands of dollars), while for players of other encrypted games, the total rewards that need to be shared with competitors The prize pool of tens to hundreds of dollars is not very attractive. Instead of spending a lot of time completing tasks with low ROI, it is better to spend your time playing airdrops. From a user perspective, YGGs Quest System struggles to attract a lot of attention.
From the perspective of the project side, the cooperation between YGG and the game will most likely receive cash or other game assets, while the rewards given to the players are YGG denominated rewards. In fact, YGG replaces its own tokens with other cash/ Behavior of game assets.
https://www.yieldguild.io/gap/season-4Merit Circle Gaming
Compared with YGG Quest Systems simple and crude missions, Merit Circle Gamings interface is more game-friendly. The official website of this incentive system is divided into four parts: homepage (key game introduction and activity timeline), game (key game display and related information summary), academy (game tutorial and basic teaching of Web3 operation) and task system (completion of tasks, rewards Experience and game NFT lottery)
In YGGs Quest system, players can have a more straightforward ROI calculation (although the ROI is not high, it is still attractive to Southeast Asian people), while Merit Circles Quest system is more inclined to information aggregation and game display. Rewards are mostly distributed through draws.
Merit Circle – Home
Merit Circle – Display of key games
Merit Circle – Faculty
Merit Circle – Task reward system
GuildFi Quest & Achievements
GuildFi uses in-game points to create a task achievement system. Every time you complete the corresponding tasks and achievements, you can get the corresponding point rewards.
GuildFi Quest & Achievements
Points can be redeemed for gift cards, game tickets, whitelists, treasure chests, NFTs, etc. But at present, the products that can be exchanged for GuildFi experience are quite limited, mainly Steam gift cards (gift cards worth 0.5-30 knives may be issued, and 15% of the cost may be refunded), Genopet, Axie game tickets, Axie NFT and CyBall NFT (distributed in the form of a limited-time lottery). This model of lottery blind box exchange for Steam gift cards/game props has been widely used in traditional game information aggregation and casual game platforms. On the one hand, it cooperates with game project parties to distribute game assets (although it can be seen that GuildFis BD capabilities are already quite limited, and the cooperation is all old projects), on the other hand, it directly exchanges a small part of the income into assets that players already have valuable concepts. , adding a blind box opening mode to eliminate inflation through gamification.
GuildFi Marketplace
In GuildFi’s semi-annual summary, they stated that “in the past year (the second half of 22 – the first half of 23), the number of in-platform purchases exceeded 200,000 times, an increase of 42% over the previous year. Obviously, our community has great respect for us. Enthusiasm for gaming products on the platform is rising. Notably, Diablo IVs Lootbox event topped the list with more than 65,000 purchases, while KOF Lootboxs purchase volume exceeded 30,000 times. ” Under such cooperation, GuildFi brought a total of 92,000 user pre-registrations to 21 partners in a year - on average, less than 5,000 registrations per game - considering that pre-registration is usually not required Wallet interaction also makes it easy for the Lumao Party to open many accounts at once for good projects, and the actual number of effective users it brings is even more worrying.
Source: GF Semi-annual Summary
Based on the above, it is not difficult to see that the energy of game guilds in the market has been significantly reduced. YGG and Merit Circle are still relatively active in the market, while GuildFi has fallen behind in terms of business resources and content output.
2. Financial situation comparison: MC has balanced financial and business development, YGG has strong business capabilities but lacks financial capabilities, and GF’s market value is smaller than the value of its blue-chip + stablecoin assets
YGG: Game communication platform + game investment fund, the national treasury is almost entirely YGG, and the highly liquid assets on the chain are less than 4.4%
Since the game NFT currently on the market has depreciated significantly and has poor liquidity, we can roughly estimate the situation of the project partys treasury directly from FT. According to the address officially announced by YGG, 95% of the treasury on the YGG chain is its own token YGG, and only less than 4.4% is highly liquid stablecoins and blue-chip assets (USDC / USDT / ETH, etc.). It can be seen that the asset allocation Pretty unbalanced.
YGG treasury address asset status Arkham, Mint Ventures Chart *Does not include assets on non-EVM chains. The amount of this part of assets is approximately US$220,000 and can be ignored in calculations.
In addition, YGG released in early August2023 Q2 Community UpdateThe calculation of the value of investment/cooperation project assets is given in: YGG holds a total of US$27.2 million worth of game assets (NFT, Token, equity, etc.), with a corresponding cost of US$18.3 million, and a book profit of 32%.
Source: YGG Medium
Although YGG has been more candid about the market price decline from Gaming NFT, the valuation of the token/NFT in the Games part may have a certain degree of calculation: even if YGG got a good price at the time of investment, under the current market conditions, primary investment The book value of the game token is likely to shrink significantly after listing. Under the current situation of extremely poor liquidity of NFT, if you want to withdraw the liquidity of your NFT, you need to sell it. The same applies to Merit Circle and GuildFi.
