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Introducing the MetaPortal Gaming Index (GAME)
At MetaPortal, we have been covering crypto gaming for almost a year now. We wrote extensively about games and how they fit into the Metaverse, play to earn, about the current state of crypto gaming, and about individual projects like Sandbox, Illuvium, Yield Guild Games and Decentral Games. So when we say that we are excited about crypto gaming, we hope that we know what we are talking about (probably not though)!
With that, we are excited to introduce the MetaPortal Gaming Index — GAME.
GAME is a basket of 13 tokens, designed to provide exposure to the emergent crypto gaming space, investing across games, virtual worlds and gaming platforms. The index is a simple and effective way to express the view that crypto games will capture a greater share of the burgeoning gaming market. GAME is built on Set Protocol infrastructure, audited by OpenZeppelin and ABDK Consulting, and is represented by an ERC20 token. It is available for purchase at tokensets.com and on Uniswap.
In this post, we will cover:
Why the Gaming Index
How is GAME different from the Metaverse Index (MVI)
Where to buy and trade GAME at launch
Why Do We Need a Gaming Index?
In 2021, the global gaming market was worth $175bn, with roughly 3.1 billion gamers globally. It is projected to reach $269bn by 2025, nice! Some estimates are even larger with a gaming-focused investment firm, Bitkraft, in its collaboration with Naavik, recently suggesting that the gaming industry is nearly twice as large as reported, at $336B.
According to Blockchain Gaming Alliance's October report, Crypto gaming specifically saw two million unique active wallets per day in October. The number of wallets interacting with games first overtook DeFi in August and now make up 55% of all blockchain activity.
And then there's the funding environment for crypto gaming. Dove Metrics showed that Q3 2021 was a massive quarter for fundraising, with $1.4bn raised for NFT start-ups in September alone. Gaming represented by far the largest vertical for investment during the three months, seeing $1.1bn of inflows. That's not surprising, considering recent raises by Bitkraft, Sfermion, a16z, and gaming funds set up by FTX, Solana, BSC, and Polygon.
At a high level, the MetaPortal Gaming Index aims to provide exposure to this long-term trend towards gaming, and particularly crypto gaming, through the simplicity of a single token. As with most thematic indices, GAME holders benefit from the following:
Always holding the top gaming tokens by market capitalisation.
Eliminating gas fees associated with rebalancing a portfolio.
No need to research tokens or try to pick winners in the sector.
Risk is spread across many tokens, providing diversification benefits and reducing volatility compared to single token exposure.
How Is GAME Different from the Metaverse Index (MVI)
The Metaverse Index exists to simplify the financial expression of the idea that our lives will continue to become more digitised, and we will spend more time in virtual environments working, being entertained and socialising.
On the other hand, GAME is designed to supercharge exposure to the hottest trend within the Metaverse sector, gaming. We see GAME as a complimentary allocation to MVI; it can be used to leverage exposure in an already fast-moving sector. As gaming and game-related tokens have been shown to perform exceptionally well during recent volatility, it may not even be that degen of a move to hold GAME.
The methodology is all about the what & how of putting together an index. It covers screening, token selection, calculation of token weights, and much more. Below is a high-level overview.
The selection of tokens is based on the following basic criteria:
Tokens must be ERC20 available on Ethereum mainnet.
The protocol must be in one of the following token categories, as defined by MetaPortal Metaverse Categories: Gaming, Virtual Worlds and Platforms.
For Platforms and Virtual Worlds, only those focusing on gaming will be considered for inclusion.
The token must have reasonable and consistent DEX liquidity on Ethereum.
In the event of a security issue, the methodologist will work with the project team to understand the problem and any effects on GAME holdings. The team is expected to provide users of the protocol with a reliable solution and adequate documentation to ensure transparency about the incident.
Index Weight Calculation
Weights are calculated using the square root of market capitalisation.
There will be a 25% maximum allocation cap on single positions.
Excess weight for a given token will be redistributed to the remaining components on a weighted basis.
The index will rebalance on an ad-hoc basis, but at least quarterly, at the discretion of the methodologist.
Where to Buy and Trade GAME at Launch
Users can also mint and issue the GAME token directly using underlying components on TokenSets. Through clever use of smart contracts, Tokensets allows users to choose the better option for their trade size, between utilising a DEX and issuing new units from the underlying.
There comes the point where the impact of trade on the DEX pool becomes large enough that it is cheaper to use issuance. The beauty of TokenSets UI is that you no longer need to work this out yourself and can compare the two from one interface!
You can learn more by checking out our FAQ doc.
And that's it, once GAME is in your wallet, you're ready to play the investment game on easy mode!