By Yinghao, investor of SevenX Ventures (Twitter @linsajiao)

The Beginning of the Story: Why did we start discussing Web3 Games?

The answer comes from an intersection.

From Web3 to Games

When we talk about "Web3," we are talking about three things: blockchain technology, decentralized concepts, and token economics.

All builders and believers hope that Web3 is a disruptive innovation. Brian Arthur described disruptive innovation in "The Nature of Technology" as "redefining," which is a paradigm shift in all past technologies, redefining the technical usage norms for a significant human need. The difference between disruptive innovation and incremental innovation is as follows:

Disruptive Innovation

Incremental Innovation

Requires new infrastructure

Does not require new infrastructure

Difficult to use, difficult to be accepted

Easily accepted

Leads to a paradigm shift

Continues the paradigm

Opportunity for new giants to emerge

Favors old giants

However, all disruptive innovations must face the ultimate test: the need for validation by the purest end-user (consumer) products, such as:

Product

Revolutionary Product

Is it a disruptive innovation?

Reason

Feature phone

iPhone

Yes

Shipped over 5 billion units

Consumer car

Tesla

Yes

Sold over 5 million units

Office software

chatGPT

Yes

User base exceeds 180 million

Human-computer interaction

Vision Pro

Uncertain

Still being validated by a large number of users, so it cannot be called a disruptive innovation yet

To demonstrate whether Web3 is a disruptive innovation, everyone is looking for validated consumer (C-end) products related to the above three aspects. In the end, everyone focused on three types of products: finance, social, and games. This is the origin of our discussion on Web3 Games: from Web3 to games.

From Games to Web3

The other side of the story is from games to Web3.

The history of electronic games has exceeded 70 years. If we divide it by age, it spans three generations, and if we divide it by technology, it has reached the ninth generation. Electronic games have entered everyone's life, they are exquisite desserts on a silver platter: everyone likes them, everyone buys them, and everyone can find flavors that suit them.

Therefore, as a purely consumer product, electronic games are a concrete product that witnesses technological progress, economic progress, and lifestyle progress. If an electronic game can incorporate and utilize top-notch technology, then that technology is fully validated. Just think about the development history and rise of NVIDIA, don't you think games are a magical existence? This is another reason for our discussion on Web3 Games.

The intersection of these two trains of thought confirms that Web3 Games are necessary to discuss and build.

Before Departure: What are our needs and expectations for Web3 games?

The answer is three needs and three expectations.

Three Needs

Believers have three needs for Web3 Games.

First, there need to be some playable and fun Web3 games (Web2.5 is also acceptable). We already have some, although not many.

Second, these games should drive the reconstruction of the game industry's infrastructure (as mentioned earlier regarding disruptive innovation), including engines, operating environments, platforms, tools, and commercialization. Each type of infrastructure should be rebuilt for the three elements of Web3 (blockchain technology, decentralized concepts, and token economics).

Third, from the perspective of the combination of token economics (internal) and the financial market (external), it should be proven that open game economies are effective in the long term—allowing investors to be validated and accumulate confidence. In many types of games (such as MMORPGs), the internal circulation of virtual currency has existed for a long time, but it cannot be traded on the open market and has not experienced the impact of speculators. The value of virtual currency is not clearly anchored, and the same goes for in-game assets. We need cryptocurrencies and NFTs to help Web3 Games achieve a truly open economy.

Three Expectations

Having clarified these three needs, believers have three expectations for Web3 Games.

First, Web3 games can partially confirm the "broad Web3," especially the theme of "massive application." If it cannot confirm many, then at least it should not refute it—no, Web3 does have consumer (C-end) products, it's just not very user-friendly yet.

Second, innovation in gameplay. We expect Web3 to bring about significant changes in the relationship between games and players, the relationship between players, in-game economies, and financial markets, reshaping the player experience.

Third, revolutionize the game industry. We expect Web3 to change the business models and commercial models of various links in the game industry chain, making it an intergenerational upgrade on par with online game revolution, game console revolution, mobile game revolution, and mixed reality game revolution.

The Current World: Three Compasses and Four Routes for the Self-growth of Web3 Games

Web3 Games have begun to grow wildly and have gradually embarked on four different routes through: a. infrastructure narrative; b. token incentives and issuance; c. decentralized philosophy, guided by three compasses.

Route 1: The Secret of the Cryptocurrency Market

Obtaining funds and time through narrative and token issuance.

