Off The Grid presents the industry’s best opportunity to demonstrate onchain economies at undeniable scale, and deliver crypto’s first truly impactful consumer product.

TL;DR:

Gunzilla has done the hard thing: delivered a world-class game capable of competing in the big leagues @playoffthegrid
Relentless updates have shipped; the game is ready to attract & retain its next wave of new users
Mainstream gamers are seeing the value of an onchain economy & marketplace for the first time
With ~10x subscriber growth, OTG will be a Top 5 crypto app by onchain revenues
GUNZ is already a Top 10 chain by daily active addresses & transaction count
The ecosystem is strongly positioned as the home of onchain AAA games
$GUN lies at the heart of the industry’s clearest mainstream onboarding prospect

Intro

Off The Grid (OTG) represents the single purest signal for validating the thesis of onchain economies in the mainstream arena. Quietly building under the radar since 2019, the team has delivered what I can sincerely say is one of the greatest games I have ever played. Ultimately, Gunzilla has done the hard part: delivered a product on par with the world’s biggest shooters.

https://x.com/pierskicks/status/1885081381824270733

Throughout years of infrastructure progress in crypto, the industry has struggled to deliver a truly impactful consumer product. Despite distribution headwinds and myriad disappointing public market outcomes, I remain confident that gaming is the most likely candidate for achieving this. In the 4 years since Axie Infinity sparked a gaming hype cycle drawing in over $4B of investment, few teams have been able to survive let alone thrive. The harsh reality of there being few experienced game devs looking seriously at this space, the long feedback loops required to build great games, and the ADHD-nature of the market left users feeling totally disappointed by an idea many were genuinely excited about.

It’s no secret that Delphi has been a staunch supporter of this thesis since its inception. We remain deeply encouraged by the great work ecosystems like @Ronin are doing with token-literate founders experimenting in mid-core games such as @Fableborne. Titles like these with broad appeal and balanced incentive systems are effectively incorporating many of the learnings of the last few years. That said, too many projects are competing for the same small pool of existing onchain users. The real opportunity has always been in showcasing the technology’s advantages by delivering a more compelling experience—one that can convert more of the 3 billion gamers worldwide into participants in truly open game economies.

Launch Recap

On October 8th, Gunzilla released Off The Grid with an explosive streamer campaign driving it firmly onto the front page of both Twitch (140K peak concurrent viewers) and Epic Games (#1 F2P game globally). The biggest voices in gaming picked up on the exact value proposition of an onchain economy for the first time. In this video Shroud—one of the top shooter players ever—explains “Instead of spending millions of dollars to make your own Steam marketplace… you can just use the blockchain as a tool. I am genuinely surprised it took so long for someone to do that”.

Three things are now abundantly clear:

Off The Grid has an undeniable PMF—gamers are absolutely crazy about the core game concept and mechanics.
The idea of truly open, onchain economies is starting to resonate with mainstream audiences for the first time.
OTG is now a globally recognized title with brand awareness firmly established well beyond crypto.

In the five months since launch, the team has worked relentlessly to address early performance issues: heavy optimization has made the game run flawlessly, enhanced user onboarding has significantly boosted retention, custom anti-cheat has allowed the competitive scene to flourish, and numerous new limbs, weapons, and map expansions have been introduced and balanced. Following a peak of ~2.5M MAU, the core player base is steadily growing with almost 100K daily users added in the last month alone. This traction has already positioned GUNZ as a Top 10 chain by both daily active addresses and transaction count.

OTG is now rolling out game updates almost weekly, with a huge content pipeline lined up for this year. Teardrop’s arsenal of limited-edition game assets continues to expand, many of which are already selling for thousands. In addition, major new modes and features—such as skill-based matchmaking, solos/duos, a full 150-player battle royale, and a narrative campaign written by Richard Morgan (Altered Carbon)—are inbound to attract a larger share of the 1.2B shooter players into the ecosystem. With the game on a strong trajectory, it is important to understand the engines of the onchain economy.

