This piece will summarize the highlights of these conversations. For more insights, you can visit the article below.

#21: Payton - Kizuna (formerly)

→ Topics: community building and community management

Quotes:

• “Community…is the interaction between people, and that is also your responsibility as a community leader. Not for them to cling to you as the driving force, but also to push into relationships…”

• “There are a lot of benefits of community that aren’t solely monetary: just drive KPIs down […] There are a lot of things within community that you can have, like marketing, ambassadorships, hiring pools, product-feedback loops…types of things that don’t really have a good connection to money or costs.”

• “This is where people have a hard time with Discord, because they just think of Discord or Telegram as a chat message platform, when in my opinion, it’s more like Gen Z email.”

Takeaways:

• The strength of a community lies in the density of member-to-member connections. Not in the leader-to-member connections. For this reason, you want to create an environment where members form relationships with each other.

• If you treat the community like a KPI, you will miss how it multiplies everything else.

• Using the Gen Z email framing helps you understand how to approach it: Discord = inbox, Channels = folders, Notifications = emails, Reacting to pings = open rate.

You can find more insights in the article below:

#22: Jihoz - Ronin Network

→ Topics: game and economy design, and tokens

Quotes:

• “What prevents them (players) from quitting when they lose their ship? […] He (Hilmar Petursson) said that the guild mechanic and the social mechanics are really important for that. First of all, players feel like they’re contributing to something…the guilds also have systems of insurance, which will help you replace your stuff in the case of loss”

• “When you do the economic balancing, don’t say that you’re doing that. Always interweave that with lore, so don’t say: the rewards are dropping, say that winter is coming. He really stressed this idea of emotion. He said that every sink in EVE Online is very closely tied to greed, wrath, anger, or love”

• “Once you’ve graduated from that point (initial community distribution), you have to be really careful in how you’re emitting supply. You want to continue to incentivize people, but if you can make sure that these tokens are going to long-term aligned users via reputation. If you can make sure that they’re actually using the tokens for the things that you want them to do…you start fixing and addressing a lot of the issues of gaming tokens”

Takeaways

• Tie the lore to economic balancing (emissions, sinks, burns, etc.), and in some cases, eventize them. Make it an experience that the players can join, rally around, so you also control the narrative of what changes.

• What Jihoz means with the last quote is that you want to start with a relatively “broad” distribution of tokens, and follow up with a more curated (aligned) approach. I do still think that the initial distribution (1st airdrop) is often largely overlooked in terms of importance.

#23: Luke - Stacked/Pixels

→ Topics: UA and growth

Quotes:

• “Part of the problem (in response to extractors and spenders in Pixels being 98.8% overlapping) is the UA problem. A lot of crypto has not reached an audience of gamers, who are important, in addition to the people playing crypto games right now.”

• “As a founder, it’s really easy to think that other people are wrong: ‘These people are wrong, there’s this thing that they should like’. That’s just not how the world works. You do have to build around consumer expectations. If you offer them something that surprises them, that’s genuinely better, that’s great, but if you try to force it down their throats, they’re just going to avoid the product in the beginning stages”

• “Are they going to move the needle for the user experience and for Stacked as a company? The reality is: I’m not so optimistic about Web3 games right now. So, what do we really need for Stacked to work? One, we need our first-party titles to work well, or we need Web2 games that have the economics to fit this into”

Takeaways:

• For your game economy to function, you need to attract an audience that is less EV-sensitive, and essentially “pays for fun.” Unfortunately, the data shows that there’s only a handful of players in crypto that play because of intrinsic motivations.

• If there’s a feeling that the user has to be educated a lot to understand the value proposition of the product. You’re likely building against consumer expectations instead of around them.

• The last quote was a response to how Luke is thinking about growth for Stacked, as the infrastructure can only be as good as the games being built on it. If Stacked can attract Web2 games and execute, this might spark an interesting wave of crypto gaming adoption through rewarded play.

You can find more insights in the article below:

#24: Abhi - AP Collective

→ Topics: marketing and distribution

Quotes:

• “If I post something on Twitter tomorrow, no one will remember it in a week. If I post a press release, maybe it won’t convert on D1, but people will still be able to see that when they search my project a year from now. So, in terms of producing content on Twitter that doesn’t convert, and the short-term lifecycle around dropping a hype-trailer, to me, that’s all sort of dead…”

• “The biggest thing about AI or tech at the moment: development, ideation, and production have been completely abstracted in terms of difficulty, costs, etc. But distribution, users, and revenue are really difficult to achieve, which is why I’ve been using words like ROAS, because that’s what AI/tech teams are looking at”

• “Spend it (in response to spending your marketing budget) on distribution and A/B test any channels they can to deliver ROAS. Spend a little bit on clipping, on X, on video production, on the distribution of certain narratives, and see what works and what’s sticking. Whenever you see a positive ROI, just re-allocate all of your resources to that specific channel until you stop seeing a positive return, and then expand to the other channels…”

Takeaways:

• You can’t rely on Twitter for evergreen content. Build a library of mid-funnel resources (blogs, YT videos, press releases, etc.) to create long-term discoverability and, equally important, trust.

• Marketing in crypto has been largely about guerrilla tactics and community building in the past few years. Not so much about traditional marketing. That’s likely going to change, as relying on CT for users isn’t viable anymore, and crypto companies have to explore channels beyond Twitter.

• Marketing in crypto has been largely about guerrilla tactics and community building in the past few years. Not so much about traditional marketing. That’s likely going to change, as relying on CT for users isn’t viable anymore, and crypto companies have to explore channels beyond Twitter.

#25: Lethe - Kamigotchi

→ Topics: onchain gaming, founder marketing, and playtests

Quotes:

• “We were really inspired by what Skarly from OCH did with Maze of Gains (MoG), because it was just so clear that adding something like this to their ecosystem brought in new users. And I think everybody in onchain gaming right now is thinking: “How do we get more distribution?”

• “If you look at how marketing works for this kind of brand in Web3...The only thing that really lands is very founder-led, influencer-style mascot marketing.”

• “Playtests are really important for marketing, which is why we’ll be doing a big one for Asphodel, and then just engaging people with WoM...I think playtesting is the big trick people miss. If you make a public event out of it, use incentives correctly, you can really get disproportionate amounts of leverage on users from that.”

Takeaways:

• What a handful of the “onchain” games realized is that midcore/hardcore games are limited in onboarding new users. That’s why we’re seeing an uptick in more casual game loops (quick sessions, little onboarding, high dopamine) being built on top of this ecosystem to broaden the TAM. Top-of-funnel experiences that can also trickle down to the bottom of the funnel.

• In the video (at 3:04), Lethe answers the “why” behind the founder-funnel. To my interpretation, it comes down to improving: marketing effectiveness, trust, relatability, community building, narrative control, and emotional buy-in.

• Most teams think of playtests only as a means to evaluate the functioning of a game. Few see it as a marketing and player acquisition channel. Turn a boring playtest into something exciting by “eventizing” the process. A way to look at it is by treating it like how indie games approach their early access launch on Steam (GameDiscoverCo has a lot of good content on this topic).

You can find more insights in the article below:

#26: Caleb - SDF

→ Topics: marketing, distribution, growth, and product

Quotes:

• “How do you lure them in with stuff that’s familiar to them? So, Picks, is super familiar to the FPL audience...it’s a really nice format that’s shareable, but also you can rank people nicely.”

• “If you look at any sports brand, whether there’s cash or not. They are all going down the route of owning their own media. Polymarket and Kalshi are doing the same. DraftKings does the same thing with Barstool.”

• “If you look at what people do with social cards for normal markets or crypto markets, you’d probably apply a lot of that to our platform. But in a much more engaging way, because it can cause discussion with huge fan bases.”

Takeaways:

• Familiarity is your first step through the door. For the user, it reduces the cognitive load, anxiety, and the time to understand an app’s value. I.e., presenting a familiar concept makes adoption much easier. Once they are in, you can sell them on unique features (e.g., markets).

• In the industries where customer attention and acquisition are expensive (like fantasy football and PMs), owning distribution is much more valuable than renting or partnering for long-term value capture. The companies that succeed temporarily use rented/partnered distribution to funnel it back to their owned distribution.

• Crypto has a lot of social cards (e.g., Abstract XP) because they’re social currency, making them very effective for WoM marketing and driving new referrals. Most social cards are simply PnL or number cards, so think about how you can give them a unique twist that’s in line with your product. Ideally, that twist adds to the virality and wow-factor of what’s being shared.

You can find more insights in the article below:

#27: Ben - Cambria

→ Topics: risk2earn and growth

Quotes:

• “There needs to be a twist. Like, this is the only game on the internet where I can do XYZ. So, the combination of Diablo-style gameplay, roguelikes, and the crypto stakes at the intersection of all three...there’s probably nothing out there right now that you can do remotely close.”

• “Because of the dynamics of the pool, most people end up not making money. That’s just how most of these products work. If they’re not making money...money is very important to people, right? So, how can you bring them back? I think that’s the definition of successful products in this niche.”

• “With financialized entertainment, there’s a floor. Obviously, with perps, memes, and prediction markets, they go vertical, still, regardless of macro. If they enjoy the product, there’s definitely a form of users that will go up, and risk-on behavior is trending. But there’s always a base of audience there. With crypto gaming specifically, the big bet is: you can convert a new audience of people.”

Takeaways:

• Competing with indie games in this genre (the best comparison imo) is close to impossible, because they are objectively better games. For this reason, you need a “twist,“ a unique angle or selling point, like “real risk.” Something only possible through integrating crypto. This is also why marketing these games to an audience outside crypto should be closer to how fomo does it (the rags-to-riches fantasy) than traditional indie game marketing. The question is, how do you reach the users who have similar risk-on behaviors but would enjoy these loops in a game, instead of through memecoins?

• One of the biggest challenges of risk2earn games is solving player churn after incurring losses. Especially when it comes to an audience outside of crypto, which is less familiar with these concepts in an experience close to a traditional game. The answers lie in game design and how supporting features, mechanics, and loops can reduce churn. Unironically, the best space to learn how to optimize for that is the casino, as these have mastered how to make losing players return/keep playing.

• On the last point, it leads back to the conversation about memes. Games like Dungeons are engagement loops of risk, just like to perps, memes, and pms. Gaming is simply the most fun wrapper to capture these loops and has the most potential to scale (in theory). However, the playbook to make this happen currently remains largely unwritten.

You can find more insights in the article below:

#28: Heimdall - The Citadel

→ Topics: economy design

Quotes:

• “Diablo 2 is not a fun endgame. It’s just getting the loot and progressing your character. Somehow, just getting the loot has been worth 30 years of gameplay. So, there’s something there that people should look at more.”

• “Every asset emission in the game is competitive, so even in these sessions [...] For the faucet, it’s also competitive because when you’re recycling assets, you’re competing against other players for that emission. Even on the governance auctions, it’s a competitive auction in the in-game currency. I think that’s really the only way that you can make a sustainable economy.”

• “A treasury-stabilized economy, where players own governance assets, and those have their value tied to the treasury. And then we stabilize the rest of the ecosystem based on those governance assets by allowing any items or currency to be converted into governance every week, when we release new emissions. It should create a really stable value for all ecosystem assets in the game, and we grow the treasury by actually driving a lot of the revenue to the player-owned treasury.”

Takeaways:

• The appeal of Diablo’s “getting loot” endgame comes from the chase for better items feeling meaningful and the fact that the depth of different builds is endless. Diablo has made itemization addictive. The challenge to resolve for crypto games (beyond making something as good as Diablo) is then how “ownership” can enhance this layer, rather than take away the fun, as Diablo III’s Auction House did.

• Economic sustainability is “only” possible when the emissions are competitive. It caps the total supply of new assets by player participation and skill, creates more constant demand and built-in sinks, and unifies the gameplay and economic loop.

• Citadel’s economy functions based on a player-owned treasury that stabilizes the economy from the center outward. The governance assets it will issue act as the anchor, and because they’re owned by the players, that aligns the incentives. So, the more revenue the game generates, the more value the owners of the treasury (or “central bank”) generate. In theory, this creates sustainable growth.

You can find more insights in the article below:

#29: Gaspode - SDF

→ Topics: airdrops, product and economy design

Quotes:

• “...so much of the data that went into the idea of the FUN score, which was your equivalent of being able to see how you were performing against other people for the upcoming airdrop, was based on how you interacted with the product. And none of the metrics were really inorganic...”

• “Nearly everything in there...were organic behaviors that happened in FDF. That’s why it (the airdrop) ended up going clearly to people who were already in the ecosystem...”

• “And what was the friction previously was the more kind of trader, more admin-side of things around the rewards and the markets. It’s about simplifying the right things [...] We don’t want to simplify the sports experience, because that’s what people really enjoy. We want to simplify all the bits that go around the edges that feel more like admin”

Takeaways:

• It’s clear that the (initial) success of the FUN airdrop, through the lens of retention data, was a result of the thoughtful design of the FUN score. This seems to suggest that the only future of airdrops is in rewarding your (genuine) power users.

• Crypto users want depth around decision-making, while keeping the mechanics as simple as possible. Quite similar to what Skarly said when we interviewed a while ago: “Players that we have attracted, they want a more complex game, complex in the sense that, not that the game mechanics are complex, but they want [...] simple decisions that have big effects on their gameplay”.

#30: rev0 - Angry Dynomites

→ Topics: UA, growth, Web2 vs. crypto, and game design

Quotes:

• “We don’t really hide that it’s blockchain, but we also don’t make it like super in your face. It’s still very easy to use. You don’t need to have your wallet, as I said, everything is being orchestrated through our backend with your smart account.”

• “So we can definitely say that once we convert a Web2 user to a deeply native Web3 user, these tend to stay for the longest and be the most loyal. And a lot of the time they’re the higher spenders in our game.”

• “Founders or teams were focusing too much on this one game and developing it for a long time without really testing it, launching it, or focusing on its marketability. So, they were always tied to looking at this community they may have built up. They were already super engaged. They probably shared sneak peeks or playtests, but they haven’t really tested it out in the market.”

Takeaways:

• In Craft World, the blockchain-based features are value-first. Instead of pushing crypto on the player, the game 1) introduces it gradually, 2) makes understanding it optional, and 3) leads with the benefits. It shows that this is a much more effective way to convert an audience to crypto than leading with crypto-first.

• Craft World’s big bet is on converting Web2 players to crypto (at scale). Not only because it improves game KPIs, like LTV, engagement, and retention. But also because they’re willing to spend for entertainment value only. While crypto-first players are much more earnings-focused or EV-sensitive.

• Just because playtest numbers (or any other “golden cohort” data) show promise doesn’t mean the product is marketable. The only way to test the marketability of the game is to get it out there. The sooner, the better.

You can find more insights in the article below:

Closing

We’re grateful to everyone who came on the show to share their insights, and I’m looking forward to welcoming many more builders in consumer crypto (my DMs are open).

What was your favorite quote here? Or who was your favorite guest?

Disclaimer: None of this information should be taken as financial advice. My writings only represent my personal opinions. DYOR. I will hold some of the assets mentioned in this newsletter.

In the past years, I’ve witnessed and logged 100s of gaming token launches. Many of these launched through a CEX or DEX, a few on a launchpad, and even fewer on @Pumpfun (PF), until recently. This made me arrive at the question:

Does Pump Fun provide a better token launch model for gaming tokens than the CEX route?

Pump Fun’s Shift to Builders

PF is/was largely known as a memecoin launchpad, and not so much for project/utility-backed tokens (or “builder tokens” as I will refer to them). However, more recently, it has been pushing the platform in a direction to align itself with more builder-minded deployers. In 2026, it launched initiatives such as the Pump Fund, the BIP hackathon, and positive changes to the creator fee model.

The most successful project coming out of this push is @pumpcade. Its story set a standard and created a narrative for other builder tokens to erupt. And the trend of gaming tokens we recently saw (sparked by Kintara’s success) is the next iteration of these types of tokens.

So, why launch on PF? Kosgood, the former COO of PF and now at Pumpcade, explains it well in the clip below:

“Launching a token, especially on pump, could be the best thing that you do for your company. It helps validate your idea. If people seem interested, you start gaining community and you get early feedback.

If you don’t have funds, it’s amazing for getting those initial funds, but it also helps sculpt the vision of your company.

Approach it as a speculative tool and a marketing tool, and maybe integrate it into your product one day. It can end up snowballing into the most valuable asset you have for your entire company.”

In summary, it’s a tool for validation, community, bootstrapping, marketing, speculation, and building momentum. But most interestingly, it changes how (gaming) startups can get funded and monetize.

“The Typical” Game Token Launch

“The typical” (gaming utility token on a CEX) launch model, as we know it, is broken, and the proof is in the charts. In this section, I will go over what’s broken specifically and how a PF token could potentially solve/soften these inherent issues.

A Lack of Organic Price Discovery

• Gaming utility tokens are often used as a vehicle to raise funds. Naturally, this pushes the listing price of these tokens up. In many cases, to a level at which the token launches at too high a valuation for any buyers to be interested. This makes the open and upward price discovery limited.

In contrast, a PF launch is much more egalitarian. Anyone can participate. It starts at a low valuation (~$2-$5K) on the PF bonding curve. This curve only gets completed (and “launched” to a DEX) when 793M out of the 1B tokens have been bought, which happens approximately at a $70K market cap.

So, the potential upside for a PF token is in the 100Xs, if not 1000Xs. Compared to a typical launch, the upside is capped much more significantly.

Speaking of upside, rewarding your early believers (making them rich) remains the strongest token enforcer in crypto, because of a couple of reasons:

1. An early buyer making the right bet triggers psychological effects: validation and ego reinforcement, identity fusion (e.g., “the guy that was early with Kintara”), and reciprocity.

2. It turns holders into evangelists. The incentives are aligned because the holders’ wealth is correlated to the success of the token. This makes them inclined to go out there and contribute to the further growth of the token.

3. Being an early winner creates status. In crypto, that has value because it can be leveraged for monetary gain, networking purposes, and access to greater opportunities.

Less Predatory Monetization Mechanics

• The main ways teams make money from their token also often happen to be “predatory” (contradictory) to the token’s success. Think of fundraising rounds, OTC deals, selling team-based unlocks, and selling tokens from game revenue.

Launching a token on PF comes with “creator fees.” A dynamic fee model that gives the developers a cut of the trading fees. So, the more volume being generated, the more revenue (fees) the deployer makes. As the team benefits from ongoing market activity, this creates a strong incentive for them to return attention and value to the token, at the same time making it less attractive to sell off their own supply.

On the topic of value accrual, it’s also worth talking about buybacks. We’ve seen dozens of teams incorporate a buyback strategy over the past 1.5 years. However, in most cases the benefits remain opaque. On the other hand, in terms of a PF-token, the upside seems clearer. Here, token velocity is directly linked to revenue through creator fees. When this revenue is used for buybacks, this creates a clearer flywheel:

Buybacks → trading volume up + supply goes down → holder confidence goes up → sustained/increased token velocity → more trading fees → more buybacks

A good example of a team benefiting from this model is Clash of Perps. The founder, Xaitoshi, told me during an interview that they make around $400 per day. So, ~$12K per month. As a primary revenue driver, it allows them to sustain their 2-man operation.

PF fees allow teams to monetize the speculative behavior of the market. At the same time, teams can still monetize the in-game experience (like Clash of Perps) through IAPs, IAAs, subscription models, NFTs, entry fees, etc. It creates a clear distinction between how the two can be monetized separately.

Different Unlock Model

• Most of the tokens in this category launch with a 10 - 20% float, meaning another 80 - 90% of the tokens will be introduced to the market post-TGE. Typically, over 3-4 years. Additionally, teams own 40 - 50% of the supply. For almost all tokens, this prolonged increase in token supply leads to continuous sell pressure and uncertainty post-unlocks. Simply because teams can’t absorb the supply increase at a high enough rate.

PF tokens (that graduate) roughly have an 80/20 community-team split. So technically, every token has an 80% circulating supply the day it launches, and new supply is introduced (the 20%) if the deployer decides to sell its token allocation. But the team can freely trade this supply, as it isn’t locked up by a vesting schedule, which introduces risks I will get into later.

So, PF’s model isn’t perfect either. Performance-based unlocks could be a solution here, as it would decrease the risk from the buyer side significantly, while at the same time creating more alignment between the team and the token’s performance.

However, the result is a token that trades much closer to its “real” market value, that isn’t plagued by continuous supply unlocks. Especially because of the “FDV shenanigans” (low float, high FDV) we’ve seen in the past few years, which have contributed to the majority of tokens peaking at TGE, and then going down forever after.

Tap into Different Audiences

• The typical gaming token launch attracts sellers, farmers, and extractors. But it often cannot tap into the audiences that are interested in buying the token.

To illustrate this point, it’d be helpful to describe the gaming and PF audiences, and show how they’re different:

1. The gaming token audience: Often a mix of grinders, farmers, and a handful of enthusiasts. Many come from regions where playing can supplement income (P2E).

2. Pump Fun audience: Crypto-native speculators. They treat tokens as pure financial instruments or lottery tickets. These people are the degens or gamblers.

Both audiences have the same goal: to make money. However, the means of getting there are different. The gaming audience is willing to invest significant time to earn tokens. The PF audience is less willing to invest its time, but more willing to gamble its money for asymmetric upside.

In the context of how both interact with a token launch, the gaming audience optimizes for yield extraction (sell airdrop and grind for tokens), leading to selling pressure. On the other hand, the PF audience optimizes for speculation, with the result of buying pressure (initially at least) to chase the asymmetric upside.

The upside of gaming tokens is usually capped by adoption, valuation mechanics, inflationary emissions, etc. On the other hand, the potential upside of PF tokens is much higher, as said. For this reason, most gaming tokens aren’t interesting to the degen audience as they don’t offer the asymmetric upside they are looking for.

In the context of Kintara

Kintara has found a crossover: attracting the gaming audience (motivated by P2E), while the PF audience provides the capital and liquidity to sustain the token price. At the same time, some of the speculator crowd turned into players as well to double-dip on the opportunity (e.g., PinguCharts).

In this post, Raiden explains well why the game managed to attract the degen audience: the PF-crowd primarily buys into a narrative they can tell themselves, and others (”a memecoin wrapped under a gamified exp.” + “the next Axie”). The buying decision here is driven by a thesis, not so much by the game itself.

At the same time, the gaming audience creates utility and demand for the token through (incentivized) play. And even though the game’s metrics (e.g., player numbers) are mostly vanity, they still “validate” the thesis. This creates a strong flywheel:

Thesis → validation → token goes up → enforces thesis.

Bag bias plays a big role here too. Because holders are financially invested, they have a strong incentive to say the game is fun/good, even though it isn’t objectively good or innovative. This makes the narrative self-reinforcing and keeps speculative capital around longer than a pure memecoin play, because there’s activity backing the story. However, it also means if the narrative were to collapse, the token would likely too.

What Teams Benefit the Most from a Pump Fun Launch?

Launching a token on Pump Fun makes more sense for a tiny startup (1-5 employees) than any larger company, as you might have guessed. As said, it's a tool for validation, bootstrapping, and building momentum. The smallest teams benefit the most from that, while it might be too much of a risk for larger, VC-backed companies, aiming for a higher valuation.

In a way, you could argue that Pump Fun flips the typical token launch model on its head. Instead of build → traction → token (the CEX route), PF goes token → validation → build. More in line with a Kickstarter campaign.

Looking at the breakdown of creator fees below, you can see that the funds aren’t significant enough to sustain larger operations without supplemental revenue streams. A token in the mid-tier (~$2.5M market cap), doing a $100k volume per day on average, would “only” generate $15K in monthly fees if they were to stay in the same fee bracket.

However, that doesn’t mean that teams can’t use their (initial) success on PF as a springboard to greater heights. Pumpcade started as a 1-man operation, led by Pop Punk. The PF fees allowed him to fund development, and continued success was leveraged in two funding rounds, naturally followed by expansion.

Is it Applicable to Gaming?

“But gaming is capital intensive, and requires capital up front”

It’s a valid argument, as venture capital made the category of crypto gaming possible in the first place. However, the outcomes of the majority of funding in A, AA, and “AAA” crypto games have almost been nothing but underwhelming. As a result, the industry’s venture investments have shrunk massively over the past few years.

