Three Stages of GameFi Development and Investment Layout Strategies

The current GameFi market is in a state of overheating, supported by irrational capital and new users. Once the market adjusts, the prices of tokens and the value of game assets will decline, putting the gaming economy to a severe test, and users and capital are likely to shift to other sectors. As primary market investors, it is essential to maintain a calm judgment on the subsequent developments even amidst the current frenzy, and to prepare for and strategize investments for the next wave.

Three Development Stages of GameFi

Phase 1: GameFi 1.0 - Play-to-"Earn"

The main theme of GameFi at the current stage is "Earn"; gameplay and refinement are more of a bonus to the narrative of the project. A complete GameFi 1.0 project typically needs to meet the following conditions:

• Can bring benefits to users within a certain period of time
• The mechanism design allows early users to make money
• Can continuously attract new users to join and invest funds
• An economic model that supports the operation of the game for at least a few months.

At this stage, primary investors should pay more attention to:

1. Does the team have a long-term business mindset?
2. Can the project attract new users to invest incremental funds?
3. Can it attract existing crypto users to transfer their existing funds?
4. The project's marketing and ground promotion capabilities
5. The rationality of the "Earn" mechanism design
6. Can new user influx accumulate project tokens and game asset value?
7. User Recovery Period
8. Potential Reasons for Mechanism Failure
9. Is there additional appeal such as stunning graphics, a strong investment lineup, etc. (?
10. Is the token allocation reasonable, and will there be excessive selling pressure in the early stages?

The main risks at this stage include: a slowdown in the growth of new users, vulnerabilities in mechanism design, sudden changes in mechanisms by project parties, and market corrections, all of which could lead to a sharp drop in coin prices. Even top projects like Axie Infinity find it difficult to determine whether they can maintain their existing ecosystem during a bear market.

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) Phase 2: GameFi 2.0 - Solving the Single Game Economy Problem

This stage puts higher demands on the basic quality of games and token economics. Low-quality Play-to-Earn games may become short-term speculative tools. Investors should pay more attention to:

1. Can it solve the problem of the single game economic mechanism?
2. Whether it is a Pay to Play project with social attributes

Solutions to the economic problems of a single game include:

• Establish a multi-game interoperable economic ecosystem
• Invest in game incubation platforms to enhance interoperability between games.
• Develop high-quality, socially-oriented games to attract users to actively spend.

At this stage, more medium and large developers may enter. However, for ultra-high valuation game projects that require years of development, a cautious attitude should be maintained.

Phase Three: Experimenting with the Metaverse

This is a trial phase for humanity's step into a virtual economic life. GameFi, as the most easily understood metaverse application, will become an important traffic diversion tool. Whether users can provide productivity in the virtual world to exchange for funds, consume or conduct financial activities in different but interconnected applications, and even interact with their real-world selves, is the ultimate imagination of GameFi at present.

Other Concerns

1. Tools for Games and Guilds: Addressing the issues faced by players, guilds, and project parties.

2. The Deep Integration of NFT and GameFi: Enhancing the Liquidity of Game Assets

3. Establishing data standards/physics engines for games: Laying the foundation for building a metaverse economic system.

Conclusion

Games focused on "Earn" are essentially a method for distributing project tokens. For most non-crypto native users, this is a friendlier and more familiar way to acquire project tokens. Gamification can also enhance project attention and participation, and even stimulate positive user behavior.

As long as the project has the need for token distribution and marketing, profit-driven GameFi may continue to exist. However, both the project parties and users need to consider: whether the distributed tokens are used as a means for short-term incentives and to boost token prices, or as a tool to encourage long-term positive behavior.

Currently, GameFi and NFTs are jointly responsible for attracting users from outside the circle. Although we are at the peak of GameFi 1.0, the most crucial thing for investors is to focus on the long-term development of the ecosystem and find truly valuable innovations and teams.

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