The Strategic Role of IGOs in Blockchain Gaming Ventures
Blockchain-based video games are emerging, providing crypto investors with an opportunity to enter the profitable gaming world further. The video game industry as a whole is huge. And it is expected to exceed $200 billion by 2023.
As a result, several gaming entrepreneurs and businesses are considering launching their platforms in order to capture a piece of this lucrative market. And one of the most common ways to launch a new blockchain-based video gaming platform is to offer an Initial Game Offering (IGO). Let’s take a closer look at it in light of this.
What Is an Initial Game Offering?
An Initial Game Offering (IGO) is a crowdfunded fundraising event for game industry projects and startups. It allows participants to obtain project tokens as well as other benefits, such as receiving discounts on the game’s release or access to special features if they pre-register before it goes live.
IGOs can be viewed as an alternative method of raising funds for gaming projects and startups. In the past, the term “pre-sale” was used as a synonym for IGO, but it is not entirely accurate because “pre-sale” can also refer to other private sales or crowdfunding activities.
They typically involve investors purchasing tokens that provide access to a service or platform and, if necessary, can be traded on cryptocurrency exchanges. As a result, in addition to the right to use those tokens once the project goes live, they will receive discounts, free services, early access to content, free passes, and other benefits. In terms of the actual digital tokens, each one is usually unique and associated with the project. This is because they may need to refer back to them in order to provide a service or use a specific platform.
IGOs typically occur when a project requires funding in order to go live and be fully operational. For example, if someone has an idea for a blockchain-based social network game, but the required software is difficult or expensive to develop, an IGO could raise the necessary funds. When these platforms go live, they can typically sell their tokens on cryptocurrency exchanges if demand warrants it. Even investors buy tokens solely in the hope that projects will become popular and increase in value in the future without ever using them on the platform.
How an Initial Game Offering Works
An IGO is a type of crowdfunding platform for blockchain-based games that is similar to an initial coin offering (ICO), with the main difference being that an IGO focuses on games, whereas an ICO focuses on cryptocurrencies. These two procedures assist investors in gaining a foothold in a blockchain game as soon as it is released.
IGO participants gain early access to in-game assets such as mystery boxes, weapons, and characters as a result of their support for games in their early stages. These assets are Non-Fungible Tokens (NFTs), which are typically required to play the game.
By investing at the beginning, you can get the best deal on a game. However, investing at an early stage carries some risks because there is no guarantee that the project will be successful or even reach its full public launch.
Top 5 Well-known Crypto Gaming Launchpads
Binance NFT allows you to invest in in-game assets as well as NFTs from various gaming projects. Because of the platform’s unique subscription mechanism, all users have equal access to IGOs. Furthermore, to ensure fairness for all users, the system employs public and verifiable algorithmic selection. To use Binance NFT, simply login to your Binance account and navigate to the Binance NFT tab. Then, from the Binance NFT homepage, select an IGO banner representing an IGO in which you wish to participate. Preparation, subscription, calculation, and distribution are the four stages of the participation process.
The all-inclusive Gamestarter ecosystem sets a new benchmark for funding Indie games through its IGO launchpad and NFT-based marketplace. In addition, Gamestarter also ventures into developing high-quality blockchain games. The Ethereum-based GAME token powers the Gamestarter platform. With a GAME token, you can purchase an NFT and other products on the platform. The platform also protects all IGOs with a $300,000 USDT insurance policy that covers a failed IGO launch or team misconduct.
The Enjinstarter gaming launchpad is dedicated to expanding the Enjin ecosystem and metaverse. It enables creators to launch crowdfunding campaigns and build blockchain communities. The platform also assists projects in developing long-term strategies and launching successful campaigns. Enjinstarter has also created several projects, including the Pixelverse, an NFT metaverse for games; Project Defina, a blockchain game platform where you can earn money by playing; and Gaia Everworld, a fantasy game in which players explore lands and build kingdoms.
GameFi serves as a platform for blockchain games and metaverse projects. It is used to create digital communities and virtual economies for public use. Its solutions cover the entire lifecycle of a game project. The platform has a ranking system based on your $GAFI staking amount: Legend, Pro, Elite, and Rookie. When determining individual allocations, the number of tokens allocated to each IGO pool is taken into account. To join the IGO pools, GameFI members must reach the Rookie rank and complete KYC. This requirement, however, is optional for those who participate in community pools.
Speedify helps blockchain-game projects with marketing and community building in addition to fundraising. For example, you can use SFUND, Speedify’s community token, to invest in a gaming project. The more money you put into it, the more weight you add to the pool. The reward system is a nine-tier program, with the first tier using a lottery system to distribute tokens, while the other tiers guarantee a share. SFUND can be purchased on exchanges such as Pancakeswap and Kucoin. You must use the same wallet you provided during the KYC process to participate in its IGO. To participate in its launchpad activities, if you use a centralized exchange, you must first transfer your tokens to other wallets such as Metamask or Trust wallet.
How to Participate in an IGO
Participating in an IGO (Initial Game Offering) involves several steps to ensure a smooth and informed investment experience. Here’s a comprehensive guide on how to participate in an IGO:
- Choose a Reputable IGO Launchpad: Identify a reputable and well-established IGO launchpad that has a track record of successful projects and a strong reputation in the blockchain gaming community. Conduct thorough research on the launchpad’s platform, security measures, and team expertise.
