Table of Contents

1. Research Highlights 1.1. Core Investment Logic 1.2. Valuation
2. Project Overview 2.1. Project Business Scope 2.2. Past Development and Roadmap 2.3. Team Situation
3. Business Analysis 3.1. Service Objects 3.2. Business Categories 3.3. Business Details 3.4. Industry Space and Potential 3.5. Business Data 3.6. Project Competitive Landscape 3.7. Token Economic Model Analysis
4. Preliminary Valuation 4.1. Core Issues 4.2. Risk Analysis
5. Reference Materials

AlterVerse

Date: Issue 12, July 31, 2023

Project Introduction (Cover)

AlterVerse is an interconnected metaverse game and AAA-level game creation platform based on the Binance Smart Chain (will integrate Polygon and ETH chains in the future), which will create revolutionary Metasevers innovative technology, allowing players to jump between different 3D game worlds like browsing web pages. At the same time, by providing a no-code Web3 game creation tool through MetaServers, it empowers creators to create their own games with the advantages and features of AAA game graphics, conversational AI, decentralized game servers, and real-world rewards, providing a unique gaming experience that allows anyone to easily create immersive, interconnected virtual worlds.

1. Research Highlights

1.1. Core Investment Logic

AlterVerse is a metaverse game platform and development platform built on Unreal Engine 5, innovatively introducing Metasevers technology.

Currently in the early testing and access stage, with plans for public testing and token issuance in 2023.

Project vision: To launch one million Web3 games, become the world's largest metaverse game platform, and provide a safe, fair, and fun gaming environment for creators and players.

• Team: The team has strong game development experience and can gradually advance the project according to the roadmap. However, AlterVerse's metaverse platform has not been officially launched yet, and the team's strength remains to be verified. The team developed a multiplayer online sandbox game called Disruption in 2019, which was released in early access on Steam at the end of 2020 for $17.99, but the game's market performance was poor, with only 5 user reviews, reflecting the game's lack of playability and appeal. The team later expanded its vision to a complete metaverse platform, but it needs to improve user experience and retention after the game goes live to prove its competitiveness in the metaverse field.

• Game: The game's strengths lie in its beautiful scene construction, rich game modes, high degree of character customization, and the ability to attract different types of players, with a certain degree of playability and retention. The game's economic model also aligns with the Play to Earn trend, as game items and tokens can be traded on internal or external markets, increasing player earnings and participation.

  The disadvantages include the fact that the game has not been officially launched yet, only undergoing testing for 4 days every two weeks, and its stability and completeness are still to be observed. The game's support for VR devices is also not comprehensive, which may affect the experience of some players. At the same time, the metaverse field in which the game is located also faces fierce competition, and the number of active users is also concerning, with the leading metaverse projects Decentraland and The Sandbox having 38 and 522 daily active users, respectively. AlterVerse needs to continue to observe game user play and retention after going live to assess its attractiveness.

• Funding: The project stood out in the fourth season of the Binance Incubation Program, becoming one of the 14 finalists out of 500 projects, receiving the lead investment from Binance Labs and follow-up investments from multiple investment institutions, including Polygon Ventures, Ankr, EnjinStarter, Baselayer Capital, PolkaBridge Ventures, etc. The project did not disclose the specific amount of funding, but based on the white paper, it is estimated to be $1.6 million, which may not be sufficient for a narrative-rich metaverse platform. The project needs to reasonably allocate funds and development progress. The project is expected to conduct a token generation event (TGE) in August/September 2023, but has not yet announced any public offering-related information, which needs to be monitored. With endorsements from well-known institutions such as Binance and Polygon, fundraising should not be difficult, so it is worth keeping an eye on.

• Partnerships: The project has been very active in terms of partnerships, frequently updating partnership resources on Twitter, increasing the project's exposure and credibility. The project has announced 100+ strategic partners on its official website, covering investment institutions, media platforms, game developers, NFT markets, and other fields, demonstrating the team's strong marketing and promotion capabilities, as well as extensive industry resources. Some of the project's partners are well-known brands such as Binance, Polygon, Ankr, Enjin, etc., all of which are leaders or participants in the metaverse field, providing the project with advantages in technology support, market promotion, user traffic, etc.

In summary, AlterVerse has overall excellent strength and is a metaverse game platform with high growth potential and competitiveness, worthy of attention.

1.2. Valuation

According to its official website, AlterVerse completed a private placement financing round in October 2022, but did not disclose the amount of financing or valuation. However, based on its published economic model, this round of financing may be a Series A private placement, with a financing of $1.6 million and a valuation of $20 million, with a token price of $0.02.

In addition, according to its disclosed financing plan, the following financing plans are in place:

Series B private placement, with a planned financing of $3 million, a token financing price of $0.03, and a valuation of $30 million;

Public offering round, with a planned financing of $400,000, a token financing price of $0.04, and a valuation of $40 million;

A simple comparison of the market performance at the time of similar projects' launch and the current market performance:

We can make a simple prediction of AlterVerse's potential secondary market performance. Of course, considering the significant differences between the current market environment for metaverse projects and the market environment at the time of SAND and MANA's launch, we can appropriately increase the valuation. The predicted price is for reference only.

Assuming that ACE's launch performance can match that of SAND and MANA, its predicted fully diluted market value at launch is between $50-100 million, and the secondary market launch price may be between $0.05-0.1.

2. Project Overview

2.1. Project Business Scope

As an interconnected metaverse and AAA-level game creation platform, AlterVerse allows users to play and create an unlimited number of interconnected games and worlds. AlterVerse's business scope includes the following aspects:

• Providing a game and world based on Unreal Engine 5 (similar to "Minecraft") and a development platform for Metasevers, allowing creators to easily build their own games and worlds without programming or design experience. Creators can use various templates, tools, resources, and tutorials provided by AlterVerse to customize the appearance, functionality, rules, and logic of their games and worlds.

• Providing an NFT creation and trading platform supported by Enjin and Altura & NFT, as well as various DeFi services, allowing users to own and trade unique digital assets in games and worlds, as well as participate in various financial services. Users can use ACE or other cryptocurrencies to buy, sell, lease, or auction various NFTs, such as SKYCITY, characters, equipment, and props. Users can also use ACE or other cryptocurrencies to participate in various DeFi services, such as lending, liquidity mining, etc.