YGG Partnered Games (holding assets, including primary investment and secondary market purchases, chainplay.gg incomplete statistics)
Merit Circle: Business is steady and stable, treasury funds are optimally balanced, stable income and high-risk assets are half and half
On the official website of Merit Circle (hereinafter referred to as MC), it defines itself as a Gaming DAO with four functions: investment, game studio, reward system, and infrastructure (creating the game chain Beam through the Avalanche sub-chain). MC is also better than the other two associations in terms of communication transparency: the dashboard of treasury funds is updated in a timely manner, not only including FT/NFT data that can be checked on the chain, but also disclosing non-current assets such as primary investments. Here, we mainly analyze two parts: investment and incubation, and treasury fund allocation.
Merit Circle Official Website
Let’s first look at investment and incubation. According to data disclosed by MC Treasury, as of June 23, MC held a total of 79 equity/tokens for game projects, including many large projects with good team backgrounds and financing backgrounds such as OhBabyGames and Xterio. These assets The value is US$45.4 million, of which US$1.6 million is already publicly traded, US$43.8 million is non-current assets, and US$300,000 MC. In addition, based on the announced purchase price, the total cost of these assets was US$29.9 million, with a book profit of 51.8%.
https://treasury.meritcircle.io/treasury MC Incomplete screenshot of investment project
The quality MC of the treasury funds on the chain is also significantly stronger than that of YGG. Only 27.4% of the wallet is its own token MC, and 69.5% is highly liquid stablecoins and mainstream assets.
Merit Circle treasury address asset status, Arkham, Mint Ventures chart
In addition, Beam, the Avalanche sub-chain that MC has launched on the test network, is also an important event in the follow-up trend. Beam will adopt the Proof of Stake model, adopt MC as the gas token, and adopt LayerZero as the cross-chain infrastructure. Three games are currently being developed based on Beam. On August 14, the team proposed a draft in the community governance section and opened for discussion:
https://gov.meritcircle.io/t/beam-development-and-ecosystem-funding/822
GuildFi: Weak business ability, better balance of treasury funds on the chain, 13% GF, 46% stable currency, 41% stETH seeking stable income
Since many of GF’s assets are LPs on Uniswap, it is difficult to directly display them through Arkham. The following figure shows the asset statistics on the ERC-20 asset chain of the publicized wallet: it can be seen that 46% of GF’s on-chain treasury are stable coins. 41% ETH/stETH, 13% GF, and some small game-related token investments, totaling $57.7 million.
Compared with the data released by GFs semi-annual financial summary, the official on-chain assets have shrunk by 19% compared to the 71 million US dollars at the time of the summary release, mainly due to the decline in token prices and the transfer of 8 million USDT to Binance. The official team stated that the assets stored in cex are mainly used for daily operations and repurchases from investors.
Source: Debank
Source: GuildFi
However, when further asking whether there is a public repurchase mechanism repurchase history, except for the two-day please wait patiently, no reasonable answer was given.
Discord QA recording
In the semi-annual summary, in addition to the assets of $71 million in Reserve (a total of $57.7 million on the chain), there are primary market investments worth $15.9 million and other game tokens, and NFTs worth $4.8 million.
GF cooperative game
3. Comparison of DAO construction and governance capabilities: Merit Circle is far stronger than its opponents
Although both YGG and GuildFi expressed their hope in the white paper released in 2021 that the ultimate goal of this gaming guild is to become a Gaming DAO, in fact it is Merit Circle that actually achieves this goal.
Clicking on the snapshots of YGG and GuildFi, we can only see a few votes with a long history:
YGG: Proposal for SubDAO two years ago.
GuildFi: Three online proposals and details about the Staking System eight months ago.
Merit Circle will allow users to see how a Gaming DAO / Investment DAO with a complete operating process and awareness of risk control should operate: In the past two years, Merit Circle’s Snapshot has voted for 26 proposals, including DAO governance, investment Risk management (authorization mechanism for exit and investment quota), game development, etc. The more important proposals are:
2022.01 MIP-7, to determine revenue distribution and token destruction. 20% of the proceeds are kept in the treasury in the form of USDC, 5% of the proceeds are kept in the treasury in the form of ETH/WBTC, and 60% of the proceeds are used for repurchase at low prices at appropriate times to maintain the stability of token prices (less than 7 days When the average price is 10-35%, repurchase is carried out. This part of MC mainly enters the pledge reward, and can also be sold to strategic investors who are willing to lock the position for a long time), and 15% of the proceeds are used for direct repurchase and destruction of MC. In addition, since most of the unlocked tokens are released to community incentives, it is decided to destroy 75% of the unlocked community incentive tokens every month (the ratio can be modified by community voting). Providing the DAOs treasury with enough tokens to cover any major community proposals also transforms mCap into a more realistic FDV. Its hard not to be surprised by MCs foresight and calmness in the face of huge temptations - voluntarily destroying 75% of the tokens released to the community is not an easy decision. The completeness of the mechanism is the basis for the balance of MCs treasury funds.