The inevitable path for any Web3 project is to establish a strong narrative. The level of the narrative represents the height of a project. A lofty and even crazy narrative can build confidence for developers, users, partners, and investors, and then gain their support.

Once the narrative is established, the project side becomes a market-leading project through token issuance, and then uses highly liquid tokens and funds to exchange time for the realization of the narrative. This is the secret of the cryptocurrency market and is more advanced than the equity market.

In the Web3 Game track, many excellent narratives have emerged, such as gaming chains, gaming platforms, gaming guilds, and full-chain games. Many project parties have come a long way on this route by establishing a narrative and standing at the forefront of the market. It can be said that having a narrative and the ability to conduct public sales does not necessarily make an excellent Web3 Game project, but an excellent Web3 Game project must be proficient in narrative and public sales.

Route 2: Progressive Innovation

From Web2 games to Web2.5 games.

This route has the most peers. Excellent companies, producers, and developers from the global game industry are constantly looking for ways to add Web3 modules to electronic games. The characteristics of such progressive innovation are very clear:

• It does not lower the production level and delivery quality of traditional games (Web2 games);

• It does not significantly change the distribution and business models of traditional games;

• The main innovation focuses on the limited application scenarios of token economics and game assets;

The goal of these games is clear: to bring a large number of existing electronic game players into the Web3 world in the most gentle way, allowing them to understand Web3 Games through incentives, asset holding, token trading, etc., while fully enjoying mature game experiences.

Route 3: Shifting Core Experiences

Shifting game experiences from non-financialized to financialized, and then from financialized to extreme financialization.

We have noticed that some developers consider financialization to be the most important starting point for Web3 Game development. They believe that financialization itself is a form of gameplay and can even exist independently of traditional gameplay.

Electronic games are essentially a product as a service, the purpose of which is to provide services to players and have players pay for them. The service here is the game experience. Traditional Web2 games bring players various experiences, such as enjoying the plot, exploration and discovery, strategy formulation, hand-eye coordination, virtual socializing, challenges and achievements, construction and management, emotional experiences, upgrades and rewards, etc. Financialized gameplay (such as trading, betting, and gaming) can also bring players extreme experiences. Cryptocurrencies can make financialized gameplay easier to design and experience.

Route 4: Full-chain Games and Autonomous Worlds

When the Music Stops

Web3 Games have been developing for several years. Let's take a look at the current situation: Web3 does have the potential to transform games and industries, and has been validated in some areas, but the pace is slow and has not yet reached the point of breakthrough required for disruptive innovation. Believers, players, practitioners, and investors seem to have forgotten that disruptive innovation has its own rhythm, and this rhythm does not necessarily align with the rhythm of the crypto market, and may even be much slower. In this crypto market cycle, there are some observable phenomena, summarized as follows.

First, the phenomena of Web3 Games themselves:

• There has not been a true "blockbuster content" yet. Our requirements for blockbuster games are: not only a considerable number of users, transaction volume, and frequency, but also a real viral effect and a long lifecycle;
• The open economy has not been proven: tokens and assets have not effectively circulated internally (among players at different levels), and after landing on the secondary market, they lack effective real trading volume and are difficult to withstand speculative impact.

Second, the phenomena of the Web3 game track:

• This track has not seen an explosion, and has even gone from being the leading track in the previous cycle to becoming the bottom track in this cycle;
• Various token prices have remained weak. Whether during the strong growth period of meme coins at the end of 2023 to early 2024, or during the market oscillation period from Q2 2024 to the present, Web3 Game track tokens have not gained favor with investors, and have instead become one of the tracks with the deepest declines during market downturns, both for game tokens and game infrastructure tokens;
• Players and investors lack confidence. Despite Web3 Game developers continuously delivering carefully developed content during this bull market, the lack of fun and strong wealth-effect games has caused players and investors to lose confidence in the track, and has even led to the conclusion that Web3 Games are not viable.

At this point, it seems that there is a huge disparity between the ideals and reality of Web3 Games, and many Web3 Game projects have disappeared.

However, over the past three years, we have observed the undeniable and sustained strong performance of Ronin. After in-depth research and assessment, we have heavily invested in Ronin. As holders of Ronin, we believe that Ronin is the project with the greatest long-term potential under the above-mentioned disparity.

