Original Title: "Harvard University Blockchain Club: The Dilemma and Solutions of Blockchain Games, A Storm is Brewing"

Compiled by: 0xzshanzha, Deep Tide TechFlow

In the 1980s, text-based MUD (Multi-User Dungeon) games dominated the landscape. Adventurers enjoyed multiplayer real-time role-playing games that featured rich lore, fantastical worlds, compelling mechanics, and RNG-based gameplay, with P2P elements that sound a bit like what we refer to as the metaverse in 2021.

However, a key piece was missing at that time: a vibrant in-game economy driven by blockchain. Since Satoshi Nakamoto published the white paper, significant progress has been made.

With the introduction of Ethereum, smart contracts, DeFi, and NFTs, we have witnessed the emergence of on-chain games like Ether Bots and Crypto Crabs, the exponential growth of play-to-earn games like Axie Infinity, and the rise of guilds like YGG.

Moreover, with the development of Layer 1 this year, Layer 1s like Solana and Wax have become new tracks for institutions due to their low transaction costs and high efficiency, with a large influx of VC funding into the industry (for example, $100 million from FTX and Lightspeed Venture Partners, and $200 million from Binance and Animoca).

This year also saw the emergence of Dom Hofmann's The Loot Project—"randomly generated and stored on-chain adventurer gear"—a bottom-up reimagining of MUD games in Web 3.0, as shown in the image below, which illustrates how LOOT ultimately returned to the MUD game genre.

There is much to look forward to.

First, blockchain and gaming complement each other; blockchain facilitates the organic formation of a neoclassical gaming economy. This is because games provide utility and adoption for blockchain, while chains provide security and real asset value for games. For example, Axie Infinity is a Pokémon-like card game that offers a way for many families affected by the pandemic to earn income by selling Axie NFTs or ERC20 tokens (like $SLP) through a play-to-earn model.

Many new players, like non-players, have learned what Ethereum is, what DeFi is, what proof of stake (POS) is, what impermanent loss is, and other broader blockchain technologies through their motivation to play games, creating a virtuous cycle. Currently, the total market capitalization of Axie Infinity's governance token AXS exceeds $8 billion.

On-chain assets are the first real bridge into the metaverse, and projects like Loot and Axie are undoubtedly steps in the right direction. However, they are still not enough to bring the next billion users into the metaverse.

In this article, we will take a normative approach to articulate that the current gaming industry is more of a hype than substance, and we will issue a warning to GameFi enthusiasts while highlighting three specific issues that need to be addressed:

First, the "crypto-first, game second" model has problems; second, the current decentralization of GameFi is an illusion; third, the issue of user governance rights.

Next, we will briefly introduce the historical process of GameFi, present our thoughts, and provide potential solutions. The image below shows the chart related to GameFi discussed in this article.

GameFi: How far have we developed?

Today, few doubt the powerful symbiotic role of blockchain and video games. The idea is simple: before the advent of blockchain, assets in video games were managed top-down by game studios. They were mutable, interchangeable, and not under the user's control, as they only existed on the servers of the producing company.

Games rarely allowed asset trading between players, especially on third-party sites, and those that did were heavily regulated, only permitting the legal use of in-game items.

Even in games where trading was allowed, players could not legally own assets, as studios had no incentive to share their profits with users. However, with the use of blockchain, all assets exist on a publicly distributed decentralized ledger, making it easy to transfer between parties.

Furthermore, the tokenization of game assets can facilitate the development of market economies, reinforcing the intrinsic value of items, even outside specific game ecosystems.

For players, a new way to earn money has emerged beyond just spending: the play-to-earn (P2E) model allows players to monetize the NFTs they earn in-game through various means (such as selling or earning through staking). Conversely, NFTs gain value from the game.

NFTs are a powerful tool for the gaming industry. This standardization allows any in-game items (like guns, spaceships, potions, farmland, or even cute digital dolphins) to be used across various games and different blockchains, even if they are produced by different studios.