• Providing a community-based game and world operation platform, allowing users to engage in various activities in games and worlds, such as exploration, shopping, entertainment, socializing, learning, and earning money. Users can join or create their own communities, interact and collaborate with other users, participate in various competitions and activities, earn various rewards and reputation, and also become managers of games and worlds, inviting other users to join for an entrance fee, etc.

2.2. Past Development and Roadmap

2.2.1. Past Development

2.2.2. Current Development Progress

2.2.3. Development Plan and Roadmap

• 2023: AlterVerse plans to achieve the following goals in 2023:

  ① Launch the public test version of Sky City: Sky City is the center and entrance of AlterVerse, a free Metaverse center that allows users to socialize, shop, and entertain in virtual space. Sky City will be open to all users in 2023, allowing more people to experience AlterVerse's Metaverse game platform.

  ② Launch the public issuance of $ACE tokens: $ACE is AlterVerse's token, which can be used to purchase, trade, and earn NFTs in the game. $ACE will be listed on mainstream exchanges in 2023, allowing more people to participate in AlterVerse's economic system.

  ③ Launch 12 different themed and gameplay Metaverse games: AlterVerse will launch 12 different themed and gameplay Metaverse games in 2023, such as Sparta, Caerule, etc. These games will all be connected to Sky City, forming an infinite Metaverse network. Users can customize their characters, spaces, and items in these games and convert them into NFTs.

  ④ Cooperate and promote with more industries and fields: AlterVerse will cooperate and promote with more industries and fields in 2023, such as retail, e-commerce, media, sports, finance, etc. It provides these partners with the opportunity to establish their own brands and services in the Metaverse, providing users with more choices and experiences.

• 2024: AlterVerse plans to achieve the following goals in 2024:

• Launch the official version of Sky City: Sky City will be officially launched in 2024, providing more features and optimizations, such as an NFT marketplace, game lobby, activity center, etc. Sky City will become the core and most important Metaverse game platform of AlterVerse.

• Launch more Metaverse games: AlterVerse will launch more Metaverse games in 2024, covering more themes and gameplay, such as history, science fiction, horror, etc. These games will all be connected to Sky City, forming an infinite Metaverse network. Users can enjoy more adventures and fun in these games.

• Support more NFTs and cryptocurrencies: AlterVerse will support more NFTs and cryptocurrencies in 2024, allowing users to create, trade, and earn virtual assets using different platforms and protocols. AlterVerse will collaborate with Enjin, Efinity, Polygon, and others to provide more efficient and convenient NFT and cryptocurrency services.

• Interconnection with other Metaverse game platforms: In 2024, AlterVerse will interconnect with other Metaverse game platforms, allowing users to freely shuttle and explore in different game worlds and use their own NFTs. AlterVerse will collaborate with Decentraland, The Sandbox, Axie Infinity, and others to create an open and decentralized Metaverse ecosystem.

2.3. Team Situation

2.3.1. Overall Situation

According to the official website and the project's DECK presentation, AlterVerse's team is composed of over 20 experienced professionals in the gaming industry, including game designers, programmers, artists, marketers, and advisors. Team members have rich experience and backgrounds in game development and blockchain technology, such as Unreal Engine, Enjin, Efinity, Polygon, etc.

Games and companies they have collaborated with include: "The Witcher," "Call of Duty," "World of Warcraft," "StarCraft," "Destiny," "Guitar Hero," "Spyro," "Tony Hawk," "Diablo," "Medal of Honor," and more.

2.3.2. Core Members

Scot Kinney, the founder and CEO of AlterVerse, is a seasoned game developer and entrepreneur with over 30 years of game development experience, having been involved in well-known game projects such as Star Trek Online, Star Wars Galaxies, and EverQuest II.

Michael Reino, the co-founder and CTO of AlterVerse, has been responsible for the technical development and optimization of the game since joining the team in 2012.

Pat Gerleman, AlterVerse's COO, has 17 years of experience in the gaming industry, having worked at Activision Blizzard and managed well-known game brands such as Call of Duty, Destiny, World of Warcraft, and Overwatch. He also has experience collaborating with industry giants such as GameStop, selling various games, expansion packs, season passes, game currency, and collectibles.

Simon Kertonegoro, AlterVerse's CMO, is a digital marketing and community management expert with 10 years of experience. He has held key positions in several well-known blockchain and cryptocurrency projects such as Enjin, Axie Infinity, and Decentraland, and has been involved in the promotion and operation of multiple games and metaverse projects.

The AlterVerse team also includes excellent programmers, artists, sound designers, community managers, etc. Team members come from different countries and regions, such as the United States, Canada, the United Kingdom, Poland, Australia, etc., and share a common vision and passion to build an open, free, and inclusive metaverse platform.

AlterVerse also has the support of well-known advisors and investors, such as Nicholas Longano (former President of Majesco Entertainment), PolkaBridge Ventures (a leading cross-chain investment institution), Samurai Starter (an incubator focused on metaverse projects), and others. AlterVerse has established close relationships with multiple partners, such as Enjin (a leading NFT platform), PolkaBridge (a cross-chain bridging protocol), Altura (an intelligent NFT platform), Capshort (a social finance platform), TOPGOAL (a sports NFT platform), and more.

2.3.3. Financing Situation

AlterVerse was an early participant in the Binance Labs Incubation Program, being one of the 14 finalists in the fourth season of the program, and after completing the program, it received private placement financing from Binance Labs and several other investment institutions.

In October 2022, AlterVerse's private placement financing was led by Binance Labs and received follow-up investments from Polygon Ventures, Ankr, EnjinStarter, Baselayer Capital, PolkaBridge Ventures, and several other investment institutions. The amount and valuation of AlterVerse's private placement financing have not been disclosed, but it is reported that this round of financing will be used to accelerate the development and promotion of its Metaverse game platform.

3. Business Analysis

3.1. Service Objects

AlterVerse mainly serves two types of users: creators and players.

3.1.1. Creators

Creators are users who use the AlterVerse platform to build their own game worlds. They can use the tools and resources provided by AlterVerse to easily create game worlds with their own style and characteristics, and publish them on the AlterVerse platform for other players to enter and experience.

Game creators can showcase their creativity and talent in AlterVerse, attracting other users to join or purchase their game worlds, thereby earning income and recognition. They can also collaborate or compete with other creators in AlterVerse, learning and exchanging various skills and experiences to improve their own skills and influence.

