Today, I would like to remind gamers who are new to the crypto market about something I find important: WEB3 GAMING COINS.

The fact that game tokens (For the rest of the text I will use the term token rather than coin, as almost all web3 game projects have their own tokens that are traded on one or more of the L1/L2 blockchains.) experienced a rapid increase in the first period of their launch and tended to lose value over time can be explained by several reasons. Here is an explanation of this situation step by step:

Speculation: The launch of gaming tokens often attracts a lot of attention and investors buy in the hope that these tokens will appreciate in the future. This can result in a rapid initial rise.

In a new launch project, the price and quantity of sales in the private round should not be overlooked. The number of followers on the project's social media accounts can sometimes be misleading. It is also seen that many contracted influencers promote the project for their own benefit.

Game Economy: Games have in-game economies. Players can earn in-game tokens or digital assets, and these assets can be valued in in-game trading. At first, players are motivated to play the games to obtain these tokens. However, over time, these tokens may circulate in excess in the in-game economy and cause a demand decrease.

To prevent this situation, with each new update, events are added to the project where players will spend more tokens. The most common practice is to direct players to upgrade their NFTs to increase earnings. For an NFT that earns more or can be sold at a better price in the market, players are encouraged to evaluate the tokens they earn in-game instead of selling them.

Multiple game tokens that can be exchanged with each other and used in different areas is also a very common practice. In this way, it is tried to prevent game assets from leaving the game and being sold.

Token Supply: The total supply of game tokens is important. If too many tokens are released, this may reduce the value of the tokens. That is, as the supply of tokens increases, the value of existing tokens decreases.

At this point, it is essential to check the max and circulating supply in advance. Therefore, it would be beneficial to briefly take a look at the whitepaper of the project and examine the tokenomics section carefully.

Many projects unlock the tokens they’ve sold before launch and deliver them in batches within a certain schedule, instead of delivering them in bulk. Their purpose in doing this is to maintain price stability by preventing those who’ve bought at a low price from selling all their tokens.

Players' Demand: The value of game tokens is influenced by the demand from players and investors. If players do not want to obtain more tokens or if the activities in the game decrease, the value of the tokens may decrease.

If the game starts to become boring or too demanding, the number of daily active players will start to decrease. Of course, when leaving the game, they try to dispose of the tokens and NFTs they have as quickly as possible. Especially when they start lowering the floor price to sell NFTs faster, it means the game has started to decline.

External Factors: General fluctuations in the cryptocurrency market and economic factors may also affect the value of game tokens. For example, a cryptocurrency market crash could also negatively impact the value of game tokens.

As a result, the value of gaming tokens is complex and depends on many factors. There may be a rapid increase at first, but over time this value may decrease. Players and investors should understand the risks of such market movements and exercise caution.

For me, the most important criterion when entering a web3 game project is whether it has the playability and addictive potential to compete with its web2 counterparts. In the games I enjoy playing, making money is not my main motivation.

So, if a game is not enjoyable enough, remember that there will be mostly cunning foxes trying to take your money from you instead of ordinary gamers.

I encounter many new games that interest me. Most of them are actually designed with a pay-to-win system rather than a play-to-earn system. These types of games, whose revenue generation mechanism is based entirely on the investment of players, are dependent on the number of active players since they do not have external income. In other words, even if the ROI (Return on investment) is good at the beginning, if the number of active players does not increase, the reality of "zero sum" is encountered.

You may find yourself in a situation like this; Even though you spend all your in-game earnings on upgrades and new NFTs to rise in the rankings, you still have to put additional money into the game. This means you have reached the "stop loss" point. Because it is very annoying to have to continue playing a game that you are tired of playing in order to save your investment.

So at the beginning, ask yourself the following question;

Am I a gamer or an investor?

Depending on your answer, I will discuss alternative roadmaps in my next articles.

Thanks for reading! Hope to see you in the next article.

Please do not forget the fact that if you subscribe now you may leave whenever you wish.