That’s why I believe the future of this category will be much more indie. Mostly solo devs or very tiny operations will try to come up with a “minimum monetizable game loop” (essentially “validation”, as Kosgood spoke of). Based on the marketability of this loop, it either gets scrapped or the teams continue to build and add features, content, and systems to turn it into a fully fleshed-out experience over time.

Current AI tools haven’t solved game development, but they do exponentially increase what a small team can accomplish in a short time.

The Risks/Downsides

For now, I’ve only addressed the benefits of launching a (gaming) token on PF. However, it would be unfair not to address the downsides as well. Because the risk is two-sided, the following arguments will be from both a deployer’s (launch) and buyers’ perspective.

Bad Actors

The biggest risk with tokens on PF, from the buyers’ perspective, is that the chance of getting rugged is much higher than with a CEX launch. The barrier to ship a game has been lower than it ever has, and the rewards (potential upside) are there, making the incentive to exploit this opportunity larger than ever before.

We’ve seen this with how Kintara’s success spawned a wave of new (sloppy) projects. Half-assed games, if you can call them “games” in the first place. Or even worse, projects pretending they’re building a game while stealing or faking game footage.

Buyers will have to navigate this space carefully and train their due diligence skills if they don’t want to be caught buying the wrong tokens. Especially considering there’s no “policing” (curation) on PF at all. This will always remain a sub-optimal experience. For the untrained eye, this means that the chance of a rug is quite significant. And a first experience that ends up in a rug seems like a high churn point.

I believe a better solution to this would be an improved incentive model (for builder tokens at least) that encourages long-term holding + project development, instead of straight up rugging.

In the example of FRAG, the incentive for the developer to rug was greater than to continue to build. Let's say he was able to secure $100K at once, instead of having to continue to ship for 10 months to get there through creator fees and in-game revenue with the risk of the token going to 0 in the meantime.

"Show me the incentive and I will show you the outcome" ~ Charlie Munger

Lack of (Good) Devs

Even though everyone can now be a developer (i.e., vibecoder), crypto seriously lacks serious, experienced ones that can build apps that matter. Just look at all the new L2s out there. Ultimately, almost all of them could use new, meaningful apps. However, despite the relatively strong incentives to build in crypto (with fees, grants, tokens, etc.), there aren’t enough good developers.

The most obvious reason why seems to be the negative connotation the outside world still has with the word “crypto.” The risk and reputation damage simply doesn’t seem worth the reward. And particularly, PF isn’t trying/design to improve this reputation, as memecoin launchpads are likely the largest vehicle for scamcoins to be created in the first place.

Furthermore, there’s a huge risk for a developer to be constantly attacked by malicious actors trying to extract, as recently seen with the example of Voicebox. Luckily, in this case it ended well, but in many cases it doesn’t.

To emphasize this point, there are hundreds, if not thousands, of indie game devs out there who are all desperate for funding and players. Crypto can provide both to them (even though the latter is debatable), yet most of them will never come near it, as they despise this industry.

I’m not sure if it can be solved, but I hope PF will continue to push initiatives for builders and attract more serious developers.

“Caballing”

Every project has a group of insiders that benefit the most from a token launch, whether that be VCs, angels, the team, or a group of KOLs. With a typical CEX launch, it’s usually fairly transparent which groups hold tokens, how many, and when they’re able to sell, as you can simply look at the tokenomics. However, with PF launches, it isn’t, and with the more successful launches, there often is some “caballing” at play.

A token that seems rather suspicious of some cabal play is none other than Kintara’s KINS. When the token took off, it felt like a coordinated effort from multiple memecoin accounts to push this token. There also wasn’t a strong reason for these accounts to push KINS at the time (or it was hidden from the public). But again, these are mere suspicions. However, you could argue against how organic the price discovery of KINS really was.

In the case of KINS, the fact that the cabal was likely involved wasn’t the worst, because it hasn’t been a huge extraction event. Yet, often, the behavior leads to only a small group of players benefiting, while the rest incurs losses.

Concluding

To get back to the question of this article:

Does Pump Fun provide a better token launch model for gaming tokens than the CEX route?

My answer would be yes. Specifically, from a token perspective, the PF model allows for:

1. Better organic price discovery

2. Less predatory token-based monetization

3. A better token unlock model

4. Reaching different audiences, with more spending power

Overall, leading to better alignment between the success of a product and the token.

Additionally, a PF token can be a powerful tool for validation, community, bootstrapping, marketing, speculation, and building momentum, with benefits that a typical CEX launch can’t parallel.

But of course, there’s nuance. Tiny tiny operations are much more likely to reap the benefits of a PF token than companies that are more than ~5 employees, I’d say. A PF launch is more of a springboard toward greater heights than a solution for an already VC-backed company.

Furthermore, PF is still plagued with the problems of bad actors (scams), a lack of good devs, and practices such as cabbaling. Without PF continuing to make the platform a more developer-friendly environment, I’m afraid it will fail to see a growing interest from this community to launch on the platform.

What’s your take on the wave of gaming token launches on Pump Fun?

Quick note: I’m still searching for a role in a new role in crypto gaming/consumer, somewhere at the intersection of marketing, growth, research, and media.

If you’re building something cool and think there might be a fit, feel free to send me a DM.

TLDR :

• Axie ships Terrariums V1

• Immutable pivots to AI marketing tech

• Cambria ships new update: Pendants

🗞️ NEWS

AXIE SHIPS TERRARIUMS V1

• Last week, Axie Infinity shipped Terrariums V1: “Bring your Axies home.” An Axie-based farming simulator and hub that reignites the utility around Axie Land NFTs (based on the vision set back in 2019)

  • With this update, they sunset Axie Homeland. During Lunacian Lounge EP3 (Feb 2026), Jihoz said: “Homeland ended up being not what we wanted it to be... we’re going to rip off the band-aid and replace it with the new Terrarium system”

• Terrariums are a lightweight and passive experience: “Think of it as gamified staking that respects your time” (Axie Substack). The core game loop is as follows:

  • Activate Plots → Assign Axies

  • Consume Lunium per Tick (in-game premium currency)

    • Every Tick (hour), Land burns Lunium, depending on the type of land and any changes made

    • Lunium is primarily acquired through IAPs. Land itself also generates some Lunium, but it’s minimal

  • Earn hourly bAXS rewards

    • Based on Atia’s Flame: Axie Power. Rare Axies carry more Flame than common ones. To earn bAXS from a Flame, Axies must be in Atia’s Shrine (i.e., staked)

      • Jihoz on Terrariums (during Sidelined), last April: “There’s also this idea that we want to use Terrariums to introduce a massive Axie burning mechanic”

        • Note: There’s no burning mechanic for now, but it’d be interesting to see it added in the future

    • Each type of land has a different, capped bAXS pool attached to it. This makes the emissions competitive

• Despite the simplicity of the game, there’s depth to the decision-making that influences earnings. Players can optimize for how many and which Axies they use, what the bAXS/day and bAXS/tick are, how competitive the pools are, and how to spend their Lunium

  • Player Marten.ron, who’s been reporting his Terrarium progress, says that: “The real alpha is still bAXS per Atia’s Flame”

• In essence, Terrariums is a vehicle that generates revenue from IAPs and gives players spending power (bAXS) in return. This leads to the majority of value being retained in the Axie ecosystem:

  • Jihoz on bAXS (during Sidelined), last April: “We've been able to get rid of 95% of all the sybils from the system and around a 50% in sell pressure from game rewards so far (with the use of bAXS)”

• Furthermore, the new utility brought to Axies + Land translated to increased floor prices:

  • According to the Axie account (on June 19), there were 117K Axie sales and 343 ETH volume (+40%) in the last 30 days. Plus, the floor price of normal Axies increased by 92%, and + Mystics went up by 43.6% since Terrarium details were shared

  • AXS also saw some upward price movement during the weekend

• What’s next for Terrariums? Let’s start by looking at the vision of the feature:

  • “You sort of manage a whole roster of Axies, because one of the core principles of Axie Infinity is the collectible aspect: You collect Axies, you expand your collection horizontally, and Terrariums fit that principle”

    • Terrariums are a metagame for the Axie collector in this sense

  • Furthermore, Jeffery Kam added, “One of the product goals with Terrariums also is consolidating a lot of the ecosystem in it. It’s sort of the game layer on top of Axie Core […] That migh mean sunsetting and deprecating some features, and rebuilding them in a holistic way inside of Terrariums”

    • The goal is to make Terrariums the “onboarding flow” for new players, i.e., the top-of-funnel experience that funnels them into deeper Axie experiences. Similar to what we’re seeing with Cambria and Dungeons

  • For more specifics on V1.1 and V1.2, you can check out this post

• Overall, it’s “interesting” to finally see Axie deliver on its original vision of Land NFTs, set ~7 years ago. While they could have let the initial promise of the NFTs die (like countless others did), Axie is using Terrariums as a way to revitalize its audience of collectors and reshape how players interact with the ecosystem

  • Lastly, I am also curious about how Terrariums will connect to Atia’s Legacy

IMMUTABLE PIVOTS TO AI MARKETING TECH

• A surprise move from Immutable this week, as it announced its pivot from crypto gaming to AI marketing tech for game publishers (through Immutable Audience)

  • With this pivot, Immutable cut almost its entire game development team, working on Gods Unchained and Guild of Guardians. Further work on these titles will be outsourced, with a very small internal team focused on games

    • From Hulog (CSO): Gods Unchained “will continue to run as our core revenue-generating Studio product,” and Guild of Guardians will “transition to Evergreen/ Maintenance Mode.”

• The pivot itself stemmed from its shift last year, in which the company opened up the platform from only crypto games to traditional games as well, specifically on the growth side. A “radical reshaping and refocusing” was required to bring their product, Immutable Audience (IA), to the whole gaming market

  • Frankly, it’s also unclear to me how successful Immutable was over the past few years (looking at its financials later). With over 700+ games on the platform, its successes seem to be a handful of titles, including Guild of Guardians and Gods Unchained

    • To date, its biggest feat remains the amount of money it raised

• So, IA is marketing tech for publishers. What does it do? According to its website, it is “the AI-native growth platform game studios use to capture player data, score audiences, automate campaigns, improve conversion, and drive revenue”

  • The solution aids in:

    • Improving the conversion funnel for pre-launch games

    • Building automated email flows that aid in conversion

    • Providing detailed player attribution

    • Facilitating creator partnerships

    • Building an owned audience that can be reused

  • It’s essentially a shot at making another AppLovin, and it’s unlikely Immutable will succeed at doing so:

    • atifkhan31: “There’s 250 ad networks around the world maybe more. For every applovin there’s 50 unity ad networks.”

    • To use a comparable in crypto, Pixel’s adtech platform, Stacked, focuses on rewarded play

• According to Ferguson (one of the co-founders), the company still has 10 years of runway left. The result of raising a monstrous Series C in 2022, of $200M, and great treasury management

  • Immutable’s Treasury as of today is worth ~$175M (per Token Terminal). And even $800M+ pre 10/10. The value of it tends to be quite cyclical

• On the topic of the company’s financials, it reported a loss of $50M in 2023 and $48M in 2024. I’m uncertain whether the company even had a profitable year (operationally)

  • “Ferguson said the company will not break even by the end of the year (2026), and that he expects to burn “hundreds of thousands” per month in the pursuit of growing the Audience product” (Forbes)

  • So, the “10 years of runway” might be overly optimistic, considering it has been burning through its reserves so quickly. On the other hand, Immutable has laid off staff in 2025 and now scrapped its internal game dev team, cutting costs

• Interestingly, Immutable isn’t the only crypto gaming company that pivoted into a more AI-focused direction in more recent times: Treasure killed its gaming division last year to focus on AI (partly), B3 ditched gaming and is now building an agent economy, and Saga is now Saga AI Labs, to name a few examples

  • It’s clear the pie wasn’t/isn’t big enough to sustain these companies

• While a pivot was needed for Immutable (see financials), building “another App Lovin” is probably not feasible either. But at least they’re trying to make it work?

CAMBRIA BRINGS MAJOR UPDATE: PENDANTS

• Cambria brought its first major update to the Dungeons + Gold Rush (its roguelite dungeon crawler) economy and metagame, through Pendants: “a new layer of rare, tradeable chase items that travel with you across runs and, eventually, across the wider Cambria ecosystem”

  • Pendants are “equippable and tradable trinkets” that carry traits, bonuses, debuffs, and more, affecting how a character plays. They can be traded and will carry utility in future Gold Rush seasons

• Pendants in short:

  • Use: During every Dungeon run, players can equip 2 Trinkets, serving as “build modifiers”

  • Faucet: Standard Pendants are distributed through the Dungeon Boss Chests

  • Sink: The “fragility” attribute wears down the Pendants per run (Standard = 100)

    • However, they can be insured for a fee in Keys/Silver

  • Genesis Pendants will be sold at an in-game auction today (5 PM CET):

    • Come with ecosystem-wide utility (bonuses, airdrop, increases, etc.)

    • 5,000 pieces for sale, based on bonding curve pricing ($35 → cap $60)

    • Rarity, traits, and character affinity revealed after a week

    • Offchain items that can be traded on the marketplace or P2P

    • 35% of the funds from the sale will be used for a boosted Jackpot pool (up to $70K if fully sold out)

• Another new feature that’s coming is “Charm Cards”, a collectible card and character favor layer that’s being added to Cambria:

  • Based on NFT holdings (Pendants or T2+ Cores), holders gain Weekly Card Packs. Upon burning the Cards, players deepen their favor with one of the characters, which unlocks voice lines, emotes, aura projects, and reacts

• Other than this update, Cambria Dungeons added a jackpot mechanic recently, called “Uncut Gems”. When a player reaches the final boss chest, they’re able to find this new treasure, paying out a randomized amount of loot (in $ or keys)

  • Looking at the data, through this Dune Dashboard, we can see how this update (on June 19) made deposit volume vastly increase:

    • Deposit volumes on 18th, 19th, and 20th: $28K, $48K, and $58K

    • Peak volume (day): $78K

    • Total deposit volume: $900K

  • In comparison, Maze of Gains’ daily ETH revenue (from key sales) has been rapidly shrinking. Suggesting that Cambria might be taking away mindshare from other risk2earn games (of course, there are other factors at play)

• Overall, it’s great to see Cambria scale to a “~$2mm annualized ARR,” but that doesn’t mean that challenges remain to sustain and even bring Dungeons to the next level:

  1. Retention: one of the biggest challenges with risk2earn games is churn after a player loses

  2. Scale: there’s no clear path yet to scale financialized games beyond crypto (Dungeons has ~5K players)

FLASH NEWS

• Gumi is shifting its ~$87M in crypto holdings to XRP

• Sophon decomissions its L2 and is going all in on apps on Base

• Fomo raised $75M in a Series B

• Panini Prizm FIFA World Cup 2026 (football cards) released on Panini

🆕ALPHA CORNER

• Early Games: None

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It’s been a little while, but we’re back with another newsletter…enjoy

TLDR :

• Fishing Frenzy goes under

• The Pudgy Party is over

• Kintara MMO makes waves

🗞️ NEWS

FISHING FRENZY GOES UNDER

• Just yesterday, Uncharted and Fishing Frenzy (FF) announced that they will shut down and cease operations: “Despite our best efforts, we were ultimately unable to prove our thesis on crypto gaming and could not find product-market-business fit.”

  • The team added that it tried to test multiple directions and audiences (e.g., Poker, fantasy sports, and even casual Web2 gamers), but the results weren’t convincing enough to move forward

• The messaging is honest, transparent, and was followed by a shutdown plan, including:

  • Opensourcing the Karma Score (reputation system), redistributing all USDC from its LP pool to the community and stakers, refunding USDC to players (since CH. 3), and distributing its PoD rewards to the community

  • Moreover, Uncharted will be returning the remaining funds to investors

• In a separate post, Derek (one of the co-founders) added some context to the announcement through the lens of Uncharted’s original thesis:

  • “Uncharted originally began with the assumption that there was a large and growing market of crypto natives who would be happy to risk and lose money for financial entertainment.”

  • “Neither of these assumptions proved true: crypto and crypto gaming are both shrinking markets, and crypto natives are not consumers but are investors - meaning they churn if they are unprofitable, no matter how fun the experience is.”

    • Some of my own findings/readings have confirmed these statements:

      • The # of onchain users has declined significantly over the past 1.5y

      • With that, crypto gaming has become a tiny slice of a smaller pie

      • Pixels’ data showed that 98.8% of spenders are also extractors

      • Onchain data suggests that risk2earn games struggle to retain players

    • However, I don’t fully agree with the fact that users (always) churn if they are unprofitable. Look at how small the % of winners is at prediction markets, casinos, and TCG products, and yet these are some of the largest verticals in crypto today

• Interestingly, FF had “impressive” numbers (on paper), with over 10M downloads, 25K DAU, and over 1M downloads as of late 2025. However, it’s obvious that the player data were “vanity metrics”, driven (and skewed) by Telegram and bots, rather than by genuine player activity

  • The onchain data that paints a more realistic picture (~1,500 returning wallets p/d as of 1 January 2026) of player activity shows that post-airdrop, the # of returning wallets and the # of new wallets declined. A typical pattern that we see in crypto

    • And maintaining a game with a 1-2K DAU, which of a tiny percentage is willing to spend for “entertainment value,” is not sustainable

  • On this topic, Dith calls these onchain games “cupcake shop business in the best of times”, which can only exist because of a combination of a) good market conditions, b) first months of launch, c) chain subsidies, and d) pre-TGE hype

    • Furthermore, he adds that there are only 2 paths forward to succeed:

      • Be the first one to achieve PMF, and be able to scale over a longer period, with the assistance of a-d

      • Leverage an onchain game as a wedge to build a larger ecosystem (like what Gigaverse is doing with transmedia)

• Overall, Uncharted gave crypto gaming a good shot, with multiple products (Gangster Arena, Blast Balloon, FF, etc.), a scrappy approach to game development (single game loop → RPG), and interesting ideas (like the Karma Score)

  • However, it couldn’t succeed because the game wasn’t attractive enough for the audience beyond crypto gaming (e.g., fantasy sports), nor was it for an audience of traditional gaming

  • Lastly, I want to insert this quote from JW (Nov, 2025), and leave it as some food for thought:

    • “The perfect Web3 game is a game that Web3 natives like and enjoy and play, and usually it’s a game that embraces a lot of crypto’s ethos, but there’s a pathway to a larger audience”

THE PUDGY PARTY IS OVER

• In other (unfortunate) news. Pudgy Party (PP) announced it’s shutting down the game and halting further development. Some of the phrases worth highlighting from this announcement:

  • “We are incredibly proud of what Pudgy Party achieved: launching at #1 on the App Store, building a large daily player community, reaching over 1 million downloads, and most importantly, helping spread the Pudgy IP far and wide”

  • “That said, we have seen that Pudgy World is on track to surpass these milestones and go even further…” and “We are going all-in on Pudgy World to make it the easiest, most fun entry point into the Pudgy Penguins story through gaming”

    • Interestingly, the announcement doesn’t go into why PP failed, but frames it more as changing its focus and resources to Pudgy World instead

• So, why is the game shutting down? Well…it just wasn’t that successful. According to SensorTower data, the game had fewer than 5K downloads and $5K revenue in the last month (App Store and Play Store)

  • In crypto, when incentives are involved, download numbers can provide a distorted picture of genuine engagement. Like in the example of Fishing Frenzy, high download numbers mean little if the players aren’t spending

    • Reaching #1 in the App Store for a gaming app also “only” requires 93,000 daily downloads (SensorTower), which is an impressive feat, but less so with the inclusion of incentives and bots

  • From a traditional gaming perspective, building “another Fall Guys, but with the Pudgy Penguins IP” was a risky decision, as the genre peaked during COVID and has declined in popularity since

• What’s also important here to add is that PP was developed by Mythical Games, and Pudgy World is developed in-house. The success of Mythical’s model, centered around building games with licensed IP, can be questioned…

  • NFL Rivals (silently) winded down a couple of months ago, FIFA Rivals is scaling in downloads, but revenue lags, and PP has shut down

    • I believe that the license fees are just eating into their margins too much, and they can’t scale profitably. But that’s just my outsider view

  • Speaking of IPs, another point to bring up here is whether the productization of NFT-based IPs is working. In the majority of cases, the collections are much more successful than the derivative products themselves

• The decision to shut down the game seemed two-sided, stemming both from the underperformance of PP and Mythical “underdelivering” from Igloo’s perspective

  • Marcello, who attended one of Pudgy Penguins’ Huddles (AMAs), added some context:

    • “basically too much was spent on Pudgy Party for what was originally promised by Mythical, especially for the results that were brought. whereas, Pudgy World built in house is pulling 20k DAU with barely even trying compared to pudgy party, so they decided to focus more on that instead”

• On the topic of incentives, PP had a vibrant skin market (at one point). The rarest skin, the “Power Pudgy,” went for ~$5,000 at its peak (only available through exclusive drops). Players were able to obtain most skins through gameplay and trade them on the Mythical Market

  • In response to a post about trading the skins last September, Luca Netz posted: “I have a theory that if you played Pudgy Party full-time, you could make more than a minimum-wage job”

    • This early Axie-esque statement (that aged like warm milk) surely attracted more of the P2E-familiar players

• Overall, PP didn’t bring enough novelty to the table (there are a lot of Fall Guy clones), and the Pudgy IP couldn’t carry its success beyond the initial wave of players

WHAT’S GOING ON WITH KINTARA?

• Kintara is a new P2E game that has been making headlines on CT recently due to the pump of its $KIN token to a ~$18M FDV. Today, we’ll try to dissect the why, what, and how behind its success (for now)

• The game and its $KIN token launched last May as a Pump.fun project, but only started taking off last week. However, whether the recent hype is “organic” is questionable, as multiple memecoin accounts started shilling the token around last week (incl. Ansem). So, some might say it’s a “cabal coin”

  • For the above reasons, it was able to expand beyond the typical crypto gaming audiences (like Fishing Frenzy wasn’t able to, for example)

  • Raiden also made a good point on why $KIN is doing well compared to the tokens of “typical” crypto games: “it's because those holders only need a "why" - why buy and hold a (meme)coin: a thesis and "omg a memecoin wrapped under a gamified exp"?? "the next axie!!" so cool, let's moon that!”

• “Cabaling” aside, let’s take a better look at what the game and its mechanics are:

  • Kintara is a (minimal) browser-based MMORPG in which players gather resources, fight monsters, craft items, and trade with others

    • The game is nothing special, but it’s “fun” because it’s financialized

    • “Kintara is a simple game where you can easily make money.”

  • To enter the game, players need to hold at least 1000 $KIN (~$13)

  • In summary, the P2E-economy revolves around gathering resources and earning in-game gold. Gold, items, and resources are sold in $KIN on the marketplace to others. Demand for these is created because it accelerates progression = more in-game earnings → more $KIN

    • So, the “Ponzi” will last as long as $KIN retains its value. Ultimately, the question is not if, but when the chart nukes

• I might sound sidelined (because I am), but there’s not much novel being done here. It’s the same old story we’ve seen in crypto gaming countless times. The wrapper is just slightly more interesting than the average Ponzi

  • On the other hand, the game lasted longer than the typical Ponzi, and the devs continue to ship. So, maybe it has another few weeks instead of days

    • Next to that, it’s interesting to see a fairly rich UGC layer around the game, including guides, strategies, and earnings

• Overall, Kintara is “succeeding” because it rides on an interesting narrative of having “Axie potential”, fueled by players posting how much they’re earning. And at the same time, breaking out of the typical crypto gaming bubble

  • But what’s concerning here is that the token chart feels manipulated, and the economy design still depends on Ponzi mechanics

  

🆕ALPHA CORNER

• Early Games: None

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TLDR :

• Fantasy top finally pulls the plug

• MegaETH concludes its terminal campaign early

• Project O fully pivots to Web2

🗞️ NEWS

FANTASY TOP FINALLY PULLS THE PLUG

• After 2 years of operation, Fantasy Top (FT) is saying “farewell.” A bittersweet end to one of crypto’s most viral apps to date. However, some might say FT already died last November, when it decided to sunset Core Tournaments (its main reward structure)

  • The team states that the reason behind its shutdown is the lack of sustainability: “Similar to previous consumer crypto products in the space (TopShot, SoRare) trading volume was not sufficient to sustainably support long-term operations.”