3.1.2. Players

Players are users who use the AlterVerse platform to experience different game worlds. They can browse and choose game worlds of interest on the AlterVerse platform, enter them for exploration, competition, and cooperation. They can also own, trade, and earn unique digital assets such as characters, equipment, props, and land in the game. Additionally, they can find their favorite games and worlds in AlterVerse, interact and collaborate with other players, participate in various competitions and activities, and earn various rewards and reputation. They can also own and trade various NFTs and DeFi in AlterVerse, thereby increasing their income and wealth.

3.2. Business Categories

AlterVerse's business can be categorized as follows:

3.2.1. Game Creation Platform

This is the core business of AlterVerse and the biggest differentiator from other Web3 game platforms. AlterVerse provides a game creation platform based on Unreal Engine 5 and an innovative Altura NFT platform, allowing creators to easily build their game worlds without programming or design experience, and easily convert game items into NFTs. AlterVerse provides rich templates, materials, tools, and services, allowing creators to freely customize and optimize their game worlds and publish them on the AlterVerse platform for other players to enter and experience.

3.2.2. Game Projects

This is the main business of AlterVerse and an important way to attract and retain players.

AlterVerse will be divided into 4 stages, including the upcoming three game projects (Sky City, OutPost, and Raiders) and its own Metasevers. These game projects are all game worlds created based on the AlterVerse platform, with different themes and gameplay, providing players with a rich gaming experience.

At the same time, nine worlds are currently in development. Creators will be able to mix and match these new assets with flagship game templates to create infinitely expandable content.

3.2.3. Game Platform

This is an auxiliary business of AlterVerse and an important way to support and enhance its core and main businesses. AlterVerse provides a game platform that supports NFTs and cryptocurrencies, allowing players to own, trade, and earn unique digital assets in the game, enjoying real ownership and profits. It also adopts a DAO governance model, allowing users holding ACE to influence the platform's development direction through voting.

3.3. Business Details

3.3.1. Game Creation Platform

The core of AlterVerse is the groundbreaking MetaServer infrastructure, which is the cornerstone of a truly decentralized metaverse, allowing creators to retain absolute control over their games and experiences. This infrastructure provides seamless access to all games, including MetaServers, through the AlterVerse platform. It facilitates free cross-dimensional teleportation and provides a multiplayer gaming experience with up to 200 players per server.

Utilizing the capabilities of Unreal Engine 5 and the innovative Altura NFT platform, AlterVerse will introduce Metasevers to the world. These are not just servers; they are creation platforms that allow anyone and everyone to build their own AAA-quality games, all integrated with NFT utilities.

AlterVerse's game creation platform offers the following features and functionalities:

1) Based on Unreal Engine 5

The AlterVerse game creation platform utilizes the industry's most advanced Unreal Engine 5, allowing creators to enjoy the highest quality graphics, physics, sound effects, and animation effects. It also enables creators to enhance the performance and experience of their game worlds using the various features and optimizations provided by Unreal Engine 5, as well as easily build games using assets from the UE Marketplace.

2) GPT Integrated Conversational AI

AlterVerse is integrating conversational AI into its core infrastructure, allowing creators to build interactive, voice-compatible non-player characters (NPCs). These NPCs can provide endless dialogue content for players, helping them navigate the game.

Creators can personalize the appearance, background story, actions, and knowledge base of each character, making their games unique and engaging.

3) Real-world Rewards

AlterVerse incorporates real-world rewards into the game, allowing players to purchase and earn tangible goods in the in-game store, win practical items to improve real-life, and have an immersive business experience.

4) Decentralized Game Servers

Creators have full control over their game servers. This unique approach, combined with out-of-the-box Web3 integration, makes AlterVerse the most decentralized game creator in the world.

Here, players have complete autonomy over their experience, and customizable game templates provide the foundation for designing unique content quickly and easily.

5) No Programming or Design Experience Required

The AlterVerse game creation platform uses a simple and user-friendly visual editor, allowing creators to create and edit game worlds in an intuitive interface without writing any code or designing graphics. Creators can arrange environments, buildings, vehicles, characters, and props, and set their attributes and behaviors through drag-and-drop, scaling, rotating, and other operations.

6) Rich Templates and Assets

The AlterVerse game creation platform provides a wealth of templates and assets covering different types and styles of environments, buildings, vehicles, characters, and props, allowing creators to choose their preferred templates and assets and adjust and modify them. These templates and assets are high-quality NFTs representing unique digital assets. Creators can own them by purchasing or earning these NFTs and can generate income by selling or exchanging them.

7) Powerful Tools and Services

The AlterVerse game creation platform offers a range of tools and services that allow creators to create and manage their game worlds more conveniently. For example, script tools allow creators to write logic and interactions for game worlds in a simple programming language; testing tools allow creators to test and debug game worlds in a simulated environment; storage and publishing services allow creators to save and publish their created game worlds on the AlterVerse platform, enabling them to earn income from their game worlds. It also provides built-in voice chat functionality, allowing users to communicate and collaborate more conveniently, and interact with other users through comments, ratings, favorites, sharing, etc.

3.3.2. Game Projects

AlterVerse will be divided into 4 stages.

Stage 1: Sky City - 85% Progress

Sky City is AlterVerse's first city server and central hub. It is an aerial city consisting of 17 massive platforms where users can explore various attractions, shops, apartments, clubs, etc. They can also drive cars or hovercrafts to shuttle between different platforms. Sky City also offers various game modes such as racing, shooting, and capture the flag, allowing users to engage in intense combat and cooperation in the air. Sky City also supports users to purchase land, build their own homes and businesses, and buy and trade various NFT items such as cars, weapons, and clothing.

Inner Circle of the City: The inner circle is the best real estate in Sky City. It has a mini-mall with many shops and a rocket shop. Sky cars, hover cars, and town cars can all be found here. The Pit, Sky City Club, City Hall, and Arnold's Restaurant are also located here.

Stage 2: OutPost - 70% Progress

This is a shooting game developed based on Unreal Engine 5, where users can engage in death matches or team capture the flag modes with other players in a space station. OutPost is highly customizable, allowing users to choose different characters, weapons, equipment, and skills to adapt to different battlefield environments and strategies. OutPost also supports users to purchase and trade various NFT items such as weapons, equipment, and skills, suitable for gaming guilds.