Personal wallets can also replace specific accounts from each company, enabling further interoperability. Although NFTs have not been around for long, we can categorize them into four different levels.

Level 0: Collectibles

Examples: CryptoPunks, Bored Ape Yacht Club, Cool Cats, Doodles

CryptoPunks are a prime example of Level 0 character NFTs. In some ways, we believe Punks capture the beta value of metaverse growth; owning a Punk means you are an OG in the NFT space, signifying that you are a serious collector with significant influence.

Additionally, using a Punk as your avatar can indeed grant you access to some more exclusive communities and possibly earn free airdrops of other NFTs (like Meebits). Meanwhile, Bored Ape Yacht Club also has numerous similar partnerships and collaborations.

Level 1: Basic Interaction

Examples: CryptoKitties, Crypto Crabs, Ether Bots

Aside from speculation and influence, Punks have no other utility.

Meanwhile, CryptoKitties offers an additional gamified component: breeding. Players can trade cats and try to unlock rare traits, but that's about it. There is almost no real gameplay beyond interacting with smart contracts via Metamask.

Additionally, there are turn-based tactical games like Crypto Crabs or Ether Bots, where every action runs on the blockchain, but these games have disappeared due to Ethereum's high gas fees.

Level 2: Exploration

Examples: Decentraland, Sandbox

Decentraland and Sandbox represent the development of Level 2 games: virtual platforms that allow users to create, experience, and profit from content and applications.

Land in Decentraland and Sandbox is permanently owned by players. The land has a fixed supply, and users purchase it from a blockchain-based land ledger. Landowners control the content published on their portion of land, identified by a set of Cartesian coordinates. Content can range from static 3D scenes to interactive systems like games. Land is a non-fungible, transferable, scarce digital asset stored in Ethereum smart contracts.

In the case of Decentraland, players can acquire it by spending an ERC-20 token called $MANA. $MANA can also be used to purchase digital goods and services in the virtual world. Players can roam these lands on their PCs and interact with a Minecraft-like 3D world, which oddly evokes thoughts of VRChat. While major players like Travis Scott have appeared in Decentraland, mainstream players have yet to embrace it, as the game itself lacks appeal beyond casinos. More directly, unlike Level 3 games, NFTs in Level 2 games do not yet generate direct income.

Level 3: Complex Gameplay (GameFi)

Examples: Axie Infinity, Gods Unchained

Building on Level 2, Level 3 games rapidly developed in early 2021, finally delivering a playable game. Users can open the client, enjoy captivating visuals and mechanics, and pay to play rather than playing farming mini-games through a browser wallet interface.

Axie Infinity led this trend. Axie users start the game by investing in Axie NFTs and the native token $AXS. There, they can earn $SLP through gameplay, as the earned tokens can be exchanged for other crypto assets or fiat currency.

During the economic hardships brought on by COVID-19, many users in the Philippines earned more by playing Axie Infinity than their usual monthly salaries. The image below shows the gameplay of Axie.

The problem with Level 3 games like Axie Infinity is that spending is based on token inflation; new players must continuously inject capital to offset this inflation to maintain economic balance. The economy relies on new funds, and if the growth rate of new players declines or old players stop reinvesting, the economy will systematically collapse due to the over-inflation of Axies and SLP, making everyone a potential "rug puller." The play-to-earn economy of Level 3 depends on the capital people invest; profits are only realized when others buy: in this case, there is no social surplus.

Admittedly, many successful businesses survive on unsustainable models that eventually become profitable through economies of scale and increasing returns to scale. Axie has a lot of cash to burn because they have many institutional investors, from a16z to Mark Cuban.

However, as we will show later in this article, the problem with Axie is that as the economy grows, the buy-in price inflates significantly, further undermining economic stability.

The image below illustrates the economic system of Axie.

All Level 3 games face a fundamental question: If the game is no longer profitable, will people continue to play? I believe not, at least not now.

