Pantera Partners: Understanding the Move-to-Earn Game Genopets

Author: Paul Veradittakit, Partner at Pantera

Compiled by: Dong Yiming, Chain Catcher

The surge of crypto games has been one of the most significant developments in our industry in 2021. This year has been filled with various events, to name a few: the explosive growth of Axie Infinity; the emergence of guild-based games like Yield Guild Games; the unique "bottom-up" nature of Loot; Facebook rebranding to Meta; the recent establishment of a $100 million Solana gaming fund; and Legacy Gaming Studios showing interest in crypto games.

If that’s not enough, the energy at NFT.NYC is exhilarating. Vibrant startups, multinational corporations, A-list celebrities, Hollywood studios, and many others gathered to discuss and celebrate the disruptive potential of NFTs in their respective fields. Most importantly, the trend of the intersection of open blockchains, NFTs, and gaming shows no signs of slowing down.

In line with our firm belief in the space, we recently invested in Genopets. This is an unprecedented "move-to-earn" game with ambitious plans to push the industry forward. We co-led this round of investment with Konvoy Ventures, with other participants including Alameda Research, Solana Capital, Spartan Group, and others joining in.

What is Genopets?

In the words of our team: Genopets is a free NFT game that combines the nurturing and evolution mechanics of Tamagotchi, the training and battling mechanics of Pokemon, and the beautiful production and collectible mechanics comparable to Animal Crossing, while also rewarding players with cryptocurrency for physical activity and participation in mini-games.

This description may be hard to imagine, but the gameplay is quite easy to understand.

Users can choose to "create" their Genopet (an NFT pet) for free—by answering a series of questions to instill unique personality traits, or they can purchase one on the open market. Each Genopet is associated with a unique NFT and is owned by the user.

Now, with their own Genopet, users can "evolve" it by earning XP, enhancing its performance in battles against other Genopets and granting it unique attributes. XP can be earned through real-world exercise (tracked by the user's mobile device or wearable) or by competing against other players in in-app mini-games.

As the Genopet develops, its in-app game settings become more practical and appealing to both speculators and other players in the open market.

While "move-to-play" games have seen success in Nintendo Wii, Pokemon Go, and other activity-based games, "move-to-earn" is a whole new form of gaming. Players will be able to accelerate their Genopet's evolution through exercise and completing step challenges, thereby increasing the value of their gaming assets. This is distinctly different from other play-to-earn games we’ve seen; Genopets does not incentivize players to mindlessly click on their screens but rather provides economic incentives for players to improve their personal health.

Genopets is designed for all players, regardless of their past experience with decentralized applications (dApps) or crypto games. Therefore, the team has made the gameplay as user-friendly as possible, abstracting NFT minting, microtransactions, or any other interactions with the blockchain away from the end user. The goal is to allow players unfamiliar with crypto technology to mint, upgrade, or even sell their Genopet without directly interacting with the blockchain or crypto wallets. All you need is a smartphone to download the app and start earning.

Why is it a free game?

One of the distinguishing points that sets Genopets apart from many other play-to-earn games is that it is a free-to-play game. For example, in a typical play-to-earn game like Axie Infinity, players must first purchase three Axies to start playing, which can cost thousands of dollars, making it prohibitively expensive for many players. Other play-to-earn games have similar requirements. This ultimately drives "gaming guilds" (like the aforementioned YGG) to provide scholarships to players as startup capital, which players then repay with a portion of their earnings.

However, playing Genopets does not require such upfront costs. In fact, players can create their own Genopet. They can evolve it by exercising and improving their performance in the game, and then sell it on the open market for profit.

This offers two major benefits over pay-to-play play-to-earn games.

First, it greatly expands the total addressable market for the game. Many casual mobile players are even reluctant to spend $0.99 in the App Store, let alone spend significant amounts on in-game NFTs before playing. By ensuring there is a free entry point into the game, Genopets will attract a more diverse player base.

Second, it can enhance the sustainability of the game economy. Other games like Axie Infinity have been criticized for overly relying on user growth to fund profits for other players. As user growth slows (and the capital injected into the ecosystem decreases), this can lead to a trickle-down effect on other parts of the game setup and overall user rewards. By examining the game from a different economic perspective (gaining value from participation rather than new user onboarding), Genopets is attempting to build a long-term resilient ecosystem.

However, if users want to purchase in-game items, they have plenty of opportunities to enhance their Genopet's performance (and the player's earnings). For example, they can temporarily change their Genopet's attributes and influence its future evolution direction by purchasing Refined Crystals (e.g., "Fire Genotype Crystal"). Habitats are also lands where Genopets can live and evolve, and players can even rent out their Habitats to earn XP.

What does the game architecture look like?

Solana's high throughput, fast settlement capabilities, and low transaction fees make it the most attractive platform for new blockchain games. Therefore, it is no surprise that Genopets has chosen it as its primary layer one blockchain architecture.

The on-chain elements of Genopets mainly fall into two categories. The first category is NFTs, which include Genopets, Refined Crystals, Habitats, and other upcoming unique elements. These elements are fully owned by the users, meaning they can not only be transferred between users' wallets but also used in other games and traded on the open market—players enjoy all the rights of ownership in an open economy. The second category is the in-game currency system, which includes $GENE (governance token) and $KI (utility token).

To gain a deeper understanding of each element and how they affect gameplay, I recommend reading the project's white paper.

What is Genopets' long-term vision?

Looking ahead, there are many exciting aspects to anticipate, whether from mini-games, leaderboards, social mechanisms, integration of prediction markets, or new features in other games.

As Genopets accelerates its preparations for the upcoming public beta release, the project has generated significant interest within the community. They already have over 100,000 followers on their Discord server and more than 120,000 followers on Twitter.

Most importantly, we are excited about the bold attempts Genopets is making in game attributes, innovating a brand new gameplay style: move-to-earn, which integrates free-to-play, play-to-earn, and move-to-play game modes. If the number of users attracted in the early stages of the game proves anything, it is that there is a genuine demand for games that challenge traditional models.

If you are interested in learning more, be sure to join their Discord and check out their Medium for more in-depth articles about the game. If you are ready to create your own Genopet and start earning, please join their public beta release waiting list!