    • Kipit (one of the co-founders) shared the following in his post-mortem: “We failed for one core reason: we tried to put crypto on top of a model that was never built for crypto.” and “The financial value of a card was a consequence of the gameplay’s quality and the community’s depth, not the entry point.”

  • Over the past year, FT experimented with various adjacent products across SocialFi, including prediction markets, mindshare tracking, social graphs, and different gameplay loops, but none achieved product-market fit

• Remarkably (because it’s very uncommon in crypto), all investors of FT will be reimbursed $1 for every $1 invested. The company raised a total of $5.6M, largely through its pre-seed and seed rounds:

  • Pre-seed (February 2024): ~$600K from Alliance DAO, Manifold, and others

  • Seed (December 2024): $4.25M led by Dragonfly

• One could speculate that the refund was done as a matter of legality, because the team didn’t end up launching a token

• FT was heavily criticized because it generated ~$10M (reported numbers differ) from the community through trading fees and game revenue, while “stringing them along” for 2+ years, with a potential FAN token, without ever delivering

  • The “FAN Points” system launched in 2024 and rewarded points through platform usage (tournaments, competitions, quests, etc.). In 2025 - 2026, there was ongoing speculation about a token, as the idea hadn’t been ruled out and users were still expecting one. Only a few months ago, it became clear there wasn’t a FAN token coming anymore

    • A clear example of how expectations and reality are mismatched. It seems FT never explicitly confirmed a token, but never denied it either

  • From Kipit on the token: “We never launched a token. We thought about it many times. We didn’t because we never reached a milestone where it would have been honest. Rugging is launching a token knowing it will go to zero like 95% of them. We refused to do that."

    • The potential future performance of the FAN token aside, the question is whether it would have been more ethical to launch a token, instead of “farming the community” (how players felt)

• Other than Kipit’s article, there were multiple post-mortems from users on FT. One of the more interesting ones came from GRITCULT, in which he argues that the product’s failure wasn’t a “TCG problem”:

  • “Fantasy imo was never just a Tcg. What they had was a live gacha casino in the form of the TCG built on their own social infra. A real time social graph of crypto's most influential voices in the form of the heroes.”

  • “The Fantasy story is a category error story, not an execution story. The team executed well inside the wrong frame.”

• For anyone building crypto products, GRITCULT’s analysis is a recommended read

• Overall, it’s sad (but not surprising) to see a product like FT shut down, because it couldn’t sustain itself. Illustrating a larger problem that’s incredibly hard to build hyperfinancialized products, because every user is expecting to be EV+

MEGAETH CONCLUDES TERMINAL EARLY

• Last Thursday, MegaETH came out to share that they are concluding the Terminal Program (points campaign) early, after only running for 3 weeks out of 8:

  • For context, the campaign had 2.5% of the MEGA supply allocated to multiple 8-week seasons that incentivised users to use the apps on the chain. These MEGA incentives have now been removed, and users who participated will receive a USDm airdrop

• Shuyao Kong (one of the co-founders) said: “The points program on Terminal has allowed crypto-native users to further explore the initial Mega Ecosystem, but we believe it has run its course.”

  • My interpretation is that the team realised that the added benefits of a points campaign are limited in today’s market, and don’t provide the “GTM acceleration” anymore, as we’ve historically seen with other L2-launch campaigns

    • Over the past year, the onchain TAM has considerably shrunk, likely due to the lack of “easy money-making opportunities”, 10/10, and the increased corporatization of crypto. It seems simply not viable anymore to run a business the size of MegaETH by focusing on onchain only

  • Unfortunately, this took more juice (sentiment) out of MegaETH, which has been underperforming since its token launch. However, the team being able to make a pivot like this is commendable, because community FUD is to be expected

    • A comment from Breadguy to CBB, who questioned whether they stress-tested the program: “After a few weeks of feedback and data collection we decided that some core problems couldn't be fixed and our time and resources were better spent elsewhere, so we moved on.”

• While this announcement was surprising, the Terminal’s Program was under pressure since it started:

  • Users complained that most apps were gambling or only whale-focused

  • The number of quality apps was lacking, and the Terminal lacked curation

  • Another common complaint was that the campaign should be more like Blast, with a more transparent points design, more attractive incentives, and more incentive-driven marketing (the opposite of what they decided)

• On the topic of incentive campaigns, I just want to highlight my piece: “Abstract XP and the reality of incentive design.” Another reminder of how difficult designing these campaigns is, because you can never make everybody happy

• So, what’s next for MegaETH? From Shuyao Kong: “Moving forward, we will double down on sourcing and accelerating the best applications on MegaETH through personalized GTM, targeting users beyond crypto.”

  • Very ambitious, yet “necessary” for this industry to grow. Because outside of prediction markets and neobanks, how many apps can you name that successfully broke into the consumer market?

  • MegaETH's M(OS)S is its mobile crypto operating system and embedded wallet (like Tria, Redotpay, KAST, etc.). To my understanding, a consumer-friendly interaction layer, similar to the idea of ABS’s portal

    • Talking about ABS, it also seems a strategy more in line with how they positioned themselves, being the “consumer crypto chain”. However, despite its consumer-focused efforts, including NFT activations with big brands (e.g., Red Bull) and benefits from a verticalization perspective through Pudgy, we haven’t really seen their thesis unfold yet

    • Then, there’s also Sophon, a “consumer chain,” but I’m unsure they even tried

• Moving forward, I will keep an eye on what kind of more consumer-focused apps will come out of MegaMafia (its incubator), and how these will approach their GTM

ORIGINS IS NO LONGER A “CRYPTO GAME”

• Timothy Jooste, the CEO of Origins TCG (formerly Project O), shared a video update about their upcoming Steam demo, ownership, demo items, and more last week. A video that left a lot of questions of were the game is headed

  • For this reason, Timothy made an additional post to clarify where the game is headed. Let’s talk about it…

• The big “shocker” from his message is that Origins TCG isn’t a “crypto game” anymore:

  • From Timothy: “it’s that after all these years blockchain tech still asks too much of the studio, the partners, and the consumer to make it the best way to scale a game globally. Not to mention the fact that many gamers still don’t understand it and will walk away the sec they hear it’s apart of your game.”

  • Origins won’t be using blockchain technology in its game, and is “retreating to the safety of a traditional web2 tcg meta game, we are doubling down by building what we call the Counter-strike of TCG’s…”

    • I.e, a TCG with a more purposefully designed layer of collectability

    • Apparently, it wasn’t “news”, as Apix posted something similar on March 30, and added that this transition to non-crypto has been going on for a while

• Part of this pivot away from crypto includes its NFTs (Alpha Set, Blueprints, and KGDS), moving to the Steam Marketplace. Despite this change, making its collectable layer less interesting (imo), Origins will “honor the core promises” of its collections:

  • So, it is a little confusing that the Alpha Set sale was ~2 months ago, and offered as NFTs on OpenSea

  • For the KGDS, this mostly includes basic utility, such as early access, community perks, and in-game benefits

  • When it comes to the Blueprints, the original pitch included owning the IP rights and revenue/yield sharing (through trading fees) of certain cards of the “master set”. However, that idea has been scrapped

    • While I understand it’s not feasible with the current setup, that was the primary reason to buy them in the first place (they weren’t cheap). A couple of DAOs and whales also spent significant amounts of money on these, but I guess “business is business” after all in crypto (gaming)

      • The new utility may include future rewards, perks, special offers, and exclusive content, events, and game-related experiences (i.e., nothing of actual $ value)

• Despite NFTs becoming items on the Steam Marketplace, the team still plans for 3rd-party marketplace integrations, including one on its own platform, DCC

  • Like with CS:GO, using 3rd-party websites for trading items is against ToS, yet it happens on a significant scale

    • However, whether owning a 3rd-marketplace and also having a game on Steam is something the platform will tolerate remains to be seen (maybe that’s why they technically split the two)

• I can’t fully blame Origins TCG for completely “ditching” crypto, and was aware it would always be more of a Web2 game (according to the in-Discord pitch of 2024). But it’s still disappointing to see that the collectability layer (meta-game), which was much more interesting on onchain, is getting a huge downgrade

• Lastly, the big question is whether the game can succeed as a traditional TCG. And while it has interesting and fresh game mechanics, I think the approach they’re taking with the IP, using public domains, is going to have an adverse effect:

  • As in, they try to overcome the “IP-first needs” to succeed in TCGs through borrowing existing IPs. However, I don’t think it provides enough of a hook to have cards from countless different IPs, while at the same time, you don’t really build out your own

FLASH NEWS

• Ubisoft’s Champions Tactics is moving away from its crypto features

• Cambria Dungeons went live last week

• Nexpace generated $31M of revenue in its first year and is doing a $10M buyback

• Pixelcraft steps down as the default dev of Aavegotchi and opens it up to the DAO

• Sleepagotchi expands into AI Wellness by focusing on health data

• YGG Play adds Roots of Embervault to its platform

• The Beacon’s Goblins Gambit S1 kicked off today

  

🆕ALPHA CORNER

• Early Games: None

Join our Telegram for daily updates & alpha as well: https://t.me/sidelinedco

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TLDR :

• Wildcard is gone…

• Chance raises $3.2M

• Axie launches Den of Mysteries

🗞️ NEWS

WILDCARD IS GONE…

• Wildcard. Once crypto gaming’s sweetheart, but now just part of another list of failed games. Last week, we were met with the unfortunate news that the game and the Thousands Network are winding down, due to running out of funding and a lack of profitability

• The big headline of this story was: “$55M raised and failed, how?” Well…Playful Studios (the studio behind Wildcard) is based in the U.S., and the game has been in development for 6+ years. Additionally, it was developing a streaming platform. With a decent headcount, that makes you burn through your capital quickly

  • It’s fairly clear where the capital went, but you might question whether what it produced was underwhelming

• The state of Wildcard in 2026, again after six years of development, is questionable. On Steam, the game is still in early access and has a “Mixed” rating. Only a few of the negative reviews mention “blockchain”, “crypto”, and/or “NFTs”. Most of the negative reviews actually point out the flaws of the game, including:

  • The core game loop isn’t fun, the heroes’ role is undefined, a lack of strategic depth, onboarding is broken, a lack of players, etc. (genre blends aren’t easy)

    • Blaming CT for not supporting the Wildcard, leading to its downfall, is just a flawed argument, because the game wasn’t great in the first place. The game peaked at a 125 CCU in October 2025 during Steam Next Fest

  • One reviewer commented: "Although there are hints of synergy between heroes and summons here and there, they’re too shallow to meaningfully affect gameplay. Until the hero gameplay and summon gameplay truly merge into one cohesive system, I can’t recommend this.”

• Something to highlight that was said in the Discord announcement: “the Wildcard IP, Champions, Summons, game systems, and mechanics remain as a solid foundation for whatever comes next”

  • While this doesn’t read as a confident statement that something is already in the works, Paul Bettner (co-founder) confirmed: “we are intentionally choosing to not have this be the end of the line for the Wildcard IP itself”

    • We can only speculate whether this means another game will be built using the IP. But, gauging Paul’s profile, it’s clear his interests are more in AI now

• Thousands Network was the platform to realize Wildcard’s vision of making gaming “Just as fun to watch as it is to play”. The streaming platform became the place for the Wildcard Premier League, streams, playtests, exhibition events, etc.

  • Thousands was announced in October 2024, positioned as the “new streaming platform for web3 esports”. Despite its early traction, it couldn’t attract a meaningful number of viewers, nor could it generate enough revenue to stay afloat or build a fanbase around Wildcard

    • In hindsight, Thousands seemed a distraction to the development of the game

• The shutdown also sheds some light on the underwhelming token launch of the WC token. Wildcard “supported” the DEX-only launch with a couple of posts, but nothing more. It’s obvious now that the studio already knew by then that the end was near, and presumably, this token was only launched due to legal reasons

  • After the token launch, my impression was that they let WC walk, so THOU (Thousand’s token) could run, because the studio had no stake in WC. Well…

• Lastly, I think Wildcard signifies the final nail in the coffin for “big budget crypto gaming”, not for the whole category

  • There seems to be a recurring pattern in which the best-funded games lead to the biggest disappointments. The big guys always suffer from “scope creep” to try to justify their valuations. They can’t be agile. The burn rates are too high. And in the end, you have a pile of incomplete games with millions of dollars that were sunk into it

CHANCE RAISES $3.2M

• In other, more exciting news. Chance announced they raised $3.2M in funding “to build the third place for TCG collectors”. The round was co-led by Makersfund and Hashed, and saw participation from Arbitrum Gaming Ventures, GAM3RGIRL, and Digital Elm

  • Chance is building a superapp, where TCG collectors can come together:

    • “The TCG market is massive and still growing. But the biggest gap isn't authenticity or liquidity, it's what happens after the purchase. Collectors don't need another marketplace. They need a place where collecting turns into connecting”

• What a TCG superapp means in practice is a platform where users can connect with other collectors through group chats, shared games, and more. What I understand as a more “bottom-of-funnel fandom experience”

  • With the funding, Chance will build out its inventory (slabs) and vaulting business. Plus, it will build out its gamified product: Chance Predict (their prediction market) and Chance Country Club (the social product)

    • When I think of a collectible-based prediction market, Throve (the scam) is the first thing that comes to mind. However, unlike Throve, predicting the future price of vintage cards is not something Predict will be about:

      • “We’re focused on markets that can’t be manipulated, primarily livestream predictions (for example, whether a newly opened Phantasmal Flames booster box contains a Mega Charizard ex)” - Gamesbeat

  • Furthermore, like any TCG-RWA platform, Chance has a Gacha product (currently in open beta). An experience with “hand-selected cards that collectors actually want to pull” (according to the team)

    • On this topic, we talked with Andrea (Beezie), who said the following in a Sidelined interview on the importance of inventory management: “When I look at growth, there's a direct correlation to how interesting we are stocking up our claws, what's the inventory that people want at that moment, and then eventually growing categories beyond that”

• Currently, Chance’s Gacha is in open beta and has exceeded $100,000 in volume on certain days, and broke $1M in revenue in the first 20 days (600 users - 11,000 packs)

  • Interestingly, their GTM has been largely focused on a Web2 audience that lives on Instagram and is reached through gaming/TCG streamers/content creators (most crypto TCG marketplaces start on CT and expand to Web2)

    • I do question whether their initial cohort consisted of Web2 users, considering the high ARPU, typical of crypto TCG platforms

    • As someone who opened a lot of packs (correction: watched Raiden open a lot of packs), you can see that Chance is focused on the normies. With an emphasis on consumer onboarding (prioritizing credit card onramps), crisp animations, and thoughtful UI

      • All these gacha products are about selling an experience after all…

• Another feature of the platform is a “collector metagame”, a progression layer (XP system) that goes beyond pack openings, keeping users engaged:

  • “Every session ends with some form of reward, whether that’s decorative cosmetics, giveaways, or EXP toward unlocks. We layer liveops on top, including bonus EXP windows, club-vs-club races to a chase slab, and “best prediction streak” campaigns tied to Chance Predict.” - Gamesbeat

• Lastly, the team itself. Chance was founded by Jun Park and Arvin Dabiri. Jun has an investor background and is still a senior investor at Hashed (explaining leading the round). Arvin is an experienced TCG buyer, seller, and vendor, plus the creator of GoatedPullz, which documents these processes

  • “The GoatedPullz business has generated $10M in revenue in its first three years of operations at strong margins.” - Gamesbeat

• Overall, when it comes to TCG platforms, the focus is always on the gacha product, but there’s no engagement and retention layer beyond that. That’s what Cache is building, and I’m curious to see them ship their social and prediction products

AXIE LAUNCHES DEN OF MYSTERIES

• After a clever marketing stunt by Jihoz, Axie Infinity and Onchain Heroes announced their new game called Axie: Den of Mysteries (DoM)

• Before getting into the game, I just want to double-tap on the marketing stunt itself. It started with Jihoz posting: “What if I told you that I'm testing a new Axie game? and “As the space has matured, we've been able to "learn" from other teams.” Attached was a video with 30 seconds of gameplay that looked like a copy of Maze of Gains (MoG), but with an Axie theme

  • Skarly (the founder of OCH and MoG) then posted: “I’ve been a huge fan of jihoz and everything he’s done for crypto gaming with axie/ronin…so its kinda disappointing to see him ripping off mog”.

  • This was the start of a viral rumor machine that led to hundreds of posts in which people were upset, praising OCH, and/or theory-crafting what this could mean

    • Personally, I thought they were testing the marketability of the game and would announce that a real game is in the works after gauging the reaction of CT

• A day later, we found out that it was a marketing stunt for Axie: DoM: “an onchain turn-based roguelike dungeon crawler on Ronin”, essentially Maze of Gains, but in the theme of Axie

  • Skarly added his thoughts to the announcement, saying that Axie continues to be an innovative, is the largest crypto gaming IP, and the values are aligned

    • The goal for this partnership is to onboard new audiences into OCH (starting with MoG), tap into the Ronin player-base, and create a new game for the Axie ecosystem, “which will soon diverge into its own game with the updates we have planned”

  • After trying both (MoG and DoM), I’d say that the two are too similar as of now. And it would be good to see the Axie version have some innovative mechanics

    • It would be cool to see more interoperable rewards, like being able to earn DoM keys in Axie: Classic, different game modes (speed runs, BR, etc.), and new mechanics that create more variation between runs

• If you’re not familiar with the game mechanics, it works as follows: you buy keys (arcade tokens), enter dungeons (fight enemies and find loot), and win rewards:

  • The more keys you buy, the bigger your multiplier ($1,000 run by Jihoz)

  • The deeper floor you reach, the better potential rewards you find

  • $5,000 of bAXS will be distributed to the top 100 Shard collectors in the first 4 weeks of the game

  • There’s a double prize pool mechanic:

    • Weekly prize pool: 60% of the value from the key returns to this pool

      • Based on a player’s treasury holding (relative to the total pool), they receive a share in USDC

    • Blessing prize pool: 30% of the value from the key returns to this pool

      • Blessings can be won by reaching a rare enemy. The pool grows when keys are used, and shrinks when Blessings are won

• It’s a simple yet effective risk-to-earn model, in which players have to optimize their runs to capture a share of the prize pool that’s larger than their buy-in. The best marketing for these types of games is the growing prize pool

  • As the developer (OCH in this case), you monetize (10% game fee) based on key sales (or volume). Not the easiest, because you have to attract significant volume to sustain even a small studio’s run rate, but probably the fairest monetization model in crypto gaming

    • On this topic, I’m going to keep an eye on the differences between the numbers, like the prize pools of MoG ($56,004) and DoM ($15,429). And compare numbers like volume, users, ARPU, etc.

      • Note: DoM has only been live for 2 days so far, so W1 is not an accurate representation for that comparison

• Overall, it’s good to see a partnership in crypto gaming for once that can move the needle, unlike most of the shallow collaborations revolved around interoperability:

  • From Luke Barwikowski (Pixels) on this topic: “Pixels actually experimented with interoperability more than almost anyone. It created fun moments. It was good for community vibes. But if I’m being brutally honest: it’s hard to justify as a long-term revenue-positive strategy.”

FLASH NEWS

• Reaper Actual raises more funding in a round led by Decasonic

• MegaETH’s token and Terminal went live this week

• Kamigotchi devs are working on a new onchain game called Asphodel

• Sidus Heroes is shutting down

• Pebble Mayhem is actually impersonating an indie game called Pebble Knights

  

🆕ALPHA CORNER

• Early Games: None

Join our Telegram for daily updates & alpha as well: https://t.me/sidelinedco

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In this week’s edition of The Founder Diaries, we summarized the best quotes and takeaways from two conversations we had on our show, Sidelined:

1. Jihoz (Axie Infinity and Ronin)

2. Abhi (AP Collective)

Down below, you’ll also find posts of the highlights in video if you prefer that format.

WaifuSweeper introduced a new revive feature this week:

“For a small energy cost, you can now revive your current run exactly where you fell. Keep your loot, finish the fight, and maintain your win streak!”

Watch the video to see how it works ↓

Sponsored by YGG Play

Jihoz

Jihoz is the co-founder of Axie Infinity, which is in the midst of developing Atia’s Legacy, and recently released the 2nd playtest. During this conversation, Jihoz shared his insights on game design and tokenomics:

• “What prevents them (players) from quitting when they lose their ship? […] He (Hilmar Petursson) said that the guild mechanic and the social mechanics are really important for that. First of all, players feel like they’re contributing to something…the guilds also have systems of insurance, which will help you replace your stuff in the case of loss”

• “When you do the economic balancing, don’t say that you’re doing that. Always interweave that with lore, so don’t say: the rewards are dropping, say that winter is coming. He really stressed this idea of emotion. He said that every sink in EVE Online is very closely tied to greed, wrath, anger, or love”

  • Tie the lore to economic balancing (emissions, sinks, burns, etc.), and in some cases, eventize them. Make it an experience that the players can join, rally around, so you also control the narrative of what changes.

• “We've been able to get rid of 95% of all the sybils from the system and around a 50% in sell pressure from game rewards so far (with the use of bAXS)”

  • Probably one of the first sets of hard numbers on how Apptokens can be beneficial? It’d be interesting to see how they can be used to attract Web2-users instead, as I believe they’re a more potent tool for that audience.

• “Once you’ve graduated from that point (initial community distribution), you have to be really careful in how you’re emitting supply. You want to continue to incentivize people, but if you can make sure that these tokens are going to long-term aligned users via reputation. If you can make sure that they’re actually using the tokens for the things that you want them to do…you start fixing and addressing a lot of the issues of gaming tokens”

  • What Jihoz is saying here is that you want to start with a relatively “broad” distribution of tokens, and follow up with a more curated (aligned) approach. I do still think that the initial distribution (1st airdrop) is still often largely overlooked in terms of importance.

Abhi

Abhi is the founder of APCollective, a growth marketing agency, with roots in crypto gaming. This wasn’t your usual gaming conversation, as Abhi shared insights on marketing, distribution, CT, and more:

• “If I post something on Twitter tomorrow, no one will remember it in a week. If I post a press release, maybe it won’t convert on D1, but people will still be able to see that when they search my project a year from now. So, in terms of producing content on Twitter that doesn’t convert, and the short-term lifecycle around dropping a hype-trailer, to me, that’s all sort of dead…”

  • You can’t rely on Twitter for evergreen content. Build a library of mid-funnel resources (blogs, YT videos, press releases, etc.) to create long-term discoverability and, equally important, trust.

• “The biggest thing about AI or tech at the moment: development, ideation, and production have been completely abstracted in terms of difficulty, costs, etc. But distribution, users, and revenue are really difficult to achieve, which is why I’ve been using words like ROAS, because that’s what AI/tech teams are looking at”

  • Marketing in crypto has been largely about guerrilla tactics and community building in the past few years. Not so much about traditional marketing. That’s likely going to change, as relying on CT for users isn’t viable anymore, and crypto-companies have to explore channels beyond Twitter.

• “There’s someone in there that auto-reviews every post that Raiden (example) ever makes, and anything that he shares in that group is auto-validated based on 6 parameters that we have for botting. So, when we receive a link, we’re able to conduct pretty thorough checks…”

• “Spend it (in response to spending your marketing budget) on distribution and A/B test any channels they can to deliver ROAS. Spend a little bit on clipping, on X, on video production, on the distribution of certain narratives, and see what works and what’s sticking. Whenever you see a positive ROI, just re-allocate all of your resources to that specific channel until you stop seeing a positive return, and then expand to the other channels…”

  • On the topic of A/B testing, it’s worth highlighting the “TikTokification of social”. Guessing with outdated methods of A/B testing isn’t the play anymore. The new playbook is about publishing a high volume of organic content, looking at what outperforms, and running viral posts as ads.

Closing

And that wraps up another week of founder insights. Who’s next? Tune into Sidelined and find out.