Current GameFi projects lack the complexity and mechanics to create genuinely engaging experiences. Most players play games purely for profit, as the current high-profit games do not offer sufficient gameplay.

As Axie prices continue to appreciate, growth will undoubtedly slow. Currently, to play Axie Infinity, let alone win, players must pay at least $100/Axie for a team of three and hundreds for a larger team (starting from November 8, 2021). For a common team made up of simple beasts, aquatic creatures, and bird Axies, they need to spend over 1 ETH ($4,400).

Additionally, there is a deflationary cycle. When players leave, they put their assets on the market, lowering the market value of items. As market value declines, people are more likely to leave the game, which only further weakens the value of game items. Momentum is bidirectional—the speed of game collapse is as fast as its rise.

The image below shows the collapse process of a game called CryptoMines on BSC.

Level 4: Future Pipeline Games

We categorize Level 4 games as exciting future projects that plan to improve games like Axie Infinity and Gods Unchained in significant ways.

Currently, we are looking at games like Gala Games' Miranda, Star Atlas, Phantom Galaxies, Aurory, Untamed Isles, and Shrapnel.

These games belong to different categories and are developing in various directions. Some have adopted Unreal Engine 5, while others have chosen a more blocky, cartoonish art style. Some are first-person shooters, while others are TCG games. Some companies plan to collaborate with DeFi projects to build synergistic dApps, while others are focused on cross-chain interoperability.

With the background statement concluded, we hope to highlight three core issues present in existing games in this article, which are particularly important for creating the next level of games.

Crypto First, Game Second

The image below is Messari's GameFi map.

The "crypto first, game second" model is adopted by studios that prioritize cryptography and financing over gameplay, and this is the first of three challenges that current Level 3 games must address.

Notably, this model does have an advantage: it allows independent developers like those at Star Atlas to raise funds more easily, either through NFT fundraising before game release or through token pre-sales to investors, or by the old-fashioned way of selling equity.

This is crucial for the development of many Level 4 games and is key to the success of various DeFi projects. However, we believe it brings many asset risks and speculative behavior that are detrimental to the entire ecosystem, leading to a decline in game quality and negative user experiences.

Excessive hype and previous success stories (like Axie Infinity) have fueled asset inflation before games are released. Companies can set initial prices far above non-crypto games, creating significant barriers to entry.

For example, the Calico Guardian in Star Atlas (a game hypothetically set to release in 2-10 years) is priced at no less than $25,000. Even a mediocre medium-sized ship costs at least $1,500. This is the developer's listed price, and all sales revenue goes directly into their pockets. The Titan ship, as Discord has been hyping, could potentially generate a million dollars in revenue. The image below shows the suggested prices for the ships.

Incredibly high asset prices diminish potential players' interest in the game and excessively burn the ecosystem. These price points not only exclude potential players but also force players to invest large sums of money to play a subpar game, or if they do not want to invest heavily, they are forced to play the role of contract slaves in the game.

Due to the volatility of crypto assets, players are forced to bear incredibly high risks. Moreover, the issue is exacerbated by asset stratification.

To encourage players to purchase higher-tier assets, game companies significantly boost the energy levels and corresponding returns of more expensive non-functional games. This means that for lower-cost projects, the price-to-return ratio (financially and opportunistically) is much lower. The return rate of ten $100 low-level NFT ships will be lower than that of a single $1,000 NFT ship.

For instance, Axie Infinity categorizes land into five categories (meadow, forest, arctic, mysterious, and genesis), forcing individuals to make significant contributions or excluding them altogether.

A plot of genesis land is priced at 550 ETH, while a plot of meadow land is priced at 3.5 ETH.

However, the stratified land system means that certain buildings can only be constructed on more expensive land or on multiple connected plots, generating more income through economies of scale and increasing returns to scale. The highest tier land typically ensures that the unit cost of producing products decreases as production scales up, while owning multiple connected plots (bulk purchases) means that unit labor productivity increases as production scales up.

