Merit Circle: Is Gaming The Next Web3 Frontier?
From play to win to play to earn this DAO is spearheading the next wave of gaming
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What entertainment sector do consumers spend over $150 billion and roughly 18 days of their time annually? If you answered video games then you were correct. These mind-boggling numbers show no pace of slowing down with analysts predicting video game revenue to balloon to $260 billion by 2025! Over a third of this revenue is generated through in-game purchases where players spend money on items enhancing their experience. These purchases can consist of new apparel, dance moves, attributes, and other status symbols for their avatar. Previously, a consumer would buy the games they wanted to play and that was the end of the revenue stream for the gaming companies. The problem was that the same revenue would be generated from an avid player spending countless hours in the game and one who only occasionally played. Clearly, the avid gamer would be willing to spend more money but there was no apparent business model on how to capture this extra revenue. In-game purchases have changed that paradigm and allows gamers to continuously spend as much money as they would like for the games they play the most. Pushing this new revenue stream to the epicenter of video game lure was the advent of the freemium business model made famous by Fortnite, which allows anyone to download and play a game for free, where all the revenue is generated from in-game purchases (for those doubting this business model Fortnite did $5.4 billion in revenue in 2021). The freemium business model has flourished by creating wildly successful games such as Fortnite, Roblox, and Minecraft which respectively boast 80 million, 220 million, and 93 million monthly active users each! While in-game purchases and the freemium business model have revolutionized the gaming industry, a whole new set of critiques and questions have popped up that need answers. Users who buy a new Travis Scott sweatshirt in Fortnite can not bring that same item into the Roblox gaming world and who is going to want to purchase duplicative items in every game that they play? Do users really own the item if they can not bring it with them to another game or sell it on a secondary marketplace? These questions along with the play-to-earn movement, the idea that gamers can earn real money for succeeding in the game, being touted by web3 enthusiasts have led to a whole new genre of web3 native games. There have been several web3 play-to-earn-based games that have gained notoriety such as Axie Infinity and StepN but both of these games proved to be highly flawed in their economic structure. However, web3 and play-to-earn games are in their nascent stage and there is no doubt there will be an exponential improvement over the coming years. One DAO looking to push the play-to-earn movement forward is Merit Circle.
What is Merit Circle?
Merit Circle is a decentralized autonomous organization (DAO) that creates opportunities for crypto and gaming enthusiasts. Together, we are building the metaverse. This is done through investments in the gaming industry and by dispensing the DAO's assets to our gamers, creators and contributors that are spread across the world. The platform we are building hosts gaming opportunities, educational content and everything else a person could need to begin their journey in the decentralized gaming industry.
Merit Circle recently celebrated its one-year anniversary on September 2nd and had a lot to reminisce on. After initially raising a $4.5 million seed round in October 2021, from venture capital firms and strategic partners, Merit Circle wanted to increase the decentralization of its community and hosted a token sale for the public to participate.
Starting on November 2nd, 2021 and lasting 72 hours, the Merit Circle DAO’s sale broke all previous records of liquidity bootstrapping events. The statistics still amaze us:
Total funds raised: $105,576,956
Total volume: $138,623,586.33
Total fees paid: $2,772,472
Tokens sold: 40,976,598 million $MC
Participants: 3,900
Total transactions: 6,313
Merit Circle DAO was immediately propelled alongside household names like Uniswap, Sushiswap and Aave with the largest non-native treasury at that time. To this day, the treasury allows us to invest across the gaming industry and differentiates us from our competitors.
Merit Circle Ecosystem
The Merit Circle DAO consists of four verticals. Each vertical can stand-alone with its respective products but together they create an ecosystem that adds value to the Merit Circle DAO and, thereby, the $MC token as illustrated in the image below.
Investments
After raising over $100 million dollars in its token offering it became clear that an investment arm of the DAO was necessary to distribute these funds and diversify the treasury. Deployment of funds involves direct investments into games (Merit Circle Investments), yield farming, and purchasing in-game assets such as NFTs or metaverse “real estate”. Merit Circle assuages any investor concerns over where these funds are going by publishing a treasury report on a monthly basis for anyone to see (check out the latest report here).
Gaming
As one of the four verticals, Merit Circle Gaming embodies the heart of the DAO. At its core, we are a community of gamers; and have been able to grow to our size in a welcoming and healthy environment. This also allowed us to provide opportunities to our community members across the world. Our ambitions, however, extend far beyond that.
The aim of this vertical is to leverage our experiences with sustainable games, and our network to build a gaming platform that will house all of our gaming operations. To summarize, the gaming vertical;
Value accrual for the DAO's treasury through the in-game earnings generated with the assistance of the DAO's assets
Hosts gaming opportunities for passionate gamers across the globe
Competitive gaming in various blockchain games
Allow the community to get more involved in a vital aspect of game development – limited entrances for beta-testing
Driving users to the NFT marketplace we are building
To further promote the gaming arm of its DAO Merit Circle launched a gaming academy that is all about empowering and educating players.
Here, we’ll give our gamers the tools to learn about everything from our gamers and cryptocurrency to managing aspects of their personal lives, such as financial guidance, as well.
Led by two experienced teachers, we have been carefully crafting educational content that will be widely available through our new platform. It will be the breeding ground for a new generation of gamers who’ll learn ‘on the job’ as they become better at playing their favorite games but also by being able to unlock their full potential.
Studios
Leveraging its passionate community of gamers and knowledgable strategic partners Merit Circle created a studios arm to:
incubate existing games and projects from non-web3 companies
to become the preferred partner for web3 native teams aiming to launch a game
is the breading ground for creative projects from within the Merit Circle DAO
drives direct value towards all other verticals in the DAO's ecosystem
Marketplace
As one of the four verticals, the Merit Circle Marketplace is positioned to overcome the flaws of conventional NFT marketplaces and set an industry standard by introducing our very own marketplace for gaming NFTs.
The marketplace will be a space for all games that have incorporated NFT technology. Leveraging our vast roster of games and collaborative community we will be able to build a marketplace with the needs of game developers and their audience in mind, rather than working with vague assumptions.
To summarize, the NFT marketplace will:
become the dominant marketplace for in-game assets
allow the DAO's portfolio companies (and beyond) to seamlessly launch NFT collections and present their assets in a customizable way
will improve the user experience for the collector, creators, traders and gamers
will become a significant revenue source for the Merit Circle DAO
Niche NFT marketplaces focused on passionate communities have a huge opportunity to steal market share from big aggregators like OpenSea and Magic Eden. The current popular marketplaces host a hodgepodge of NFTs and make it ostensibly impossible for them to cater to any one community or user. A focused marketplace can tailor every experience to what its users are interested in such as Merit Circle plans on doing with gaming (look no further than NBA Top Shot for this theory already being a success). Kyle Samani of MultiCoin Capital goes into detail about this topic in this blog post if you want to learn more.
The gaming industry is undergoing a transformation and long-held beliefs are being challenged to see what the next big thing might just be. Merit Circle is placing its bets across a wide range of web3 projects and offers investors diversified exposure to this specific industry. With a burgeoning passionate community (100k Twitter followers, 8k DAO participants, 20k Discord members) and a track record of executing its plans over its first year of existence, we are excited to see what the future holds for Merit Circle DAO and web3 gaming.
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