The web3 gaming industry is hotting up. Today, there are several exciting play-to-earn (P2E) platforms that have crowded this space, and almost each of them is a hit with users. One of these games is Aavegotchi, a P2E platform that revolves around collecting and taking care of digital pets.
At its peak in April last year, the game had more than 14,000 daily active users with a 24-hour transaction volume of nearly $100,000, according to DappRadar. Recently, the platform has also found itself in the news for carrying out the largest multiyear token sale in the history of web3 gaming. But what is Aavegotchi, how does it work and how much money did it raise in its token sale? Tag along to find out.
What is Aavegotchi and how does it?
As mentioned earlier, Aavegotchi is a popular P2E platform. Originally, the game was meant to be launched on the Ethereum blockchain. However, developers pivoted to Polygon instead, due to high gas fees on the Ethereum mainnet.
To play this game, users must collect and take care of digital pets known as Aavegotchis. These ghost-looking avatars are nothing but NFTs, each with its own unique attributes. These attributes include special character traits and wearables. The value of the Aavegotchi also depends on the amount of interaction between the player and their pet over time. Finally, value can also be increased by staking a Tokens to the avatar (more on this later).
To start playing the game, users must first buy GHST, the platform’s native token. These tokens can be purchased from most leading crypto exchanges. Now, with GHST tokens in hand, users can purchase Aavegotchi from the platform’s community-owned, fully decentralised market place. Alternatively, they can also buy a portal. In case you’re wondering, a portal is a pack of 10 Aavegotchi avatars, from which the user can pick only one pet as their own.
Armed with a pet, users can play several games on the platform. For instance, they can enter fight clubs to battle other Aavegotchis. Or they can play several other community-created minigames such as Reverse Pacman or Snaake. And yes, these are just Aavegotchi-themed versions of the normal Pacman or Snaake games. Users can earn XP by winning these games. The more XP they have, the higher their Aavegotchi ranks on the platform’s leaderboard. And those topping the leaderboard can win GHST prizes.
Users can also stake aTokens in their Aavegotchi to earn more rewards. For the unacquainted, aTokens are cryptocurrencies pegged to the value of another asset. These tokens can be staked with the user’s Aavegotchi avatar to increase its rarity score. The amount of tokens deposited is also known as Spirit Force. The more spirit force an Aavegotchi has, the more valuable it is. The aTokens also generate yield, thereby increasing the number of aTokens stored within your avatar over time.
The game also has its own metaverse - the Gotchiverse - where users can own land and build an ecosystem around their Aavegotchi. Besides land, the Gotchiverse also has an Arena where users can battle their Aavegotchis, competing for the Spirit Force of their opponents. Finally, to adopt decentralized governance, the AavegotchiDAO has also been established for community members to vote on proposals and make this project user-driven.
The GHST token
GHST is the utility token of the Aavegotchi platform. It can be used to purchase portals, consumables, wearables and other in-game items. Players buy and spend GHST to train and upgrade their avatars. Users can also stake GHST to mint REALM, the land plots of the Gotchiverse. The fees collected from all these transactions are distributed across the Aavegotchi ecosystem.
For instance, a large portion of the value is dedicated to Aavegotchi DAO, which funds the development of the Aavegotchi ecosystem. Another substantial chunk goes to the community through the various rewards on the platform. Another 5 percent is burnt as a deflationary counterbalance to the downward pressure on GHST's price. And finally, 40 percent of the revenue goes to the developmental team.
Aavegotchi’s record-breaking multiyear sale
Aavegotchi recently put a stop to its multiyear token sale which netted over $30 million, without any contribution from investors and venture capitalists. Pixelcraft Studios, the makers of Aavegotchi, started the token sale in mid-2020. To purchase GHST tokens, users had to deposit the DAI stablecoin into Ethereum-based smart contracts.
The project’s fundraiser was going smoothly, becoming the largest fundraiser in the Web3 gaming landscape. However, DAI began to de-peg after the Silicon Valley Bank fiasco. Therefore, the developers behind the game decided to end the token sale, having already collected upwards of $30 million. Pixelcraft Studios allocated 25 percent of the funds ($7.5 million) for itself, while its DAO will receive the remaining $22.5 million.
Conclusion
The recent fundraiser opens a door for more developments in the ecosystem, suggesting that the project has a passionate community backing it. In the coming months, it will be interesting to see how the Aavegotchi ecosystem expands and what utility it adds to the Web3 realm. Perhaps, Aavegotchi could even emerge as a promising competitor to more popular P2E games, like Axie Infinity and Cryptokitties. However, the digital asset space is highly volatile and projects can tumble despite the strongest indicators. Therefore, it is always important to do your own research and invest only as much as you can afford to lose completely.