In other words, the stratified nature of the Axie economy not only provides better returns for whale users who can afford it but also actively excludes individual retail players from game profits. According to the distribution of AXS game-earning rewards, a genesis plot is worth 343 meadow plots, meaning its true value should exceed 1,130 ETH.

The image below shows the estimated earnings from Axie Discord.

Other games like Star Atlas face the same issues: even with a larger number of cheaper ships like the Opal Jet and Pearce X4, the gameplay experience provided by these cheaper ships is significantly limited (e.g., lack of asteroid mining capabilities and combat abilities).

For example, if a $28,900 C9 capital-class ship can vaporize an Opal Jet in seconds during combat, how can an Opal Jet approach a "medium-security zone"?

Ultimately, the "crypto first, game second" model presents a dilemma: players are forced to choose between being a worker or an investor.

Those willing to pay exorbitant amounts are forced to become investors, as they must bear the risks of these expensive assets. Those with less investment willingness, or who simply do not want to engage too deeply in the game, are forced to become workers under a "scholarship" system—they borrow expensive assets from investors to earn money with them while giving most of the profits to the investors—this is a form of 21st-century serfdom, with a rent-seeking guild between them and the game.

Thus, it attracts speculators and large lending associations like YGG, who are not true gamers, which may benefit the short-term price of tokens but ultimately harms the long-term growth of the project.

Mainly because speculators do not actively contribute to the gaming community and occupy a large number of valuable NFT gaming resources that could have been owned by more decentralized individual players capable of creating better games.

In other words, the model of YGG and other guilds may not be positive for game community building, as they encourage the hiring of labor. It is equally important to emphasize that this labor primarily comes from wage earners in third-world countries, who have almost no negotiating power regarding their wages; this is not the "future of gaming" we dream of.

Finally, we want to point out that while there are class stratifications and pay-to-play phenomena in traditional games, the essence of GameFi and the "play-to-earn" model of all crypto games exacerbate this issue, directly leading to many games being unable to sustain healthy longevity. Unlike traditional gacha games (which offer cheap thrills through in-app purchases), GameFi projects collapse faster when attempting this approach.

One solution is the "game first, crypto second" model.

This model emphasizes the gaming experience while maintaining the security of the crypto component: enjoying fun and making money are not mutually exclusive, but emphasizing the former is crucial.

We envision that in the near future, new content from different developers and studios can be added to the game through voting from different nodes. Specifically, what makes a game interesting in the long term is the slow learning of skills (through a deep understanding of game logic and mechanics) or the slow progress felt by players investing time, rather than merely purchasing expensive high-tier assets.

Simply put, games can be designed to reward skill, like League of Legends, or to reward hard work (resource acquisition), like Clash of Clans. Some of the most popular games, like Clash Royale, balance these two elements: units can earn more rewards through upgrades, and cards are reasonably stratified based on rarity, with all cards reset to the same strength level.

Essentially, the "game first, crypto second" model means that not everyone can earn money; only those who know how to play have the opportunity to earn, and how much they can earn is influenced by the capital they invest, of course, also depending more on their gaming skills and time invested in the game.

Even those without sufficient funds can earn money through their unique skills and understanding of the game, rather than being forced to become weaker due to the cheapness of specific assets.

It is also reasonable for game studios with player backgrounds not to allocate most of the pre-sale tokens to private buyers. Because they simply want to profit more themselves, but this practice may affect the overall economy.

The Illusion of Decentralization

The second challenge that Level 3 games must address is decentralization.

The sale of in-game assets is by no means unique to GameFi, but the crypto gaming industry touts its game assets as completely independent and uncontrollable markets.

This is misleading: studios have ways to maintain control over assets, and in most cases, these games remain centralized, despite many crypto game leaders marketing themselves as decentralized. For example, in Axie, many Axies have been banned, as shown in the image below.

The first and most fundamental question is whether these games should or need to be decentralized as claimed by game developers.