- Register and Complete KYC/AML Procedures: Create an account on the chosen IGO launchpad and complete the Know-Your-Customer (KYC) and Anti-Money-Laundering (AML) verification process. This typically involves providing personal identification documents and verifying your residence address.
- Research IGO Projects: Carefully research the IGO projects that interest you. Read the project whitepaper, analyze the team’s experience, and evaluate the game’s concept, mechanics, and potential for success.
- Understand Tokenomics and Allocation: Familiarize yourself with the tokenomics of the IGO project, including the total token supply, token distribution model, and vesting periods. Understand the allocation structure for the IGO, which determines how much you can invest.
- Prepare Funds and Connect Wallet: Ensure you have sufficient funds in the supported cryptocurrency or fiat currency to participate in the IGO. Connect your cryptocurrency wallet to the Launchpad platform to facilitate token purchases and withdrawals.
- Whitelisting (if applicable): Some IGOs may require whitelisting to participate in the token sale. Follow the launchpad’s instructions to complete the whitelisting process, which may involve completing tasks or providing additional information.
- Participate in Token Sale: During the IGO token sale, follow the launchpad’s instructions to purchase tokens. The sale may follow a fixed-price or Dutch auction format, determining the token price based on demand.
- Receive and Manage Tokens: Once the IGO concludes, the purchased tokens are typically distributed to participating investors within a specified timeframe. Manage your tokens securely in your cryptocurrency wallet.
Some Successful IGOs
Despite the inherent risks of IGOs, a number of successful projects have been launched using this mechanism, such as:
Axie Infinity (AXS):
Axie Infinity is a play-to-earn digital pet universe in which players can collect, breed, battle, and trade token-based Axies. In September 2021, the game raised $152 million in its IGO on Binance Launchpad and has since grown to become one of the most popular blockchain games in the world, with over 2 million daily active users.
The Sandbox (SAND):
The Sandbox is a metaverse platform that allows players to create, share, and monetize gaming experiences. In November 2020, the game raised $3.5 million in its IGO on Binance Launchpad, and its metaverse has since attracted over 2 million registered users and 100,000 creators.
Illuvium is an open-world role-playing game in which players capture and battle collectible creatures known as Illuvials. The game, which is still in development, raised $72 million in its IGO on Binance Launchpad in December 2021, and it has generated significant hype due to its high-quality graphics and innovative gameplay.
Guild of Guardians (GGG):
Guild of Guardians is a mobile RPG game in which players collect, upgrade, and battle Guardians in order to earn rewards. The game raised $10 million in its IGO on Immutable X in February 2022 and is currently in beta testing with over 100,000 players.
Guild of Guardians is one of the first successful IGOs to launch on a non-Binance platform. The success of the game demonstrates the ability of IGOs to attract investors and community support across a wide range of platforms.
The Advantages of an IGO
Benefits for Game Developers:
- Early-Stage Funding: When traditional financing options are limited, IGOs provide an opportunity to raise funds early in the development process. This allows developers to concentrate on developing their game without being concerned about immediate financial constraints.
- Community Development: IGOs attract early supporters and game enthusiasts, fostering a community around the project. This community can offer useful feedback, assistance, and marketing opportunities.
Benefits for Investors:
- Early Project Access: IGOs provide early access to promising blockchain game projects before they gain widespread attention. This allows investors to participate in the project’s potential growth and token value.
- Potential for High Returns: Early-stage projects have the potential for significant value appreciation if they are successful. IGO tokens’ value may rise as the game’s popularity grows and its ecosystem expands.
Risks and Challenges in an IGO
Challenges for Game Developers:
- Selection and Vetting: Developers must be selected and vetted by reputable IGO launchpads. This process can be competitive, and developers must effectively showcase the potential of their project.
- Tokenomics Structure Design: Creating a solid tokenomics structure is critical for IGO success. To ensure fairness and alignment with the project’s goals, token distribution, allocation, and utility must be carefully considered.
Challenges for Investors:
- Due Diligence: Before investing in IGO projects, investors must conduct extensive due diligence. This includes assessing the whitepaper, team, tokenomics, and potential risks of the project.
- Identifying Legitimate Projects: It can be difficult to distinguish legitimate IGOs from fraudulent ones. Investors should be wary of projects that make unrealistic promises, lack transparency, or have anonymous teams.
Difference between IGO , ICO and STO
The main difference between IGOs, ICOs, and STOs is the purpose of the tokens that are sold. IGO tokens are used to play games or access in-game assets. ICO tokens are used to power cryptocurrency projects. STO tokens are used to represent ownership in companies or assets.
Another major difference is the regulation of the tokens. IGO and ICO tokens are not typically regulated by securities laws. STO tokens are regulated by securities laws, which can make them more expensive and time-consuming to launch.
Here’s a table that summarizes the key differences between IGOs, ICOs, and STOs:
However, it is important to note that IGOs are still a relatively new investment vehicle, and there are inherent risks associated with investing in early-stage projects. Before investing in IGO projects, investors should conduct thorough research and be prepared to lose their entire investment.
Initial game offerings (IGOs) have emerged as a dynamic and innovative way for blockchain game developers to raise funds. They provide both game developers and investors with early-stage funding, community building, token value appreciation, and governance participation. Despite the risks and challenges, IGOs are a transformative force in the blockchain gaming landscape, allowing developers to realize their visions and giving investors access to promising opportunities in this rapidly evolving sector. As the blockchain gaming industry matures, IGOs will play a larger role in shaping the future of gaming and decentralized finance.