As said before, you can visit the article below to get a myriad of insights from builders in the industry on topics ranging from scaling, marketing, liveops, tokens, and much more.

Disclaimer: None of this information should be taken as financial advice. My writings only represent my personal opinions. DYOR. I will hold some of the assets mentioned in this newsletter.

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Congrats to the winners of the YGG Play Casual Degen Game Hackathon:

• 1st Place: Bank or Plank - 3D multiplayer board game

• 2nd Place: Dungeon Raising

• 3rd Place: Gas Wars - 2D Arcade Blackhole survivor

What’s Bank or Plank?

“The game features 2-4 players racing yachts around a lagoon to gather, plunder, and bank gold before a negative turn of events or the five-minute time limit causes them to lose their haul. With its high-pressure mechanics, the project successfully remixed familiar formats for a competitive crypto-native audience”

Sponsored by YGG Play

TLDR :

• Cambria introduces Dungeons

• RealGO raises $3.5M

• 93% of crypto gaming is dead (Caladan report)

🗞️ NEWS

CAMBRIA DEV UPDATE: DUNGEONS

• Yesterday, Cambria shared a new development update, covering Dungeons, Genesis (the full release), Islands, and much more. Let’s talk about it

• Firstly, there’s the new Dungeon feature, the next major release, coming to mainnet in May. Dungeons are designed to be “the first touchpoint a new player has with the Cambria universe”, a more accessible gameplay loop (short, understandable, streamable, and juicy) to attract a broader audience:

  • Deposit → get into a Dungeon → kill mobs → level up → find new gear → extract loot

  • The closest reference to the gameplay is “a cross between Diablo x roguelike dungeon crawlers”. Dungeons also borrows the best elements of Gold Rush (Luster, Stress/Sanity, etc.?), but with some key twists

    • Interesting to see this re-emergence of the dungeon-crawling genre within crypto (see Maze of Gains and Unchained). Arguably, one of the best formats for a risk-to-earn model

• Ben says: “key goal w/ design - distilling down best parts of Gold Rush loop into a sit & go experience, w/o the 10hr+ MMO ramp up time.”

  • The docs mention the key principles that shaped its design:

    • Built for scale (hard to solve, easy to expand), easy to onboard (“sit ‘n Go format”), streamable (short and punchy sessions), surprisingly deep (easy to learn, hard to master)

  • Since it’s built for streaming, Cambria will likely focus heavily on short-form (UGC) content to drive growth. We talked more about the topic in Sidelined Alpha 91

• The V0 of Dungeons won’t have PvP, but the team has plans to introduce Hardcore Dungeons in a future version: “a fast paced Dark & Darker-style PvPvE mode that is a winner-takes-all”

• Moving on to the development of Genesis, Cambria shares that the goal is to have Dungeons, Islands, and Gold Rush live inside a single world:

  • Gold Rush is becoming a “macro-PvP-centric experience,” centered on extraction and competition between groups of players and guilds. Part of its design will be a combination of a standard league + season-based structure:

    • “The intent is to give serious players fresh resets at the competitive level while also creating long-horizon progression tracks”

  • Historically, Cambria had a seasonal wipe model (with 0 progression carried over). In Genesis, some things will become permanent, changing the meta-progression of the game (we talked about seasonal models with Skarly as well)

• Furthermore, it’s worth noting how Cambria is approaching Island NFTs: “We think of continued Islands development as centered around enhancing the value prop of Islands as mini-communities inside of Cambria…”

  • So, Islands are becoming a deeper social retention layer for these mini communities to congregate and participate in a game (Supply Drives) that benefits them in the other parts of the game

• Lastly, there are more interesting updates on NFTs (incl. Cores), Renown, and more. But this segment is already becoming too long

  • It’s interesting to see the Cambria universe piecing together: Dungeons are top-of-funnel, the Duel Arena and Gold Rush are more in the middle, and Islands are at the bottom

REALGO RAISES $3.5M

• This week, RealGO announced that they raised over $3.5M in funding in an early investor and strategy round, backed by Animoca*, Cogitent Ventures, X21 Digital, Notch Ventures, and Becker Ventures to build out its “Meme 3.0 ecosystem bridging gaming and onchain utility for Meme IPs”

  • *I’m uncertain what round Animoca was part of, nor was I able to confirm the involvement of the VC through its social media channels

• RealGO is turning crypto-based memes into assets that can be “captured, collected, battled, socialised, and truly owned” through an AR + AI + Web3 lbs-game. Think Pokémon Go, but for memes

  • Players explore the world → capture meme pets (DOGE, PEPE, PNUT, etc.) → collect resources → battle → and earn rewards

  • Something that isn’t new in crypto, as we’ve seen with games like GenoPets, Coin Hunt World, SpaceCatch, and I would even put STEPN in that category of games

• So, why memes? RealGO aims to solve the gap that memes lack in tangibility and experiences that make them last. Turn memes “from speculations to participations”

  • Gaming is just a pillar of RealGO’s “Meme 3.0 infrastructure”, which the founder sees as a type of media that can educate Web2 users about crypto and memes, and onboard them

    • I do question whether RealGO is able to do so. Why would anyone play this game (Play Store) over Pokémon Go?

  • After watching an interview with the founder of RealGO at HK Consensus and on the Blockchain Game Alliance, it became apparent to me that this team is likely just oblivious to what’s actually happening, based on quotes like:

    • “A game should be fun first” (a classic 2022 - 2023 quote), “the gamers are still there (in crypto)”, and “our users are actually craving to get our tokens, not because they want to sell, actually because there’s a usage in game”

• Currently, the team is running a loyalty points program (airdrop campaign), in which players can earn 5% of the total supply of RT tokens. Points can be earned through in-game and social actions

  • According to its dashboard, there are 41K “active loyalty players” (S2 participants?), and the campaign is ending in 37 days

  • TGE is scheduled for Q2 2026 and will likely happen close after S2 concludes

• Overall, I don’t see this attracting a Web2 audience, nor do I see it being interesting enough for a crypto-audience, let alone meme-coin holders. But who knows, maybe I’m overlooking something, and their TGE turns out to be a success

“93% OF WEB3 GAMING PROJECTS ARE DEAD”

• Today, CoinMarketCap (CMC) felt the need to remind us that crypto gaming is “effectively dead” (93% of games). The headline comes from a Caladan report, stating that token values are down 95% down from 2022 peaks, and studio funding has collapsed by 93% by 2025. So, let’s get into the details of this report….

  • Daniel made a good point on the failure rate, questioning the methodology that resulted in the 93%, saying that ATHs are a hype metric, tokens can fall while game metrics rise, DAUs vary by genre, among other things

• The report starts by mentioning how $12 - $15B in VC capital and token and NFT sales have flowed into crypto gaming between 2020 - early 2026 (VC accounted for $8 - $9B)

  • Most of that (VC) funding came in in 2021 ($3.5B) and 2022 ($4B) in 2021 - 2022, and since then, funding has taken a nosedive ($0.36B in 2025).

    • What’s important to note here, but isn’t mentioned in the report, is that VC funding in traditional gaming also peaked during COVID, and has declined since

• The slide “The Decline Across Every Dimension” details how key metrics across funding, users, tokens, and capex, such as quarterly VC funding, annual funding, average token ATHs, gaming share DAU, and DAWs, fell significantly from their peak

  • Notably, 62.5% of all crypto VC investment in 2022 went to gaming, while in 2025, it only captured 7.2%, and capital moved to AI, RWA, PMs, etc.

• As mentioned, 93% of projects have failed, which are put into 5 buckets, each illustrated by a case study:

  • Pre-product capitalization, metaverse vaporware, unsustainable tokenomics (P2E), corporate governance failure, and perpetual development

    • Some of the taglines: “P2E economics required perpetual new capital inflows to sustain existing player payouts”, “hundreds of millions spent for virtual worlds with fewer users than a mid-tier Minecraft server”, and “Always building. Never shipping. A sector-wide pattern of scope expansion without product delivery”

  • You could make the argument that the failure rate in traditional gaming is similar. Which was surprising to me, considering that until a few years ago, there wasn’t even “a goal to shoot on” in crypto gaming

    • On the other hand, you could question whether this comparison is the right one to make, as the business model sustaining traditional gaming and crypto gaming (thus far) is quite different

• The report adds additional cultural signals of sector exhaustion, including:

  • Lily Liu’s quote about gaming on the blockchain (which backfired), Axie’s co-founder leaving, and the BGA 2025 Survey, in which 36% of professionals rank scams/fraud as the #1 threat

    • But the same BGA report says 65.8% of respondents have a positive outlook on the industry in the next 12 months

• Moving on to “what survived”, the report highlights what has worked, including Cambria, Pixels, and Web 2.5 Studios (Wemade and Fumb Games)

  • “Player retention for quality web3 titles has improved 35 - 45% monthlu, approaching web2 benchmarks of 40 - 50%. Gaming accounts for 25% of all dApp activity (up from 20.1%), but this is a growing share of a shrinking pie…”

• Lastly, the report states how there’s a disconnect between token price recovery and the operational reality of gaming studios, and whether this is an indicator of genuine re-emergence or another speculative cycle

  • Then, 5 variables are stated that determine the outcome of crypto gaming: game-first replicability, institutional publisher entry, Animoca Brands’ Nasdaq IPO, Web 2.5 trajectory, and token rally sustainability

    • For now, I question the impact of institutional publishers (“crypto AAA gaming is dead”), and on the last point, maybe the future of crypto gaming is less about volatile (utility) tokens

• Overall, the Caladan report provides an interesting overview of the sector. Even though you might disagree with some of the methodology, we can’t deny the hard numbers showing that the industry is starving, but we have to believe “the remaining 7%” will prevail:

FLASH NEWS

• SuperTrip (FPS game) is coming to Abstract

• MegaETH TGE on April 30

• Nectar AI (Love Island x AI) raised $5M and is now live on MegaETH

• Xeet is migrating to MegaETH

• GensoKishi Online (GENSO Meta) is returning

• Big Time’s new game, Pet Time, is having its first playtest

• The Beacon’s token is going to be BCN

• Ronin is coming home to ETH (migrating) on May 12th

  

🆕ALPHA CORNER

• Early Games: None

Join our Telegram for daily updates & alpha as well: https://t.me/sidelinedco

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A new Waifu Sweeper Waifu Rush leaderboard event went live. This week, with 3 different leaderboards:

• 50x MP Waifu Rush: 250,000 energy (Top 3)

• 20x MP Waifu Slayer: 250,000 energy (Top 10)

• 2x MP Waifu Slayer: 150,000 energy (Top 30)

Start sweeping (with Waifus) today: waifusweeper.fun

Sponsored by YGG Play

TLDR :

• Limit Break launches Puzzle Panic!

• Pixel Heroes Adventure is shutting down

• Hytopia pauses development, awaiting a tax refund

🗞️ NEWS

LIMIT BREAK SOFT LAUNCHES PUZZLE PANIC!

• Last week, Gabriel Leydon surprised us with the announcement and (soft) release of Limit Break’s first title: Puzzle Panic! A 3D arcade puzzle (match-3) game for mobile, with a waifu theme, making for an “interesting” blend

  • It’s a novel approach to the puzzle genre, as JACL points out, calling the market for this game “puzzle-loving gooners”. But is there an audience for this type of game? The players of match-3 games are usually moms (70% female, 35-55+)

• It seems that Puzzle Panic! is an attempt to break this genre open to a younger demographic. Not only through the “motivational animations” (taking up 1/3rd of the screen), but with a game formula that feels more fast-paced and closer to the design of dopamine-infused gambling experiences:

  • A comment from Leydon: “Yes I studied L&W (Light and Wonder) very closely! We brought on talented pachinko effects artists in Japan to get the look right”

  • It’s worth noting that over the past few years, we’ve seen a broader trend toward the “goonification” of mobile games. NIKKE is a very successful example of that

• The game looks very polished (animations, effects, sfx, level design, etc.) and has apparently been in a playtesting phase for over a year. A handful of creators were able to play (under NDA)

  • Puzzle Panic! uses the waifus from the DigiDaigaku IP. This IP came together in August 2022 through a free mint, followed by an additional 17 NFT collections over the next couple of years

    • So, seeing people lose hope for “a game” to ever come out of Limit Break more recently wasn’t surprising. I also remember that there were some rumors last year of the company working on a gacha game

  • On the crypto integration of Puzzle Panic!, Leydon mentioned:

    • “For this phase, we’re focused on gameplay first. The current build doesn’t include Web3 features, our priority is delivering a great core experience and learning from real player feedback. In parallel, we’re continuing to build our infrastructure and upcoming testnet.”

      • The use of “current” here makes me optimistic that there will be a crypto integration at some point. My best guess would be something around the in-game collectibles, and it’s likely going to have an Apptoken

        • The question is: how can you leverage crypto here to enforce existing behaviors?

    • Limit Break has the funding (and so time) to take this slow and build something lasting here. So, I’m really curious about what they come up with, and if it can change our views on integrating crypto in games

      • Do note that the argument against Apptokens remains, as some perceive the tool as restrictive and against the ethos of crypto

• Overall, “the return” of Limit Break to crypto gaming is not something to be understated, considering a good number of people already wrote them off. If Puzzle Panic! can be a success (with a crypto integration) remains to be seen, but it’s a win the industry desperately needs

  • And, if someone of Leydon’s caliber can’t make this work, who can?

PIXEL HEROES ADVENTURE IS SHUTTING DOWN

• In more unfortunate news, we got a “shutdown announcement spree” this week, and Pixel Heroes Adventure (PHA) is one of these games. The Discord announcement says: “Due to unavoidable circumstances, our studio is shutting down, and as of today all members of the Z5 team have been laid off” (~10 employees)

  • Not many details were shared on the reason why, but we can assume that the studio ran out of money, right? Or is that the reason…

  • Z5 Games, the studio behind PHA, was founded in 2020. The game started as Meta Toy City, and was rebranded to its current name in May 2024

• Bearington (the founder) shared an update on Friday: “I am currently in discussions with multiple parties regarding a service transfer for Pixel Heroes Adventure to keep the game going”

  • Furthermore, there will be more details that will be shared on a refund: “Regardless of the outcome of these discussions, we will be accepting refund requests soon”. What will be refunded remains unclear at this point

• Interestingly, the studio was acquired by Nexus (Cross Protocol) not too long ago, in September 2025. As part of the deal, Kim (Z5’s founder) joined Nexus to oversee the tokenomics of its games

  • Nexus paid 3B KRW (~$2.2M) for the takeover, and Z5 became a subsidiary

    • Unofficial sources report (a Korean recruiting page) that PHA made ~$360K in revenue in 2023

  • As part of this acquisition, the game expanded from Ronin to Cross, becoming multi-chain. Just like Ragnarok: Monster World (ALPHA #72)

    • Post-acquisition plans included content expansions, new NFT systems, enhanced PvP, and a broader integration of PHA in CROSS’s other games. However, not many of these changes were shipped

• An article by Chosun on the closure of the Z5 studio sheds more light on the closure and some of the team’s “shenanigans”:

  • “There are suspicions that internal officials at Nexus and Z5 Games obtained information before the decision to terminate the service was made and sold a large number of MGT tokens and NFTs, etc.”

  • “Nexus officials said “employees who have already been confirmed to be involved in the transaction have resigned. It is planned to conduct additional investigation and action”.

• Furthermore, a (former) PHA ambassador, called Ramen, put together an extensive expose with his guild mates, which provides more details on insider trading, Z5 lying about developer-owned accounts, and more:

  • “Cutyboy, Flea, Dontkillme began to list PHA NFTs in the beginning of April 2026 suggesting frontrunning potential devastating news.”

• On a similar topic, Z5 admitted to manipulating its gacha roll system back in 2023, when the game was still called Meta Toy City. Showing that the company was acting “shady” for a long time

• It’s interesting to see how the core community stays loyal to the game till the end, which is a testament to the game’s fun. But it’s unfortunate to see that employees abused the game for their personal gains

HYTOPIA PAUSES DEVELOPMENT AWAITING TAX REFUND

• Hytopia was one of the other “gifts” that crypto gaming presented last week, as the company’s X account announced the following: "HYTOPIA is currently waiting on a large tax refund from the IRS. Without these funds, we are unable to continue covering the operational costs required to keep the project running in its current state”

  • Adding that they are “forced” to pause the infrastructure of the game, and services will be taken offline for the time being to reduce overhead. The expected downtime is 1-3 months

  • These issues also created an ongoing dispute with the HY Foundation (a separate entity) regarding unpaid invoices, resulting in “token-related activities” (e.g., token emissions) being delayed

• In a reply to the question whether HYTOPIA can make it beyond the “tax problems,” Arkdev (the technical co-founder) said the following:

  • “We tried really hard to raise more venture capital but no one in VC seems to want to touch web3 and/or gaming right now unless it’s a clear cex launched token for a quick ROI for them.” and “With proper capitalization, there’s still an opportunity. Without it there’s not a clear path forward”

• Interestingly, Temptranquil (co-founder and COO) also posted the following:

  • “If we don't make it through this tough spot with HYTOPIA. I'm going to release a long deep video on the history of HYTOPIA, including all the industry and community dirt.”

    • A strange thing to post as a founder? And telling that there’s more going on behind the scenes than we’re aware of

  • On the topic of “community dirt” (as in HYTOPIA doing the community dirty), Grail chimed in, pointing out how this team fumbled the bag, mentioning how the token and NFT pivots “rugged” all of the utility out of them:

    • “Three token name changes, 3 pivots in 3 years, 99% of all the NFT utility from each mint replaced with diminished versions or no utility at all”

• Temptranquil replied to Grail’s post, leading to an interesting back-and-forth about whether HYTOPIA acted according to the community’s best interests, or whether we all got played:

  • One of Grail’s main criticisms is the intellectual dishonesty behind the feasibility of their pivots: “The default was you guys would spin your wheels for a year, hit another dead end. Make a bunch of excuses, throw out another pivot and another mint, then proceed to do the same thing again.”

    • For context, HYTOPIA started as NFT Worlds in 2021, a blockchain layer on top of Minecraft, but had to pivot to building its own engine due to Microsoft’s NFT ban (Duncan wrote about it in 2023)

    • In 2023, it rebranded as HYTOPIA, focusing on becoming a UGC gaming platform (Minecraft x Roblox creator tools), which also came with the HYCHAIN L2

    • After years of trying to build an engine compatible with Minecraft, they scrapped the work and pivoted to a browser-based client in late 2024

    • In 2025, it changed its tokenomics, with the introduction of HYBUX

• Of course, the community isn’t happy about HYTOPIA “dying”, especially because their money largely kept the lights on. The 2024 node sale (as part of the HYCHAIN) raised a total of ~$8M. Furthermore, they raised $3M in a seed round in 2023, plus there were a couple of other paid mints

  • It seems the platform itself wasn’t making any (or barely any) money, because it couldn’t keep the lights on

• Overall, it doesn’t look too good for HYTOPIA here, and unless they raise (which seems unlikely), it looks like it’s “joever”, the tax refund aside

  • In a way, it feels like we’re in the last leg of shedding the dead weight of this industry. But the question is, whether anything remains…

FLASH NEWS

• The League of Kingdom Games and Arena-Z Network is shutting down

• OTG is planning a complete rework of its economy, marketplace, loadouts, etc.

• Xociety is pausing its live service and Web3 activities

• 77-Bit’s development is being paused indefinitely

• Gigaverse announced Gigling Racing, a high-stakes onchain racing game

• PUMPCADE announced a $5M seed round, just after closing a $1M pre-seed

• GameStop launched its new TCG (gacha) product: Power Packs

🆕ALPHA CORNER

• Early Games: None

Join our Telegram for daily updates & alpha as well: https://t.me/sidelinedco

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As part of our liveshow Sidelined, we interview founders in crypto consumer (mostly gaming) every week. And if you’ve been reading this newsletter, you must be familiar with some of the quotes we shared from these builders over the last couple of months.

Today, we will be sharing the insights and sprinkling in some takeaways from two founders we spoke with more recently, including:

1. Payton (Kizuna)

2. Luke Barwikowski (Pixels and Stacked)

YGG Play is in Korea this week with YGG Star, where you can experience the Casual Degen universe live at JBK Convention Hall, including:

1. Live Waifu Sweeper Tournament

2. A GIGACHADBAT Challenge cage

3. Build games with Verse8

🗓 Saturday, April 18 | 5:30–9:30 PM KST

Sponsored by YGG Play

Payton Kaleiwahea

Payton is the co-founder and CEO of Kizuna, a new Discord-based analytics tool, “that helps community-driven brands convert audience into action, not just reach.” During this conversation, Payton shared his insights from years of community-building:

1. “Community…is the interaction between people, and that is also your responsibility as a community leader. Not for them to cling to you as the driving force, but also to push into relationships…”

   1. The strength of a community lies in the density of member-to-member connections. Not in the leader-to-member connections. For this reason, you want to create an environment where members form relationships with each other.

2. “You were part of the Bored Apes, but now you’re not part of it, because you don’t have this NFT. There’s a big issue within the NFT community, that it’s the only way to be part of it…”

3. “There are a lot of benefits of community that aren’t solely monetary: just drive KPIs down […] There are a lot of things within community that you can have, like marketing, ambassadorships, hiring pools, product-feedback loops…types of things that don’t really have a good connection to money or costs.”

   1. If you treat the community like a KPI, you will miss how it multiplies everything else.

4. This is where people have a hard time with Discord, because they just think of Discord or Telegram as a chat message platform, when in my opinion, it’s more like Gen Z email.”

   1. Using the Gen Z email framing helps you understand how to approach it: Discord = inbox, Channels = folders, Notifications = emails, Reacting to pings = open rate.

5. If you look at it (pinging users excessively) from an email perspective, you’re going to get blocked (muted). And your power over a person in terms of broadcasting things to them is now very low.”

Luke Barwikowski

Next, we spoke with Luke about Pixels’ new rewarded play platform, Stacked: “AI-powered rewards infrastructure”. During the conversation, we touched upon P2E, UA, growth, and more.

1. “Part of the problem (in response to extractors and spenders in Pixels being 98.8% overlapping) is the UA problem. A lot of crypto has not reached an audience of gamers, who are important, in addition to the people playing crypto games right now.”

   1. For your game economy to function, you need to attract an audience that is less EV-sensitive, and essentially “pays for fun.” Unfortunately, the data shows that there’s only a handful of players in crypto that play because of intrinsic motivations.

2. “If you go and analyze every game in Web3 […] Even in those that are doing $1M in revenue. There are maybe six spenders that that $1M of revenue […] It’s a shockingly small number of users that drive the spend in these games.”

   1. We have known for a while that the space has been held up by a small userbase of high LTV players. But if it is as bad as Luke says, that’s concerning. Especially considering the space continues to shrink.

3. “I’m strongly feeling that if we give people the option to cash out via PayPal or crypto. And PayPal, if it takes 1-3 days, and crypto is instant, I have a feeling that a lot of normal people will still choose crypto.”

4. “As a founder, it’s really easy to think that other people are wrong: ‘These people are wrong, there’s this thing that they should like’. That’s just not how the world works. You do have to build around consumer expectations. If you offer them something that surprises them, that’s genuinely better, that’s great, but if you try to force it down their throats, they’re just going to avoid the product in the beginning stages”

   1. If there’s a feeling that the user has to be educated a lot to understand the value proposition of the product. You’re likely building against consumer expectations instead of around them.

5. “Are they going to move the needle for the user experience and for Stacked as a company? The reality is: I’m not so optimistic about Web3 games right now. So, what do we really need for Stacked to work? One, we need our first-party titles to work well, or we need Web2 games that have the economics to fit this into”

   1. This was a response to how Luke is thinking about growth for Stacked, as the infrastructure can only be as good as the games being built on it. If Stacked can attract Web2 games and execute, this might spark an interesting wave of crypto gaming adoption through rewarded play.