Ronin's Values, Driving Force, and Moat

Values: Pragmatic Innovators

We believe that Ronin's most valuable asset is its values: Ronin has always adopted an extremely pragmatic approach to diligent construction, while continuously breaking through innovation.

Ronin's solid offline activities

As mentioned earlier, there is a huge disparity between the ideals and reality of Web3 Games, and many builders have turned a blind eye to this disparity and scoffed at many "down-to-earth" practices, leading to the inability of these products to find product-market fit in today's Web3 Game market.

Based on an extremely pragmatic value system, Ronin has maximally satisfied the game industry's three needs for Web3 Games and reinforced everyone's three expectations for Web3 games. At the same time, on the four routes mentioned above, Ronin has not stubbornly followed a single route, nor has it given up exploring any route, but has instead interwoven and converged the directions of these four routes.

Ronin has not only delivered solid infrastructure products, ecosystem products, game products, communities, and data; it has also improved the business model of Web3 Games, written the first complete Playbook for practitioners, and single-handedly driven the secondary market trends of the Web3 Game track for two consecutive cycles, giving investors and holders strong confidence.

Ronin's panoramic ecosystem, July 2024

Driving Force: Trend Leader

The core logic behind our investment in Ronin/$RON is the belief that Ronin is a project leading the trend of the Web3 Game track.

In our investment philosophy, the Web3 industry (especially the secondary market) is more suitable for trend investing as the main framework, with cycle investing as a supplement. In the concept of trend investing, we believe that the Web3 industry is a line that occasionally encounters obstacles but is on a long-term upward trajectory. Our observation of the history of the Web3 industry is that it is in a channel of progress, and our attitude towards its future is optimistic. The wheels of history roll forward, so we will treat the targets in the Web3 industry as we do the new species of each era, such as the internet, new energy, and artificial intelligence, and simplify our investment behavior into: identifying the trend of a specific sub-track and following it.

We divide trend leadership into three levels, namely technological trends, fundamental trends, and value trends, corresponding to the macro, meso, and micro aspects of the Web3 Game track.

-Leading Technological Trends

Ronin provides the track with the highest quality technological empowerment through a pragmatic infrastructure roadmap and a complete product matrix.

After three years of construction, Ronin has built a complete product portfolio through self-development and external cooperation. Currently, the ecosystem has a total of 40 products, as follows:

Ronin's ecosystem dApp introduction, Ronin

dApp

Attribute

Function

Ronin Name Service

First-party

Short domain names for Ronin addresses

Ronin Wallet

First-party

Universal wallet for the Ronin ecosystem

Mavis Hub

First-party

Discover and download games in the Ronin ecosystem (similar to Steam)