Stage 3: R e k t - 70% Progress

R e k t is a hardcore survival game and part of the AlterVerse series. It is set in a sci-fi world where players must survive on a spaceship that has lost its way near the Three Sisters star system. Players must face dangers such as radiation, anomalies, mutants, and other players. They can also own and operate their own game servers and trade with $ACE. This game is expected to be released this year.

Stage 4: Metaservers - 40% Progress

What are Metaservers?

As a revolutionary innovation at the core of AlterVerse, Metaservers make it possible to access interconnected, NFT-driven 3D worlds from anywhere, just like web hosts on the internet. This technology allows users to "teleport" between these different worlds through an interactive server list in AlterVerse, turning each server into a clickable gateway, similar to internet hyperlinks.

Metaservers are servers that can be modified and sold to cities, clubs, associations, and gaming guilds, allowing them to enter the metaverse. It comes in three types: city servers, club servers, and game servers, each with different functions, scales, and themes. Owners can use $ACE to profit, such as selling stores, hosting events, and providing game services.

In addition, nine games are currently in development.

Viken: Viken is a game set in the Viking era, where players can explore, battle, and trade in a world full of adventure and legend. They can also build their own ships, villages, and fortresses, engage in wars or alliances with other players or hostile forces, and participate in various missions and activities.

Sparta: Sparta is a game set in ancient Greece, where players can experience epic battles and adventures in a world full of mythology and heroes. They can also choose different city-states and factions, compete or cooperate with other players or gods, and participate in various challenges and rewards.

Caerule: Caerule is a game set in a futuristic sci-fi background, where players can explore, survive, and create in a world full of wonders and dangers. They can also pilot different aircraft and robots, travel and battle in the air and on the ground, and collect and craft various resources and items.

Maya: Maya is a game set in the ancient American civilization, where players can experience ancient culture and legends in a world full of mystery and magic. They can also build their own pyramids, temples, and cities, interact or confront with other players or supernatural forces, and participate in various rituals and ceremonies.

The Bog: The Bog is a horror survival-themed game, where players can attempt to escape or resist in a world full of fear and suspense. They can use various weapons and items to search for clues and a way out in the swamp, forest, and ruins, while avoiding encountering various monsters and traps.

Mytriel: Mytriel is a fantasy adventure-themed game, where players can experience different characters and stories in a world full of charm and wonders. They can choose different races and professions, cooperate or compete with other players or NPCs, and participate in various quests and events.

Sudarak: Sudarak is a game themed around Eastern martial arts, where players can experience different styles and sects in a world full of martial arts and the martial arts community. They can learn different martial arts and internal skills, roam and struggle in the martial arts world, and participate in various martial arts competitions and bounties.

Illura: Illura is a game themed around ocean exploration, where players can experience different underwater creatures and environments in a world full of beauty and danger. They can pilot different submarines and underwater equipment, travel and research underwater and on islands, and collect and trade various rare and useful items.

Pangaea: Pangaea is a game set in prehistoric times, where players can experience different survival and adventure in a world full of ancient and dinosaurs. Players can build their own camps, tools, and weapons, interact or battle with other players or dinosaurs, and participate in various hunting and gathering activities.

These games are all part of AlterVerse and will be connected to Sky City, forming an infinite Metaverse network. Users can customize their characters, spaces, and items in these games and convert them into NFTs.

3.3.3. Game Platform

AlterVerse provides a game platform that supports NFTs and cryptocurrencies and adopts a DAO governance model, allowing players to own, trade, and earn unique digital assets in the game, enjoying real ownership and profits. Users holding ACE can influence the platform's development direction through voting.

• 3.3.3.1. Game Economy System

The game economy is roughly divided into 3 categories: Alpha - Beta - Gamma

1) AlterVerse Alpha

AlterVerse Alpha is the in-game economy, where $ACE is distributed and destroyed through various game activities such as exploration, combat games, PVP, PVE, racing, mini-games, mystery boxes, sales of weapon-clothing-vehicle skins, billboard advertising sales, restaurant/food sales, NFT art sales, and household goods sales.

It includes:

• Visiting various casinos and game halls in Sky City, playing classic casino games, betting with stablecoins or ACE, and winning prizes.
• Purchasing premium passes at Club Sky City to participate in various activities, performances, concerts, or showcase dance moves.
• Buying, crafting, harvesting, and purchasing consumables and food to provide higher energy for walking or fighting in AlterVerse.
• Earning ACE through hunting, fishing, and planting food, which can be used to purchase skins, weapons, equipment, loot boxes, etc.
• Betting in multiple events and mini-games in AlterVerse to win more ACE.
• Renting space on billboards to showcase brands or projects and paying advertising fees with ACE.

AlterVerse Alpha also has a decentralized engine, a smart contract that distributes a portion of the game's revenue to players, developers, and the community. The decentralized engine aims to incentivize more people to participate and create content in AlterVerse.

2) AlterVerse Beta

AlterVerse Beta is the economy before skill acquisition or gameplay. It mainly includes banking, land sales, apartment and office sales, city server sales, game server sales, club server sales, and partner programs. Players can experience the game's features through:

• Pledging ACE in the AlterVerse Bank to earn annual rewards with no lock-up period and the ability to withdraw rewards and principal at any time.
• Borrowing various assets using ACE as collateral. Other cryptocurrencies can also be used as collateral to borrow ACE.
• Integration with various DeFi lending platforms to get better rates for borrowing and lending various cryptocurrencies if holding ACE.
• Purchasing or leasing land in AlterVerse to build their own homes or offices. They can sublet or resell the purchased land. Using ACE to purchase land also provides a discount.
• Building their own shops or homes on purchased or leased land. Using custom portals and selecting various aesthetic options. Using ACE to customize shops or homes also provides a discount.
• Purchasing or leasing city servers and club servers to run their own cities and events. All servers will use ACE as currency.

AlterVerse Beta also has a decentralized engine that distributes a portion of the game's revenue to players, developers, and the community. The decentralized engine aims to incentivize more people to participate and create content in AlterVerse.