In "centralized games" (like CSGO on Steam), accounts can easily be banned from trading. This leads to many issues, with assets worth millions of dollars locked in trading bot accounts.

While many may argue that these locked assets push up the equilibrium price by reducing total supply, making this ban somewhat reasonable, and that it prevents bots from simply transferring their assets to another account and continuing to attack and violate terms of service, which is crucial for stabilizing the game economy.

However, the decentralized nature of blockchain assets also has many reasons worth protecting. If we assume that decentralization is something we want to maintain and enforce, it raises the question: Does the current crypto gaming ecosystem execute these ideals? How can these games evolve to better create the ultimate decentralized metaverse?

In the current crypto gaming space, while game developers cannot directly prevent asset trading because they are independent on the blockchain, they can significantly reduce the value of assets by prohibiting them from entering the game. This would remove most of the utility belonging to that asset.

If properly marked on exchanges and other trading platforms (like the Axie Infinity market), it could easily replicate the trading ban functionality of centralized games. For example, when Axie Infinity discovered that Chinese studios were paying players to play multiple accounts simultaneously to maximize profits, they banned all Axie accounts and warned the player community on Twitter against further violations.

Of course, Axies themselves can still be traded, but they cannot be used by anyone in the game, rendering their trading value worthless. Because the game company monopolizes the rights to reduce and remove asset value, these assets remain highly centralized.

More deeply, games like Star Atlas claim to be developed by anonymous developers, meaning they can gradually withdraw over time and let other game developers take over their ideas.

They claim in many official channels that over time, if the community needs it, new developers can replace the development team.

In their white paper, the studio claims that "using blockchain technology based on the Solana protocol" can provide a "serverless and secure gaming experience," and the NFTs obtained and traded in Star Atlas create a tangible economy that replicates real-world assets and ownership.

Regarding the lack of servers, their reasoning is that if the game has no servers, then server failures will not affect the game, thus maintaining the stability of asset value and user base.

However, we believe that due to the speculative prices discussed above, companies have more motivation to start a new game, sell their tokens to raise funds, and due to the hype and rapid dissemination characteristics of cryptocurrencies, the cost of acquiring customers is very low.

For example, in the case of the CryptoMines game on BSC, the project claims to have over 230,000 users. When the development team failed to control FUD (Fear, Uncertainty, and Doubt), the project saw its token price drop from $801 to $4 within two weeks, and they proposed a complete game shutdown plan, promising to launch a new NFT completely independent of the original game, declaring that the NFTs from the original game had no utility.

In reality, to solve this problem, several structural barriers need to be overcome.

The first is the issue of intellectual property: while companies themselves cannot control the trading and transfer of NFTs, the images and names used in the game are protected rights. We know that protecting intellectual property is important and needs to prevent independent game studios with more funding from conveniently creating "Mirandus 2" or "Axie Infinity 2" using existing assets, thereby undermining the user base of GameFi.

While protecting and developing intellectual property is crucial for game development, there also needs to be a clear transition plan. Unlike other forms of protection like patents, trademarks do not have a clear expiration date and can be maintained indefinitely, so transferring ownership requires clear public information disclosure.

Our suggestion is to allow these companies to hold trademarks for a predetermined, public, and flexible period, allowing them to develop their intellectual property through collaboration, marketing, intellectual property, design, etc.

Then, the trademarks would be transferred to the game's DAO or a similar DAO structure, where the community can vote on partnerships.

These partnerships would be submitted to the DAO and thus voted on: they would require a minimum number of game-native tokens or NFTs, which would be locked by smart contracts during the voting period to coordinate interests and prevent one-off marketing plans.

Additionally, there are issues with the servers running the game itself. This can be addressed in two ways.

The first way is what Gala Games has proposed; Gala Games currently uses a node service, claiming that in the future they can "run a decentralized game hosting platform," which we believe has tremendous potential. New content from different developers and studios can be added to the game through voting from different nodes, allowing us to infer that future servers will no longer rely on a single game.

