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Like the lending rate updates, I’m going to reduce the frequency of the Sunday industry highlights to every two weeks. I want to allocate more time to my NFT project and researching new GameFi platforms. With barriers being eroded by Web 3 we’re going to see increased accessibility to a wide array financial products. If you watched my most recent video I explained how at 16 yo was able to turn $3k into over $1M in a few short months. As these types of opportunities become more abundant I want all of us to benefit from them. So in place of weekly newsletters expect to see more GameFi related content.
General News
Walmart Gets Ready for Metaverse Push
The big retailor is planning to create its own crypto asset and NFTs
According to a filing, Walmart submitted seven trade marks at the end of December.
The documentation states Walmart may launch, “financial services, namely, providing a digital currency and a digital token of value for use by members of an online community via a global computer network.”
Opinion: With Facebook rebranding to Meta and large companies making similar pivots - Walmart is pressured to act. The digital shift has started and is gaining more momentum by the day. In part due to this I don’t believe we’ll have a lengthy bear market correction as we’ve experienced in the past. During previous cycles we were just given promises on white papers. This time around we have working products and services.
Large companies like Walmart will be experimenting with the technology to create products and services for crypto natives. In return we’ll see increased accessibility which will aid in mass adoption. For example, GameStop recently announced a new division aimed at creating a market place for gaming NFTs. Most the users today are on layer 1 chains. Once these NFTs are available to the average consumer with reduced rigidity, we’ll see a massive onboarding of new users.
GameFi Analytics
Global gaming grew 5.3% from 2015 to 2021 with current annual revenue sitting at $18B. Mobile gaming accounts for 52% of the total global market.
GameFi transaction increased over 3000% in 2021. The volume was concentrated on Hive, WAX, BSC, and Ethereum. Defi Kingdoms recently took the number 1 spot from Axie.
Fourth quarter saw peak funding for GameFi projects in 2021.
Opinion: Most analysts saw this trend from a mile away. The problem is identifying the best method of getting exposure. Unless you have early stage access to private deals, it’s important to keep an ear to the ground. Follow people who’ve made early discoveries, join discord groups who focus on discovering gems, and most importantly take action. This space moves fast so there’s significant opportunity cost for delaying research and being indecisive.
Metaverse Estate Valuation Models
Source: https://jeffopdyke.medium.com/24-000-an-ivory-portal-nft-value-based-on-real-world-real-estate-8057cb26f6aa
The author of this post uses cap rate ( cost / annual) to devise a valuation model for Portals. All these numbers are pulled from his ass so don’t fomo buy simply on his model. He thinks conservatively each Ivory Portal will generate $100-200/month in passive income. According to CBRE group (large commercial real estate giant), cap rates range from 5-9%.
The current floor for Ivory is 44 SOL ($6468). Let’s assume his numbers prove to be accurate. This means each Ivory NFT should be worth in anywhere between $13,333 to $48K (90-326 SOL).
Whether it’s metaverse real estate or DeFi tokens, analysts will always make efforts to create valuation models. It’s part of marketing the idea to other investors and coming to a consensus on fair market value. The average human mind loves to make forecasts by analogizing or comparing. You see this a lot with technical analysts who make forward looking projections on price action. This authors model obviously has its flaws (assumptions) but it’s a good start.
I’ve stated numerous times that many of these metaverse NFTs are going to become productive assets. At this stage it’s difficult or damn near impossible to identify the big winners. However, given the huge speculative premium that will inevitably result you’ll have ample opportunity to derisk. Also, the r/r isn’t going to get any better than this. You can wait for larger communities and players to coalesce around a collection or you can begin spreading out small bets today. I’m sure years from now we’ll hear stories of individuals turning a few hundred dollars into millions by purchasing metaverse real estate early.
Altcoin Index
Crypto Fear & Greed Index
Market Outlook
It’s evident at this point we have very engaged market participants who are actively making capital rotations. While BTC has taken a large hit from its November high a few majors have decoupled. This includes FTM, ATOM, ONE, LUNA, and NEAR. Provided BTC doesn’t make another big leg down I can see this trend continue. I believe the major catalyst will be ongoing capital injections from ecosystem funds. They help create mini innovation cycles that lure in devs, speculators, NFT collectors, yield farmers and more. If this practice continues it may embolden other large funds to also make contributions to ecosystem funds. As a result it may become the new the dominant channel for institutional inflows. I’m bullish for the next two weeks and remain cautiously optimistic for the quarter.
Portfolio Update
I sold half my LOOKS position to get my original investment out. Right now I’m sitting heavy on ONE, JEWEL, OCT, RUNE, POKT, FTM, LUNA, ATOM, and OSMO. I also have small positions in MAGIC, LUMEN, TRANQ, ROY and FLX. You can refer to my previous newsletters but I have a few funds sprinkled across Tomb Finance forks earning 4-6% APR daily. If you guys want a more detailed account of my investment activities you can join my private discord by signing up through Patreon.