Analyzing the current development and future of GALA Games
Gala Games' mission is to become the largest gaming ecosystem in cryptocurrency and break its centralized competition.Source: “GALA Games: NEXT BEST Gaming Token?? Deep Dive!!”
Translation: Deep Tide TechFlow
Gala Games aims to prioritize some secret issues within its ecosystem.
A new game is starting to emerge. Many people wonder which games will succeed and which will fail in the long run. Among all the game monetization projects, Gala Games stands out as one of the few ecosystems that has withstood the test of time.
Today, I will explain what Gala Games is, how it works, and why the GALA token could become one of the largest gaming monetization cryptocurrencies.
History of Gala Games
Gala Games was founded by Eric Schiermeyer and Michael McCarthy.
Eric is the former CEO of Intermix Media, the company behind MySpace. He is also a co-founder of Zynga, a publicly traded gaming company currently valued at around $7 billion.
Michael is the former creative director of Zynga, known for creating the famous Facebook game Farmville.
Eric has been researching cryptocurrency since 2014, inspired by the play-to-earn model pioneered by Axie Infinity in 2018. In January 2019, he founded a blockchain gaming partnership company, which is a for-profit company based in the U.S. that develops and operates Gala Games.
Eric currently serves as the CEO of Gala Games, while Michael holds the title of President of Games at Gala Games, which I think is a cool job title.
While Eric and Michael have been actively engaging with the community, Gala Games has been represented by Jason Brink, the Chief Marketing Officer of Gala Games.
Jason previously worked at the United Nations, and his main motivation for joining GALA was the potential for gaming monetization to lift people out of poverty in developing countries.
He also witnessed the corruption within these international organizations and hopes to eventually replace them with cryptocurrency protocols, and on this point, I support you, buddy.
For Eric and Michael, they have stated: "We have a grudge against centralized gaming companies and big tech." In a collective interview in March, the two explained that free games cause developers to spend up to $20 per user, leading them to focus on profits at the expense of game quality.
Cryptocurrency, especially play-to-earn, makes it possible to create profitable free games while giving users more control through NFT projects and on-chain governance, allowing game developers to focus on quality and scale. This is the reason Eric and Michael founded Gala Games.
What is Gala Games?
Gala Games' mission is to become the largest gaming ecosystem in cryptocurrency and break its centralized competition. Unlike other cryptocurrency projects, Gala Games has not received any form of VC funding and did not conduct an ICO for the GALA token. For more information about GALA's tokenomics, see below.
Gala Games initially received funding from its founders and currently makes money by selling NFTs related to its existing blockchain games. All tokens and NFTs associated with these games are on Ethereum and will eventually be released on the upcoming GALA chain sidechain, which I will discuss shortly.
The only Gala game currently available is Townstar, a farming game similar to Farmville. Townstar actually has its own TOWN token, which can be earned by playing the game and used to purchase Townstar NFTs in the Gala Games NFT store or marketplace.
Spider Tanks is currently the only Gala game that has launched, but it is still in the testing phase and is said to be well-received in South Korea.
The only thing that really needs to be implemented is the play-to-earn mechanism for Spider Tanks, which should be finalized later this year or early next year. In addition to Townstar and Spider Tanks, Gala Games is currently developing a Sims-like game called Legacy, a first-person shooter similar to Dead Space called Last Expedition, a Starcraft-like game called Echoes of Empires, a tower defense game called Fortified, and the recently announced survival game The Walking Dead Empires, as well as a fantasy RPG similar to Runescape called Mirandus.
According to Gala Games' website, its live games have over 1.3 million monthly active users. A total of 26,000 NFTs have been sold, with the most expensive reportedly selling for $3 million.
What’s strange is that there seems to be no active player tracker, and the trading volume of the Gala Games NFT marketplace cannot be found on any dApp or NFT tracking site. This may be related to the fact that most of the activity on Gala Games is apparently handled by independent GALA nodes.
How Does Gala Games Operate?
