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CoinEx Speaker Series

CoinEx Roundtable with Binary, Chain of Eternals, and AAG Ventures to Explore the Future of GameFi

2023-12-15 00:02:51

CoinEx hosted an Industry Roundtable session with Rudy from Binary, Hash from Chain of Eternals, Jack from AAG Ventures, and Molly, Researcher at CoinEx. The roundtable was moderated by CoinEx Global Social Media Manager, Johnny, in CoinEx Global Twitter Spaces. 

The conversation covered various aspects of the GameFi ecosystem, shedding light on crucial topics such as decentralized governance, the core focus of blockchain games, economic models, in-game skin economies, personal gaming preferences, and the future direction of fully on-chain games.

Q: Blockchain Game Governance: How do you find the right balance in decentralized governance? What are the potential drawbacks of too much decentralization, especially when frequent game parameter adjustments can affect user experience?

Hash: I think it's a really good question. Most of the games that we see right now in the space that are coming in are more or less decentralized in their governance as well. I mean most of the games that we see or have a centralized governance you can't really change assets as well or in a very limited way. So I think the key to that is obviously to store every asset in the decentralized way either on PFS or other methods as well as contracts upgradeability to be able to create content, push more content into games, and provide a real decentralized solution for governance and players as well.

Jack: For me, the way I see things we have to separate all these two parts, right? Governance and decentralization are, I think, two separate things. So if you talk about governance where people actually can have a pot of a say in the direction of a game store, what they do, I think we're way far away from that right because I mean think about it this way it will just slow down the content creation. I mean new mechanics whatever like that game they will play. 

Got all these ideas and when they want to run and it's basically come up with new ideas they cannot be like they can we do this right because I have we have coming up a million users. It doesn't quite work like that in games, so I think it will eventually get to a point where the game is so developed that they're basically there's all these environments that make certain changes in how people maybe even behave or what people can do in this.

In the gaming environment, like all metaphors or what not, I think once we get that, I think we'll make more sense. But in terms of I mean. Actual real cons right now, I don't think it's essential for GameFi, but yeah, I think we might see more and more in this cycle because I think it’s still quite young. And there's not really that many game ecosystems that have really gone that far where government is essential.

Rudy: I totally agree with what Jack talked about when it comes to speed in decision-making. So finding the right balance in this sense and also in terms of complete and complete information. So for instance if you are talking about moderating and you're talking about banning suspected cheating activities, right? Who has the most information? And if you are slow in terms of acting on it, how is it going to impact the game economy and so on and so forth? So there's always going to be some responsibility on, you know, the developer and where they have more information and of course.

Eventually, when it comes to appealing and all, you can bring in a council and things like that. But yeah, I don't think that it's ever going to be fully decentralized. It's going to be a balance between, you know, central certain things where people have more light on the issue. 

Molly: I totally agree with what Jack and Rudy said. So at this moment, we should separate these two parts and right now I think this centralized governance is a top priority in gaming. When the CoinEx research team checks out gaming projects within decentralized governance actually is a big deal unlike in DeFi projects which is a more actual area compared to GameFi in our view asset.

Ownership of transparent transactions is more important, however, many missed this part because they still hang on to centralized service. Essentially, I think the industry should focus on building a solid foundation for whether it is game-specific layers, SDK, Wallet, or other infrastructure. Let's focus on building a strong foundation before getting into a decentralization discussion.

Q: The Core Focus of Blockchain Games: In your opinion, should blockchain games prioritize profit-making or offering a rich gaming experience? Can a balance be struck between these two aspects?

Jack: I think my experience definitely has to come first, otherwise it's not really a game, right? So I mean if you're gonna build an environment where people would farm, then I mean go ahead. But if you want like real gamers to come in, actually enjoy the game without having to like to pay attention to earning. 

Rich game experience should always come first. Otherwise, it’s not a game to begin with. Typical Web2 games only last for maybe a month or two and people stop playing after completion. With Web3 games, people expect it to last for a long time to help sustain the price of the token. If the game is not fun and not complex enough right at the start, the value will not be accrued and more tokens will most likely be earned than spent. Then for long-term sustainability, a large amount of content must be planned so it can last 5-10 years.

Hash: Nowadays yes, many games call themselves play to earn. We don't see this as a valid option, nor a suitable model for the long term. If you observe most of the Web3 games today, they launch and crash after a month because of ponzinomics mainly.

We like to call ourselves play to own: you get new items that empower your character, allow you to get stronger, but also gain in value over time because of that. They have an intrinsic value in the game, not a speculative value. The player remains free to trade and acquire new items of course. But the main goal isn't to earn. The goal is to get liquidity and value of the items you spent time to acquire. So essentially your time In the game is rewarded by powerful items that have both a monetary value and a value in-game.