Validator Nodes & Token Model

As described in the GUNZ Whitepaper, there are two primary pillars:

$GUN buybacks via revenue: Gunzilla Games commits 30% of Off The Grid’s gross revenue to consistently repurchasing $GUN tokens from the open market. These tokens are then used to replenish the platform rewards fund and are redistributed to players based on their in-game performance. This model ensures sustained game operations while fostering continuous demand for the token.
Validators earn fees via player HEX decodings: In OTG, all items (other than the battlepass) that enter the economy are extracted by players from Teardrop Island as items called HEXs—a mechanic that essentially functions as a lootbox. Players pay GUN fees to Validators for HEX decodings which mint game items onchain, with the fee dynamically adjusted to ensure that total validator rewards approximate 30% of total OTG revenues, denominated in GUN. For more information on the function and rarity tiers of validators, see the GUNZ website.

These revenues will be composed of both OTG Pro subscriptions ($11.99/month) and secondary market fees (up to 5%). With increased regulatory clarity, it’s likely that the market will trend away from raw token emissions to entice adoption and towards fundamental revenue streams. Having built conviction in OTG’s mainstream potential, Delphi Ventures made a large strategic investment into these validator nodes last year. It’s our view that they represent an attractive investment opportunity as we expect this ecosystem to command considerable revenues.

https://x.com/pierskicks/status/1838950041731702862

Scenario Analysis

Following launch, the number of subscribers rapidly exceeded 100,000 proving the model’s early success and has continued to grow steadily reflecting strong user engagement with the recurring monthly payment model. Whilst a subscription-first model for a shooter game is uncommon, this substantial conversion rate for a relatively small player population is very encouraging. We believe that the proclivity to spend on a subscription is greatly enhanced as access to OTG Pro and the marketplace literally pays for itself. For every single month since launch players, should they want to, have been able to cover their next month’s subscription from selling the monthly battlepass skin alone.

Naturally, most choose to keep their game items as they learn about the long-term prospects of this onchain economy. Growing subscribers by 10x to 1 million as it heads into its full release and next global marketing push OTG will be throwing off ~$145M in gross revenues, and $43M in onchain revenues (30%). In addition, if our thesis holds that onchain economies will stimulate more investment, trade, and ownership, we could see the secondary market volumes grow significantly.

In my view, Off The Grid represents an incredibly compelling game surface area for a massive collectibles economy to emerge. Building on the principles behind the design of the Counter Strike economy, OTG clearly satisfies many of the luxury digital goods criteria that Valve leaned on such as: conspicuousness (3rd person shooter makes skins visible 24/7), heritage and personal history (onchain economy unlocks immutable digital history), scarcity and uniqueness (enforced and observed onchain), excellent quality (world-class creative lead in Neill Blomkamp), aesthetics (the rarest collectibles already look amazing).

For reference, Delphi Digital’s Counter Strike report estimated their average annual trade volume over the analysis period to be $8B. If OTG’s secondary market were to grow to this scale as the first AAA title with a blockchain-based economy, with an average marketplace fee of 2.5%, this amounts to an additional $200M gross revenue with $60M going to token buybacks.

Combined with the earlier forecast of 1M monthly subscriptions, this represents over $100M/year in onchain revenues flowing to validators. At this level OTG is one of the highest-earning applications in crypto, and the most successful consumer product since Axie. As illustrated in the table above, the numbers can become material once momentum starts to build. Importantly, this does not account for GUNZ successfully launching additional 1st party titles as well as those of 3rd parties.

TGE – Bringing out the Big $GUN (Binance)

https://x.com/GUNbyGUNZ/status/1906165224173961529

Following a long hiatus from gaming listings, Binance has recently confirmed that $GUN will list on March 31st. It is no secret that the entire sector has a lot riding on this launch. I firmly believe $GUN represents our clearest signal for gaming market appetite, which is our most credible consumer category.