While it is unclear what GALA nodes are currently doing, they will drive the GALA chain sidechain in the future. Documentation regarding the GALA chain sidechain has not yet been released, so there are not many details about things like transactions per second. What is known is that the GALA chain will have 50,000 GALA nodes, and Jason Brink believes this will be sufficient to scale to 100 million monthly active users.
Currently, there are about 23,000 nodes, known as founder nodes. There are only 50,000 "founder nodes." To become a founder node, you need to pay about 16,000 GALA for a founder node license, which, at the current price of GALA, amounts to about $80,000. I believe this GALA is for Gala Games.
Founder nodes earn GALA as well as tokens from current and future Gala Games, in addition to other yet-to-be-announced benefits and rewards. Founder nodes also primarily manage the ecosystem by voting on which new games should be added to Gala Games and must remain online for at least 6 hours a day. Obviously, the longer they are online, the more rewards they earn. According to a recent video by a YouTuber named Sorensen Family, the current rewards for running a founder node are about 150 GALA per day, or about 50,000 GALA and other Gala Games tokens per year, which is not bad at all.
As far as I know, two additional nodes will be introduced once the GALA chain sidechain goes live. These nodes are paid nodes that will provide operational infrastructure for specific games. There are also free nodes that support founder nodes or paid nodes to earn a portion of the rewards.
The craziest part is that the GALA chain sidechain will actually have three consensus mechanisms. Founder nodes will run proof-of-work calculations, paid nodes will provide proof-of-stake security, and free nodes will offer proof-of-storage to ensure the entire Gala Games ecosystem is decentralized.
More importantly, the GALA chain will automatically adjust token rewards based on the ecosystem's needs. If it needs better computation, it will give more tokens to founder nodes; if it wants more security, it will give more tokens to paid nodes; if it needs better storage capabilities, it will give more tokens to free nodes.
This sounds very similar to the incentive pendulum of Thor Chain, and you can learn more about that project below. But before you do that, let’s take a look at GALA's tokenomics.
GALA Tokenomics
In terms of tokenomics, GALA is an ERC20 token on the Ethereum blockchain and also exists as a BEP20 token on the Binance Smart Chain.
GALA is currently used to purchase Gala Games NFTs and the aforementioned founder node licenses. In the future, GALA may be used to pay transaction fees on the GALA chain.
The total supply of GALA is quoted at around 50 billion, which leaves it unclear whether the token has a maximum supply. The information on Gala Games' tokenomics page is also not very detailed, so I had to piece it together with the help of some other secondary sources.
From the information I gathered, the first batch of GALA tokens was minted in July 2020, with a total of 25 billion minted in the first year, from then until July 2021.
Every July, the minting amount of GALA will be halved, meaning that only 12.5 billion GALA will be minted between July 2021 and July 2022, and 6.25 billion GALA will be minted between July 2022 and July 2023, and so on.
Additionally, 50% of the newly minted GALA belongs to what is referred to as Gala Games conservatorship, which seems to be a community treasury used to support the development of new Gala Games.
Interestingly, Founder's Nodes must pay ETH gas fees to open chests to claim GALA tokens and other rewards, indicating that GALA is minted from scratch and continues to be minted from scratch.
In other words, GALA is likely a cryptocurrency similar to Bitcoin's BTC. This idea is supported by GALA's maximum supply of 36.3 billion on Etherscan.
Strangely, this seems inconsistent with Gala Games' emission schedule (which is detailed on Gala Games' tokenomics page). Additionally, the circulating supply of GALA on Coinmarketcap or Coin Gecko is also quite different, and there is no narrative of Gala's supply in the smart contract, which is concerning. Because this means that the actual circulating supply of GALA could be 36.3 billion, which would give Gala Games a massive market cap of nearly $20 billion. This means that a significant amount of funds would be needed to drive up the price of the GALA token, which would push Gala Games' market cap to nearly $20 billion. This means that a significant amount of funds would be needed to drive up the price of the GALA token.
GALA Price Analysis
Since it began trading in the summer of 2020, GALA has increased over 500 times, with most of the increase occurring in 2021. These gains have mostly happened in the past few months. The first spike occurred in September, triggered by Binance's announcement that GALA would be listed.