Appe.axie

First-party

Trading, tasks, voting, and more for Axie game assets

Mavis Market

First-party

NFT trading platform for Ronin games

Ron Staking

First-party

Staking, Rewards, and Security for Ronin

Explorer

First-party

Ronin's blockchain explorer

Bridge

First-party

Cross-chain bridge for Ronin/Ethereum

Katana

First-party

Token swapping, providing liquidity, and earning rewards on a DEX

Scatter

First-party

Tool for sending tokens to multiple addresses

Multi Signature Wallet

First-party

Multi-signature wallet tool

Ronin Launchpad

First-party

Launchpad for Ronin games

Axie DAO

First-party

Exploring ecosystem tools for Ronin developers and community members

Aixe.Tech

First-party

Exploring community development tools for Axie community members

Footprint Analytics

Third-party

Data analytics platform

Presail

Third-party

Investment management platform

Impossible Finance

Third-party

On-chain native launchpad and accelerator

zkMe

Third-party

Identity oracle service

WOW3

Third-party

Asset management platform

0xScope

Third-party

Big data-driven trading and analytics platform

NFTBank

Third-party

NFT management platform

ForgeGG

Third-party

Game identity aggregation and incentive platform

Cookie3

Third-party

No-code user identity aggregator

Delegate.xyz

Third-party

Protecting NFT and ERC20 asset security

Guild

Third-party

On-chain community development tools

Space3

Third-party

Game task platform

Community Gaming

Third-party

Esports platform

Metaland

Third-party

Platform for lending using in-game assets on Ronin

Sablier

Third-party

Tool for real-time streaming tokens

Ramp

Third-party

Tool for fiat currency purchase of Ronin game tokens

APY.vision

Third-party

Tool for managing liquidity pools

Breadcrums

Third-party

Tool for tracking and monitoring Ronin transactions

GeckoTerminal

Third-party

Real-time statistics and price analysis platform for different DEXs

Clique

Third-party

On-chain & off-chain game identity oracle

Onmeta

Third-party

Tool for purchasing Ronin tokens with Indian and Philippine fiat currency

Moku

Third-party

Gamified user growth and community incentive platform

Pyth Network

Third-party

Ronin price oracle

Earn Alliance

Third-party

Super game aggregation and discovery platform

PHPC Stablecoin

Third-party

ERC-20 token anchored to the Philippine peso

Tribally

Third-party

Social platform for game play

Statistics of Ronin Ecosystem dApps

Several characteristics of the Ronin ecosystem products:

• Developer-friendly, adaptable to developers with different levels of Web3 experience, helping developers solve problems and necessary components outside of game production
• User-friendly, meeting users' gaming experience, investment experience, and social experience, understanding the ecosystem from the user's perspective
• Investor-friendly, meeting investors' focus on token and asset trading experience

-Leading Fundamental Trends

Ronin's fundamentals are extremely solid, with impeccable data performance, leading the industry by a large margin.

For a long time, the difficulty of effective investment in the Web3 application track (especially secondary investment) has been that project prices are not anchored to "fundamentals":

• Project token prices (and price changes) lack effective correlation with commonly used fundamental indicators such as users, transactions, growth, and commercialization
• Projects themselves even lack fundamental data for analysis, making fundamental analysis lose the most basic premise

The situation in the Web3 Game track is slightly better, but most projects also have the same problems. When we tried to find projects with effective fundamentals, we found that Ronin's fundamentals are very solid, with long-term trackable and effective data in several key data indicators, and leading similar projects by a large margin.

First, Ronin's daily active users have reached 1.04 million, which is 2.96 times that of the second-ranked gaming chain, 3.01 times that of the third-ranked gaming chain, and 4.34 times the average of the second to tenth-ranked gaming chains, accounting for 28.3% of all gaming chain users.

Unit: M

Ronin

Near

Oasys

OPBNB

Nebula

Polygon

BNB Chain

TON

Wax

Base

Solana

Klaytn

IMXzkEVM

Rank 2~10 Avg.

DAU

1.04

0.35

0.35

0.34

0.26

0.24

0.18

0.18

0.13

0.13

0.06

0.05

0.05

0.24

(X)

1

2.96

3.01

3.03

4.04

4.38

5.72

5.92

7.72

8.08

18.02

19.31

21.06

4.34

Ronin user numbers and share, July 17, 2024, Footprint Analytics

Second, Ronin games have consistently ranked at the top of the overall game rankings. In addition to Axie Infinity, which has been on the list for many years, new games such as Pixels and Apeiron have also become top 20 games within a few months of launch and have continued to do so.

Global game rankings, July 17, 2024, Footprint Analytics

In addition to the user numbers mentioned above, they have also performed well in terms of transaction frequency, transaction volume, asset prices, and user retention. For example, Pixels has maintained a stable next-month retention rate of over 45% in recent months, and Apeiron has maintained a stable next-month retention rate of over 50%, even exceeding 90%.

Pixels retention data, June 2024, Footprint Analytics

Apeiron Retention Data, June 2024, Footprint Analytics

Axie Infinity Retention Data, June 2024, Footprint Analytics

Third, transaction data is also an important indicator for measuring gaming chains, and Ronin's daily transaction volume has reached 1.11 million, which is 2.36 times the average of the fifth to tenth-ranked gaming chains and accounts for 7.06% of all gaming chain users. It is worth noting that Ronin's transaction volume is generated by less than 10 active games, with a fairly substantial average transaction volume per game.

Unit: M

Wax

Oasys

OPBNB

Ronin

Nebula

Near

Polygon

TON

BNBChain

DFK

Base

EOS

Hive

Rank 5~10 Avg.

DAU

5.28

2.62

1.68

1.11

0.80

0.75

0.47

0.31

0.25

0.23

0.21

0.15

0.14

0.47

(X)

0.21

0.42

0.66

1.00

1.38

1.48

2.37

3.54

4.40

4.85

5.17

7.64

7.81

2.36

Ronin transaction volume and share, July 17, 2024, Footprint Analytics

We believe that Ronin not only demonstrates solid fundamental data in the gaming chain, but also stands out among all chains. Such effective fundamentals are the long-term guarantee of Ronin's value. As the Web3 game track emerges from its low point and Ronin games continue to grow, Ronin's fundamental data will surely become more outstanding, driving the continued increase in Ronin's value.