Rudy: Yeah, just quickly touch on mechanics and I think Jack has a good summary of what's happening. The industry has been just rotating and trying out different models to see if they are so-called sustainable or fun in that sense. So while I'm not, I'm not going to say that profit is not important in GameFi. How do you define rich gaming experience as yet to be, you know, proven? So I think many of the industry are coming out of many innovative gameplay mechanics ourselves. We have launched two entirely different games and with different mechanics as well. And I think that kind of innovation is what's needed to really explore. You know what GameFi is possible because it can't be fun in the sense of Web2 and then it's just going to be Web 2 with the shop. 

Molly: I'm on the same page as previous speakers. So Play-to-Earn or the earning mechanism is to acquire important features of web3 games. However, Play-to-Earn or sustainable challenge as you all use that. So from my perspective, games should put their focus on delivering a great gaming experience rather than providing earning opportunities in these new markets.

From 2021 to early 2022, we have been closely monitoring Play-to-Earn projects and selecting those with good teams. We recognize that play to earn is a good go-to-market strategy to achieve players at the early stage but it is not the core driver for a sustainable game project. After that when considering potential listings for GameFi projects, our research has shifted our focus to gain experience and the team's ability to deliver on that front.

Q: Economic Models in Blockchain Games: How do you sustain a healthy in-game ecosystem while avoiding issues like severe inflation or high entry barriers due to asset pricing?

Hash: Inflation is a big, big topic. Nowadays yes, many games call themselves play to earn. We don't see this as a valid option, nor a suitable model for the long term. If you observe most of the Web3 games today, they launch and crash after a month because of ponzinomics mainly.

We like to call ourselves play to own: you get new items that empower your character, allow you to get stronger, but also gain in value over time because of that. They have an intrinsic value in the game, not a speculative value. The player remains free to trade and acquire new items of course. But the main goal isn't to earn. The goal is to get liquidity and value of the items you spent time to acquire. So essentially your time In the game is rewarded by powerful items that have both a monetary value and a value in-game.

Jack: In most cases, there should be no barrier to entry. Allowing users to mint the initial asset and allow users to play and upgrade is what will make the asset unique. Think of Elden Ring where you can individually upgrade each stat. Couple that with multiple play modes or PvP with various environmental advantages and opponents with various builds and you will see users end up collecting a large amount of assets or potentially borrowing to gain advantage. This is how you can create a potentially sustainable economy for the assets.

As for preventing severe inflation, a combination of what I already mentioned is crucial. People must want to utilize the token instead of cashing out. That could be in the form of upgrades, purchasing new assets, borrowing, etc. You can also use a similar strategy like with Seraph where you must get to a certain level before you can even cash out. This will guarantee that users have spent enough time enjoying the game and learning the strategies. You can also separate out the farming from actual gameplay like with Genopets. Web2 users play and buy assets from Web3 users directly from the NFT marketplace. If the game is fun and challenging enough that people want to spend to give themselves an advantage, there will always be demands for Web3 users to keep farming and earning.

Rudy: On my end, just looking at our games we employ a lot of you know, tracking mechanisms in terms of understanding where our players are interested in designing use cases and utility. That's pretty much the main job of a GameFi game studio. Understanding the utility of your token, how it is being utilized, and so on, and making those micro adjustments along the way before it's too late. I think it's a huge topic, it's

pretty inevitable. But in terms of, you know, getting a sense of how fast or reducing and preventing it from happening earlier, I think that is something that game developers can do. And it again, goes back to why we are designing GameFi games utility for the token. So it's pretty much the same strategy there. Thanks.

Molly: From my end, I think this should be a question for investors over us especially after the market notices that there are a lot of challenges that play to earn game face. I think the insights shared by previous speakers are really small and well-rounded and I don't have much to add in terms of solution. I would like to share how we will model the economy from an exchange perspective.

To CoinEx, ensuring a sustainable in-game economy is really crucial when evaluating gainfully token listing or beyond their economies. Decide without intro or untrained data, say looking at the number of token holders, and token transaction activity, and other indicators of active user engagement.

Q: In-Game Skin Economy: What's your take on the thriving in-game skin markets, such as CS: GO Skins? How do they impact the gaming and economic landscape?

Hash: Promising, but skins are only the beginning. What we do in COTE for example is make every single item ownable, equipable, and tradeable. They not only have a rarity but also a use case for you to play with. So skins are really just a side artifact and maybe as speculative as regular JPEGS.