3) AlterVerse Gamma

AlterVerse Gamma is the governance aspect of the economy. The DAO will decide the distribution of the remaining funds collected through all activities in AlterVerse Alpha and Beta. It is the next stage of the game's development, allowing players to participate in governance, voting, and decision-making in more scenarios. Players can experience the game's features through:

• Joining the DAO and participating in important decisions such as project collaborations, multi-chain integrations, Sky City version sales, setting staking rewards, acquiring game studios, deploying reward pools, burning ACE, using the decentralized engine, harvesting farm rewards, and protocol upgrades.
• Joining special instance DAOs to participate in local political, tax, and military affairs, such as electing mayors and council members, restructuring tax policies, allocating budgets, building defenses, and purchasing weapons and special vehicles.

The income of the DAO mainly comes from AlterVerse NFT sales, MetaServer NFT sales, NFT Marketplace fees, Land transaction fees, partner in-game store fees, Ace Royale membership fees, e-sports betting fees, event and exhibition fees, and partner revenue sharing profits.

The expenses of the DAO mainly include distributing rewards through the decentralized engine, token buyback and burn, funding community proposals, and protocol integration costs.

The governance role of the DAO is to decide the allocation and use of ACE, as well as the development direction and strategy of AlterVerse.

At the same time, AlterVerse Gamma also has a decentralized engine that distributes a portion of the game's revenue to players, developers, and the community. The decentralized engine aims to incentivize more people to participate and create content in AlterVerse.

• 3.3.3.2. NFT Marketplace

The NFT Marketplace is an important part of the AlterVerse ecosystem, providing a convenient, secure, and fair platform for users and creators to trade NFTs. In the NFT Marketplace, users and creators can buy and sell various NFTs using ACE, including NFTs officially produced by AlterVerse, NFTs produced by MetaServer creators, and NFTs produced by other partners. The NFT Marketplace features and advantages include:

1) Supporting various types of NFTs, including game props, artwork, collectibles, music, videos, etc., to meet the needs and preferences of different users and creators.

2) Providing a simple and user-friendly interface for users and creators to quickly browse, search, filter, publish, buy, sell NFTs, and view detailed information, history, ownership proof, etc.

3) Implementing a reasonable fee mechanism, charging a certain percentage of fees for each NFT transaction, and distributing these fees to the relevant stakeholders, including beneficiaries, creators, and AlterVerse DAO.

4) Encouraging interaction and community building between users and creators, allowing them to express their opinions and feelings through comments, favorites, shares, etc., and participate in various activities and competitions to earn rewards and honors.

• 3.3.3.3. Ace Royale Community

The Ace Royale community is an exclusive VIP community of AlterVerse, providing a series of benefits and rewards for ACE holders. The purpose of the Ace Royale community is to incentivize users to engage in more games and interactions in AlterVerse and enhance their status and influence in AlterVerse. The features and advantages of the Ace Royale community include:

• A paid community where users need to pay 29 ACE per month to join. This ensures the high quality and high participation of the community and provides financial support for the operation and development of the community.
• A gamified community where users can increase their level in the community through various fun in-game activities and receive corresponding rewards and honors. The Ace Royale community has seven levels: Patron, Pioneer, Prodigy, Luminary, Visionary, Champion, and Titan.
• A rewarding community where users can earn various rewards by increasing their level in the community, including exclusive NFT drops, in-game drop multipliers, discounts at the AlterVerse NFT store, ACE transaction discounts, etc.
• An interactive community where users can communicate and interact with other community members through comments, favorites, shares, etc., and participate in various community activities and competitions to increase their reputation and influence in the community.

It provides users with a unique and fun gaming experience and also provides a powerful value capture mechanism for ACE.

The industry track to which AlterVerse belongs is gaming, specifically the sandbox game segment.

3.4.2. Market Size

• 3.4.2.1. Game Market Size

The metaverse may be the next generation of the internet - combining the physical and digital worlds in a persistent and immersive way - rather than just a virtual reality world. A device-agnostic metaverse accessible via PC, game consoles, and smartphones could form a very large ecosystem. It is estimated that by 2030, the total addressable market size of the metaverse economy could grow to between 8 trillion and 13 trillion US dollars.

According to a report by Newzoo, the number of global gamers is expected to exceed 3 billion in 2023, an 11.1% increase from 2.69 billion in 2020. Of these, mobile gamers will reach 2.85 billion, accounting for 94.4%; PC gamers will reach 1.47 billion, accounting for 48.8%; and console gamers will reach 910 million, accounting for 30.2%. The Asia-Pacific region will continue to be the largest gaming market, with 1.84 billion gamers, accounting for 60.9%; followed by the Middle East and Africa with 560 million gamers, accounting for 18.5%; Europe with 420 million gamers, accounting for 13.9%; North America with 310 million gamers, accounting for 10.3%; and Latin America with 250 million gamers, accounting for 8.3%.

Game players can be categorized based on their motivations and behaviors:

• Achievement-oriented players: These players set game-related challenges and strive to achieve them, requiring the accumulation of a large amount of resources and experience.
• Exploratory players: These players require a high degree of freedom, trying various experiences offered in the game and collecting game equipment. Collectors also fall into this category of players.
• Social players: These players enjoy interacting with other players during the game and like to enhance their social presence using guild or team mechanisms.
• Killer players: They aim to use the tools provided in the game for destruction (including PK with NPCs/other players) or to use weapons to help others.

In traditional games, a competitive game meets one or more of the following characteristics: it meets the needs of one or more types of players, has strong playability, has excellent graphics, and can create profits for game players.

Sandbox games have two main themes. The first theme is the ability to change, influence, and create the virtual world in the game, with the core being to empower players with the right to create, providing a high degree of freedom, greatly enhancing the game's playability, and reducing dependence on game operators. The other theme is social, with sandbox game social interactions being more small-scale and tending to occur among acquaintances.

User creativity is also one of the key factors for the sustainable development of sandbox games.