Alternatively, we suggest that game developers start a fund directly funded by themselves until they decide to no longer support the game, at which point they would promote the fund and transfer legal control to the DAO.

This way, if the game remains popular, the community can decide to maintain the servers or fully migrate to new servers at the appropriate time. Generally, this money should come from the company's profitable revenue and from new content creators who wish to maintain economic growth.

In practice, new content creators can choose to enrich the existing infrastructure by adding new playable content, or they can create a completely different game that includes the same NFTs.

If the new game provides a platform that is significantly better than the original game, the DAO can vote to suspend support for the original game and transfer funds to the new game, thereby phasing out the original developers.

Overall, we can predict that future blockchain games will be built on different Layer 1 blockchains, such as Ethereum, Solana, Wax, Cosmos, etc., and users will be able to easily switch games, carrying their assets, such as skins, avatars, or weapon NFTs, to other games or Layer 1 blockchains.

Governance Rights: A Major Illusion

Majoritarian governance refers to deciding on on-chain proposals or changes to the game system through on-chain voting. This is a significant illusion that needs to be addressed, and this issue is also crucial for the development of Level 3 games.

While games need user feedback and data to design the best products to maximize consumer experience, the on-chain movement of governance rights has historically never effectively resolved any issues faced by anti-majoritarian rule-makers.

The image below shows the distribution of governance tokens in Axie Infinity.

First, in the long run, majoritarian governance is harmful because individual players lack the skills, knowledge, and long-term motivation to maximize game growth.

Considering that most game development teams possess the expertise to design complex economic structures (which are necessary for balancing game revenue), while taking user feedback and input into account, we should trust the teams to make meaningful decisions.

We believe that promising projects with long-term visions, like Phat Loot Studios' Untamed Isles, will continue to listen to user feedback, just as they have done in character art design.

It is important to note that this can be achieved through data collection and pools, with a note reflecting NFT holdings for developers to consider, rather than through tokens.

This also raises another issue of exclusion and alienation, as many have invested significant funds in the game by purchasing NFTs (the act of purchasing NFTs is crucial for the game's operation). This token-based governance system forces individuals to also purchase these tokens and penalizes those who allocate funds to in-game NFTs.

In terms of incentive mechanisms, granting power to change fundamental aspects of the game to those with more money seems unfeasible, as their motivation is to protect their interests rather than the balance and health of the entire game. This could lead to changes based on protecting their higher-tier assets, making it easier for votes to pass, thus creating a power imbalance that alienates ordinary players.

While the crypto gaming space has almost no governance policies due to a lack of any type of governance structure, the consequences of crypto whales can be seen in other governance instances in the crypto space.

In April 2021, a proposal to change the pool was submitted on PancakeSwap, the largest DeFi platform on Binance Smart Chain. This change (which was supported by developers) was overturned by a whale user who pledged over 94,500 votes using their Cake tokens. This made them the largest single voter against the proposal, garnering 65% of the majority support. The number of tokens held was nearly double that of the entire proposal, allowing this whale to single-handedly block the vote that the majority wished to succeed.

This illustrates that giving power to those whose motivations may not always align with the collective can be destructive. What happened next was equally concerning: the Binance development team repeatedly proposed this suggestion until the whale eventually gave up opposition.

Decentralized finance (DeFi) protocols have been striving for quality and fairness, but many protocols have failed to meet these requirements due to their governance voting mechanisms: shifting the decision-making process on-chain sounds like the next blockchain revolution, but its effectiveness remains legally unrecognized.

The image below shows the results of that Pancake vote.

There is clearly a question about how to incentivize, as whale users will only allow votes that do not harm their portfolios.

Of course, we also have to ask, since whale players are those who invest significant assets into the game, do they not have the right to do so? After all, they bear most of the risk. Even if we try to circumvent the whale issue by establishing a one wallet one vote instead of a one token one vote alternative, we still face a similarly troubling issue: the Sybil attack problem, where a user can create 500 wallets and use scripts to distort governance or unfairly obtain airdrops, thus undermining democracy.