Rudy: I think I have a similar opinion that skins, it's a very low-risk take, right? Because it's just static, it doesn't change the game or in any way. So that's why we are seeing it done over and over again in a lot of games.

Again, of course, there is a market for that. I don't hate it. I think it's nice that people are trying this, but there's a lot more in terms of designing our NFTS than just skins, right? 

Jack: For me, skin is kind of set up for two purposes. So one is basically I mean a lot of people want to have other people see who they are by appearance. So then they choose the dress of their character, pick all these different parts, and like everyone said it does not have any utility or impact on the game. The second part I think has to do with a sense of accomplishment. I mean take a look at Street Fighter 6 or take a look at all these games where I mean you can change, you can go.

So in a way, it is like a reward to show you that you have become good at certain things and then you earn it so it makes people feel good.

And sometimes because it's so rare because you have to do certain things that no one else can do then it even accrues some value in that way.. And then for people we like, I mean they can go and buy from someone else. So I think there's a multi-purpose here and I think in the future as well as I think when there is a lot more good content.

Molly: To be honest, I am not a big skin collector, but I think I have an opinion opposite to those of Rudy and Hash. I see the promise of the in-game scheme market just does. Actually, we noticed that some primary market purchases are exploring a mix of user-generated content and AI-generated content with skin NFT markets and we will kill ourselves on such creative projects.

I think skin NFT markets due to a cool touch to gaming because it allows a player to personalize their experience plus the creator can earn by selling skins activities or getting an account of transaction fee. However, to adjust the second question regarding the economic impact, I think it is important to keep us separated from the engine economy to make sure they don't advertise ability. If not, I think it will make the economy quite complicated.

Q: Personal Gaming Preferences: What types of games do you enjoy in your leisure time, and what draws you to these games?

Hash: Personally I play a lot of World of Warcraft. I still do it from time to time when I have the time. Age of Empire, of course, with friends, I mean even online as well, it's still in the amazing strategy game WarCraft as well. A little bit for the more European, the French people lose a game called Doofus which is a very famous MMORPG from That's pretty much. I mean, a lot of strategy games mainly. That's really what I'm into.

Jack: For me, I love to explore beautiful environments that's why I love kids' games like Pension and Pack where it is just completely open you can do whatever you want and I always take it as a challenge to find myself in the hardest path possible and trying to figure out how like how can it get through it. A lot of people like my wife as well actually we all bought location impact on and I think we'll say that's the one game that we are still playing now. The second type of game that I enjoy quite a bit is this mobile free-to-play game like Survival IO or there are a few other games as well that I mean they get quite challenging so my objective when I play this game is how do I get to the top 10 globally without spending and beat anyone else who are also spending money. So that's the kind of challenge that I put to myself.

Rudy: I used to play a lot of World of Warcraft, so, generally drawn to large-scale games that require a certain amount of cooperation from the players.

There's another one that I've been playing recently called Foxhole as well, so it's very similar. Every player is a soldier.

In the war between 2 factions, so you can do anything you want in that well, including being a logistic driver or just building stuff. So things that require that level of cooperative element are nice. Resource building is always fun. So Civilization, StarCraft, and so on. South. Two different genres, but yeah, what I play in my free time.

Molly: For me in my downtown especially during the bear market. I enjoy playing online mobile games like Jack but I just display this game for getting social. I don't pursue ranking and I also enjoy playing mini-puzzle games because it is perfect for queuing time. However, I think the bull market is coming and as a researcher, I don't have anytime to play those Web2 games, and as researchers, we also need to avoid failing as their personal interests shouldn't weigh our evaluation and additionally, we should steer clear of fair when competing branching and traditional games and when researching the game.

Q: Full On-Chain Games: What are your views on fully on-chain games? Which game genres do you think are best suited for full on-chain implementation, and do you consider this a practical direction for the future?

Hash: Quite a long answer is possible to this, but essentially the perspective is the path COTE is taking : 

Removing any centralization.

Game progress fully on chain.

All assets should be on chain, with intrinsic value (as explained before).

A game made for devs to build on top of it and grow a community as well as the economy around it.

Viable economy with controlled inflation, no ponzinomics.

The game is also a Social network.

Listen to the players as they represent the value of your game

Speculation is not the core of the game: as players spend time and grind your game, they are rewarded with items that should be liquid. As simple as that.

Games suitable to be fully on-chain are MMOs, open-world games in general, and Coop games that involve a common adventure progression. They need ever-evolving datas to be recorded in contracts instead of servers. I see this as a viable direction because players should be able to really own their progression as their adventure. Not only for speculation but for real decentralization.