-Leading Value Trends

Ronin's token economic framework is reasonable and effective, with a relatively healthy value curve.

As the governance token of the gaming public chain, $RON has rich and practical utility, including paying gas fees, being the internal currency of the ecosystem, governance decision-making power, and network security staking. We believe that $RON's token economy has the following characteristics:

First, $RON has a wide range of applications: users, investors (and stakers expecting staking rewards), and developers all need to deeply participate in the use and construction of Ronin with $RON. Taking validators as an example, Ronin's 24 node types are diverse, including gaming companies, non-gaming companies, Web3 companies, non-Web3 companies, and even internet giants like Google. High-quality validators give holders and stakers confidence.

Validator

Type

Real-time APR%

Total Staked Amount

Luganodes

Web3 company/non-gaming company

9.99%

12,960,076.36

MysticNode

Web3 gaming community

12.51%

10,349,910.23

Sky Mavis GV

Web3 company/gaming giant

12.20%

10,060,387.68

BigYak Axie Club

Web3 gaming community

12.99%

9,755,279.71

Ronin Catalyst

Web3 gaming community

13.33%

9,708,113.68

Google

Web2 company/internet giant

12.86%

9,540,702.05

aurarticcloudwhtie

Web3 gaming OG

12.90%

9,509,040.67

EternityHub.tech

Web3 gaming community

13.81%

9,376,068.92

StableNode

Web3 company/non-gaming company

12.69%

9,347,976.86

Nansen

Web3 company/non-gaming company

13.19%

9,307,183.43

CyberKongz

Web3 company/non-gaming company

13.28%

9,236,258.83

Animoca Brands

Web3 company/gaming giant

12.03%

9,069,700.50

0xak.eth

Web3 gaming OG

13.83%

9,063,809.69

Owl.eth

Web3 gaming OG

13.56%

9,044,881.52

Yield Guild Games

Web3 company/gaming giant

12.13%

8,990,889.82

Moku

Web3 company/non-gaming company

12.36%

8,828,588.38

DappRadar DAO

Web3 company/non-gaming company

12.55%

8,691,692.79

NonFungible.com

Web3 company/non-gaming company

12.68%

8,605,746.97

Community Gaming

Web3 company/gaming company

12.85%

8,461,974.38

RonerDAO

Web3 gaming community

14.47%

8,325,156.62

Coco_Bear

Web3 gaming OG

12.69%

8,008,655.92

AxieChat

Web3 gaming media

12.98%

7,898,467.81

BlockAhead.dev

Web3 company/non-gaming company

13.70%

1,021,256.95

Sky Mavis

Web3 company/gaming giant

12.29%

274,874.23

Ronin node classification statistics

Second, $RON's unlocking schedule is moderate: $RON's unlocking schedule lasts for 9 years. This not only balances the pressure released during the unlocking period for $RON, preventing rapid selling in a short period of time, but also gives $RON holders confidence in Ronin's long-term development.

Ronin unlocking schedule and progress, TokenUnlocks

Third, $RON has multiple staking scenarios, including:

• Node Staking: $RON holders can delegate their voting rights to candidate validators, allowing users to participate in network validation and decision-making processes, and have the opportunity to receive a portion of block rewards.

• Airdrop Staking: $RON holders will periodically receive airdrops from Ronin games, for example, Pixels previously announced an airdrop of 20 million tokens to $RON holders.

• Liquidity Staking: Ronin's DEX platform, Katana, provides a liquidity staking program for $RON holders, leading to rapid growth in Ronin's TVL and price increase.

• Launchpad Staking (potential): Ronin has partnered with Impossible Finance for a Launchpad program and has indicated that $RON may have launchpad staking allocation functionality. We look forward to Ronin becoming a high-quality issuance platform.

Under the promotion of multiple staking scenarios, the staking rate of $RON has reached 60% and continues to rise. This not only represents the confidence of $RON holders but also locks in a large amount of liquidity for $RON, favoring the stable increase in price.

We believe that in addition to its rich utility, $RON also has a healthy "economic framework" combined with high-quality business fundamentals, which will surely lead to a healthy price curve in the future.

