Farm, farm, farm those coins
Welcome to the fifth issue of 2 cents on a coin!
Today, my 2 cents are on Gala (GALA), the blockchain-based game with a farm, a town and an international market.
By now, you’ve probably noticed all I have written about recently are games. Well, it’s not completely my doing — millions of other people believe blockchain-based games are “it” and decided to either play or invest in them, driving up the price of their tokens in 2021.
There are more than 10,000 coins listed on CoinMarketCap, all of which are categorised into ~150 groups. Of these ~150, excluding those categories comprising less than 20 coins, Metaverse, Gaming & NFTs are the top 3 of the last 90 days. On average, the price of coins in the Gaming category has grown 37% since October 2021. The majority of the 271 coins in this category had a price increase (66%) which points to overall interest in this category plus lower investment risk. In contrast, only 21% of coins in the Synthetics category saw a price increase while the rest are negative vs their position in September. This means if you had randomly picked and invested in a basket of 10 coins each from both Synthetics and Gaming category in September, only 2 of the Synthetics coins would increase in value in 3 months while 6 or more of your Gaming coins would see a price increase in the same time frame.
If you consider the fact that the Metaverse category which ranks first also consists of many gaming coins, it becomes clear that blockchain-based games are currently the clear winners on the crypto leaderboard.
So gaming is big and most block-chain based games — both those with proof of concept and others with promise alone, have seen a positive price change in the past 3 months. What do we see when we zoom into that category? — Gala token, sitting gallantly 🙂 in the top 3 by volume (excluding coins with less than 20 market pairs) Market pairs are the number of coins that a specific token can be traded with directly. e.g GALA ←→ USDT is one market pair.
So what’s this game about and how do its fundamentals stack up against others like Axie Infinity, The SandBox & Decentraland?
What is Gala?
Unlike many other blockchain games, Gala has scanty documentation providing an overview of the project and plans for the future. What the company has is Townstar, a farming game that bears an uncanny resemblance to one of the most popular games on Facebook in the last decade - Farmville. That resemblance is not a coincidence - Gala is founded by the co-founder of Zynga - the company behind Farmville.
Townstar was released to the public in 2019. The game is about building your town into a machine that produces things as quickly and efficiently as possible. The workers that come with various buildings will always fulfil their duties, and it’s the player’s job to make sure they follow the path of least resistance.
“2022 promises to be a year of many major additions to the Gala Games platform”
A major advantage this project has is its team. Behind Gala are executives who have run very successful “off-chain” games in the past - Eric Schiermeyer, John Osvald, Adam Price.
How does Gala compare to counterparts like The Sandbox, Axie Infinity & Decentraland & “off-chain” alternatives like Roblox?
GALA’s marketplace performance
1. 4-month price trend: Of the top 23 coins in CoinMarketCap’s Gaming category (excluding those with fewer than 20 market pairs), Gala ranks #2 by the 4-month price change, under Radio Caca which has significantly less impressive fundamentals. However, at 73, The Gala has much fewer market pairs than Decentraland, Axie Infinity & The SandBox, pointing to lower demand & visibility on big exchanges for the GALA token in the past year. Of the four, the Gala token was the last to list on the Binance exchange in September 2021.
2. Volume: At the time this data was pulled on 21.12.2021, GALA had the third-highest volume in trades in the Gaming category, after The SandBox - about $400 million in transactions within 24 hours. This speaks to the level of interest in the coin and its liquidity.
3. Unique value proposition:
Gala plans to move from Ethereum to a sidechain which should speed up in-game transaction speed and reduce costs (gas fees)
The platform reports that it currently has 1.3m monthly active users - the only other blockchain-based game to beat that is Axie Infinity. However, unlike Axie Infinity, Gala’s community is not that strong and it’s difficult to see where all that traction is coming from.
1. Limited choice: Gala has only one game available which is the farming game, TownStar. All others are still in production.
2. Focusing on a high level of decentralisation: The team seems to be hyper-focused on decentralisation. I am sceptical because the utility of decentralisation, in this case, is unresolved - do gamers really care about where a game is hosted? - whether in a single location on the company’s server or distributed on 50,000 laptops (nodes) around the world? or do they care more about what the experience is and with blockchain Games, increasingly, whether they can transfer their gaming assets out and sell them openly? I think most players care about the game experience and how much they can earn from it but the Gala team are hyper-focused on the decentralisation theme has few benefits besides “putting the game in user’s control”
3. Limited funding - Gala has not raised any funding to date.
4. Limited accessibility - The game is not accessible via a mobile device and looking at the impact of mobile penetration on the gaming industry, this is usually a significant requirement for a game’s success.
I think the GALA token has benefited from the overall market interest in blockchain games and the spillover effect from more successful alternatives like Axie Infinity. There will only be 2 - 3 winners in this new category and for Gala to be in that rank, the company needs to offer considerably more value to players than they are now.
1. Improve choice: build more immersive & interesting games
2. Increase user activity: invest more in marketing & generating awareness
3. Enable mobile
Would you invest 2 cents in GALA, yes or no, and why?
Please leave a comment below.