VeradiVerdict - Issue #184
As we begin 2022, all eyes in crypto are on gaming. The blockchain gaming ecosystem continues to enter the mainstream, especially with the dazzling success of companies like Axie Infinity, Genopets, and Perion. Two of the most pronounced crypto sectors - gaming and NFTs - create amazing synergies in the world of Web3. On the one hand, NFTs enable players to build up a repertoire of assets in the game, which furthers their connection to playing it – and their social and financial investment in it. This creates a self-perpetuating cycle because a user’s earning potential grows as he acquires more in-game assets. Play-to-earn rewards users with the company’s liquid token for earning victories in the game. This formidable combination enables a more intimate, personalized, and fun gaming experience – one that isn’t possible in the world of Web2 gaming. Despite lacking play-to-earn, Web2 gaming popularity has surged due to the pandemic as players seek both community and entertainment. Half of American homes now have a gaming console, and time spent gaming online and in-person with others in 2021 reached 7.5 hours and 4.5 hours per week respectively. A recent study found that provided they could financially support themselves, nearly 40% of global gamers would become professional. Young gamers – the ones more likely to adopt blockchain gaming – are particularly eager, with nearly half of players aged 18-35 willing to quit their job and become pro if guaranteed financial security. Play-to-earn blockchain gaming provides an incredibly fun, lucrative, and community-oriented solution. As players increasingly look to 1) earn supplemental income through these products and 2) establish themselves and grow their social capital in the gaming community, the Web3 gaming market provides the perfect niche. With the added boost of the NFT market reaching $44B in 2021, the crypto gaming industry is expected to continue to experience hyperbolic growth.
A particularly compelling company is Summoners Arena, a blockchain game that runs on the Binance Smart Chain and provides a unique Idle RPG (role-playing game) experience infused with NFT assets. Idle role-playing games – essentially games that play themselves – have historically fared well in traditional gaming. Youtube has entire channels just for users to watch idle RPG games play themselves. Within Kongregate, a video game publisher owned by GameStop, the three most popular games are idle RPG. In mid-January, Microsoft announced the nearly $70B acquisition of leading game developer Activision Blizzard.
Blockchain gaming takes the concept of idle RPG a step further than traditional games by allowing the user to not only progress in the game, but also earn. By simply interfacing with Summonia, the Summoners Arena world, the gamer is rewarded with tokens which can then be used for in-game features such as summoning (minting in-game NFTs), upgrading Heroes, and more.. Pantera is proud to have participated in the Summoners Area seed round and further deepen our involvement in the blockchain-based gaming ecosystem. Crypto gaming has proven over the past year that it’s here to stay, and we’re excited to be partnered with companies pioneering the space.
About Summoners Arena
An entire economy and community exists within Summoners Arena called Summonia, where users collect and interact with assets in the form of NFTs. Heroes are the game’s core feature and the user’s portal into the digital world, and can take on a number of different attributes. Summoners Arena was built with careful attention to detail in the user experience, ensuring that players can fully enjoy gameplay without solely worrying about making money. The primary goal of any game should be the entertainment derived from it; that’s what subsequently drives growth, community, and profit. Making the experience both entertaining and profitable keeps users coming back for more, especially as they earn, accumulate assets in the virtual world, and find a place in the vibrant community. The game offers two excellent gaming modes: PvE (player vs environment) and PvP (player vs player), which each have different environments that users can switch between.
The two-token method
Summoners Arena uses a two-token model similar to Axie’s framework: one token for governance ($SAE) and another for in-game utility and rewarding players ($ASG).
$SAE: the governance token
Voting on the future mechanics of the protocol
Participate in premium in-game features
Gives the owner partial ownership in decisions relating to the game
Reward top players on the leaderboard
Both spent and earned by players
The $SAE economy flow (Source: Summoners Arena)
$ASG: the transaction token
Provides an incentive for participating in in-game activities
Used for upgrading and summoning Heroes
Supply regularly rebalances based on parameters placed on users’ behaviors to prevent hyperinflation
Limited daily attempts
Limited by player progress in the game
Can be burned to create new Heroes, which can subsequently be used to mine more $ASG
The $ASG economy flows (Souce: Summoners Arena)
Like other popular crypto games, the protocol also allows players to earn tradable NFTs. Beyond the liquid tokens, the game’s assets include Heroes, Items, Costumes, Land, and Guild, each in the form of NFTs. Heroes and Items have unlimited supply, while Land and Guild have limited supply and can only be purchased at the Genesis Sale or through the secondary market. Land is the most rare in-game asset, followed by Costume, Guild, Items, and Heroes. Items are categorized as Equipment, Stone, or Artifact, and three of the same items can be “merged” into a higher-level item. Hero’s rarities come in two fixed groups (Common and Mystic) and each one is classified into one of six factions: water, fire, abyss, nature, light, or dark. Mystic heroes have more capabilities and are easily distinguished by their appearance in-game when compared to their common counterparts. Heroes are also categorized into classes: mage, priest, assassin, ranger, and warrior, and each class assigns distinct characteristics and abilities to the Heroes in it. Heroes compete against Heroes of other factions, and strategize with their own team to position themselves well in the game. The complexity of the game and room for growth allows players to become deeply immersed in it without becoming bored.