Moat: Ronin Effect

We believe that Ronin's moat is a combination of its ecological strategy, community foundation, issuance & operation methodology, and blockbuster experience, which is exactly what players love to call the "Ronin Effect."

Ronin Effect, Ronin

-Ecological Expansion Strategy

There are many gaming chains and platforms on the market (these two have now been completely integrated), each chain has different degrees of differences in technical routes, but the biggest difference between chains is their ecological development strategy.

Popular games in the Ronin ecosystem

We observed an interesting set of data: there are only 6 active games on Ronin, accounting for only 0.44% of all active games on all chains. The chain with the most active game projects has 276 games, which is 46 times that of Ronin. However, Ronin's active user base is 1.04 million, accounting for a high 28.3% of all active users. If we calculate the number of active users per game, Ronin's value can exceed that of other gaming chains by more than 100 times. In other words, with a very small number of games, Ronin dominates the current Web3 Game market.

Active games on various chains, 2024/7, Footprint Analytics

Unit: M

Ronin

BNB Chain

Polygon

Wax

Arbitrum

EOS

Daily Active Users

1.04

0.18

0.24

0.13

0.02

0.02

Active Games

6

276

264

117

41

13

Average Daily Active Games

0.173

0.001

0.001

0.001

0.000

0.002

Comparison of average users per game on Ronin and various chains, July 17, 2024, Footprint Analytics

This set of data truly reflects Ronin's ecological strategy: not blindly expanding the number of games, but carefully selecting each cooperative game and helping these games succeed through deep co-construction and empowerment. According to our discussions with the Ronin team, their BD team communicates with over 100 games each year, and after rigorous evaluation, they will only collaborate with no more than 10 projects. This is very different from the mass expansion approach of most gaming chains.

A closer observation reveals that Ronin also makes clear choices in game type selection:

• It leans more towards Web3 native moderate games, rather than Web2.5 games derived from traditional 3A games with simple tokenization and asset chaining. These games often have more in-depth token design, making them very suitable for Web3 native users.

• It still uses classic gameplay from traditional games as prototypes. The games in the Ronin ecosystem include role-playing, real-time strategy, card games, and casual games, giving Web2 users ample reason to try them out.

• The types are relatively diverse, with no particularly high percentage in a single type. While providing players with different types of experiences, Ronin's games also continuously experiment with various gameplay types and their compatibility with Web3, continuously exploring the product-market fit of various game types.

Gameplay overview of Ronin games, Ronin

Game

Attributes

Gameplay

Aixe Infinity: Classic

First-party

Casual

Aixe Infinity: Origins

First-party

Casual

Aixe Infinity: Homeland

First-party

Strategy

Pixels

Third-party

Simulation

Apeiron

Third-party

Real-time strategy, pigeon

Wild Forest

Third-party

Real-time strategy

Puffverse

Third-party

Party

The Machines Arena

Third-party

Shooting

Duet Monsters

Third-party

Music

Axie Champions

Third-party

Casual, match-three

CyberKongz Play & Kollect

Third-party

NFT collection

Kaidro

Third-party

Action role-playing

Fight League

Third-party

Pigeon, card, action role-playing

Ragnarok Monster World

Third-party

Role-playing

LumiTerra

Third-party

Role-playing, simulation

Forgotten Runiverse

Third-party

Role-playing

Tribesters

Third-party

Role-playing

Statistics of game types on Ronin

Ronin's strategy is not groundbreaking, but rather a collection of micro choices based on deep market insights and first principles thinking. This truly exemplifies Ronin's pragmatic values, and these strategic details have also made Ronin a leader.

-Community Network Effect

Metcalfe's Law describes the value of a network as being proportional to the square of the number of nodes in the network. In other words, the more users there are in a network, the greater its value. This is because with each additional node (user), the node can interact with all other nodes in the network, thereby significantly increasing the overall value of the network. The specific formula can be expressed as: the value of the network is proportional to the square of the number of nodes, i.e. V ∝ N^2.

Metcalfe's Law is commonly used to explain and predict the growth and value of various network systems such as social networks and communication networks. However, it seems that no one has considered whether it can also add value in a "gaming network" because in the traditional gaming industry, games are very independent entities, with very few actual resources shared between games, and there is no concept of a "gaming ecosystem" (even many major game companies have very independent titles).