6. “You can almost consider this thing they did (Cash App’s Cash Apples) as a playable ad […] These apps, do you know how much they pay per user? Their CAC is often $20 - $100, so if they give out $5 in rewards, and somebody new joins Cash App, because of it. That saves them so much money”

Closing

And that’s another week of gaining valuable insights from builders in crypto (gaming). We thank Payton and Luke for coming on the show, and look forward to having Jihoz (Ronin) and Kohei (Pandemic Labs) on later this week.

For more builder insights on topics ranging from growth to tokens to liveops, and much more, I recommend checking out “24 Lessons from People Actually Building Crypto Consumer Apps”.

Disclaimer: None of this information should be taken as financial advice. My writings only represent my personal opinions. DYOR. I will hold some of the assets mentioned in this newsletter.

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GIGACHADBAT is introducing a new Degen Mode, exclusively for $CHAD stakers.

→ To access the Degen Mode, you need at least $100 of CHAD staked.

Start staking: Yggplay.fun

Sponsored by YGG Play

TLDR :

• Gunzilla Games didn’t pay?

• Giggles raised pre-seed funding

• (No third story this week, sorry…)

🗞️ NEWS

GUNZILLA GAMES DIDN’T PAY EMPLOYEES?

• A few days ago, a piece from Insider Gaming came out titled: “Developers accuse Gunzilla Games of not paying salaries for months.” The article details how both current and former employees have yet to receive salaries and how they have been ignored regarding more info on outstanding wages, according to LinkedIn posts

  • Employees who shared the “wrongdoings” held various roles, including talent acquisition lead, principal artist, senior QA engineer, and senior VFX animator, so it’s not as if entry-level employees weren’t being paid

    • The (now retired) animator shared in the Insider Gaming piece: “Gunzilla Games has not paid its employees for many months but still expects them to work. I have personally not been paid since October 2025. Some have had their pay delayed even longer.”

• Kate Irwin (former Blockworks) added how there’s more to the story, as she started investigating the issue last year after a dozen OTG game testers posted on Steam alleging that they weren’t being paid:

  • “When I was reporting at Blockworks, I spoke with 6+ different game testers in Ukraine who told me they were hired to play and find bugs in Off The Grid, but claimed they were not getting paid or faced weeks or even months of delayed payments.”

    • It’s important to note that all testers were hired through a third-party intermediary, and it remained unclear whether the payment issues were caused by this intermediary or Gunzilla

  • Interestingly enough, these posts on Steam were made almost 2 years ago, as Inhuman pointed out on June 14, 2025. Plus, there seemed to be delays in players receiving their Clash for Cash prizes (the daily $3,000 prize pools)

• In 2025, Gunzilla had two rounds of layoffs as part of its restructuring. The same year, they also acquired Game Informer to save the company. A business decision, which many, including myself, still cannot comprehend

• Yesterday, Vlad (CEO and co-founder of Gunzilla) responded to the “FUD”, addressing that OTG is doing well and why some payments were made late:

  • He claims that: “Every single day, 3,000 new players join OTG.” And they’re happy to set up a live dashboard with the player numbers to prove it (accessible with a 100K GUN, or ~$1,600)

    • The only (now) publicly available metric is the game’s Steam numbers, which peaked at 15,247 CCU 19 days ago and a 12,896 CCU 24-hour peak. Not much different from what their numbers looked like in the 1st week, so I assume most of their (supposed) growth comes from consoles?

      • OTG’s Steam CCU might even be “manufactured”. The game has also (purposefully?) delayed its mainnet migration for many months. We can guess why…

  • Furthermore, Vlad says that “haters” are spreading a false narrative of Gunzilla incorrectly laying off contractors and delaying payments, which he describes as a matter of “cashflow optimization”

    • Yet, their actions seemed more telling, as the talent acquisition lead’s payment issues suddenly got resolved

  • The whole message from Vlad reads bitter, boastful, it’s AI-slop (“Off The Grid today is not just part of web3 gaming — it defines it”), and desperately tries to prove they’re relevant today, instead of directly addressing the issues at hand and taking some accountability

    • I highly doubt any comms or PR person read this letter before posting it. Gunzilla, I recommend you read “Ilkka’s long texts” to understand how to put out a founder message

• Overall, I remain sceptical of OTG’s “success” and believe they handled this situation quite poorly. Wouldn’t be surprised if the studio had to shut down in the next 12 months either, because the math doesn’t math

GIGGLES RAISES PRE-SEED FUNDING

• This week, Giggles shared that they raised $1,234,567 (why? because memes) in a pre-seed funding round led by 1KX. A new social media app that combines short-form content with trading/prediction markets

  • With Giggles, all content becomes tradeable. Inside the app, you place bets on internet trends (buy shares), which you can then trade. You’re essentially investing in a meme’s viral potential, much like the X meme: “investing in this Tweet at 54 likes”

• Memes are viral moments in internet culture, and since Pump democratized launching memecoins, these moments have been “coinified” en masse. Giggles is trying to shorten the meme → memecoin loop of packing the essence of virality, memecoins, and owning a stake in internet trends into one (consumer) platform:

  • Giggles’ website says: “…the price discovery of all asset classes are becoming downstream of doomscrolling, and vice versa. With meme coins, we saw the emergence of a new social and financial behavior that have only captured <0.1% of its global potential.”

• The founding story of Giggles is “interesting” to say the least. According to the TechCrunch article, the idea started as a joke, a meme about a replacement for TikTok, a platform that wasn’t real at the time. One day, one of the founders made a landing page for a fake app, which managed to accrue 100,00 visits in one day. That’s when Jin called his friend Wang to build the app (the co-founders)

  • An innovative way to find PMF before building anything, I suppose?

  • Both founders are less than 20 years old. The two started working together as Minecraft YouTubers with a dropshipping business, and later had businesses in media + a food deliveries

• The beta for Giggles launched in August 2025 and accumulated over 150K users so far, with 10,000 videos posted. In the next few weeks, there will be a public launch, with over 400K waitlist signups. This will be the first time users will be able to start trading with real money (instead of the “Aura Points” currency)

  • According to SensorTower, Giggles had fewer than 5K downloads on iOS last month

• Unfortunately, the founders of Giggles made the mistake of launching a token early on. In May 2025, the GIGGLES token was launched on Believe to kickstart the idea for the app. But last December, it was decided to sunset the token, now trading at ~$40K market cap

  • At the time, a snapshot was made of the existing holders, and the team burned their own tokens, meaning that there might be a (proper) future token launch in the books

• We’ve seen similar projects to Giggles, like Zora, that blends social media with tradable “creator or content coins” in which users bet on internet memes and share the upside. However, Zora focused more on crypto users, while Giggles is targeting the consumers (e.g., it saw much of its initial growth in American colleges)

• Overall, I think Giggles has an interesting consumer angle. Yet, succeeding with a new social media platform is no easy task

FLASH NEWS

• Animecoin is launching a collectibles (gacha) platform powered by Phygitals

• Kaito Studio’s first content contest is in partnership with Axie Infinity

• In S1 of Rugpull Bakery, players got $76,000, but $173,000 was spent on GAS fees

• My Pet Hooligan shared the tokenomics for its HOOLI token

• Chandler Thomlison (founder of Sparkball) says it’s time for the next chapter

• Atia’s Legacy playtest #2 is now live

• bRON is now live in Moku’s Grand Arena (+ an airdrop for eligible players)

• Fishing Frenzy announces chapter #3, focused on going after new audiences

🆕ALPHA CORNER

• Early Games: None

Join our Telegram for daily updates & alpha as well: https://t.me/sidelinedco

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We’ve entered the bear market. Your portfolio is in shambles, and it’s not only your (“worthless”) altcoins that are suffering. Your majors are too. Gaming isn’t exempt from this massacre, as the total market cap of gaming (according to CMC) has nearly reached the bottom of 2023 of ~$5.9B in January. In comparison, the total market cap of crypto since then is up roughly 2.8x.

With that in mind, it’s time again for another update on what new tokens have popped up recently, specifically in Q1 2026. The goal is to get an overview of what tokens have launched, how they have performed, and what we can learn from the data.

For reference, we will use some of the 2025 EOY token data shared in Sidelined Alpha 79 (December 2025). Do note that the price data has been updated to make an accurate comparison for the new TGEs in 2026.

A new Waifu Sweeper Waifu Rush leaderboard event is live, but this week, things are different.

Instead of a single leaderboard, there are now two:

1. Waifu Rush:

   1. 10x multiplier leaderboard + a 250,000 Energy Prize Pool

   2. Put the best time on the board

2. Waifu Slayer:

   1. 2x multiplier leaderboard + a 150,000 Energy Prize Pool

   2. Rank based on your win streak

Start sweeping (with Waifus) today: waifusweeper.fun

Sponsored by YGG Play

Q1 2026 Overview

As you can see, the number of TGEs in Q1 2026 is low, with only 10 new launches. Because of the size of the sample, the findings might be surprising (skewed) in comparison to 2025, but it’s also telling of the reality of the market.

Overview of the data:

Number of Launches

As said, there were a mere 10 launches (N) in Q1 2026. In comparison, we had over 2x as many N in Q1 2025, with 23 new tokens. However, we’ve seen an ongoing downtrend of N from Q3 (N=28) to Q4 2025 (N=17), and Dec 2025 (N=3) specifically, as a result of the worsening market sentiment and conditions.

Regardless of whether market conditions determine a TGE’s success, they clearly influence projects’ willingness to launch, resulting in a decline in N. Probably not a surprise.

Furthermore, using the data from 2024, we can get a broader picture of how N is slowing down:

• 2024: (N=100) | Q1 (N=19)

• 2025: (N=87) + Q1 (N=23).

• 2026: (N=?) + Q1 (N=10)

Average Performance

The average performance of gaming TGEs in 2026 is -73.6%. This is based on the opening price of the tokens according to CMC, Coingecko, and DEXScreener. So, do note that these differ from token listing prices (in the case of listings on CEXes).

Previously, I have used X-day market cap/market cap ATH to measure performance. However, the above measurement is a more accurate presentation.

Nonetheless, the numbers are similar, as the average drawdown of all TGEs in 2025 today is -80.5% (based on the old methodology). Do note that over time, a dozen or so tokens have been deprecated (e.g., listing has been removed). Moreover, a significant number of tokens have close to zero volume and so retain their value, because nobody is either buying or selling.

The largest enemy of these token charts? It remains to be time.

Average Market Cap

The average market cap of Q1 2026 TGEs is a mere $6.5M. This number is also inflated by Moonbird’s BIRB token launch, which is more of a “brand token” than a gaming token, yet should be included in this list, due to its business in gaming. When excluding BIRB, the average market cap is $2.4M (-63%).

The average market cap at the EOY for all TGEs in 2025 came out to be $19.6M. Today, that number has shrunk to $11.5M (-41%). Excluding the top 5 tokens (by MC), that number further shrinks to $3.4M (-70%). In combination with the median only being $0.47M, it illustrates how top-heavy the distribution of tokens is.

Top 20 Tokens by MC

After merging the 2025 TGEs with 2026 and only displaying the top 20 tokens by MC, we get the following overview (2025 = blue, 2026 = red):

The bar chart shows the dominance of tokens that were minted in 2025 compared to 2026. Thus far, 2026 seems to be underperforming in creating new “winners”, but considering the bearish market conditions, that isn’t surprising.

Larger projects in terms of revenue, investments, and users (e.g., OpenSea) are also often more hesitant to launch in bearish conditions, because they want/need a higher opening valuation. Of course, this is much more difficult to achieve in bearish than in bullish market conditions.

Average 24H Volume

The average 24h volume of new tokens is $0.98M. As shown in the chart below, volume is dominated by BIRB. When excluding BIRB, the average becomes $0.35M (-64%). Notably, 5/10 tokens on this list have less than $1,000 in 24h volume. These include a combination of projects that already failed (e.g., CASH and CROWN) or completely flopped (e.g., WC).

Unfortunately, the average volume for gaming TGEs in 2025 isn’t (and wasn’t) looking great either. At the EOY, the average was $14.9M, but today it’s only $1.9M (-87%). It’s important to add here that these numbers were heavily skewed by the outliers, as by excluding the top 5, the respective 2025 numbers are $1.34M (at EOY) and $0.85M (today).

Top 20 tokens by Volume

We can merge the 2025 and Q1 2026 data and get an overview of the top 20 tokens by volume (2025 = blue, 2026 = red):

Despite the lower number of new launches (i.e., less competition), new tokens still struggle to attract liquidity. Likely, both a result of the lack of liquidity in the market right now, and the lack of appetite for (new) alts, including gaming tokens.

Conclusion

Based on the data, we can make the following conclusions:

• The market cap of gaming continues to shrink

• New TGEs slowed down due to worsening market sentiment

• Time remains the worst enemy of any token

• 2026 isn’t creating new “winners” thus far

• Trading volume is a better indicator of reality than market caps

• Trading volume is down as a result of less liquidity and a lack of appetite for alts, including gaming

Overall, it’s a bunch of “doom and gloom” (like usual…), and I believe not only the market environment, but a handful of other factors and trends will slow down the number of new TGEs this year.

The Slowdown of Tokens

In 2024, we saw 100 new gaming tokens. In 2025, there were 89, and in 2026, I think there will be fewer than 50. This development will be multifactorial:

• The first reason is the most obvious one: there will be fewer games that’ll launch in the first place. Over the past two years, much of crypto gaming’s “dead weight” has been shed through failures. And there are simply not that many teams left developing games that have yet to launch a token.

• The “TGE massacre”, as laid out in the previous sections, will start to make more teams reconsider whether they need a token or can adopt stablecoins instead. Or at least, makes teams battletest their systems with a stablecoin before introducing their own token.

• On a similar topic, I foresee more teams adopting “game-branded stablecoins”, like Gigaverse’s GIGABIT and Apptokens (like bAXS) to gain greater control of the in- and outflows of a token. This will lead to a decrease in traditional (utility) token launches.

• Another development that I believe will lead to less traditional token launches and larger stablecoin adoption is the increasing need to go after audiences outside of crypto. For these audiences, playing to earn a “digital dollar” (e.g., USDC) makes much more sense than playing to earn tokens named after tickers they’re not familiar with.

• Lastly, there will be consolidation, as the larger gaming companies (with sizeable treasuries) will seek other builders to build in their ecosystem, on their infrastructure, in an attempt to revitalize their tokens, e.g., Pixels and Stacked. This means more games will integrate existing tokens, and fewer will launch their own.

Overall, token fatigue has peaked, so I see fewer new tokens being launched as a net benefit, instead of an indicator that the space is dying.

Disclaimer: None of this information should be taken as financial advice. My writings only represent my personal opinions. DYOR. I will hold some of the assets mentioned in this newsletter.

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How to participate:

1. Vibe code your game idea to life on create.verse8.io

2. Publish it with the #YGG tag

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TLDR :

• Pixie Chess annouces $5.2M raise

• Pumpcade raises $1M

• KTTYWORLD is shutting down

🗞️ NEWS

PIXIE CHESS LAUNCHES AND ANNOUNCES ITS RAISE

• Pixie Chess, “magical chess for real money”, announced it raised $5.1M in a round by Paradigm (the big P) with participation from Seed Club and a handful of angels. The announcement was made just before the official game release (you can try it out now)

  • I believe the round was closed in 2025, as they have been in talks with Paradigm for every 2 years now, according to the founder, Joshua Harris. Harris used to be a former entrepreneur-in-residence for the firm

• So, what’s Pixie Chess? It’s a spin on the game of chess. Instead of the traditional rules, the chess pieces have certain abilities (different movesets, knockbacks, resurrection, etc.). There’s also an element of collectability to it:

  • Every day, new pieces with special abilities are auctioned. The funds from these auctions are then used to fuel tournament prize pools. However, the catch is that you have to burn a piece to activate them and enter to earn your share of the pool

    • Players can enter with more pieces (depending on the tournament) to increase their chances of winning, but at the same time, this increases their cost of entry. It’s essentially a risk-based pay-to-win mechanic

  • “The Bouncer” piece, for example, is around $20 now. Other than buying specific pieces, players can open Mystery Packs (gachas) to earn a random piece. According to the website, 1279 pieces (10.6 ETH) have been sold so far today

• Tournaments run every day, in different sizes (players and prize pools), and have different rules. The largest tournament so far, the “Silicon Prix”, had a 2 ETH prize pool with 42/256 players, and funnily enough, was won by someone with the name Magnus Carlsen

  • I don’t think it’s the real Carlsen, one of the best chess players in the world, but it’s funny nonetheless

• If you’ve been around in crypto gaming, you also know that the “chess 2.0 pitch” isn’t new. Remember Anichess? The idea is very similar, although the execution is different, as Anichess uses a spell-based overlay and resource-management, plus it isn’t as financialized

  • Anichess went for the approach of opening up the genre. They have big partnerships, including Chess.com, Magnus Carlsen has a stake in the company, and they tried larger Web2 GTM efforts

  • Pixie Chess’s approach rather focuses on the degen and plays into the emergence of financial nihilism. From the founder: “Pixie Chess. It carries the elements of a game, but that game is a language for financial warfare”

    • Additionally, in the 11/AM interview, I didn’t get the impression that Pixie Chess has any Web2 GTM plans

• On this topic, Chev, the founder of Anichess, shared that the two will be collaborating through Anichess pieces and tournaments

• While I see the viral potential of streams and clips, with chess and stakes on the line. I still have some concerns about why this wouldn’t take off:

  1. Onchain users are “lazy”, and most of the CT-focused games that have taken off are idle or require low time-investment. Chess has so much depth to it, and introducing these new mechanics increases complexity. It requires time, effort, and understanding to get good at it

     1. At the same time, you don’t appeal to the more serious chess players, because the ruleset kind of “kills the purity” of the game

     2. DUPER is a game that is in a similar genre, but it never took off because the game is too complicated

  2. Because of the stakes at hand and the available tools, the game will trend toward fully agentic play, I believe. Even if the new pieces add elements of randomization, chess is (theoretically) solvable. Playing as a human will put you at a disadvantage, which means the incentive to risk your assets this way will go to zero

     1. This will suck most of the fun out of the game, and only the players who want to play the game of optimizing their AI will remain

• A cool and exciting product, but can it scale? I’m uncertain

PUMPCADE RAISES $1M IN A ROUND LED BY PUMP.FUN

• In other news today, PUMPCADE (PC) announced they raised $1M in an oversubscribed round led by Pump.fun with participation from Foundation Capital and Radio Salace

  • Less than a month ago, Pop Punk (the founder) won $250K in the Pump Fund Hackathon. Pop shared that right after he won, he was able to raise: “Within a matter of days, I filled this round with massive oversubscription... WITH A LIVE TOKEN”

• PC has an interesting founding story, as it started with a one-man team (Pop Punk), only 6 months ago through Pump.fun streaming. Originally meant as an “autonomous arcade” (a game controlled by a livestream chat), it evolved into a “new model for prediction markets”

  • The prediction markets (PMs) on PC are fast (60 sec to 30 min), instantly resolvable, and internet-native. It essentially works as a layer that allows users/creators to embed a PM on any type of stream, whether that be gaming, sports, politics, etc., on various platforms

  • Interestingly, Pop Punk left his job as an engineer at Limit Break to pursue his then side-project full-time. The trading fees he captured from the $PUMPCADE token managed to fund the project (i.e., pay him for his time)

    • Pop is also a great example of the founder-first marketing approach

    • Similarly, we talked about how Pandemic Labs managed to build its first game using trading fees through the “ICM-model”

• PC uses a “parimutuel market model” in which all predictions go into a single pool, all you need is one bet on both sides, and winners split the pool pro rata. This is different from Kalshi and Polymarket, which have longer-to-resolve predictions that require order books with deep liquidity and market makers

  • From Radio Salace, on the raise: “It is hyper-focused on the long-tail side of the market - the fast-paced, embedded, micro-duration predictions on anything. Literally, anything.”

• During the 11/AM show, Pop Punk shared how PC’s format plays into the rising degeneracy and shrinking attention span of the audience: “ Prediction markets need to get faster.” and “ They want an instant gratification, they want their dopamine receptors to get hit like as many times as possible in a short time period.”

• How does PC work? From a high level, it works as follows:

  • Install the browser extension → create a market → predict while watching → timer hits 0 → market pulls data from API to verify result → automatically resolves → users that won can claim rewards

  • Either the creator/viewer can create these makers. And I believe there’s a fee split for the maker as well, creating an incentive for creator adoption

• A few months back, there was this prediction market based on when iShowSpeed and Kai Cenat would finish their Minecraft marathon. Now imagine these types of markets, but they resolve every 60 sec to 30 min

  • It adds a financial layer and so a stake for the viewer, increasing their engagement

• PC rides a few interesting narratives at the same time: pms, financial nihilism, and streaming. Sounds like a recipe for success to me, and I look forward to the product finally going live

  • I have to add here that I have held some PUMPCADE tokens (NFA) since November

KTTYWORLD IS SHUTTING DOWN

• There’s also some unfortunate news today: KITTYWORLD (KW) is shutting down. According to the Discord announcement, the underlying reasons are the changing landscape of Ronin, the lack of opportunities, and the underperformance of RON, which affected their balance sheet

  • “When we started, Ronin was around $2. Today, it sits closer to $0.08 representing roughly a 96% drop which has had a significant effect on our balance sheet and our ability to sustain the project”

• KW was a developer of “the next economic layer for Ronin”. It was building infrastructure for digital economies. The flagship product was the RONHUB (released in Dec 2025), an aggregator of the games on the Ronin Network, including project discovery, token and NFT analytics, trends, insights, apps, and more

  • Frankly, much of this information and functionality is already provided by the Ronin Wallet. So, I wonder what people used the platform for

  • Most of RONHUB's functionality was free, and it didn’t seem to have any strong monetization mechanisms. It reminds me of DappRadar, which had to shut down in November last year, due to a lack of ability to monetize sustainably

• KW has a token called KTTY, which launched in February 2025, on the Ronin-based Tama Meme platform (shut down in July 2025). Holders were able to use the token for discounted mints, staking, and there were plans for in-ecosystem spending

  • In January 2026, they sunset the KTTY utility as they shifted their focus toward the RONHUB. I assume because it hindered their ability to monetize

• KW also has 2 NFT collections:

  • KTTY World Tamers is a 6,666-supply collection that was launched in April 2025, minting at 45 RON

  • KTTY World Companions is a 10,000-supply collection that was launched in October 2025, minting at 35 RON

  • There was a “game” attached to the NFTs as holders could stake them in return for materials, reputation points, and rewards

• Outside of raising through the launch of the token and the two NFT sales, KW didn’t raise capital. Going off the Discord announcement, it also seemed most of the company’s treasury was held in RON

  • I don’t believe they had much capital to work with in the first place, but to me, this seems like a case of poor risk management

• To add, there’s some interesting lore (beef) between KW and Cagy. A few months ago, after joining Ronin through his project Silly Kitties, he claimed that he was “met with intense and at times malicious treatment from the kttyworld community” to the point where they returned a $20K grant from Ronin

  • In November, he mentioned it was because of “recent backlash from some Ronin builders and community leaders” that they gave up the grant. They returned it to avoid favoritism

  • Were people upset because another “cat-centered project” received a grant?

• Overall, it’s unfortunate to see another Ronin project bite the dust. The space hasn’t been forgiving lately. However, is it surprising? In hindsight, it doesn’t, as KW simply didn’t have PMF

FLASH NEWS

• Golden Tides addresses its move away from crypto

• Fishing Frenzy is teasing a new update

• BGB shares founder insights on key metrics for sustainable web3 games

• Onchain Heroes launched World’s Eve

• Decentraland is now live on Epic Games and Google Play

• Fugz announced it is moving the Genesis collection away from Abstract

🆕ALPHA CORNER

• Early Games: Pussycat

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In the past few weeks, you have probably seen a take like Ico’s on your timeline about “CT being dead”. Crypto posts are getting less engagement, various crypto accounts have pivoted to AI, and more worrisome is the lack of retail. While the latter is influenced by the bear market, the institutionalization of crypto and lack of “dumb money-generating events” (NFT-cycle, memecoin-cycle, etc.) play a role as well.

If you’ve been paying attention to crypto gaming over the past 2 years, you can also sense the disappearance of retail and the shrinkage of CT through the participation numbers of P2A campaigns. In 2023 - 2024, it was “easy” to attract 10s of thousands of players (and bots) to a campaign, but from 2025 and beyond, it’s hard to attract more than a couple of thousand players.

