Pixelmon Token Sale Preview: Exploring 'GameFi Hunter' IP Value

Pixelmon, which became highly controversial in 2022, announced early this month that it had raised $8 million in funding. It then partnered with MON Protocol to launch the MON token and announced a public token sale set to take place at the end of this month.

Odaily Planet Daily will organize information in this article about the blockchain game that once made a record of $70 million in NFT sales, interpreting its vision and the token sale process.

Pixelmon Analysis

Where lies the market opportunity?

Pixelmon states that NFT technology has seen widespread adoption in recent years, initially driven by digital artists and collectors who found NFTs to be the perfect means to eliminate middlemen, securely transfer unique images or underlying IP ownership, and earn royalties from the secondary market; it believes that gaming will quickly become the first consumer market to benefit from and drive the massive adoption of blockchain and NFT technologies.

When the market first tried to decentralize game asset ownership through blockchain, it used NFTs as a payment channel in games, embedding earning into gaming, thus rationalizing NFT prices as a relationship between paying to play games and earning (i.e., Play to Earn). The problem with this strategy is:

• No focus on creating high-quality game products and experience iteration;

• The underlying business goal targets NFT buyers rather than gamers;

• An unsustainable economic system, where new buyers maintain the old economic system without real “consumers” (players).

In short, Pixelmon believes the current blockchain gaming scene is more of a Ponzi economy, struggling to survive in the long term through sustainable income.

How does Pixelmon want to break the game?

Pixelmon aims to break new ground by creating a decentralized game IP ownership system that supports the Play to Own model with the right incentives and establishes a revenue model based on free-to-play games. The strategy focuses on differentiating between two user groups: “art and commercial IP collectors” and “game users”, with the goal of building a mutually beneficial ecosystem.

To achieve this, Pixelmon has developed two sets of NFTs, naming the system the Right-of-Game (RoG) system, which consists of Genesis NFTs and in-game NFTs.

Genesis NFTs encompass the IP ownership of specific assets, targeting those interested in acquiring artwork and wishing to explore, negotiate, and commercialize IP related to the artwork. In contrast, in-game NFTs are designed for consumers/game players.

By leveraging free-to-play games and in-game NFTs, Pixelmon aims to lower the barrier to entry for the game, thereby attracting a broad user base. According to the Pixelmon whitepaper, game players are seen as the ultimate consumers of the Pixelmon game and are expected to serve as the engine for ecosystem growth. A large user base can add value to the game IP and achieve linear value growth as the number of users increases.

Genesis NFTs are key to the RoG system. Although these NFTs do not have in-game functionality, they will receive airdrops of in-game assets and can also earn rewards from activities within the game ecosystem.

On the other hand, Genesis NFTs will serve as a certificate of IP ownership and franchise fee rights. Pixelmon states that by decentralizing IP and franchise fees, Genesis NFT holders are motivated to explore, negotiate, and realize the commercial application of IP, thereby earning franchise fees.

In summary, Pixelmon aims to introduce a large number of game users through free games, building a base of ecosystem users, and then developing the IP of each character on the basis of the ecosystem, much like Pokémon, by giving each character a separate and prominent IP value.

The ideal is too full

Admittedly, there have been a few cases of Web3 native IPs breaking through and creating value, such as in 2022 when China’s Li Ning launched the “Li Ning Bored Ape Yacht Club” series of apparel themed around BAYC #4102, and also opened a BAYC pop-up store offline. Pudgy Penguins’ “Pudgy Toys” dolls sold over 20,000 units on Amazon within two days of launch. However, these are only a few examples, and PFP-type NFTs, which are considered to be focused on IP development, have not seen many long-term survivals or breakthrough spread, not to mention integration with a vast game ecosystem.

Therefore, the blockchain game model proposed by Pixelmon can indeed be considered a novel and theoretically feasible path. However, as one of the first to explore this model, it will still face many challenges.

Financing Background and Token Sale

Although the development path of Pixelmon is still relatively long based on the analysis of its development model, Pixelmon still possesses certain strengths when considering its financing background and market expectations.

At the beginning of this month, the NFT project Pixelmon announced the completion of an $8 million seed funding round. The round saw participation from Animoca Brands, Delphi Ventures, Foresight Ventures, Amber Group, 9GAG founder Ray Chan, and Immutable co-founder Robbie Ferguson, among others. Pixelmon stated that the team plans to use the new funding to promote the development of casual and mid-core games.

Earlier in 2022, Pixelmon had conducted an NFT sale, reaching a sale price of 3 ETH, with a total sales volume of $70 million. However, the price plummeted by 90% after the disclosed game content quality fell short of expectations. Afterwards, Pixelmon replaced its project leadership team and launched a new roadmap. After two years of restructuring, the NFT price has rebounded to 1.65 ETH, and the quality of the game has significantly improved.

Token Economics

Mon Protocol, a partner of Pixelmon for IP management, has announced the launch of the MON token, with a total supply of 1 billion tokens. Approximately 36% of the total MON supply will be directly distributed to the Pixelmon community through two allocation mechanisms, while about 29% of the MON’s total supply will be indirectly allocated to the Pixelmon and Mon Protocol communities through an ecosystem fund.

MON serves as the governance and utility token for Mon Protocol, which will be applied as an IP protocol within the Pixelmon ecosystem for the first time. Within the Pixelmon ecosystem, the MON token will function as an in-game currency, representing IP governance rights, among other roles.

Token Presale

The MON token presale will be conducted at a fixed price, with the following process and requirements:

• Participants in the token presale must first obtain a Waitlist Code, each equivalent to a subscription opportunity.

• Each subscription can purchase 2,888 MON tokens, with a total of 62,092,000 tokens available for presale.

• In the event of oversubscription, selections will be made through a lottery.

• Waitlist Codes will be generated by two NFT series launched by Pixelmon, namely Pixelmon Gen 1 and Golden Trainer. The former will have 3 or more Waitlist Codes, and the latter will have 2 or more, with the number of allocated Waitlist Codes increasing further based on rarity.

• The subscription will be made with ETH, and although the official price has not been disclosed, it is preliminarily estimated that each subscription will cost between 200 and 300 US dollars. Assuming a median value of 250 dollars, the token’s price would be approximately 0.0865 USDT, resulting in a fully diluted valuation (FDV) of 86.5 million dollars.

Conclusion

The token pricing of Pixelmon, compared to the tens of millions or even hundreds of millions in market value of mainstream blockchain games, is at a moderate level, and it has just announced a substantial funding round, suggesting some short-term potential. However, its project vision is very ambitious, and it is still difficult to conclude whether it will be successfully implemented.

Note: “GameFi Hunter” is a new section launched by Odaily Planet Daily that focuses on Web3 games. It regularly updates on hot projects, breaks down economic models, and shares interactive tutorials. For coverage requests, please contact WeChat: AmadeusL.

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