Is "Free-To-Own" The Next GameFi Model?
Gabriel Leydon has been trending on crypto twitter (CT) for a few weeks now, especially after he announced a $200m fundraise (literally, Limit Break) AND the free mints for DigiDaigaku started listing for over 13 ETH on Opensea.
I’m constantly amazed when founders announce a breakthrough that the community, investors and competitors find worthy of dissecting. But what happens when a founder goes against the grain?
When I see someone like Gabriel, who’s had massive success in the traditional gaming industry, make a move that could be considered “crazy” by most people, it makes me think that there’s something worth diving deeper into. Not to criticise the model, but to explore it and to encourage more innovation in the GameFi space.
This is an expansion post inspired by Ryan's here:
In summary, he made 3 main points about the Free-To-Own (F2O) model.
The community starts for FREE
DigiDaigaku started as a free stealth mint and this fulfils these objectives:
No whitelists that create tiers
This means that all members of the DigiDaigaku are EQUAL, insiders or longtime members are not rewarded with whitelist spots. ✅
Low barrier to entry. Some play-to-earn (P2E) games have a high mint price which creates an undesirable barrier to entry for some casual players. A free mint allows anybody interested to participate in the community and play the game. ✅
However, the low barrier to entry only applies to the initial minters and the secondary market increases the barrier to entry as players are more likely to scalp these free NFTs and sell them for profit. ❌
No “revenue” upfront
Not having a mint price allows the developers to focus on the gameplay and mechanics instead of the tokenomics of the game. Better gameplay leads to better player retention. Too many “Web3 games” are just focused on tokenomics and minting out their NFTs that they design such bad games. ✅
Having a mint price will only cause players to be more profit driven and treat the game as an investment rather than an actual game, which is what it was meant to be. Many players will keep the mint price in mind and ditch the game once they’ve lost money. Not having a mint price allows the players to focus on actually playing the game and earning rewards and it keeps them interested in the game for a longer period. ✅
Naturally, higher mint prices reflect that the character/item is more viable than those of lower mint prices. The game developers should not be the ones deciding which characters/items are more viable in the meta. This is the job of the community to play around and figure out the meta and it is up to the developers to balance the game accordingly by using statistics like pick rates and win rates to buff, nerf and introduce new mechanics. ✅
Understandably, some games have a tiering system (common, legendary) and higher/rarer tiers would naturally have better stats leading to higher mint prices. In an ideal world, all of the NFTs with the best stats (all legendaries) should not make the meta (that would honestly be a trash game) as this forces players to spend money to get the best characters, which makes it a pay-to-win game (not desirable). ❌
The developers should design the game mechanics in such a way that the tiering system only affects how hard the characters are hard to pull using a gachapon mechanic. An ideal meta should consist of characters across different tiers. To raise the skill ceiling, a common tier should always be able to outplay a legendary tier if used correctly. ✅
Avoids scam-like behaviour by failing to deliver after minting out
By not taking money from players during mint, the developers have the freedom to put out the game at their own pace. They don’t have to feel pressured by the community to rush out a game just because the community minted out their NFTs and gave the developers their money. This sadly happens to a lot of projects, which causes really bad games and NFT projects to be put out. ✅
By setting a mint price on launch, it incentivises walking away from the project if things go bad because the developers have already profited and got the money. DigiDaigaku has a 10% transaction fee on their NFTs, which is how they generate revenue to improve their games. This is an ideal model that more GameFi projects should follow. ✅
The NFTs the community get are OWNED by them
Players will be more invested in the game when they own their NFTs.
Think CS:GO skins. It has one of the largest communities for in-game items in the world and it even has its economy. However, the player doesn't own their skins as it belongs to Valve where they can be taken away at any time. ❌
In the case of GameFi projects, players will own their items and they cannot be taken away by the developers which will allow players to have a more meaningful stake in the game and leads to a more invested and committed community. ✅
Those NFTs are factories that generate new NFTs
Having factory NFTs creates a more flexible game economy, by incentivising players to be factory NFT holders.
Each season, NFT factories will produce X amount of NFTs that can be redistributed into the in-game economy.
Factory NFTs can also generate exclusive rewards that reward the user for holding onto that factory NFT.
The free-to-own (F2O) format is very similar to the free-to-play (F2P) format. Allowing players to mint NFTs for free, reduces the barrier to entry and allows the player base to grow extremely rapidly since there is no cost. But there are some differences which I've summarised in a simple sketch below:
Next, it allows the developers to focus on the gameplay and make a good and playable game. The players are the ones who get to decide the meta and not the developers when they attach value and money to certain characters/items as naturally, the ones that cost more will be more sought after.
One negative implication of the free-to-own model is that it does not reward longtime community contributors with whitelist spots which most projects do. This does not incentivise community contribution as the player sees little to no value if they do not get rewarded for their contributions. This lowers the ceiling of the game as good games heavily rely on player and community feedback.
However, this could be potentially mitigated by the fact that good games will have more people playing them and thus, the community will grow organically. All in all, I think the free-to-own model is a very strong and intriguing model that has the potential to succeed.
Part 2 of this post will cover some feedback I've found from CT (mostly negative). There are lots of valid points, but I will also be sharing my thoughts.
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Disclaimer: I own one Genesis DigiDaigaku bought on Opensea
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