The audience that “lives onchain” isn’t growing, and it seems growth inside of CT is exhausted. The next pockets of growth for crypto (gaming) will be found outside of this bubble. So, where does that growth live? I believe it’s short-form content on the normie platforms (primarily TikTok).

A new Waifu Sweeper Waifu Rush leaderboard event went live, this week with a 10x multiplier.

Can you beat Raiden, who managed to clear the board in 08:46?

Prizes: 250,000 Energy for the top 10.

Start sweeping (with Waifus) today: waifusweeper.fun

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The Old Playbook

When I talk about short-form content and crypto gaming, your mind might wander to the (yet) unsuccessful examples we’ve seen from a handful of crypto games that have already tried with this format.

A glaring (and painful) example of this was AOF Verse’s TikTok strategy, which included building a library of short, relatable, and relevant videos centered around their character “Frog Pikeman”. This frog accrued millions of views, which led to millions of likes and followers.

Other crypto games, which achieved similar numbers, include:

• Gigaverse

• Superchamps

• SuperTrip

These examples all used similar character IP-building strategies (except SuperTrip) to amass engagement. However, the more important question is: What does this brand awareness lead to? The videos don’t have any reference to the games that are tied to these IPs. You can’t capture interest in a game without showing gameplay. I.e. no funnel captures this massive amount of engagement and translates it to game success.

Introducing more game-focused content after building a following around a character is an option. However, the chances that someone who likes your character also likes your game enough to go through the hoops of playing it seem slim. It seems like a backwards process of trying to find your audience in an audience you already established.

Even though the costs of generating these videos are going down significantly with the usage of AI, it remains a costly operation, with seemingly little ROI. Unless you reach a large enough scale to subsidize production costs with creator payouts.

Pudgy Penguins

It’s important to note here that this is different from why Pudgy Penguins is doing it, the one who coined this strategy (in crypto). For them, an IP-building strategy with a focus on brand awareness makes sense because it’s one of the first touchpoints of the Pudgy IP, which can translate to an interest in a range of consumer-facing products later down the road.

Pudgy doesn’t directly advertise Pudgy World on its page, but the plushies in Walmart and Target have QR codes on them with in-game redeemables that might convince fans of the brand to try out the game.

I want to add here that Pudgy’s page did start to advertise its products more on its page recently, but these are collectibles, merch, and board games. I.e. products that make much more sense to market towards an audience that’s a fan of your IP than a game is.

The “New” Playbook

The “new” playbook isn’t actually a new way for apps to market themselves and convert views into users. Traditional (mostly tech) apps have been using it for years now, and in 2025, this form of advertising saw significant growth (popularized by Cluely). However, seeing it work inside crypto is new, and only started rising recently with the success of Polymarket and fomo.

This video taught me a lot when I started learning more about the topic:

So, what is this playbook? It’s about UGC-ads. With this approach, creators don’t post content on their own accounts, but under brand-owned ones that resemble them. All they do is make (“organic”) content in the brand’s vein. The videos (or technically ads) need to feel like someone is genuinely sharing this app, in a way that a friend would text you.

As part of the UGC-ads, the viewer shouldn’t be able to detect that it’s an advertisement, because if they do, the video loses credibility and will be turned off. From an ethical standpoint, this is tricky because they’re technically a paid partnership, but “game is game”, I suppose?

Here’s an overview of some of fomo’s UGC-ads:

According to the co-founder of fomo, the platform has added an average of 3.3K users per day in 2026 (with ~900 being funded). He says that “probably most of these users” are coming from social platforms through referrals. Important to add is that almost all the accounts in the above example have referral links in their bios, which the creators actively use for the CTAs.

Fomo’s revenue numbers, according to DefiLlama:

Crypto Consumer

For years, there’s been a limiting belief and stigma that apps in crypto can’t scale beyond CT. But that idea is finally starting to crumble with apps like fomo (essentially Pump-fun with a better UI and UX) becoming a breakout success. It’s about positioning and applying crypto-based solutions that everyday people (consumers) care about. I.e., instead of talking to crypto nerds, you need to be relatable.

And don’t forget, that consumers are just as degen as we are:

High-level Approach

From a high level, here’s how the UGC-ad approach works:

• Establish an ideal customer profile (ICP)

• Find a hook that works (steal and repurpose from your niche)

• Find a network of creatives

• Systemically test and post on TikTok and Instagram

• Double down on the winners

• Push winning formats through partnerships with larger creators

In writing, this playbook sounds easy, but the difficulty lies in the execution side of it (note: I’m still actively learning about it myself). According to my research, getting good results requires rigorous testing, finding the right creators, actively evaluating them, etc. If you want to learn more about the nuances and execution side of it, I can recommend this video by PlayKit.

The Playkit Report

The System Behind 10M+ Views/Week

Before you dive in…

Listen now

6 months ago · 8 likes · 2 comments · Julia Pintar

Paraphrased from the video: “Treat UGC as an operating system, not a one-off creative project. The bottleneck is not “finding viral creators.” It is sourcing, briefing, reviewing, incentives, publishing, feedback, and tracking working as one loop.”

Applied to Crypto Gaming

There isn’t a crypto game that has figured out this playbook yet, or at least I’m not aware of it (let me know if you have seen it). What we can do is look at examples in adjacent niches, such as rewarded play platforms, like KashKick, Snakzy, Swagbucks, and others. The videos talking about these apps frame earning as “making money while being on your phone”.

In a similar vein, here’s a semi-viral example (600K+ views) of somebody playing Cash App’s Cash Apples game (essentially a P2E game). See how different this piece of content is from a typical video on crypto gaming. Have you ever seen so many emotions from someone earning a single dollar?

@realkatiebCash Apples will be live March 23rd - March 25th 4pm ET daily! @Cash App

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If I were to figure out a “consumer angle” for Cambria, for example, I would start by looking at formats and hooks used in performing YouTube Shorts of OSRS’s Duel Arena or in high-stakes PKing. Consumers aren’t familiar with terms like “Risk 2 Earn”, but they understand the gravity and thrill of risk and reward. Just look at the popularization of watching gambling and gacha (soft-gambling).

Any crypto game out there has a similar Web2 title that one can learn from. And the winning formula might be found in combining the best of two worlds.

Frankly, I think the biggest appeal to push crypto gaming is still through the lens of financialized entertainment. But that doesn’t mean growth shouldn’t be tested with different hooks, formats, and value propositions that are less money-focused and in line with your ICP (strategy games → strategy aspects).

Note: The average gamer is more anti-crypto than the average consumer. This is still a hurdle to overcome.

“Adapt or Die”

If I am being blunt and dramatic, it’s probably not an option anymore to solely focus on CT for any game that seeks beyond a couple of thousand players (games like Maze of Gains are the exception). This is also not new, and something people have been shouting for years, but only now we’re starting to see the urgency of it, due to the shrinking TAM (of CT).

Whether short-form video content focused on (non-crypto) consumers can be a viable growth strategy for crypto gaming remains to be seen. Nevertheless, it’s something you should start experimenting with.

Disclaimer: None of this information should be taken as financial advice. My writings only represent my personal opinions. DYOR. I will hold some of the assets mentioned in this newsletter.

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A reminder to join the Verse8 x YGG Play Casual Degen Game Hackathon.

How to participate:

1. Vibe code your game idea to life on create.verse8.io

2. Publish it with the #YGG tag

3. Submit your game on BuidlHack 2026 Ludium Portal before April 16th

Still lost on how to get started? Make sure to watch back the Verse8 workshop to go from "Idea" to "Playable Game" in only 30 minutes.

Sponsored by YGG Play

TLDR :

• Psychedelic Games raises $3.5M

• Verse8 raised $5M in a Seed round

• Rugpull Bakery launches on Abstract

🗞️ NEWS

PSYCHEDELIC GAMES RAISES $3.5M

• Psychedelic Games (PG), the makers of Golden Tides (GT), announced they raised $3.5M in a strategic round by KRAFTON (PUBG), FlyQuest, and Arbitrum Gaming Ventures

  • According to the SEC filing data (Form D), this was an equity deal

  • PG started in 2021 and has largely been operating as a self-funded studio. Only in 2024, it held a private + public NFT sale (more on this later)

• One of the investors, FlyQuest, is an esports organization that worked with championship teams across LoL and Valorant, among other titles. The partnership between them and GT extends beyond capital in a long-term collaboration through competitive expertise and a creator network

  • So, it looks like breaking into the competitive scene will be a larger part of the game’s GTM. But it’s quite different from your usual MOBA…

• GT is a pirate-themed 4v4 MOBA “that breaks the genre wide open” through open-world exploration, dynamic objectives (treasure hunting), naval combat, and deeper progression and player agency. You can watch the Golden Test Playtest Trailer here

  • "The MOBA genre created some of the most beloved competitive games of the past fifteen years, but the formula has grown stale…" ~ Devin Richman, CEO at Psychedelic Games

    • I don’t think GT will appeal to the hardcore MOBA players, but it can to the more casual ones. Additionally, the “adventure” elements (open-world, treasure hunting, etc.) of the game open it up to players of other genres like BR and extraction, and pirate-themed games (e.g., Sea of Thieves)

  • The game reminds me of Sparkball, which is also an innovator of the MOBA genre, and it only raised funding after years of being bootstrapped

• PG claims to be an indie studio (on Reddit at least), but the team is larger than someone would define as an “indie” with 50+ (previously even 70+) developers. Leadership is based in the US, in Dallas, Texas, but it seems they largely outsourced development to Asia (Indonesia or China, I believe)

  • Frankly, it would also be impossible to build this game with a “shoestring budget” in the US

• Regarding the crypto side of the game, there is an NFT collection that was launched in 2024, but the game “shifted away from their focus” on crypto:

  • The Golden Tides Gen1 Skins is an 11,000-supply collection that minted in March 2024. There was a private sale for communities and KOLs with discounted pricing. Golden Packs sold for 0.09 ETH each (containing 3 heroes) during the public sale

  • These NFTs will be cosmetics in the game, but won’t have any value beyond that. Some people expected a token allocation for holding these NFTs. However, the team clarified that “there will be no earning nor tokens”

• Overall, I’m happy to see Psychedelic Games raise to bring a cool title that innovates on the MOBA genre to life. However, is this still a “crypto game”? Not anymore

VERSE8 RAISES $5M IN A SEED ROUND

• In other fundraising news, Verse8 announced they raised $5M in a seed round backed by Story Foundation, NEXPACE, Neowiz, MARBLEX, and NEXUS to accelerate the expansion, creator tools, and creator growth of their AI-game development engine

  • It was notable to see NEXPACE (makers of MapleStory Universe) on this table, and I assume this investment was part of the $50M Ecosystem Fund they announced in late 2025, focused on AI, builder tools, and UGC

    • This is likely part of their ecosystem expansion strategy of getting more Synergy Apps (derivative MapleStory experiences)

• So, what’s Verse8? It’s an “AI-native creation layer that turns your ideas into interactive games and stories”, closely connected to Story Protocol. Through this partnership, Verse8 kind of functions as the AI-game creation frontend, while Story is the onchain IP backend

  • As we’ve seen with its competitor Remix (more on this later), becoming a co-creation and IP proliferation platform is one of the major ways to grow. So, there seems to be a lot of synergy here with Story

  • If you’ve been reading Sidelined, you must be somewhat familiar with Verse8, as we mentioned it a couple of times, as part of the news + we have mentioned the “Casual Game Hackathon” with our partner YGG Play a couple of times, including today

• According to Verse8, it achieved the following numbers so far, since its stealth launch in July 2025: 3.5M+ MAUs, 5,000+ monthly active creators, and 25,000+ games created

  • Growth is driven by initiatives such as its creator partner program, Kaito Guild + build challenges, a points campaign + referral program, and its IP partnerships

    • Remix reports they have 954K total players and 29K live games in comparison

  • I assume that the funding that will be used for “creator growth and creator tools” is their lever to get more creators on the platform/convert more users into creators

    • What I’m curious about is whether there will be any strategy for Web2 growth, through a creator or short-form content strategy. There’s definitely a larger market for these AI tools than just CT

• But let’s put my “sceptical hat” on for a minute and look at the defensibility of these platforms. The tech is cool, and the tooling is probably only getting better from here, but at this point, both platforms are simply churning out hypercasual titles and not much more. I’m unsure whether this genre can work (monetize) in crypto (excl. direct games of chance/casino-adjacent)

  • So, you have to go Web2 to monetize (through ads mainly) and scale, but to compete in this space, you’d have to spend heavily on UA

  • To add on to this, these tools will likely become democratized in the (not so far) future. So, the only moat that’s left is distribution and UA. Do note that this puts Verse8 in a stronger position, as they have an (Web2/3) IP-pipeline

• Overall, it’s great to see Verse8 gain initial traction, but again, whether the platform (and business model) can succeed is something that remains to be seen

RUGPULL BAKERY LAUNCHES ON ABSTRACT, BUT…

• Just yesterday, a new title launched on Abstract called “Rugpull Bakery” from Onchain Chemists. An onchain game about collective strategy in which you’re tasked to bake the most cookies with your clan

• The game loop works as follows: Join or create a bakery (clan) → start baking cookies (onchain) either manually or automatically → reinvest cookies to buy (temporary) boosts to increase output or “rugs” to hinder the competition → at the end of the season, the best clan divides wins the prize pool (distributed pro rata among members)

  • Important to note here is that you pay a gas fee for every cookie you bake. With the “auto-cooking” feature, this can rack up a good amount of fees quickly, around $10-$15 an hour

    • For this reason, people have already started calling it a “transaction farming app” (it probably already crossed 1M transactions by now). A delicate subject within the Abstract community, after recent changes to XP put more weight towards onchain transactions, and nerfed holding

  • There’s a referral mechanic that rewards the referrer with a +1 cookie for every 20 the referred one bakes

  • The prize pool started at $2,500 and grows each time a new clan is created or someone joins a clan (0.02 ETH fee). Today, around 14 hours later, it climbed to $5,955

• I played around with the app for a little while myself, and while the app is “cute”, I lost interest rather quickly. It (kind of?) positions itself as a Ponzi game (it’s literally called “Rugpull Bakery”), and it’s mostly idle. The gameplay features that try to introduce depth fall flat. But then, the earning potential is far from a Ponzi-like game, so what is it trying to be?

  • Let’s do some napkin math on the earning potential. At the moment, the clan that’s in the first spot, “Cockring Cakehouse” (S/O to Skarly), has 271 members. Furthermore, a season takes ~14 days, and let’s assume that at the end, this clan hits ~500 members, and the prize pool reaches $50K

    • If my fictional contribution to the total of my clan is 1%, it means I earn $500. That means, I need to reach a 1% contribution rate by running my bakery for a maximum of 40 hours, assuming $12,50 in fees per hour (40 x 12,50 = 500). And it also means that my bakery (clan) needs to win

      • At this point, I might as well play other games of chance on Abstract

  • Other napkin math says it’d cost you ~$6,048 to run your bakery 24/7

• Rugpull Bakery uses the IP from three different NFT projects on Abstract, including RUYUI, Fugz, and Bearish. However, surprisingly, both Bearish and Fugz reported that they didn’t permit the usage of their IPs in the game

• Lastly, I’d add that Abstract has been under a lot of scrutiny lately, and whenever “shit happens,” an already unsatisfied community will shout how “terrible Abstract has become”. When/how will ABS win back its community?

FLASH NEWS

• Wildcard launched its WC token, but it’s already trading under a $1M MC

• Volt is now live on Ronin, a TCG collectibles platform for SEA

• Proof of Play launched its new title, Shiba Story Go!

• Abster released a new game on Abstract called Dropster, but did an “oopsie”

• Anichess’s CHECK token is getting listed on Coinbase

• Pixels officially introduced the Stacked App

🆕ALPHA CORNER

• Early Games: None

Join our Telegram for daily updates & alpha as well: https://t.me/raidenalpha

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“Also, gaming on a blockchain is not coming back”.

This QRT came from Lily Liu, President of the Solana Foundation, in direct response to Meta announcing the shutdown of the Metaverse. CT’s reaction was a mixed bag of agreement, confusion, and thankfully plenty of pushback.

But before we dive any deeper into Liu’s controversial take, let’s get into the headline itself: Meta’s decision to shut down the Metaverse. Was it actually important to crypto gaming? And if so, by how much?

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What’s the Metaverse?

When you hear the word “Metaverse”, you might think about The Sandbox, Decentraland, or any other empty virtual world that raised significant amounts of money through the sale of “digital land” in 2021–2022. Outside of crypto, people will probably think about Facebook and how it was renamed to Meta.

Here’s how Matthew Ball, one of the largest investors (and shillers) of the Metaverse, described the term in “The Metaverse: What It Is, Where to Find it, and Who Will Build It”:

“A massively scaled, interoperable network of real-time rendered 3D virtual worlds that can be experienced synchronously and persistently by an unlimited number of users, featuring an individual sense of presence and continuity of data, such as identity, history, entitlements, objects, and payments.” ~ Matthew Ball 2020

Crypto’s version of the Metaverse never achieved the vision described above, and frankly, traditional gaming didn’t either. Ball’s description was simply “hopium”. However, that’s not to say that Roblox is probably the closest title to the idea of the Metaverse we have ever had. Ball often describes Roblox as a foundational example of a Metaverse platform, rather than a complete Metaverse in itself.

How does the Metaverse tie to Crypto Gaming?

While the Metaverse and crypto gaming aren’t as connected anymore, the industry gained footing based on this idea in 2021–2022. At the time, Zuckerberg described the Metaverse as the “embodied internet” in which everyone would use AR/VR devices to be connected, changing how people interact with each other and the world.

Much like the (dystopian) state of the world in WALL·E, or more in a VR/AR context in Ready Player One.

The Metaverse as the future would also mean one’s “digital being”, which I describe as a persona and its possession, would be incredibly important. So, how does someone, seeing the gravity of the importance of this shift, bet on it? Digital real estate.

The pitch (in crypto) was simple, and along the lines of:

• Obtain full control and ownership of a digital piece of land

• Monetize the land by building games, casinos, shops, events, social hubs, etc.

• Land is scarce, with only X amount of plots with location-based value

• There will be a secondary market to tie in economic incentives

Decentraland was one of the first to successfully commercialize this opportunity, as it raised $26M through its ICO and first sale of digital land in 2017. This was years before Zuckerberg used the word “Metaverse” publicly.

“Decentraland provides an infrastructure to support a shared virtual world, also known as a metaverse.” ~Decentraland’s Whitepaper in 2017

In a sense, Decentraland was one of the frontrunners of the Metaverse cycle that followed (note that the term “Metaverse” is 33 years old and stems from a book called “Snow Crash” from 1992). This fact adds to the idea that crypto gaming is deeply connected to this movement.

Other projects, early to the sale of digital real estate, were Cryptovoxels (now Voxels) and The Sandbox. In 2021, after “The Zuck” legitimized the Metaverse, retail barged in, and these sales exploded. Examples include Axie Infinity, Otherside, Star Atlas, Bloktopia, and many others. Primary sales of virtual land exceeded $1B.

Today, now that the Metaverse has “fallen” (and frankly been dead for a couple of years), it’s comical to look back at the mania behind it. The tweet from Peter Girnus below is a great shitpost with a good amount of satire, capturing the irrationality of it:

“A guy in my Discord paid $2.4 million for a 618-parcel estate in Decentraland. Prime district. High foot traffic. I asked him what "foot traffic" meant when the platform had 38 daily active users.”

The Metaverse was the largest driver behind speculative capital entering crypto gaming to date (and to be frank, we can largely attribute the success of NFTs to it). Yet, today it’s a burden. Even though the industry moved away from building empty virtual worlds with hefty land sales, the two are still closely associated in the eyes of (non-gaming) crypto and retail. We’re essentially fighting against the stigma of still being the same “multi-billion-dollar-fugazi-real-estate-fiasco.”

Was the Metaverse a good thing?

This brings us to the next chapter of this conversation: would crypto gaming look better or worse today if the Metaverse cycle were not happening? Let’s look at both sides of the argument.

Financial Bubbles → Misaligned Incentives

A financial bubble is a period in which asset prices detach sharply from their intrinsic value and are driven instead by speculative demand. The gap between these two prices is the “speculative premium” that accounts for the potential future value of that given asset.

The euphoria behind the Metaverse led to a huge wave of speculative capital flooding in, long before the underlying idea, product, or asset class had proven itself (found PMF). We saw this with the astronomical increase in the prices of digital land in 2021–2022, even though the worlds themselves were boring and empty.

The fact that these soulless experiences were able to raise $10Ms through retail and/or venture capital created a huge incentive for other projects to turn to a land sale, without having to care much about game development. To hop on the bandwagon, projects started to frontload sales, years before they could realistically release a playable product.

A good example of this is The Otherside’s Otherdeed sale, which raised hundreds of millions of dollars in April 2022. The persistent live version of the game only launched in November 2025, over 3 years later. Have you ever met someone who likes to play the Otherside without being financially incentivized?

Rippling Effects

This funding spree of venture capital (as shown below) not only reached the Metaverses but also expanded to the whole sector of “GameFi”. For instance, I believe that Axie Infinity never would’ve achieved the size it did without the Metaverse. Note that the term was thrown around loosely as well, as any virtual world could be considered a Metaverse if you looked at it from the right angle.

A couple of years back, it was relatively easy to raise a sizeable round ($5M+) through only a pitch deck if you used the right cluster of buzzwords. We all know now how much of that capital was put to use to push this industry forward (close to 0%).

“Zombie Companies”

Companies like The Sandbox still have considerable treasuries, simply because they raised such enormous amounts of capital through venture, NFT, and token sales. Many of these projects are now operating more like mini hedge funds, trading off their own balance sheets rather than building games. Daniel Paez described them as “Zombie Companies”.

Reputation Damage

As mentioned, crypto gaming as a category and term is still fighting the stigma of “empty worlds, capital misallocation, and scams.” A recent experiment by Luke Barwikowski (CEO of Pixels), which I mentioned in this newsletter before, illustrates how much friction crypto introduces.

Furthermore, one can sense this negative connotation by reading through the reviews of the majority of Steam pages for crypto games. Even though the pages don’t mention the words “crypto” or “NFT”, players will often find out and center their review around its connection to blockchain. I would add that it is the worst with PC games built for Western audiences, as in the example of Off the Grid.

Metaverse Funding made Crypto Gaming Possible

An argument in favor of the Metaverse being a positive outcome for crypto gaming is that the bubble-sized injection of funding justifies its existence as a category today. Without the Metaverse, billions of this speculative money wouldn’t have flowed into (adjacent) projects, infrastructure, and tooling that keep up this industry today. Investments that sped up the adoption curve.

The strongest example of this would be Sky Mavis’ $152M round in late 2021 at a $3B valuation. Without the success of Axie Infinity, fueled by the broader Metaverse wave, this wouldn’t have been possible. This money was later used to develop Ronin. Even if you question Ronin’s existence today, you can’t downplay its overall importance in contributing to what crypto gaming is today.

Note: while the upcoming P2E can be attributed to a mixture of novelty and timing (during Covid), its existence is closely tied to the Metaverse. Axie Infinity didn’t lead with it, but embraced it, and used the label in their own words as part of their GameFi positioning.

Furthermore, there are still a handful of studios building today that were only able to raise because of the trickle-down effects of the Metaverse funding spree. Even though we have yet to see most of these “survivors” make a notable contribution today, and this cohort is shrinking, it’s “the last stronghold” of crypto gaming.

Overall, it wouldn’t be too far-fetched to say that crypto gaming would be considerably smaller if it weren’t for the Metaverse. But I’m sure people would disagree with me here.

Funding → Attracts Talent

The billions of dollars poured into the industry legitimized it, which attracted bad actors, as mentioned, but also talented developers from Web2. Despite many of these teams’ contributions being “unfruitful” (e.g., Homa Games, Ubisoft, Pirate Nation, a handful of Korean and Japanese legacy studios, and many more), there are still teams with veteran gaming experience building here today.