Various Ronin game players

AXIECON Conference

However, Ronin is turning the "gaming community" into an effective "gaming network" through the unique community concept of Web3 games using Metcalfe's Law. Specifically, Ronin's first game is Axie Infinity, which brought a large number of users to Ronin three years ago and established a comprehensive community. If you closely follow Ronin's social media, you will find that the Ronin community includes a diverse range of roles in addition to users, including professional players, KOLs, streamers, video content creators, data analysts, and more. These community members shuttle between Ronin games and deeply engage in multiple games (even all games). This phenomenon has gradually transformed Ronin's community into an organic gaming network, as there is a large and direct interaction between similar and different roles within the community, thereby increasing the value of this network.

Category

Examples

Twitter

Founder

Jihoz.ron

@Jihoz_Axie

Guild

Yield Guild Games

@YieldGuild

Professional Player

stark.ron

@Stark_axie

KOL

Elisa

@eeelistar

OG

Cloudwhite

@cloudwhiteNFT

Degen

Jesus Martinez

@0xJesusMartinez

MOD

TheGuillotine.ron

@GuillotineNFT

Streamer

Ryan.ron

@Ryann_AF

Video Content Creator

Dabudda.ron

@Dabudda17

Text Content Creator

david.ron

@Davidnft_nftfi

Data Analyst

Nanthan

@0xxNathan

Creator Community

KIND

@Kind_HQ

Role classification and examples in the Ronin community

Ronin offline gathering

Ronin creators

Diverse community roles and high overlap (or high reusability) are necessary conditions for building a gaming network and for Metcalfe's Law to take effect, requiring subjective establishment and guidance by the gaming chain. We have not seen such network effects in gaming chains outside of Ronin. Many chains are trying to make communities more cohesive through a unified DID, but they overlook the importance of role diversity. We believe that as Ronin's games increase, its community network effect will become stronger and stronger, a victory that belongs only to Web3 games.

Non-gaming UGC on Ronin

Ronin In Real World

-Cross-Issuance and Cross-Operation

How to effectively utilize the above "community network effect"? Ronin's approach is to use this network effect for efficient game issuance and operation. Since the birth of Web3 games, people have been expecting "composability" and "interoperability," and many gaming chains are exploring the feasibility of composability and interoperability through token and asset sharing.

Ronin has given composability and interoperability another definition in a more moderate way, that is, "cross-issuance" + "cross-operation." Whenever a new Ronin game is launched, we can see several issuance and operation actions:

• Using the community resources of mature games to quickly accumulate early volume and users for new games and create a chain reaction. We can see that Axie Infinity's professional players, KOLs, streamers, video content creators, and data analysts made significant contributions to Pixels in its early launch, rapidly pushing Pixels' DAU to break through hundreds of thousands. We can also see that Pixels' community made the same contributions to Apeiron. This kind of "old brings new" is happening time and time again;

• Collaborative activities between games often focus on incentive programs, tokens, and assets, continuously providing benefits and special rights to players for new works, and naturally guiding players of mature works into new works. If you observe carefully, you can see rich collaborative activities between almost every two Ronin games, which is the ultimate in partnership within the ecosystem.

Intensive Partnership between the New Game Fight League and Other Mature Games

In traditional game issuance and operation, issuance is used to grow users, and operation is used to improve retention. Due to the high maturity of the industry, these two actions have gradually become purely a money game, lacking new methods and making it difficult to reduce costs and increase efficiency. Ronin's cross-issuance and cross-operation based on the community network effect is an innovation, and it is an innovation that belongs only to Web3 games. At this point, we see that Ronin has quietly realized part of the expectations of Web3 game believers for the industry revolution.

Partnership between Ronin Games

-Bestselling Methodology

We believe that in every (secondary market) cycle of Web3, the necessary condition for the start of the Web3 game track is that there must be more than one high-quality bestselling game. The bestselling game must have the following characteristics:

• Explosive growth in the number of users in a short period and a far lead in the number of users compared to other games, i.e. extremely fast "breaking the circle speed"

• Excellent wealth effect, i.e. a significant increase in coin price, sustained increase in coin price, and users truly obtaining a substantial return on investment

• Clear innovation in game mechanics, contributing to the advancement of Web3 games, rather than being purely a financial scheme or rehashing old ideas

Ronin has launched bestselling games in two consecutive cycles, namely Axie Infinity and Pixels. These two games are undisputed benchmark products in terms of user numbers, coin price, and innovative mechanics, especially Pixels in this cycle, with its peak user numbers accounting for almost 50% of the entire network.