Faction restrain (Source: Summoners Arena whitepaper)
Summoners Arena is backed by a seasoned team with tech and blockchain experience. The current leaders of the project,, Manh Hung Tran and Nang Doan, together cofounded OneSoft gaming studio, a computer game development platform which has over 5M daily active users and over 300M downloads. The pair both have ample game development experience and work very well together. Tran is also the co-founder of Onechain, a blockchain-integrated solutions provider for gaming studios with over 25 games fully developed. Onechain is essentially an alliance of gaming studios, player communities, and content creators and operates as a DAO. Onechain’s goal is to create an NFT gaming system where stakeholders – such as players, guilds, and investors – can participate in the game, manage their assets, share revenue and more. The synergies between Onechain and Summoners Arena are substantial: Onechain acts as the solutions platform for Summoners Arena including helping with community growth, implementing sustainable earnings, and providing technical assistance to customers. Because Tran successfully built out a gaming solutions platform before creating a blockchain game, Summoners Arena is implemented to a high technical standard and will be better equipped to handle potential future setbacks. Furthermore, the team has amassed a strong cap table with investors such as Coinbase Ventures and Impossible Ventures.
What differentiates Summoners Arena?
Unlike other popular play-to-earn games, SummonersArena allows players to earn without punishment from prolonged periods of no play. Players can progress in the game idly, and earn by actively playing. Furthermore, SummonersArena is being built out on Binance, which gives the company access to a massive user base - one that may be less cryptonative. Because Binance is a more centralized platform, users may feel higher confidence when onboarding into digital gameplay for the first time via Summoners Arena. Summoners Arena’s seamless UX combined with BSC’s popularity and user trust will surely attract Binance users who have not tried play-to-earn gaming. And as work-from-home normalizes and the metaverse goes mainstream, many incumbent gamers will spend larger portions of their time earning in-game, which in some cases is more lucrative and enjoyable than other job prospects.
Furthermore, a large repertoire of lore differentiates Summoners Arena from other blockchain games. A recent survey that asked respondents which parts of a game are most important found that fast performance and interesting storyline ranked highest. Summoners Arena’s performant technology paired with the fun and immersive world of Summonia certainly satisfies these demands.
So many games… now what?
Players are likely to become experts and amass capital in one singular game, whether that be Axie or Perion or Summoners Arena. Once they have a stake in that game, they’ll continue to use it because their financial incentives are baked into the platform. Furthermore, players are unlikely to fully switch their game of choice once they’re too deep down the rabbit hole on one game. Often, just gaining access to blockchain games takes expensive initial capital. Once they’re onboarded, players tend to stay with one favorite game for the long-term and buy or trade even more in-game assets. Whereas Web2 games are cheap and easy to intermix, Web3 gaming requires a commitment level that causes stickiness among players. With financial incentives mixed in, this combination creates a strong effect that causes players to spend extensive time on the game. Additionally, in idle RPG, less gaming expertise is demanded and it’s subsequently easier to onboard users new to both gaming and crypto.
The next phase
As play-to-earn and blockchain gaming popularizes, Summoners Arena will be uniquely poised as a game of choice for many seasoned blockchain gamers. Given its speed, ease of use, and community, it will also attract those who are completely new to the space and serve as an onboarding experience into Web3. Summoners Arena is distinguishable in its earning model, ability to progress in-game idly, strong leadership team, and two-token model. Pantera is delighted to partner with Summoners Arena and their impressive community as they continue to make waves in the blockchain gaming industry.
- Paul Veradittakit
NFTs, Gaming, and NFTs w/Makersplace, Faraway, and Perion
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Hi, I’m Paul Veradittakit, a Partner at Pantera Capital, one of the oldest and largest institutional investors focused on investing in blockchain companies and cryptocurrencies. I’ve been in the industry since 2014, and the firm invests in equity, early stage token projects, and liquid cryptocurrencies on exchanges. I focus on early-stage investments and share my thoughts on what’s going on in the industry in this weekly newsletter.