Additionally, headlines such as “Ubisoft is the First Major Gaming Company to Embrace In-game NFTs” helped to grow the pie of Web2 developer interest by making them look at what’s going on in this industry.

Expensive “Learning Money”

Another way you could look at Metaverse funding is as expensive “learning money”. The funding came in at a speed and scale that organic growth couldn’t ever have replicated. Post-crash, the failures were so enormous and obvious that the industry was forced to confront what didn’t work (note: to what degree some of these learnings were applied is another matter). Similar to how other bubbles have led to breakthroughs in R&D.

Some of the largest areas of learning include:

• Incentive design

• Tokenomics and game economies

• UI and UX

• Crypto-abstraction

• Scaling

Crypto gaming is a “graveyard of failures.” And without these failures (accelerated by the Metaverse cycle), I believe the industry wouldn’t have progressed as far as it has today. It forced technical innovation.

The Bottom Line

If the Metaverse cycle had not happened, crypto gaming would likely look “less big” but “more credible” in 2026. Here’s my interpretation of it:

• The Metaverse hype justified crypto gaming as a category, attracted talent, and forced technical innovation. However, it did so by funding and publishing many projects that had misaligned incentives, which led to a reputation we’re still dealing with today.

• Without the Metaverse cycle, crypto gaming’s path would likely have been slower, P2E would’ve been much smaller, but there would be less self-inflicted pain as well. In this scenario, the outlook for the industry would’ve likely been better.

“Also, gaming on a blockchain is not coming back”

Now, we’re back to where we started, with Liu’s (infamous) quote. We looked at what the Metaverse is, what it means for crypto gaming, and what it would look like today without its existence. So, let’s address Liu’s commentary that focuses on what’s beyond.

I don’t know whether her post is rage or engagement bait or whether she actually believes this. Nor do I understand the incentive or need to shoo away and discredit game developers on Solana. However, for our own sake, we can reframe the statement into: “Gaming on a blockchain as the only value proposition is not coming back” (I stole this, but can’t find a source for this quote anymore, sorry, anon).

So, what can we look forward to when it comes to crypto gaming in a world where the Metaverse is now (completely) “dead”?

The Financialization of Gaming

When speaking of the future of crypto gaming, there’s a view in which gambling and gaming don’t disappear, but rather continue to converge.

At first glance, this sounds similar to the Metaverse cycle, a future that’s still driven by speculation. However, the key difference is that speculation was the product. In the next wave, it becomes part of the experience, designed to enhance the experience, rather than replace it.

In response to Liu’s post, Beanie replied with a contrary view, which included the following quote: “Got a secular gambling tailwind. Financialization of gaming is a mega trend.”

This points to a broader shift towards more speculative, risk-taking, and betting-like behavior (long degeneracy!). In this context, crypto gaming is aligned with this trend to become the “frontier of financialized entertainment”.

The difference is in what gets financialized:

• The Metaverse financialized land (assets)

• P2E financialized time (grind)

• The next wave, financializes behavior (from bug → feature)

But why gaming? When looking at gambling (-adjacent) products such as prediction markets, memecoin launchpads, and perpetuals, we see a common behavior. People continue to use these products, not because they’re winning, but because they believe they can win (believe they have an edge).

Statistically speaking, if every user churned after the 1st time of losing money on Pump Fun, the platform wouldn’t have any users left. Prediction market traders are also losing their stakes at a higher rate than sports bettors.

My point is, the fun lies in the competition to make money, not “only” winning money. And this doesn’t even mean the most rewarding, but the loops that make this competition engaging, skillful, repeatable, and socially meaningful. Gaming is the best wrapper to capture that competition.

From Ben in his piece “The Thesis For Degen Gaming”: ”With financialized entertainment, there’s no obligation to create any tangible value outside of the fun, especially since the underlying economics of these products are zero-sum, by technical nature (wHo iS ThE mArgINAL buYeR).”

I recommend reading Ben’s thesis if you want to read up on a compelling bull case for gaming’s position within financialized entertainment.

Rewarded Play

One of the clearest examples of the above already exists, just not in crypto.

“Rewarded play” is a form of financialized entertainment that’s (eerily) similar to P2E, but lives in Web2. In Web2, this mostly looks like: play 5 different games and reach certain milestones, watch a couple of dozen ads, and when you have enough coins, you can convert them into a $10 Amazon Gift Card.

It’s financialized gaming at its core, but in a controlled environment. The rewards are capped and predictable, giving the developers a clear picture of what the return is on the reward spend (but in this case, ad or partner revenue).

Since the hook of crypto gaming is virtually the same (but better), my thesis is that this is “the” potential pocket of growth for crypto gaming to expand to the normies.

A recent example of “rewarded play” we discussed in detail is Cash Apples, from the (non-crypto) wallet app Cash App. After the second day of the game being live, it had to shut down since 350K players tried to get in (the game has since relaunched). Cash App could’ve given away $500K in rewards through many ways, but perhaps they believed that a (simple) game would be the most engaging format to do so.

The TAM of normies that would play to earn something (with a dollar value) is much larger than that of crypto gaming. And again, they’re both P2E. Yet, crypto gaming’s stigma lingers here and has limited its growth in Web2, as shown by the aforementioned experiment of Pixels.

Furthermore, Ben shared the following with us from a Sidelined interview in November: “Crypto is almost like a bad word…to a lot of people, it means Ponzi scheme”. He added that at this point, Cambria isn’t a “crypto game” anymore, and now has to use terminology closer in line with real-money trading (more familiar to the OSRS audience).

Blockchain “Solving” Gaming

On the other hand, we have the view of the underlying blockchain tech pushing adoption for crypto gaming. Within this view, the value will largely shine through in solving existing macro challenges in the broader gaming sector.

A “return to the fundamentals,” as one might say:

One of the major unlocks is blockchain-powered payment rails. In short, these rails reduce the costs of transacting, which improves margins for the developer and, in turn, leaves more money for development or UA.

Furthermore, token rewards have proven to reduce CAC and increase LTV (LTV > CAC is essentially “the gaming success formula”), plus boost engagement and retention numbers. For example, Bitcoin Miner’s 30-day retention rose by 1,000% after adding BTC rewards to the game. ZBD’s reward rails increased the ARPU of PlayEmber’s games by 380% on D14. While this area is exciting and promising, it’s not fully solved, yet, as many games still struggle to achieve a positive return on reward spend (RORS).

From our interview with Ethan (Arbitrum Gaming Ventures) on the topic: “When developers see […] hey, I’m building a product, and I’m building it on Web3, I can “make more money”. Because there’s more margin, it’s more efficient, it’s cheaper, I think that has to be the focus that blockchain can solve for gaming…”

On the topics of Bitcoin Miner and payment rails, the Lightning Network enables developers to pay out sub-1-cent nanotransactions, something that simply isn’t possible through traditional fiat rails (and the majority of blockchains).

Other primitives include solutions such as LimitBreak Apptokens, a programmable token standard that gives developers more influence over how their tokens behave. With Apptokens, developers can set customizable rules for how a token is earned, spent, or sold, creating more intentional and balanced economies. I won’t go into it too deeply here. You can read a piece I wrote last year called “Apptokens: The Answer to Solving Broken Incentive Structures?”

On a similar topic, there are stablecoins, which function like Web2 currencies, but with some added benefits (and some downsides). A core challenge with traditional game tokens is auditability, as these systems aren’t built to answer how tokens were created, how they were spent, who touched them, and who used them. Stablecoins on the blockchain provide this source of truth. We talked about “BGA’s Stablecoins & Gaming Report” in the newsletter below.

The Convergence

Overall, the fundamentals are more about “Web2.5 solutions” than something that is purely Web3 or aligned with crypto’s decentralized ethos. Yet, it isn’t an opposing vision of the “financialization of gaming” view. I see them as complementary.

Financialized experiences will drive demand, while better infrastructure and economics (“the guardrails”) will make that demand sustainable. The Metaverse failed because it had the former without the latter (note: neither did it have the products).

The next wave of crypto gaming will be financialized differently, as explained by this section of Dith’s article:

Conclusion

So yes, Liu is right in the sense that the old “empty world + land sale” (Metaverse) version of crypto gaming isn’t coming back. But that doesn’t mean the whole category of “gaming on the blockchain” is dead. It’s simply changing.

The next wave of crypto gaming will be defined by financialized entertainment that’s actually entertaining, yet wrapped in infrastructure that makes economic sense for both players and builders.

The Metaverse made crypto gaming possible and gave it life, but we’re still fighting the stigma from this period. Now, we need to prove that blockchain-enabled gaming can be more than what the Metaverse showed.

Disclaimer: None of this information should be taken as financial advice. My writings only represent my personal opinions. DYOR. I will hold some of the assets mentioned in this newsletter.

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TLDR :

• OpenSea delays its SEA TGE

• AlphaTon acquires a majority stake in GAMEE

• Azuki’s TCG: Gates Awakened

🗞️ NEWS

OPENSEA DELAYS SEA TGE

• Devin Finzer, the CEO of OpenSea (OS), shared that the foundation (fdn) is pushing back the SEA TGE timeline. Finzer said: “the reality is that market conditions are challenging across crypto right now, and $SEA only launches once”

  • Of course, this begs the question: Does launch timing matter? We’ll get into that later….

• As part of the announcement, a couple of key changes were made to OS’s airdrop campaign:

  1. There will be no more waves (reward cycles)

     1. For context, as part of the airdrop campaign, users completed Voyages (quests) by trading, buying, and selling NFTs and tokens on OS. In turn, they gained XP, which leveled up their Treasure Chests (rewards), which were fueled by a reward pool

  2. Users can claim an optional fee refund for wave 3-6

     1. On NFT sales, OS had a 1% platform fee (raised from 0.5% in September) and 0.85% fee on token swaps. 50% of all platform fees fueled the reward pool. The other 50% went to OS

     2. However, users were critical of the refund because wave 1 - 2 were much more significant in terms of fees, and so revenue for OS. You can see this by checking the Dune Dashboard

        1. This also wasn’t the first time people were disappointed about the campaign. Back in October, after Wave 1 ended, users showed their disappointment on the TL as the Treasury Rewards were underwhelming. The rewards didn’t match the fees they paid

           1. But, of course, the future SEA airdrop could compensate for that

  3. Existing Treasures are honored:

     1. The announcement says: “they will be meaningfully considered by the Foundation at TGE”

  4. 0% fees for 60 days:

     1. OS wants to reel in people with a 0% fee incentive to try out their new platform and trading products, including perps. After this period, there will be a fee in place that’s “significantly more competitive” for traders

• Naturally, the delay and these changes weren’t received well by many, because of a couple of reasons:

  • The first one is the same as what we talked about with Abstract: it feels like there’s no end in sight (Voyages launched in May 2025). Initially, the team gave a soft TGE period of around Q1, but as we know now, this has been pushed

    • Waiting for market conditions to turn around for TGE is ambiguous and creates uncertainty

  • Secondly, people have been using OS for years, as it launched in December 2017. During these years, and especially during NFT mania, the platform generated significant amounts of fees and revenue

    • According to DeFiLlama, OS collected $2.8B in fees and generated a cumulative revenue of $917M

  • Thirdly, the timing of the Vanity Fair piece, “Crypto’s True Believers Demand to Be Taken Seriously”, featuring Finzer, was just the cherry on top. The article features a quote describing his elitist lifestyle, with private suites, a personal team of assistants, security, designer clothing, etc.

    • In February 2024, OS also posted an image called “Parisian dinner vibes”, featuring a dinner hall as if OS leadership were part of the bourgeoisie

    • Finzer responded to the criticisms, but seemed “tone deaf” in terms of how users actually feel, one commenter pointed out: “At a moment when so many of your users are down bad, what everyone wants to hear from you is "we're going to win, and I'm not going to rest until we all win together”

• Lastly, before this gets too long, does launch timing matter? According to Haseeb (managing partner at Dragonfly), it doesn’t. His conclusion was based on an analysis of ~200 tokens that launched on Binance. Do note that we can question the methodology here and the incentives of pushing this narrative, as it’s coming from a VC

  • I’d say launching in low vs. high market sentiment, both have its up- and downsides. In low sentiment, it’s easier to dominate mindshare and launch at a lower FDV to allow more organic price discovery. During high sentiment, there’s more liquidity available, and launch valuations are higher

    • It ultimately depends on what you’re optimizing for…

• That’s not to say that you can’t launch at a (relatively) high FDV ($1B+) in a bear market. It seems OS is just aiming for something higher. However, I don’t believe it’s just about timing the market, because OS’s revenue in 2026 so far is telling me it’s not there yet to support the SEA TGE

ATON ACQUIRES MAJORITY STAKE IN GAMEE

• Just yesterday, AlphaTON Capital announced it is acquiring 60% of GAMEE, the mobile and Telegram gaming ecosystem owned by Animoca Brands. Outside of the “controlling interest”, AlphaTON is acquiring 51% of the treasury holdings of both GMEE and WAT + will acquire an additional $2M of GMEE on the market

  • Earlier, in September 2025, AlphaTON showed intent to acquire GAMEE

  • GMEE is GAMEE’s ecosystem token, while WAT is the native token of the “Watbird Universe”, a casual game that was incubated and launched on the GAMEE platform

• Sidenote: there was a larger KOL campaign to amplify the news, including names such as Wale, StarPlatinum, Jampzey, moritz, Sanjay, Elisa, Loki, etc. An attempt to revitalize GAMEE?

  • The funny thing is that there’s a good chance you would’ve missed this news altogether if you’re using an adblocker or Brave

  • Although the above is not surprising, since AlphaTON went on a space with Mario Nawfal before. A good indicator for questionable marketing spend

• Animoca became the owner of GAMEE through a full acquisition in July 2020. Originally a Web2 social/casual game platform, Animoca made the company pivot to crypto post acquisition

• AlphaTON Capital is a NASDAQ-listed company under the ticker ATON. Interestingly, the company was called Portage Biotech (ticker PRTG) from 1973-2025, and pivoted hard under new leadership from Brittany Kaiser in August 2025

  • They changed the name of the company, the ticker, and the strategic focus from biotech to building a TON token treasury and scaling the Telegram ecosystem. Additionally, they raised $71-$100M through private placement and custody deals to buy TON, run validators, and invest in TON projects

  • What AlphaTON did is called a “public vehicle” strategy, essentially a fast-track ot get publicly listed without having to go through the whole process of getting listed and doing an IPO

    • It reminds me of Animoca’s plans to list on the NASDAQ this year through a reverse merger with Currenc Group Inc. (CURR). We talked about it in Sidelined News 144

  • Notably, since the leadership change of last year, ATON stock has lost significant value. Today, ATON is trading around -92% YoY, at an $8M market cap. In 1999, it was trading at $15K a stock. Today, it’s a penny stock at $0.34

• GAMEE claims to be one of the “most established Web3 gaming platforms” with 119M+ registered users, of which 61M+ (51%) are on Telegram. Of course, the real question is how many of these are real users. Discounting these numbers by at least 90% isn’t too outrageous. So, what’s the actual value of that distribution?

  • Over a year ago, I interviewed someone in the Telegram games world, just out of curiosity. This person confirmed to me that UA on TG is largely a pyramid scheme, as apps (games) were continuously “reselling” their audience to the next app through the ad network. The “player numbers” were astronomical, but the LTV of this audience was often close to 0 (post-airdrop)

    • There were millions of “real” users coming for the rewards, but over 90% of this audience were probably bots, too

• So, where’s the value for AlphaTON in this acquisition? Well…outside of being a gaming platform, GAMEE is one of these ad networks I just mentioned

  • GAMEE’s “Attention Network” works as follows: games act as a delivery channel (largely in TG) → advertisers buy campaigns by paying in GMEE tokens → payments are performance-based, on user actions/engagement → users get rewarded in GMEE or points

• Overall, I believe this acquisition is mostly about the adtech, data, and maybe about the distribution. AlphaTON will likely leverage this tech for growing its own ecosystem of apps on TON

AZUKI TCG: GATES AWAKENED

• In February 2025, Azuki announced they’re building a TCG. This week, they officially introduced their TCG Gates Awakened (GA)

  • Unlike most TCGs in crypto, which are either only digital or phygital, GA is only a physical card game. There are digital elements to the overall experience, with a mobile companion app and commemorative NFTs. However, the game itself is completely physical

    • The game seems largely like an IP-extension to reach the TCG player/consumer, instead of the crypto crowd. The TAM of (physical) TCG players is small. However, the TAM of TCG collectors is large

      • Azuki is also making an anime called Bucketman, which will come with collectible figurines

• GA lends systems from familiar TCGs such as One Piece TCG and Final Fantasy, while adding a unique twist through the Gate Portal (moves units and scales card effects), a strict IKZ-cap (mana-cap), and a two-row battlefield. Matches are also relatively fast, with around 20-minute games

  • From The Team Behind The Azuki Trading Card Game post: “The gameplay had to be deep enough for competitive players and intuitive enough that someone picking up cards for the first time could learn it in a few minutes.”

  • The same post details that former talent from Blizzard, Riot, Ubisoft, Pokémon TCG, and more are working on this game

• As part of its GTM strategy, Azuki has focused on hosting tournaments. In January, it held an invitational with a $10K prize pool. This March, it held an NYC Tournament, and for S1 (the next 18 months), it allocated a $100K prize pool

• With the announcement trailer, GA also launched its first official set of cards, a limited presale of cards (starter decks and cases), and collectibles (posters, uncut sheets, and playmats) that come in 6 Tiers, ranging from $80 to $35,000

  • Within the first hour, it sold out its Tier 6 (8 supply at $35,000). In the first 2 hours, over 300 orders were placed. And within ~5 hours, 25% of the supply was sold out. After the first milestone was hit, a new promo card was unlocked and included in every order

• Among Azuki NFT holders, the sale received some pushback due to the lack of perks, like priority access or discounts

  • One user said: “Honestly this can't be the way. ~70M raised directly from mints, 100M+ in Revenues including royalties. And then a pivot to the model of 'If we become big brand, surely our NFTs will be worth something as a collectible”

    • It highlights an important shift and tension we’ve seen with other NFT brands, moving away from community-first to brand-first

      • Holders want the companies they hold NFTs of to be successful, but for any consumer brand that’s paired with expanding beyond CT. In that process, choices have to be made to favor mass-market and monetization over the “eternal pleasing” of holders

      • The dynamics are difficult, because on the one hand, these people brought you were today, but on the other hand community is not a scalable marketing and monetization solution

• The TCG market is a competitive space with huge IPs and cemented player bases (switching costs are high). So, whether Azuki can succeed here with their gameplay innovation and anime art-style is something I’d remain sceptical of

FLASH NEWS

• Animoca Brands invested in AVAX + partnered with Ava Labs

• Wildcard’s WC token is getting listed on the 26th of March

• Farm Frens launched a new gardening game called Seedy Frens

• Pixie Chess is launching on the 2nd of April

• Pixels’ Stacked App released its beta

• Maze of Gains crossed $1M in total volume

• Cash App is bringing back Cash Apples

🆕ALPHA CORNER

• Early Games: Unchained

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Today’s newsletter will use a different format than you’re used to. Let’s call it an experiment to keep improving Sidelined. We hope you like it…

Abstract XP

Designing an incentive system is “easy”. Designing one that survives in practice is much harder. Abstract (ABS) XP is a living experiment in that challenge, an evolving system that has been trying to crack the code of rewarding “real participation” instead of behavior that simply farms the metric (in this case, XP).

What inspired this topic?

Last week, we had the chance to speak with Raj on Sidelined, the Ecosystem Lead at ABS. During the conversation, we touched on the topic of XP. After the interview, I went down the rabbit hole and found that it’s a controversial yet complex issue within the community.

So today, we’ll walk through the what, how, and why of XP, the changes behind, and the criticisms to understand what we can learn from large-scale incentive design.

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Incentive Design and Goodhart’s Law

“When a measure becomes a target, it ceases to be a good measure” ~Charles Goodhart

Like almost any incentive system in crypto, Abstract XP couldn’t avoid becoming “the target”. After all, the majority of ABS users’ goal has been to increase their weekly XP rewards since the start.

Note that I don’t believe you can fully solve this, because motivations in crypto are primarily extrinsic (financially driven). Targeting and attracting a less EV-sensitive (Web2) crowd at a later stage of your product is one of the few ways to reduce how aggressively the measure becomes the target.

That said, I do think there are a lot of valuable takeaways from how ABS designed XP.

What’s Abstract XP?

To answer this question, let’s start with what the goal of Abstract XP is, according to Raj: “We want to incentivize users to come in and actually explore the ecosystem […] we want to make sure that we’re rewarding people who are actually participating onchain”.

We understand that XP is tied to a (potential) airdrop at ABS’s TGE. Therefore, it functions as the chain’s “carrot” to seed attention and encourage users to explore apps, bridge over, and spend, similar to other L2 incentive programs that have launched, like Blast Points and Gold.

At a high level, here’s how XP works:

• Weekly XP is earned based on your (onchain) behavior, including using apps, minting NFTs, swapping tokens, streaming, and holding assets in your Abstract Wallet based on the past 7 days.

• Holding specific Discord roles or Pudgy Penguin-related assets (NFTs or tokens) grants XP bonuses.

• As users gain XP, they progress through three ranks within XP Tiers.

  • For example, I’m ranked Gold Tier 1. If I surpass Gold Tier 3, I’ll level up to Diamond Tier 1.

• Users can obtain badges to showcase on their profile and collect extra XP. Badges are essentially chain-wide quests, and come in 3 types:

  • Flash Badges: require users to complete a task within a limited time.

  • Normal Badges: always achievable and visible, such as connecting your Discord account.

  • Hidden Badges: not visible but can be earned by completing specific actions.

• More recently, the Perks feature was rolled out. Perks are app-specific offers (incentives) presented to users of a specific Tier.

  • For example, Ruyui granted a free 7-day Guild Pass from Roots of Embervault to players in the Gold Tier and above.

• They also recently introduced an Upvote Streak mechanic, which grants users an additional XP boost after achieving a 30-day streak.

XP → Social Cards

An aspect of XP we shouldn’t overlook is the shareability of the reward through social cards. Within the ABS profile, users can easily generate an XP card to share with their friends and followers. The higher this number, the more “flexing value” it creates for the user. It’s social capital that drives awareness around ABS and adds a competitive layer to earning more XP than your friends/followers.

XP: A Monetization Layer

While XP is an incentive system, it also functions as a monetization layer. Users are willing to spend to gain additional XP because they believe this spend will outweigh the future rewards, whether XP (i.e., an ABS airdrop) or app-native rewards.

The underlying assumption is that these pre-TGE incentives will eventually translate into a higher return on spend. In other words, users are effectively “spending to earn more.”

A good example of this is Gigaverse, as illustrated by Hunter’s post:

A useful datapoint to contextualize this comes from Pixels LiveOps: “Extractors and spenders in Pixels are 98.8% overlapping - the real divide is between pure extractors and power users”.

The takeaway is that spending players aren’t fundamentally different from farmers. They’re still optimizing for extraction, but simply have more capital to do so.

Takeaways from Abstract XP:

Some takeaways from XP that can be applied to other incentive programs:

• XP is rewarded on a weekly cadence, based on the user’s activity over the past 7 days. Within this activity log, the amount of XP rewarded per action is unknown. If it were transparent, users would simply optimize for what generates the most XP. That’s why this type of black-box design is necessary. At least part of your incentive program should function similarly.

• Everyone who’s ever played video games is familiar with XP as a progression mechanic. Calling it XP, instead of something more direct like “points,” creates a layer of abstraction between XP and a (future) reward. This makes it feel more integral to the platform.

  • The Tier progression system is a vital component of XP. It creates short- (Gold 1 → Gold 2) and long-term goals (reaching Obsidian Tier), which make the platform stickier. Furthermore, Perks can feel like complementary rewards for achieving certain Tiers, reinforcing the joy of progression.

• Create systems that enforce habit formation. ABS’s example of this is the Upvote Streak, which functions similarly to a daily login streak. A user who returns every day is more likely to spend more time on the platform, try out more apps, and spend more.