Leaning into Off The Grid alone could be enough to propel GUNZ to a massive outcome. However, the market continues to reward robust infrastructure, and much of the speculative premium above the flagship game’s appealing revenue potential will depend on GUNZ’s ability to establish itself as a leading ecosystem. Ultimately, successful apps king make their own infrastructure. Despite years of development and billions in investment, the throne is still there for the taking. If Gunzilla continues to dominate the mainstream funnel, it could very well claim it.

Five months into early access, @GUNbyGUNZ has already become the largest onchain gaming ecosystem by DAW. Off The Grid is the first onchain game to successfully crack the blueprint for Xbox and PlayStation distribution, opening up a vast segment of the global gaming market previously untapped. Beyond platform distribution, Gunzilla’s recent acquisition of @GameInformer also presents an interesting media channel that has a special place in the hearts of many gamers.

https://x.com/GunzillaGames/status/1904628157614797274

Additionally, GUNZ offers a comprehensive, white-label product suite that includes:

An in-game minting engine
A mobile wallet live on iOS/Android
Ecosystem dashboards and a blockchain scanner
An NFT marketplace (both in-game and web/mobile based)
A mobile companion app featuring detailed game stats & social functions

This makes it an attractive option for other ambitious studios targeting mainstream audiences with onchain game elements, offering a way to mitigate risk by leveraging an established team and infrastructure. How much is the home of AAA onchain games worth? We shall soon find out.

The Future of Game Economies is Onchain

Our team believes that in the coming decades virtual game economies are going to grow into the hundreds of billions of dollars. Unlike traditional closed gaming economies, having all items exist onchain unlocks an unprecedented degree of verifiability, accessibility, and composability. The lower cost, higher transparency nature of onchain marketplaces will drive increased spend as users build comfort in the technology. The Off The Grid launch was the first glimpse at this starting to click with mainstream audiences. Every single day the ecosystem draws in new users, and exposes them to these ideas for the first time. From my perspective, this is the closest we have ever been to fulfilling the vision for onchain virtual economies that I fell in love with.

Put simply, an onchain economy of OTG’s nature unlocks:

A lower cost, higher transparency marketplace technology
Residual value for all purchases giving players true economic agency
Enhanced game analytics via onchain data (users, revenue, economy)
Provable digital scarcity (item histories, battlepass grind, unique game assets)
Evangelical forces as players can share in the success of the game ecosystem
Significantly higher spend ceiling from onchain whales far larger than their web2 peers
Programmable royalties that create substantial long-term value capture for both players and developers

While the gaming industry faces its own challenges and dominant titles like Warzone and Fortnite continue to capture attention, we believe the enhancements outlined above significantly elevate the player experience. Over time, we expect major game economies to shift toward this model.

In our view, Off The Grid presents the best opportunity to demonstrate this at an undeniable scale, with the $GUN ecosystem best-positioned to entrench itself as the leading platform for onchain AAA games.

Disclaimer

The above information is not financial advice and is intended for informational purposes only.

I am personally invested in both $GUN and validator nodes. I also sit on the @GUNbyGUNZ board as described in this article.
Delphi Ventures is an advisor to GUNZ, and is invested in both the $GUN token as well as validator nodes.
It is true that I have a sniper named after me in-game, which may bias my weapon usage. I shall not be held responsible for any limbs or lives lost on Teardrop Island.

Disclaimer
Unless otherwise indicated, the views expressed in this blog are solely those of the author(s) in their individual capacities and not the views of Delphi Citadel Partners, LLC or its affiliates (collectively, “Delphi Ventures”). All opinions expressed are further subject to change without notice and may differ from opinions expressed by others.

The content of this blog is provided for informational purposes only, and does not constitute legal, business or tax advice nor should the contents of this blog be construed as an investment recommendation or offer to provide advisory services. Readers should consult their own advisors for those matters. The content of this blog may also, at times, incorporate information sourced from third parties (including portfolio companies) and while Delphi Ventures believes such information is reliable, we have not independently verified the veracity and therefore make no representations or warranty as to its accuracy, completeness or correctness. To the extent that this post incorporates links to external websites, the incorporation of such links do not constitute an endorsement of the content of such websites and we take no responsibility for the content therein.

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