AlterVerse is a metaverse platform for gaming and world-building, where users can play and create an infinite number of interconnected games and worlds. AlterVerse's most prominent competitive advantage lies in its ability to meet the needs of various types of players and its high playability. Due to the high degree of freedom in the sandbox and the platform providing various tools and templates, it can attract a large number of advanced players, enabling re-creation within the ecosystem, forming a good cycle. AlterVerse supports single-player games and multiplayer servers, allowing users to experience different game modes on different servers, including Sky City, OutPost, etc. Sky City is a free-to-play central hub, a floating city with various entertainment facilities such as shops, bars, casinos, cinemas, and sports venues, as well as some unique game activities. Sky City can meet the needs of exploratory and social players. OutPost is a new version of the Disruption game developed based on Unreal Engine 5, renamed OutPost, a multiplayer FPS game where players can explore and battle in space. OutPost can meet the needs of achievement-oriented and killer players. Multiplayer servers typically have forums and guilds, allowing for small-scale social interactions within sandbox games. Nested games exist within the virtual space, some of which are created by advanced players. Player-created content can be freely priced and sold, giving players the opportunity to profit from game resources.

• 3.4.2.2. NFT Market Size

NFT types are mainly divided into digital collectibles and game equipment.

According to Nonfungible's website, in the first half of 2023, the number of active addresses in the global NFT market was 87,897, an 11.4% increase from 78,881 in the first half of 2022. In the first half of 2023, the global NFT market's transaction volume was $290 million, a 26.1% increase from $230 million in the first half of 2022.

Collectibles

Types include digital artwork, cards, images, etc., with no practical use.

Collectibles come in many forms, including art, antiques, stamps, luxury goods, etc. Their value depends on: 1) historical value, as the age and cultural significance of the item cannot be replicated; 2) celebrity effect, as the association of the item with a celebrity enhances its value; 3) aesthetic value, as the artistic level and creativity of the work are recognized and appreciated by the public; 4) rarity, as the quantity of the item and supply-demand relationship affect its price.

The motivations for purchasing collectibles can be divided into 3 categories: 1) hobby; 2) appreciation expectations; 3) value preservation.

The global art auction market was estimated to be around $16.3 billion in 2022, auctioning about 750,000 art pieces. Among them, the top 100 globally auctioned about 20 art pieces per capita, indicating that the auction market is dominated by a few wealthy individuals. The secondary market for art NFTs on platforms like SuperRare, Known Origin, and Makers Place had a total transaction volume of about $35.72 million in the first quarter of 2023, with about 165,000 transactions and approximately 9,040 active addresses participating in the transactions. These data indicate that the digital art collectible NFT market is also participated in by a small number of people. Only collectibles with high liquidity and consensus of value can be called "soft gold."

However, the current value support for collectible NFTs is insufficient, with many relying on artificial hype and speculation to maintain prices, without forming widespread value consensus and having low liquidity. To increase the value of collectible NFTs, the future trend is to use the celebrity effect, collaborate with well-known brands or large institutions, and launch limited edition NFTs, such as Binance anniversary commemorative NFTs, etc. The main reason blockchain users purchase NFT digital collectibles is the expectation of appreciation and profit.

Game Equipment

Represented by virtual properties (LAND) in Sky City, weapons, and equipment in OutPost, card games like Gods Unchained, virtual reality games like Decentraland, etc.

Game equipment NFTs are NFTs that can be used in game scenarios, giving users real ownership of game assets, unaffected by centralized server data loss. These NFTs are particularly important in virtual reality games, with the most representative NFT asset being virtual properties (LAND), allowing users to deploy content on their purchased or leased land and generate income from it. It is estimated that global game market revenue will reach $20-30 billion in 2023, making game equipment NFTs a highly potential sub-market.

The playability of games is the foundation for attracting game players, forming consensus on the value of game assets, and the sustainable development of games. Only when enough players are attracted can game equipment have high liquidity.

3.5. Business Data

3.5.1. Social Media Data

As of July 26, 2023, ALTERVERSE has performed relatively well on social media platforms. Currently, ALTERVERSE's Twitter account has attracted nearly 60,000 followers, making it one of the most popular channels, with frequent Twitter updates. Additionally, in the Discord community, users actively participate in discussions, creating an active community. The specific data for each platform is as follows:

• Twitter: 58.3K followers
• Discord: 8.1K followers
• Telegram: 10.6K followers

3.5.2. Partners

ALTERVERSE is very active in terms of partnerships, often updating partnership resources on Twitter. The project has announced 100+ strategic partners on its official website, covering investment institutions, media platforms, game developers, NFT markets, and other fields, demonstrating its team's strong marketing and promotion capabilities, as well as extensive industry resources.

3.6. Project Competitive Landscape

According to the comparison information published on the ALTERVERSE official website, the competitive projects referenced by ALTERVERSE include The Sandbox, Roblox, Minecraft, Fortnite, Decentraland, etc., and demonstrate its competitive advantages.

A comparison was made in terms of realistic graphics, integration of artificial intelligence, decentralized servers, decentralized currency, interoperable assets, game templates, average player age, and game engines, showing that AlterVerse has comprehensive advantages in innovative technology.

3.6.1. Competitive Projects

• 1. The Sandbox

The Sandbox is also a virtual reality world game (sandbox) based on Ethereum, with pixel-level graphics in the game, reducing the difficulty of game construction for developers. Players can use the token SAND to purchase LAND (plots) and other equipment. The Sandbox is led by the largest crypto asset fund and accelerator company Hashed in South Korea. The Sandbox has a total of 166,464 plots of land, contained within a single map and divided into multiple regions, forming The Sandbox Metaverse (virtual world).

The existing products of The Sandbox include Vox Edit (content editor), Marketplace (trading market), and Game Maker (game creation tool). The project allows users to initiate transactions on Ethereum through the ERC-1776 standard, with the platform paying the gas fees, optimizing the overall user experience.

• 2. Roblox

Roblox is an online game platform and game creation system developed by Roblox Corporation, allowing users to program games and play games created by other users. Roblox was officially released in 2006 and uses Lua as the programming language. The platform is primarily aimed at children and teenagers, with over half of the children under 16 in the United States being Roblox users. Roblox is free to play, but users can purchase in-game items and services using a virtual currency called Robux.

Roblox allows players to use its proprietary engine, Roblox Studio, to create their own games, known as "experiences." Users can use basic building blocks called Parts of different shapes and colors to build game scenes, as well as use preset models and tools to enhance the functionality and interactivity of the game. Users can also create purchasable content, such as "game passes" and "developer products," to increase their income. Over 20 million games are created using Roblox Studio each year, with the majority developed by minors.