Peak period of user growth in Axie Infinity, Footprint Analytics

Peak period of user growth in Pixels, Footprint Analytics

We believe that the success of Pixels is not accidental, and Ronin may have already mastered the secret of creating bestselling games. Axie Infinity is the first game and IP independently developed by Ronin, and its success may have had some luck and randomness, but Ronin has summarized its KSF from Axie Infinity over a long period of time and applied it to Pixels. The rise of Pixels is the best proof. Initially, Pixels was not built on Ronin, and its overall user numbers and popularity were not outstanding. However, after migrating to Ronin, Pixels achieved three important milestones in almost a few months: a significant increase in user numbers, the highest popularity across the network, and a public sale on the world's largest exchange.

Trend of user growth before and after the migration of Pixels, Footprint Analytics

According to our communication with some Ronin game teams, the cooperation between Ronin and the game teams is extremely close, not only involving weekly meetings and progress updates, but also detailed issuance, promotion, operation, and capital market strategies based on the situation of the game itself. We believe that if there is a playbook for the genesis of Web3 games, it must have been written by Ronin, and the name of this playbook is exactly.

The Song of Innocence and Experience

The British poet William Blake published a famous collection of poems called "Songs of Innocence and of Experience," which is divided into the "Songs of Innocence" and the "Songs of Experience," exploring the dialectical unity of "innocence" and "experience." The chapters in "Songs of Innocence" depict the innocence, carefreeness, and beautiful wishes of children for the world, while the chapters in "Songs of Experience" reveal the challenges, complexity, and imperfections of the adult world.

In our eyes, Ronin is such a team, with innocence in one hand and experience in the other. On one hand, they continuously deliver successful works to the industry based on years of accumulated experience and provide assistance to newcomers, while on the other hand, they remain true to the original intention of exploring the vast sea of Web3 games and tirelessly innovate. We also have very high expectations for Ronin.

Narrative Height

We are optimistic about Ronin's evolution from a single game sidechain to an aggregated game L2 ecosystem, establishing a new narrative height.

The narrative of Web3 games has achieved the establishment of the first stage with the maturity of the market. With the emergence of more and more high-quality, diverse, and user-carrying games, the second-stage narrative of Web3 games has begun. An excellent comprehensive game project needs to delve deeper into infrastructure construction. Ronin's zkEVM upgrade this year is an important milestone, and the evolution from a single game chain to an aggregated game L2 ecosystem is a good start for the second-stage narrative of Web3 games. We look forward to the migration of Ronin games bringing a batch of truly vibrant game-specific chains to the market.

Upcoming Ronin zkEVM

Enhanced Ronin Effect

We are optimistic about the further effectiveness of the Ronin Effect, becoming a reputable brand and bringing more good products to the market.

The number of games in Ronin has exceeded 10 and has consistently maintained excellent quality. We see that Ronin is actively expanding the types and styles of games, and these new games will continue to expand the boundaries of the Ronin community, bringing in more new players, creators, and influencers into the world of Ronin. The Ronin Effect will also be further enhanced as the network expands. Currently, there is no brand effect based on any public chain or platform for Web3 games (think of Blizzard and Tencent). Ronin is likely to become the first game chain with a brand effect.

Approaching Singularity

We are optimistic about Ronin becoming the source of innovation and the vanguard of practice for Web3 games, constantly approaching the singularity.

In addition to the narrative, innovation in Web3 games has just begun. Ronin has always been an innovation-driven game chain, not only innovating the paradigm of game issuance and operation, but also making contributions to the innovation of game mechanisms (such as incentive mechanism design). According to our research, many developers with innovative spirit are very interested in collaborating with Ronin, hoping to make Ronin a base for innovative practices. With strong infrastructure and product matrix, pure innovation will happen here, gradually bringing Web games closer to the singularity.

Leading the Race

Most importantly, we firmly believe that Ronin will firmly establish itself as the leader in the Web3 game track and lead the track to new heights in the secondary market.

Based on the above, we believe that no matter from which perspective, Ronin is undoubtedly the leader in the Web3 game track and will continue to do so. Web3 games are sure to reverse the downturn in the second half of this round of the bull market, and Ronin will lead this highly anticipated track to new heights.

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