Jack: In the past 3 years, I have run across 4 games that are fully on chain and one of them is ours. However, I would defer this answer to Hash from Chains of The Eternity since I think they have the most extreme case.

Rudy: Idealistically it would be an ideal outcome, right? To have the entire game on chain, having that transparency and so on and so forth. But based on our experience there, it comes with a whole host of problems, right? Security.

Things like, you know gas fees. We have, we have uh a game recently, it's called AI Hero. You basically made a hero after your adventure, your quest and you can sort of save that hero. Each mean was about $0.30 in terms of guest fees and we do have people coming to us and like hey, it's too expensive blah blah and we actually make that decision.

Take it off the chain and only allow them to maintain it when they want to withdraw it from their account. So I think, I would love for a fully on-chain game, but in terms of operation and security, I think it's we're still quite far from there, and of course, we are seeing more technology and more you know solutions coming out here and there but for now I think, it remains more as a dream.

Molly: Actually on-chain Games are really buzzing this year. When I read some research papers, I always see they are talking about fully on-chain games and I think that's why the class would like to invite chains of the eternal to join this Twitter space. However, as of now, this letter is still in the early stage and practicality is a key consolation and we are keeping a close eye on it.

And will select some promising projects for potential listing when they are ready. I have to say a fully on-chain game is really an exciting future direction there, but there are a lot of current technical hurdles as Rudy mentioned. I believe that teams like Hash teams are trying to solve this problem for broader adoption.

Q: For Binary: When selecting a project for BinaryX's IGO platform, what key factors or qualities do you prioritize?

Rudy: That's a good question. So honestly, we are really looking at innovation, innovative gameplay, of course, the experience of the developers as well if they are actually trying to support more Web 2 developers to come into the space. But innovation in terms of gameplay, there is something that we prioritize as well. If their project is a bit down the line, then a strong community and you know what kind of engagement they have in their communities.

And then I look at and of course, at the end of it all, the sustainable economic model is also something that we think about. Either we work with them together to develop something that is sustainable or you know we really have to evaluate what they really have. So we do have projects coming to us at different stages.

Q: For Chains of the Eternals: People often refer to this period as the blooming season for GameFi. In this context, what sets Chains of the Eternals apart from other Web3 games?

Hash: It's a very good one. It's difficult to answer shortly, but essentially what we were doing is a complete full game where every single action that you do in the game is recorded in smart contracts. So to explain the game briefly to our listening, that's a classic MMORPG where you have your character, you start level one, your character is an NFT, the items that you get in the game for monsters are NFT, but also your health points aren't chain, your pet is on chain. 

So the entire adventure that you will follow through in the Openworld is recorded in smart contracts and that includes your quest, your fight, your health, your health points etcetera. So what sets us apart in my opinion is that from what I've seen so far in web three games, very few, I mean very, very few of the games that I've seen record all these actions in smart contracts.

Just part of it is recording in the smart contract, but um, not all. I mean, sometimes you just have the token or you just have your character information, but that's it. So what we want to do eventually is also to store all the assets in a decentralized way, like an IPFS for example. So we are really approaching a state where all the game information is actually on the blockchain. So what that allows essentially is all the builders to come and then develop the game around us and contribute to us creating content with us Quest, new monsters, etcetera. So that's really the big, big difference.

Q: For AAG: Can you share any recent updates or the latest developments happening at AAG?

Jack: Basically we've been providing quite a bit of grant for Game Studio. So if there's any game that is looking to deploy on Sakho and Joiner OC ecosystem, we can help support and what we've been building is kind of like almost like a white glove solution. I mean we have tons of marketing partners, partners now. Partners from like even from helping with development, a lot of different aspects, PR and all these things, so we can help with fundraising as well. So yeah, I think we are quite equipped now to help any game studio. The second thing that we are quite excited about, we just launched this about two weeks ago now. It's called Meta One Cashback. So basically it's like the way we see things, right? In the last cycle when a lot of people came in, it was through GameFi and it was because people were being sponsored to a scholarship program. So they can use access to earn rights in this cycle.

We decided to launch this product so that people can go and shop online on sites like eBay, Lazada, shopping and hotels. We support about 6200 merchants now and get cash back in USDC. The goal is that once they have all these USDC, we can allow them to discover what they can do in Web3 and one big activity will be comfy because once they have all these.

The CoinEx-hosted roundtable provided valuable insights into the evolving landscape of GameFi, showcasing the diverse perspectives and innovative approaches of key figures in the blockchain gaming industry. The participants' discussions highlighted the challenges, opportunities, and future directions for this dynamic and rapidly growing sector.

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