• 3. Minecraft

Minecraft is a sandbox game developed by Mojang Studios, allowing users to explore, build, fight, and create in a 3D world made up of blocks. Minecraft was released in 2009 and uses Java as the programming language. Minecraft is available on various platforms including Windows, macOS, Linux, iOS, Android, Xbox, PlayStation, and Nintendo Switch. Minecraft is a paid game, but users can purchase in-game skins, texture packs, maps, and other content using a virtual currency called Minecoins.

Minecraft allows players to play in two main game modes: survival mode and creative mode. In survival mode, players need to collect resources, craft tools and weapons, build shelters, and fend off enemies and hunger. In creative mode, players can freely use various blocks and items to build their desired scenes and structures.

Users can also create custom game modes and rules, or join servers and worlds created by other users. Minecraft also allows players to create their own content using its built-in code editor or external software, known as "mods." Users can use mods to change the game's appearance, behavior, mechanics, and add new elements and features.

Users can create their own maps and adventures, or download maps and adventures shared by other users to play. Millions of mods and maps are created and shared by Minecraft users each year.

• 4. Fortnite

Fortnite is a multiplayer online shooter game developed by Epic Games, allowing users to cooperate or compete in a large open world. Fortnite was released in 2017 and uses Unreal Engine 4 as the game engine. Fortnite is available on various platforms including Windows, macOS, iOS, Android, Xbox, PlayStation, and Nintendo Switch. Fortnite is free to play, but users can purchase in-game outfits, weapons, and items using a virtual currency called V-Bucks.

Fortnite also allows players to create their own content using its built-in Creative Islands or external software, known as "Creative Islands." Users can use Creative Islands to create their own games and maps, or explore games and maps created by other users. Users can also use a feature called "Replay Royale" to record and edit their gameplay videos and share them with other users. Millions of Creative Islands and Replay Royales are created and shared by Fortnite users each year.

• 5. Decentraland

Decentraland is a blockchain-based virtual reality world developed by the Decentraland Foundation, allowing users to create, experience, and monetize in a 3D world owned and controlled by the community. Decentraland was officially released in 2020 and uses the Ethereum blockchain as its infrastructure. Decentraland can be accessed through a web browser or virtual reality devices. Decentraland is free to play, but users can purchase land, items, and services in the game using a virtual currency called MANA.

Decentraland allows players to play on a 2D grid consisting of 90,601 plots of land, with each plot called LAND representing ownership and control of the land. Players can build various scenes and applications on their own land, or sell or rent it to other players. Players can also combine multiple plots of land into a larger area called an ESTATE, or join a community organization with a specific theme or goal called a DISTRICT. Users can also participate in regular activities and competitions, or attend virtual art exhibitions and concerts.

Decentraland also allows players to create their own content using its built-in editor or external software, known as "Scenes." Users can use Scenes to create their own games and applications, and share them with other users. Users can also use a feature called "Snapshots" to take and share photos of themselves in Decentraland and interact with other users. Millions of Scenes and Snapshots are created and shared by Decentraland users each year.

• 6. Comparison of Gameplay

In summary:

AlterVerse, The Sandbox, and Decentraland all use LAND as limited, tradable, user-owned, and user-controlled virtual space. However, they also have the following differences:

• AlterVerse does not focus on land and instead emphasizes the game and creation platform. Its land is server-based, with each server able to accommodate multiple players. Players can create their own worlds on the server or join other players' worlds. Players can purchase or sell servers using in-game currency or cryptocurrency. AlterVerse has not yet disclosed the total amount of land and its prices.
• The Sandbox's land is blockchain-based, with each plot being a unique NFT. Players can create their own games and assets on the land, or join other players' games. Players can purchase or sell land using the SAND token. The Sandbox currently has 166,464 plots of land, with each plot covering an area of 96 square meters.
• Decentraland's advantage lies in being one of the earliest metaverse platforms to go live, with the most users and an active community. Its land is also blockchain-based, with each plot being a unique NFT. Players can create their own scenes and interactive systems on the land, or join other players' scenes. Players can purchase or sell land using the MANA token. Decentraland currently has 90,601 plots of land, with each plot covering an area of 10 square meters.

The main problem facing blockchain virtual reality games is that the land is owned by individuals/communities, and content creation permissions belong to individuals/communities, resulting in a large amount of unused land. On one hand, the number of landowners is limited, making it difficult to support game development solely through landowners. Although users without land can still play the game, their participation is relatively low. The quality of the game depends on the level of content on the land, i.e., the creative ability of the landowner. If the content quality is low, it is difficult to attract users to play, and user quality needs to be improved, making it difficult to increase user stickiness. On the other hand, users are the foundation of the game, and without increased user stickiness, landowners find it difficult to generate income beyond land appreciation, leading to a decrease in the number of people wanting to buy land, creating a vicious cycle that may result in insufficient liquidity for NFT assets such as spaceships.

Compared to other blockchain virtual reality platforms/sandbox games, AlterVerse's approach is to focus on self-created games and development platforms, aiming to attract and retain players through playability and creativity.

3.7. Token Economic Model Analysis

3.7.1. Token Total Supply and Distribution

• Native token: ACE
• Maximum supply: 10 billion

Initial Distribution

The total supply and distribution of tokens: AlterVerse's total token supply is 10 billion, with a circulating supply of 23.5 million (2.35% of the total token supply) after listing. The specific distribution is as follows:

3.7.2. Token Value Capture

The main utility of the ACE token is for various in-game transactions, purchasing NFTs such as LAND and clothing, and participating in governance voting. It also includes a burning mechanism as a deflationary model to increase the value of the token.

The value capture of the ACE token mainly includes the following aspects:

1) ACE is the universal currency within the AlterVerse ecosystem. Holders can use ACE to purchase various NFTs and items, participate in activities and services, and enjoy discounts and benefits. Its use cases are extensive.

2) ACE is the governance token of the AlterVerse DAO. Holders can participate in AlterVerse's decision-making by staking ACE and can receive rewards from the income of the AlterVerse DAO.

3) ACE is a scarce resource in AlterVerse. Holders can acquire rare NFTs and items within AlterVerse using ACE and can benefit from the appreciation resulting from ACE burning.

3.7.3. Core Token Demand

Based on the above information, the core token demand for the AlterVerse project (ACE) mainly includes the following aspects:

1) Users: Users are consumers and users of ACE. They need ACE to purchase various NFTs and items, participate in activities and services, and enjoy discounts and benefits.