The image below shows the result of cheating in a Mekaverse lottery.

Moreover, token-based voting systems alienate players and create a power imbalance between the rich and the poor. They not only exclude those with fewer tokens but also force those with other assets, such as NFTs created directly in the game, to maintain a large supply of tokens to prevent harmful policies against them.

This is disastrous for NFT asset holders, as they are the ones most affected by the game. In the case of Axie Infinity, the players most affected by game changes are land and Axie players. However, those voting on game development proposals are all AXS holders.

While land in the game is proposed to generate AXS tokens in some way, most AXS tokens are in the hands of AXS speculators, who will undoubtedly try to maintain their economic interests. Ultimately, governance needs to be pushed slowly on a case-by-case basis, rather than raising funds afterward, severely impacting game progress.

Secondly, current game-based DAO frameworks have few successful implementations. Due to a lack of transparency and progress in DAO development, almost no policies have been voted on.

There is little information on specific examples or structures for how to conduct voting, and while games like Axie Infinity and Star Atlas have proposed basic governance and proposal structures, there have been no significant decision votes or regular voting yet.

It is worth mentioning that those who wish to truly decentralize games can use some of the ideas mentioned in previous DAO voting as a basis for future voting procedures.

The image below shows the distribution of governance rights in Star Atlas.

Finally, the early distribution of tokens hinders the implementation of DAO structures in the current environment.

First, the worst-case scenario is that game development teams that plan to execute rug pulls (scams and schemes) carry out the rug.

Second, even if we assume developers will not do this, due to the need to raise funds and reward employees in the early stages, many tokens will be distributed to private owners and employees. Therefore, even if major players can acquire most of the valuable tokens in the market, they still lack relative voting power.

Note that this is not just an issue for a few games, but a problem across the entire GameFi space. Currently, the average shares allocated to team investors and private investors are 20.3% and 13.2%, respectively, while the ownership sold publicly is 9.17% (based on data from three games: Axie Infinity, Star Atlas, and Splinterlands). From the data collected from games, in some extreme cases like Star Atlas, the public token of POLIS (their governance token) only accounts for 2% of the total POLIS allocation, while the private allocation is 22.5%, leaving many issues such as public governance rights, democracy, and land allocation.

Even in fairer games like Axie Infinity, although the public and private allocations are the same, the team still retains the majority of tokens, giving them the final decision-making power.

While many claim that this distribution system may change over time, such as through play-to-earn and staking, we argue that this strategy also applies to private institutions, as they may earn more due to their first-mover advantage.

In any case, the public's desire to have the final say in governance policies may take years to achieve. At the start of the game, when the most important decisions are made, companies and funds will have control without governance tokens. Therefore, the solution is to either remove governance and not use it as a fundraising tactic, or give power to the people, like Loot, and then disappear from it.

Conclusion

Given the playability and economic value of games and NFTs, GameFi offers an opportunity to bring the next tens of millions of new users into the cryptocurrency space.

Since mid-2021, we have witnessed the first explosion of crypto games. The number of wallets interacting with game NFTs and games is more than double that of DeFi. YGG (Yield Guild Games) is currently valued at $6 billion as they and other on-chain guilds continue to bring users from emerging economies (like the Philippines) into the crypto economy. Sandbox will one day become a larger company than Roblox, and more sandbox games will emerge.

If we can address the issues of the "crypto first, game second" model, the illusion of decentralization, and governance rights one by one, the GameFi revolution will inevitably occur.

Finally, we will quote a line from the Loot Project website:

A storm is brewing, and each of us will inevitably be affected by it. Can you feel its presence now?

This world needs us to make an effort again; will you join us in striving to change our fate, or will you choose to remain the same, repeating the hardships of the past for just enough reward to get by?