• Badges disrupt existing behavior and incentivize users to use the ABS portal and its apps outside of their usual hours and set of apps. It’s a strong cross-ecosystem distribution mechanic that also works at an app level to incentivize usage of specific features.

• Make progression and achievement easily shareable through social cards. They might feel overused, but social cards are social capital because they often translate into engagement. That will always have value.

• As mentioned, XP is both an incentive system and a monetization layer. Start thinking about how these can amplify each other, and how this allows you to introduce monetization to your game or ecosystem at an earlier stage (to extend your runway).

Another source I can recommend on incentive design is Hunter’s “Do’s and Don’ts for Play-to-Airdrop Campaigns.” While this resource is almost two years old now, it still holds many valuable insights that can be applied to any reward program today.

Hunter's Edge

Do’s and Don’t For Play to Airdrop Campaigns

Ideas → Demos → Games…

Read more

2 years ago · 5 likes · Hunter

Changes to Abstract XP

The ABS team has made it clear from the start that XP “is an evolving system.” This is part of its (initial) strategy to “smoke the farmers”, i.e., disincentivize users from min-maxing XP rewards through more sophisticated, evolving, and value-aligned reward design, rather than direct and predictable incentives.

Since ABS’s launch, various changes have been made to what behaviors are rewarded and by how much. Here are some examples:

• Initially, XP was highly curated and granted to a small set of apps, NFTs, and streamers.

• In July 2025, XP was updated to better reflect memecoin holdings.

• In October 2025, they introduced XP incentives for LPing to major pairs.

• Also in October 2025, another overhaul was made to Abstract XP scoring.

More recently, a major change shifted XP rewards from general chain participation to primarily onchain activity (app interactions, trading, and DeFi). This decision was driven by the fact that offchain transactions have no costs attached to them and therefore get “botted to death,” as well as the goal of bringing more users onchain.

Last week, the team decided to double down on this change. As Cygaar put it: “We are going to further scale up teams that are building onchain and reduce those that are not.” To further align XP with the value brought to the chain.

XP for Holding NFTs

One of the more controversial changes (more on this later) in these XP updates is the nerfing of rewards for holding NFTs. In the clip below, Raj explains what drove this decision.

"It was a user saying: I've done nothing on Abstract for the last 8 - 10 weeks, but I still get around 80 - 100K XP, because I just keep my assets there […] This is doing a disservice not only to the user, but also to the apps we have..."

The misalignment of incentives here not only led to shallow engagement but also distorted where attention flows. From a value perspective, there’s relatively little value for a chain in a user who passively holds an asset. Other than “protecting a floor price” and, in a few rare cases, building community, it doesn’t create any new volume or attention.

Cygaar added that holding is now far more balanced, as they previously allocated a lot of XP to teams (with NFT collections) that don’t even exist anymore. This signals that XP is gradually shifting from holding to activity, because that’s what better aligns users with the ecosystem.

Retroactive Analysis

Cygaar has said that the team will conduct a retrospective XP analysis at some point. This includes reviewing XP amounts, badges, time spent on the chain, apps and activities used to earn XP, and tracking Sybil activity.

To add, it’s in their best interest to align XP as closely as possible with the value brought to Abstract, because it’s tied to a (potential) airdrop. Teams often underestimate how important the quality of users receiving this initial token distribution is relative to TGE performance.

Criticisms of Abstract XP

Note: I understand there are more criticisms of XP, including unpredictability, bots, unfairness, and more. However, the two issues discussed below seem the most relevant.

Misalignment about NFTs

The tweet below is a quote from Ely, reflecting on how XP has evolved since October. Luca shared the following in this video (as shown below):

"Holding is the most +EV thing that users on the chain can do for us. I reward holding more than anything"

Naturally, this prompted users to accumulate and hold (more) tokens and NFTs on the chain, with the expectation that their “loyalty” would be rewarded more than if they sold (especially if they were in profit).

It’s a behavioral bias of loss aversion. By selling today, users feel they are “giving up” potential future gains, which are often believed to be higher than they actually turn out to be. For this reason, many have “round-tripped” their gains (myself included).

While XP was heavily rewarded for mere holding in the past few months, as we talked about, that system is now changing (and being reduced). With the majority of these asset prices down, often significantly, this hurts bagholders even more.

Of course, we don’t know whether these users will be compensated with a larger airdrop for accumulating, say, hundreds of thousands of additional XP. However, some napkin math suggests that it likely won’t, especially if they could have made thousands of dollars simply by selling earlier.

Cygaar offered a counterargument, stating the following:

“The market has also changed significantly since this video was recorded, we would be foolish to not adapt to what's happening in real time. I've mentioned many times that the XP system is dynamic, none of this should be a surprise.”

What’s the takeaway here? It’s best to be careful with what you promise and communicate, because that shapes expectations. These expectations are further inflated by what we’ll talk about next.

A Lack of a Clear Timeframe

Let’s start with a quote from Hunter’s article we referenced:

“One major pitfall is running campaigns for an undisclosed amount of time. It is wise to let people know upfront what kind of time commitment you’re asking from them. It can create a lot of frustration if teams keep farming their community endlessly without any indication of when it will end.”

I believe a lot of frustration from the ABS community comes from waiting without an end in sight. After a year of using the portal and its apps and spending on them, combined with no clear timeline for a TGE, users begin to feel fatigued. For comparison, Blast’s campaign took 3–4 months.

This frustration is further exacerbated by the fact that an initial (soft) TGE timeframe of Q4 2025 was pushed back, driven by the team’s unrealistic expectations of going for a “$20–$30B home run.”

As time passes, ABS continues to accrue “expectation debt”: the longer a promise (TGE in this case) takes to deliver, the larger the gap between reality and expectations becomes. In turn, this creates significant execution risk.

Furthermore, this gap only widens as you get players to spend (in their eyes, “invest”). Interestingly, users also begin to feel entitled to an airdrop or compensation in the form of rewards once a project starts generating revenue.

Closing

Abstract XP shows that incentive design isn’t something you perfect in one go. It’s a continuous process of adaptation to maintain alignment between users and builders.

Here’s everything we talked about in a compressed format:

• Every incentive program will be gamed. Design with that assumption from day one

• Don’t over-reward passive behavior (holding), reward actions that create value

• If users can see the optimal path to farm rewards, they will optimize for it

• Make the incentive program feel like a game, in which users can progress

• Make achievements visible and shareable. Status is a powerful motivator

• Short-term goals drive engagement, long-term goals drive retention

• Monetization and incentives should reinforce each other, not exist separately

• Incentive systems must evolve to adapt to how they function in practice

• Align rewards with value creation, not just activity or retention

• Be thoughtful in what you communicate, as users will optimize around your messaging

• Time-box your campaigns or clearly communicate timelines to avoid expectation debt

• The larger the gap between expectations and reality, the higher the execution risk

• Your early users will shape your token distribution, meaning quality matters more than quantity

• In crypto, incentives don’t just shape behavior, but also shape expectations

Disclaimer: None of this information should be taken as financial advice. My writings only represent my personal opinions. DYOR. I will hold some of the assets mentioned in this newsletter.

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TLDR :

• Cash App launched a P2E game?

• Amigo: “the next Friend Tech”

• Pudgy Penguins’ Pudgy World launches

🗞️ NEWS

CASH APP LAUNCHED A “P2E GAME”?

• A couple of days ago, Cash App surprised us with the announcement of a game called Cash Apples (CA). The game is extremely basic, the graphics are pixelated, and players could earn real cash by playing, making it awfully reminiscent of crypto gaming in 2021 - 2022. So, you’d probably wonder: “Why Cash Apples?” Here’s my attempt to make sense of it…

  • For context, Cash App is one of the largest digital (non-crypto) wallets in the US. It’s mainly used for sending and receiving cash (fiat), and users can also buy Bitcoin and invest in stocks on the app

    • As of Q1 2025, Cash App had 57M MAUs, making it larger than Robinhood with 27M (funded) customers as of January 2025

• So what is CA? “Cash Apples is a web game where you walk through a virtual orchard, shake trees to find Golden Apples, and earn real cash sent straight to your $Cashtag”.

  • After shaking a tree, the rarest drop would be a Golden Apple, but most often, you would find random collectibles (without cash value). The more Apples you collect, the higher reward tier you hit:

    • Apple to $ ratio: 1:$1 - 5:$2 - 15:$5 - 30:$40 - 75:$100

  • The game was scheduled to run for only 5 days. Every day, it was open for a limited amount of time (only 4 hours). Plus, the cash pool was limited, so it could run out before the time lapsed

    • When giving out $ directly, it seems like the companies start acting sensibly and understand that earning has to be limited. Unlike the early crypto games, in which this sensibility didn’t apply to their native game tokens

  • When playing, players could see the prize pool for every day, plus how much cash was already collected on the day they were playing. The prize pools were pretty significant as well: D1: $80K, D2: $85K, D3: $90K, D4: $95K, andf D5: $150K (total: $500K)

    • However, because the turnout was so significant (more on this later), the pools got diluted, and most people earned peanuts. People shared that they only earned $1 or $2 after an hour, while some shook 1000s of trees without finding a single Golden Apple

    • Rewards were sent to players a day after, directly to their cashtag (usertag). Users were free to use this cash as they pleased

  • As said, it’s a pixel game. Ben jokingly said it looked like a mix of Cambria and Pixels

• CA was supposed to run till the 13th of March. However, the game had already shut down after its second day, due to 350K players trying to get in:

  • “What was designed as a lighthearted online orchard quickly drew a crowd large enough to overwhelm the experience, leaving hundreds of thousands of hopeful harvesters refreshing the page from outside the gates.”

  • Funnily enough, they spun up a new website called “The Appleton Post” to bring the announcement, including that it’s uncertain whether CA will return

• So, why would Cash App launch CA and give out $500K?

1. It’s making use of the “house money effect”. It’s a behavioral bias where people see gains (cash rewards in this case) differently from their own money. In a sense, it feels like “free money”, meaning they’re more likely to take a risk with it and buy stock and Bitcoin with it (on Cash App)

   1. This can lower the barrier to users making their first investment. A bridge to start interacting with more of Cash App’s investment products (likely where they make more margin than on transactions)

2. This is probably a bit far-fetched, but it could have been an attempt to increase mindshare among the crypto crowd, because you can also buy Bitcoin on the platform

3. If every user got $1-$5, that would be a cheap acquisition channel (for a fintech company) to attract new users, plus a way to (re-) engage existing users

   1. The campaign also reminds me of this time when some DeFi apps launched a Telegram game in 2024 - 2025

4. It associates Cash App with money gains, creating positive reinforcement around the brand

   1. However, whether this activation achieved that is something I’d question, considering the many bugs and server issues

• Lastly, this experiment from Cash App reinforces my thesis that the audience that is interested in “rewarded play” is much larger than just crypto. The opportunity for crypto gaming to expand in financial entertainment is huge imo

AMIGO: “THE NEXT FRIEND.TECH”?

• After 7 months since its first announcement, the “new” SocialFi app, Amigo, has launched on Abstract. Luca Netz QRT’d the announcement and said: “Amigo is what Friend Tech could’ve been”

  • I vaguely remember criticisms of Amigo at the time, after its first announcement (now deleted) of being a Friend.Tech (FT) copy. So, let’s compare the two

• To start with this comparison, we’ll take a look first at why FT failed, and then move on to how Amigo compares. So, why did FT fail? Grok says:

  1. FT failed to deliver beyond meaningful features to retain users beyond speculation

  2. The revenue model and economic design were flawed. Most revenue came from a 10% fee on key trades, a 50/50 split between the platform and creators, but this zero-sum structure led to extraction over value creation

  3. There was a huge database leak in August 2023, which led to a huge loss of trust and user churn

  4. In May 2024, FT returned with V2.0 and the FRIEND token airdrop. However, the app was still clunky, new features such as social clubs underdelivered, and the token price crashed post-airdrop

  5. FT’s team was anonymous, plus had a questionable past. The platform generated $44M in revenue, but little was done to improve the product itself

• How does Amigo compare?

  1. Amigo’s main mechanic is about buying keys from your favorite creators, which can increase in value as they become more popular. It’s about speculation. The social feature it offers is a gated chat room, which is the same as FT, where “fans” can talk to creators

     1. Instead of being solely based on the bonding curve, keys in Amigo are also priced based on a creator’s social metrics

     2. With FT, people stopped caring about the chatroom feature rather quickly, because speculation was a much stronger motivation

  2. It looks like Amigo uses the same monetization model as FT, revolving around trading fees. On every trade, they charge 8%, of which 3.5% goes to Amigo, 3% goes to creators, and 1.5% goes to a referral pool (potluck)

     1. Again, this system leads to capital depletion (fees shrink the pie) unless new buyers constantly enter. This fee structure could work if there is new value being created, but it seems too similar to FT’s design, centered around speculation only

        1. There’s also a 0.25% referral fee on all trades, which can incentivize growth. But it won’t solve the inherent issues with Amigo’s design

     2. What’s particular here is that Amigo takes a larger cut than the creators. With these platforms, new creators are your main growth lever to pull in new audiences (→ buyers → capital). So, the question is whether the incentive is big enough

        1. Update: They announced they’re lowering the platform fees by 50%, while keeping the creator fees the same. Good stuff

  3. What Amigo does improve on is the UI and UX. Try ES5HVP, LQI6WC, or 753ER4 to check it out. Signing up is simple and happens through ABS Wallet, and the layout is minimal and intuitive

• In terms of onboarding new creators, Amigo is taking a curated approach. There are about 20 creators on there now, including a mix of OF models, crypto KOLs, and Abstract employees

  • More recently, they onboarded a “gaming streamer”, NataaGataa, with 400K followers on Twitter and 3M+ followers on Instagram. She sold a total of 38 keys so far, and earned 0.02 ETH in fees

  • The most-traded key (as of yesterday) on the platform is Luca’s. His key sold 219 times, and he made 1.79 ETH in fees

• Part of their strategy seems to be attracting creators beyond the CT bubble. Creators will be able to connect their Instagram and TikTok accounts soon. The app is easy to use, and the branding is consumer-friendly

  • However, whether it can scale with normies is something I question (other than it becoming a glorified OF)

• Overall, this is just Friend.tech with a better wrapper, and perhaps a slightly improved fee structure. But again, it doesn’t innovate on SocialFi in a meaningful way to make the product move beyond speculation

PUDGY WORLD LAUNCH

• This week, Pudgy World (PW) went live, a social virtual world in a browser, based on the Pudgy Penguins IP. Let’s break down what we know about the “modern Club Penguin”

• In September 2023, we saw the first clip of PW. The fragment shows an early version of the game, with movable Pudgy characters and a largely empty world, which just had an obstacle course. So, the game is likely in dev for ~3 years now

  • The game has been built in partnership with Abeto. This studio has done some impressive browser work with “The Messenger”. It looks and feels quite similar to PW

    • Looking at the timelines of these games, I believe they built The Messenger on top of the custom engine they made for PW. And not the other way around, like some claim….

  • Chef, the co-founder and CCO of Pudgy and Igloo Inc., provided some insight on how PW was built: “We built PudgyWorld from scratch. No traditional game engine. No downloads. Just open your browser and you're in.”

    • Furthermore, he goes into some technical stuff like how they build their physics, camera system, assets, etc.

• So, what’s the game about? The first time you play, you can customize your own penguin. After that, you enter the world, which starts with a quest line about finding the missing Polly. Along the way, you’ll speak to NPCs, fish, visit different towns, and play mini-games

  • There are social features such as a friend chat and proximity (voice) chat

• PW is free to play and monetizes through two currencies: Pebbels and Seashells. Both can be earned in-game, but shells are more premium. Currencies can be bought with a credit card only, no PENGU (and I doubt they will add PENGU as a payment option)

  • Using these currencies, special eggs, fishing gear, and traits (cosmetics) can be purchased. Monetization is light and largely centered around cosmetics

    • For context, Club Penguin primarily monetized through a subscription-based model to access exclusive features

  • In the main menu of PW, there’s a button that says “toy claim”. This will allow players to claim items from their physical toys in the game

• PW is an extension of the Pudgy experience. Most people will find out about Pudgy through the gifs and short-form video content. After a while, they might recognize the Penguins in a Walmart

  • The collectibles have QR codes that lead to this online experience with unique offers (redeemables), hooking people in. It’s a “phygital experience”. Luca Netz calls it: “A massive bridge between web2 & web3”

• So, why did Pudgy build this game? I think it’s simply about IP proliferation. Games can create connections (fandom) to characters that other forms of media simply can’t achieve. It deepens the brand experience

  • And I don’t think the game is too far off from becoming an enjoyable virtual social hangout for the younger generations, just like Club Penguin was, and Roblox now is

FLASH NEWS

• SDF introduces SDFN: the internet’s sportsbar

• BPMG is becoming the joint owner of the crypto game Cooking Adventure

• Genome Protocol lays out why it’s closing down

• Pixels started revealing what their new ad tech layer, Stacked, is looking like

• DungeonCross, a new ARPG, went live on the Cross Protocol this week

🆕ALPHA CORNER

• Early Games: None

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We’re happy to announce the first sponsor of Sidelined: YGG Play!

Across our show, Telegram, and this newsletter, we will highlight what’s happening in the YGG Play ecosystem.

This week, we want to let you know about the Verse8 x YGG Play casual degen game hackathon. A vibecoding competition that allows anyone with a cool game idea to bring their imagination to life.

There are $5,000 in prize on the line, intros to investment opportunities, and a chance to become part of YGG Play’s publishing pipeline. For more info you can attend the BuidlHack 2026 Kickoff AMA tomorrow.

MARKET TALK

BASKETBALL.FUN IS NOT THAT FUN ANYMORE…

• Basketball.fun (BBF) “another rug shilled by KOLs”? This statement was the start of a post from Mando that went viral in the last couple of days, pointing out BBF’s lack of communication and lack of product, despite holding its first pack sale in January

  • Attached to the post was an image of 16 KOLs who were paid to promote the platform

  • Bando added to his Tweet: “The responsibility lies less with the KOLs and more with the marketing agencies…” In this case, the agency Arcadia was behind this campaign

• Naturally, this sparked the conversation around an already hot topic: ad disclosures and paid partnerships. Moreover, the ethics behind shilling and who’s at fault here were part of it:

  • A self-named “onchain investigator” named Specter posted a list of KOLs that were (supposedly) paid for undisclosed promotion. Some of it seemed true. However, the comments were quick to poke holes and point out that some names on this list (1) did disclose the partnership, (2) didn’t get paid, or (3) weren’t part of this campaign all

    • When market sentiment turns worse, people often also get much more hateful when KOLs get paid. Something important to add here

  • And who’s here to blame? Arcadia (like Bando says), the KOLs, or BBF? It’s clear that BBF underdelivered so far, but you could argue that the other two parties could’ve done better DD as well. So, is everyone to blame?

    • Personally, it seemed obvious to me that this was a poor attempt to copy a different product that saw a great (initial) success. On the other hand, you could argue that someone couldn’t predict that this would end up being a “rug” (or is it even a rug?)

• For context, BBF is very similar to FDF. Users buy packs containing player shares to build a lineup and trade. Based on the performance of their players, they gain currency, which they reinvest to buy more packs

  • However, this isn’t a playable loop yet. The marketplace to trade player shares has yet to go live. In many ways, this launch felt rushed, and now they’re paying the expectation debt of making people wait with nothing to show for

    • In contrast, FDF already had a playable product during its soft launch and only sold packs right before the official launch of the platform

  • BBF is also co-founded by Tristan Thompson, a former player in the NBA. Thompson has been speaking about his venture at blockchain conferences

    • But of course, we have learned by now that celebrity endorsement/involvement in crypto ≠ success

• Interestingly, the BBF account responded to the chatter of the last few days. In the post, they went after Adam (founder of FDF), who has been sceptical of BBF: “Ironically Adam and his team have been “trying” to build a basketball product for months with no real momentum behind it.”

  • Furthermore, they suddenly realised they needed to be more transparent and shared what’s coming soon, including multi-chain deposits + the marketplace. The post also included a form for anyone who wanted their packs to be refunded

    • So, it seems like they’re dodging the rug allegations here?

    • I wouldn’t be surprised if 70% or more of the buyers ask for a refund

• Lastly, it seems that there’s a recurring theme of projects failing that largely rely on “borrowed credibility”. Instead of BBF establishing credibility first through showing off a good product, they had to buy it (temporarily) through this larger KOL campaign. A reminder that KOL marketing should be an amplifier, not a starting point

DITH SHARES LESSONS ON MONETIZATION AND GROWTH

• Around two weeks ago, we had the pleasure of speaking with Dith again on Sidelined (our first returning guest). Since we spoke with him in September last year, lots of things have changed for Gigaverse. During our conversation, we spoke about systems, monetization, growth, and tokens. Here are some of my favorite quotes and takeaways:

• Building systems:

  • “From an early point, we recognized that we wanted to build certain things in our product stack that just aren’t available out there. We want to integrate this marketplace into the game, so we built Gigamarket. Then we wanted a way that we can swap offchain for onchain items…so we built our own swap system called Gigaswap. Now we’ve launched GIGABIT…”

    • As a crypto game, you’ll often need custom infrastructure to support your economy, because the tools are not (publicly) available yet. It seems most teams build their tooling in-house and then use it to create an infrastructure moat to support their own ecosystem (e.g., Mythical’s QuickTrade)

• Why teams fail to monetize:

  • “It’s probably a combination of things…for many teams, it’s make or break. If you can monetize enough…even if you make mistakes…even if it’s a bear market or whatever, you can weather the storm […] If you don’t monetize, that’s the fast track to realizing that you’re out of gas here, and now you’ve lost attention too, so it’s even harder to monetize later”

    • Games take years to come to completion, and in crypto, they often don’t even reach a final stage. So, to increase your chances of survival, you need to start thinking about how to introduce monetization into an early stage of your game. I.e., what’s the “minimum monetizable game loop”?

• The design philosophy behind Gigajuice:

  • “One of our most important metrics is getting people who buy Gigajuice to repurchase it…From a design perspective, we had this discussion…Look, from a SaaS best practice, you lock people into long-term subscriptions. He was like…we absolutely must not do that […] We intentionally did not call it a VIP subscription, and we’re intentionally not going to auto-renew”

    • Instead of the subscription-like lock-in, Gigajuice is designed to prove its value every (purchase) cycle. This way, repeat purchases are not a product of users forgetting to unsubscribe, but a measure of real product satisfaction

  • “Gigajuice is not sold from a traditional shop. It’s sold from a vending machine”

• Growth within and beyond crypto:

  • “The game has to reach a stage in which we plausibly can go after mostly normie gamers. The audience that we’re interested in, who are a fit for the game, are real money gamers or high stakes gamers. They like to play games that feel consequential, maybe there is money on the line, or you’re trying to get rare items, maybe there’s a chance of losing items”

    • We often tend to forget that “rewarded play” (i.e., real money gaming) is huge in Web2, and crypto gaming essentially delivers the same premise. Going after these audiences (while leaving out the crypto terminology and friction) seems to be one of the pockets of growth with the most potential

  • “Part of our GIGABIT design was ensuring that we’re set up to reach people where they are and not force people to have to come to Abstract…”

    • Bridging = friction. With multi-chain onramps, you remove that friction and don’t box yourself into a single chain. You’re not just an app on Abstract anymore, but can expand your onchain TAM and reach audiences beyond

• On games and tokens:

  • “Games can still have a token by all means. Games, consumer apps, gaming infrastructure. It just shouldn’t be used as the currency […] It shouldn’t be the central currency that the whole thing runs on, so if the price tanks, nobody cares anymore”

• We appreciate Dith coming on the show again to share his new lessons, and we are excited for what’s next for Gigaverse. Are you building something exciting in crypto gaming/consumer? Then feel free to send Raiden or me a DM to get you on the show

ON THE RISE

• Pudgy Penguin’s Pudgy World browser game is now live

• Thousands, the platform behind Wildcard introduced the THOU token

• KAST raised $80M in a Series A to open access to stablecoin payments to everyone

Disclaimer: None of this information should be taken as financial advice. My writings only represent my personal opinions. DYOR. I will hold some of the assets mentioned in this newsletter.

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