2) Creators: Creators are producers and suppliers of ACE. They need ACE to sell the NFTs and items they create within AlterVerse and can generate income from the AlterVerse Store or MetaServer Store.

3) Partners: Partners are promoters and expanders of ACE. They need ACE to collaborate and integrate with AlterVerse and can generate income from partner stores or game portals.

4) Governors: Governors are managers and decision-makers of ACE. They need ACE to participate in the governance of the AlterVerse DAO and can receive rewards from the income of the AlterVerse DAO.

4. Preliminary Valuation

4.1. Core Issues

Which stage of the business cycle is the project in? Is it in the mature stage or in the early to mid-stage of development?

Based on the provided website content, the AlterVerse project appears to be in the early to mid-stage of development. The project is actively seeking partners and investors, and the company is promoting its upcoming games such as Sky City, Outpost, and REKT, which are still in development with release dates ranging from 2023 to 2024. Additionally, the company is actively promoting its unique features such as the no-code web3 game building tool, conversational AI integration, and decentralized game servers. Overall, the project is in a growth stage, striving to establish its position in the gaming industry.

Does the project have reliable competitive advantages? Where do these competitive advantages come from?

1) Technological Advantage: The AlterVerse project is developed using Unreal Engine 5, a leading game engine that provides high-quality graphics and physics effects, allowing users to enjoy a realistic and immersive gaming experience. It also integrates GPT conversational artificial intelligence, enabling creators to build interactive, voice-compatible non-player characters (NPCs).

2) Innovative Advantage: The AlterVerse project is not just a game but a metaverse consisting of interconnected worlds and communities. In the project, users can experience different roles, scenes, stories, and missions in different games and can teleport to other games or platforms through portals or MetaServers. It allows users to engage in various activities in virtual space, such as socializing, shopping, exploring, creating, and earning, and can prove their ownership and identity through NFTs and ACE.

3) Team Advantage: The AlterVerse team consists of industry veterans in gaming and entertainment who have been involved in well-known game projects such as God of War, Call of Duty, Titanfall, Overwatch, and Apex Legends. They have extensive experience in game development and innovation, capable of creating a high-quality and diverse metaverse platform.

4) Capital Advantage: The AlterVerse project has received investments and support from well-known institutions such as Binance Labs, Polygon Ventures, Ankr, EnjinStarter, and Baselayer Capital, all of which are leaders or participants in the metaverse field, providing technical support, market promotion, and user traffic advantages to the project.

What are the main variable factors in the operation of the project? Are these factors easily quantifiable and measurable?

1) User Count: This is an important indicator of the game's popularity and influence. User count can be divided into active users (DAU, MAU, etc.), registered users, paying users, etc., reflecting the game's attractiveness, retention rate, conversion rate, etc.

2) User Behavior: This is an important indicator of the game's user experience and satisfaction. User behavior can include game duration, frequency, content, social interaction, spending habits, etc., reflecting user interest, engagement, loyalty, etc.

3) Revenue and Profit: This is an important indicator of the game's economic benefits and sustainability. Revenue and profit can include total revenue, average revenue (ARPU, ARPPU, etc.), costs, profit margins, etc., reflecting the game's profitability, cost efficiency, competitiveness, etc.

4) Technical Performance: This is an important indicator of the game's technical level and stability. Technical performance can include loading speed, latency, error rate, crash rate, etc., reflecting the game's usability, reliability, scalability, etc.

These factors are quantifiable and measurable but require appropriate data collection and analysis tools, as well as clear objectives and standards.

What is the project's management and governance approach? How is the level of DAO?

AlterVerse is transitioning from early centralized operations to DAO governance. The AlterVerse DAO is a highly innovative and collaborative DAO that is dedicated to building and developing the AlterVerse metaverse gaming platform and actively collaborating and integrating with other NFT games, crypto platforms, retail and e-commerce brands, DAOs, NFT artists, etc., to create an open, interconnected, and decentralized metaverse experience platform.

The AlterVerse project has officially partnered with Community DAO, which fractionalizes real estate ownership. Community DAO will build a high-rise apartment building called CommTower within AlterVerse, allowing users to buy and rent virtual real estate and access various community services and activities. This collaboration not only adds more content and value to AlterVerse but also provides more exposure and influence to Community DAO.

4.2. Risk Analysis

Based on the provided information, the updated risk analysis for the AlterVerse project is as follows:

1) Risk of Game Not Launching: The project has not yet officially launched, and the development progress of the game may be affected by various factors such as technical challenges, team changes, and insufficient funding, which may result in the game not launching on time or at all, leading to a loss of trust and support from users and investors. However, based on the official progress updates, this possibility seems low.

2) Risk of Game Falling Short, User Insufficiency/Churn: Metaverse platforms mainly rely on user activity and retention. The two leading metaverse projects, Decentraland and The Sandbox, currently have very poor daily active users. The user base for AlterVerse is still unproven. While the project has a grand vision and rich game content, if the quality and experience of the game do not meet user expectations, or if the gameplay and innovation are not enough to attract users, users may lose interest and loyalty to the game, choosing other, better metaverse gaming platforms, leading to user churn and reduced revenue.

3) Technical Risk: The project uses technologies such as Unreal Engine 5 and NFTs, which may have issues related to instability, incompatibility, insecurity, and immaturity, such as system crashes, data loss, hacking attacks, code vulnerabilities, etc., which may affect the project's normal operation and user experience.

4) Competition Risk: As a metaverse gaming platform, it competes with other metaverse gaming platforms such as Roblox, Epic Games, and Decentraland, which may have more users, better content, stronger innovation, or more partners, potentially affecting AlterVerse's market share and revenue sources.

5) Content Moderation: The game needs to manage user-generated content to ensure it complies with rules and standards.

5. References

https://www.alterverse.com/ AlterVerse Official Website

https://bit.ly/AlterversePitchDeck Project Pitch Deck

https://bit.ly/AlterverseTokenUtility Project Token Utility

https://twitter.com/AlterVerse AlterVerse Official Twitter

https://newzoo.com/resources/blog/games-market-engagement-revenues-trends-2020-2023-gaming-report/ Newzoo Gaming Data

https://nonfungible.com/reports NFT-related Data

https://medium.com/alterverse Official Medium

https://enjin.io/showcase/alterverse Enjin Official Website

https://www.youtube.com/AlterVerse Official YouTube Channel

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