In search of some more high-conviction gaming token bets for this cycle, I heard some chatter about Gas Hero, a game developed by creators of the infamous move-to-earn app STEPN, Find Satoshi Labs (FSL). I’ve spent the past week playing and looking at some numbers and wanted to share my initial thoughts here.

I’ll start by saying that Gas Hero has a very simple core loop but still manages to come across as quite convoluted. There is a 30min tutorial that is free for anyone to try but you then have to buy a player-crafted NFT to access the full game (these NFTs were selling for 500GMT or ~$150 at the time of writing).

The game is essentially an idle battler where players collect and upgrade a collection of 6 heroes. The team with the highest power output (made up of all items, weapons, pets, and the hero’s level and attributes) wins. Sounds both simple and probably a bit boring to anyone who doesn’t get a kick out of building spreadsheets. Where Gas Hero really shines is with its incentive mechanisms and player archetype segmentation.

I wanna keep this post short so I’ll only highlight the interesting parts at a really high level. For anyone interested in learning more, you can look through all the documentation here.

Gas Hero is designed to be a game for crypto whales. Aside from costing more than $100 to play, the game is broken into different tiers, with each tier having a “Leader.” The tiers are as follows:

• City
• District (only 2 per city at the start of each season but can be expanded)
• Guild
• Clan
• Base (1 Base = 1 player)

All Leaders earn income based on the amount of P2P trading activity that occurs within their respective jurisdictions. For context, all trading within Gas Hero occurs on FSL’s first-party marketplace, MOOAR. There is a fixed trading “tax” of 6% on all transactions, with 2% going to FSL and MOOAR, 2% to the NFT creator, and 2% to the Leaders (note that in the case of there being no third-party creator, 4% goes directly to the Leaders).

In addition to this rev-share system, each season the game will feature several tournaments with player-fueled prize pools.

Every day at set intervals, the Auction House opens to auction off a random selection of pay-to-win (P2W) items to players. Half of the Auction House revenue goes to FSL (half of this is burned), and the remaining 50% goes toward tournament prize pools. This prize pool is then further topped up by the proceeds from World Elections.

The World Elections determine the 7 individuals that sit on the World Council. In order to be eligible for the election, players must first rise to the rank of City Mayor, a process that can only be achieved by P2Wing your way to the top of a District and then be voted in — making these players the richest and most dedicated in the game.

From there, players enter a blind bidding war where the 35 largest “donations” go through to the second phase (the others go home and get refunded). This repeats again in the second phase and the 7 highest donations fill the council seats (the others get refunded). 100% of the remaining proceeds from both phases then top up the seasonal tournament prize pool.

To better understand all of these systems (and the many others I haven’t outlined here), it can be helpful to breakdown the target player base into 3 groups:

• Low-level Farmers – grind the game to acquire NFTs that can then be sold to the other 2 groups
• Mid-level Whales – P2W with a small % becoming leaders (this group finances the game for everyone else)
• High-level World Leaders – only unlocked thanks to crypto’s unlimited depth of spend, these players are in search of ultimate power, status, and rewards

 

Now on to some stats

Gas Hero launched on January 3rd to little fanfare and currently only has roughly 10k total unique wallets/players. Rarely discussed in the West, the vast majority of players are located in Asia (predominately Chinese) based on activity observed within the discord.

A total of 93M GMT has been deposited into the game (depositing GMT allows it to be used in-game without every action being recorded on-chain), 59M GMT has been withdrawn, and 7.5M GMT has been burned from in-game player actions.

 

This past month, Gas Hero NFTs have been trending as the number 1 NFTs by trading volume on Polygon and within the top 5 across all blockchains. Cumulating a total of almost 350M GMT in trading volume. Because 100% of Gas Hero trading happens on MOOAR, the marketplace has suddenly become the largest trading site (by volume) for polygon NFT trading by a large margin.

To date, FSL has generated roughly 11M GMT in revenues from in-game spending (upgrading Heroes, breeding, name-changing, NFT crafting, etc.), Auction House sales, and trading tax. The largest of the 3 was Auction House sales – 7.4M GMT, followed by trading tax – 3.5M GMT, and in-game spending – 200k GMT.

In less than 30 days since launch, the smallest prize pool available to players is a reported 5.5M GMT, with the ultimate Gas War prize pool currently sitting at 14.9M GMT (not including World Election donations).

 

Thoughts & Predictions

I’m a fan of any project that makes an effort to experiment with blockchain-powered models that create net-new player experiences. FSL gets a lot of flak for their work on STEPN but I think they deserve some credit for applying the knowledge learned from past mistakes and creating something new.

I also think Gas Hero has so far made the best attempt at building a game for crypto whales. They are by no means the first, but previous attempts by projects like Yuga Labs and Sugar Town leverage IP over mechanism design.

Moreover, in a market where many of the best-performing gaming tokens have barely started their emissions, the fact that Gas Hero is designed to be net-deflationary for the GMT token is a key differentiator. As reported in this X post here, it seems that the worst of the GMT investor dumps are also behind us.

Unfortunately, even after a momentary 57% pump after the release of the previously mentioned X post, token prices have now gone straight back down to where they were before. GMT has performed terribly over the past 3 months, and I suspect this is due to there being many bag holders, along with very little understanding of the project from Western investors.

All that said, more players entering the game = more GMT locked and burned is not always a good thing. Deflation has typically led to hoarding, which would have a significant impact on the game’s core sinks and sources of funds for the prize pools.

Further, there is a risk that players within the Mid-Level Whales tier will not submit to the sunk cost fallacy and eventually churn out of the game after spending significant amounts of money.

The UX needs significant improvement as the complexity for new users is dizzying. However, I think this might actually work to benefit early adopters. One of the only things I liked about STEPN was the smooth onboarding experience. We know this team can deliver here, and the mobile app has yet to launch. There’s no guarantee Gas Hero’s model works but it has enough viral factors to warrant keeping it on your watch list.