MC repurchase and destruction announcement https://treasury.meritcircle.io/
https://gov.meritcircle.io/t/mip-7-sustainable-future-vision/192
2022.05-06 Refund of YGG investment. Termination of relationships with investors who do not provide substantial assistance.
https://snapshot.org/#/meritcircle.eth/proposal/QmT71tWtTwk6q5Cd2kvhoLzxm76SpNaQGBR9RE7pCxBM58
https://snapshot.org/#/meritcircle.eth/proposal/QmanW7dTyF2LvvU9iAGwj3i9D4F3TS7ZbxR33jVCmKMrgR
2022.07 DAO structure reorganization.
2022.12 Merit Circle Grants proposal. 150k USDC is set aside every quarter for small-amount incentive research and game development. A single Research Grant does not exceed 10k, and a single Development Grant does not exceed 25k.
2023.07 Cancel the subsequent staking rewards of Uni V2, and destroy this part of future rewards. The main reason is that the existing staking model does not bring much benefit to Merit Circle, but there are clear use cases for subsequent staking on Beam (the game chain MC intends to build, proof-of-stake). Therefore, V2 rewards are cancelled, and staking rewards will be concentrated on Beam in the future.
https://gov.meritcircle.io/t/mip-26-cancel-all-future-v2-v3-staking-rewards-and-unlock-all-v2-stakers-proposal/803
Through the analysis of several proposals, we can see that although the proposer is mainly a team and the number of voters is not large (basically around 5 million MCs), the Merit Circle team has a clear strategic thinking and does not hesitate to give up short-term interests The long-term interests of the community are safeguarded, and governance is relatively transparent.
4. Summary and comparison: comparison of business capabilities, investment capabilities, risk control capabilities and market value
4.1 Business capabilities: MC has more diversified services, YGG has a wider user base, and GF lags behind
In addition, from the perspective of organizational structure, YGGs model is a product of the Axie era - regional sub DAOs are extended under YGG to facilitate regional members access and management, and it lacks a risk control system that keeps pace with the times. Merit Circle, on the other hand, is more like a major game company. It has done well in all aspects of investment (and has a complete risk control system), incubation, publicity, and infrastructure. GuildFi’s investment capabilities and market activity are inferior to the former two.
4.2 Foreign cooperation and investment capabilities: MC ranks first, followed by YGG in scale and rate of return, GF is the smallest in scale, and rate of return is unknown
4.3 Risk control ability: MC ranks first, GF comes second, and YGG performs poorly
The evaluation criteria in this part are two aspects:
· Whether the team’s asset transactions, management and control are open and transparent and comply with the pre-established mechanism. MC >> GF/YGG
· How much impact does asset tokens have on total asset prices? If the ratio of own tokens/total assets is too high, it is a sign of poor risk control capabilities. Position management GF>MC>YGG.
Overall, MC ranks first, GF comes second, and YGG performs poorly.
4.4 Valuation comparison: MC has entered a high level, YGG has fallen back normally, and GF’s business is weak, resulting in market value < total value of treasury stable currency + blue chip
Due to the nature of the associations business, the treasury assets of the project can partially reflect the business situation. As mentioned earlier, the current core functions of the guild are:
1. Relying on the players at hand to serve the game project side
2. Investment incubation
Part of the project assets corresponding to this part of the function has entered the book value of foreign cooperation and investment (NFT, FT, equity), and part of it may have been converted into stable coins and blue chips and remained in the treasury. Therefore, the comparison of treasury assets can partially reflect the valuation of the associations projects.
Before the start of the YGG pull, the daily trading volume of YGG was only several million dollars per day, and the liquidity was quite limited. The proportion of YGG in the YGG treasury is as high as 82%, which means that a sell-off will only cause a devastating blow to the price, so here we will compare mCap/book value of total assets and mCap/assets other than its own tokens at the same time total market capitalization for objectivity. After comprehensive consideration, value support GF > MC >= YGG (please note that both book value of total assets and total market value of assets except own tokens include stable currency + blue chip and investment/external FT/NFT brought about by cooperation, the latter is not valued at fair market value, but comes from financing valuation. If the token is listed or the project does not develop smoothly in the future, there will be a greater risk of asset write-downs. Moreover, for FT/NFT brought about by investment/foreign cooperation, except for Merit Circle, which disclosed the cost and book value of all projects, the other two did not provide specific algorithms, so there may also be problems with statistical caliber.)
Since the unlocking of MC has been mostly completed, but there are still a large number of YGG and GF tokens that have not been unlocked, from the perspective of FDV/mCap, the potential downside risk is YGG>GF>MC.
Except for MC, which has a clear token repurchase mechanism, the other projects have no token repurchase mechanism. GF has a staking mechanism with a fixed reward release amount, and YGG does not even have staking. Coupled with GuildFis weakness at the business level, even if GFs market value is smaller than the total market value of stablecoins and blue chips on its chain, it is difficult to conclude that it is undervalued.
From the future Upside observation, MCs follow-up has the narrative of the game chain, and the POS chains logical capture of pledge profit value, while YGGs follow-up is to open a new Quest System on Base. GF has no breakthrough in business narrative for the time being.