Gala Games (GALA0) rebounded 265% shortly after Binance announced its listing.
Gala Games also released a trailer for Spider Tanks, which received a good response.
The second spike occurred in November, driven by Coinbase's announcement that it would list GALA. Gala Games also revealed the utility of its recently launched VOX NFTs, and if you're interested, I will leave a link to that blog post below.
The third spike was more of an anomaly, as it occurred during a clear downward trend for GALA. This spike was triggered by announcements made at the Galaverse conference held in Las Vegas.
The largest announcement may have been the establishment of a $100 million blockchain gaming and metaverse fund with the help of C2 Ventures, a cryptocurrency venture capital firm closely associated with Huobi Exchange.
Assuming GALA's current market cap is accurate, it still has significant room for growth compared to other cryptocurrencies in that specific market. Of course, the leader in that specific market is Axie Infinity, and if GALA catches up to AXS, assuming AXS's market cap remains unchanged, its market cap would be double that of AXS.
Unfortunately for GALA, the supply side of the economic equation seems to be skewed. Millions of GALA are minted weekly to reward founder nodes, and I estimate there is reason to believe that most of it is being sold.
Eric Schiermeyer also revealed in a speech in March that 2 billion GALA has been reserved for the Gala Game fund, which likely increases selling pressure. Let’s not forget the recently announced $100 million fund, which could also be related to GALA's sales.
At the same time, the only things that can drive demand for GALA are the NFTs in the Gala Games marketplace, whose trading volume is unassessable, and the founder node licenses, which are too expensive for most people to afford. Even so, GALA's fundamentals are much stronger than Decentraland's, and if Mana can briefly flip AXS, I estimate GALA can too. You can learn more about Decentraland through the link below.
Roadmap
Like all cryptocurrencies, GALA's long-term potential ultimately depends on the roadmap of Gala Games. The closest thing Gala Games has to a roadmap is a recent blog post titled "Node Map."
The first paragraph explains this statement: "We do not publish roadmaps, white papers, or specific development timelines," which is quite frustrating, as the next sentence acknowledges.
Interestingly, the first milestone is that Gala Games may abolish the roles of paid and free nodes. Instead, it will introduce specific nodes within games, with the first node announced on the same day the node map was released.
The node map states: "The potential rewards for these nodes will be limited to specific games, and they will never receive GALA or be granted the benefits and privileges of operating founder nodes." It also explains that game-specific nodes will only manage their own games, with only a few exceptions. The last point is not very clear, but my interpretation is that founder nodes will earn a portion of the GALA paid for their node licenses from specific game nodes.
I need to clarify that Gala Games explicitly states that everything here is subject to change and cites "very significant updates to the node program and ecosystem in the near future."
In interviews with founders, it can be found that one of the most important milestones for Gala Games may be the release of Mirandus, expected to take place by the end of next year.
Gala Games also seems to have some plans to collaborate with Polygon and Flare Network. In its partnership with Polygon, a new blockchain game will be created, and Gala Games will also leverage Ethereum's leading Layer-2 to save on gas fees, although it is still unclear how this will proceed and when it will start.
The collaboration with Flare Network is particularly interesting because Flare Network is essentially a smart contract sidechain for XRP. Gala Games has been providing semi-frequent updates about its partnership with Flare, with the latest update indicating that GALA will be mintable on Flare, and Flare will increase support for the GALA token when it completes its Ethereum bridging.
Concerns
When it comes to my concerns about Gala Games, they are almost all related to communication and transparency. First of all, Gala Games actually has no documentation. Most of the important information about the project can only be found on its support page, which is not very easy to locate. The Gala Games support page is also not very user-friendly, not very detailed, and where it is detailed, it is detailed to the point of being hard to understand, especially when it comes to calculating node rewards.
I also found that Gala Games does not have a forum, which is a bit frustrating. I know it uses Discord as its common discussion platform, but having a place to organize specific ideas and project suggestions would greatly help in understanding the project's situation.
As I mentioned earlier, Gala Games also lacks a white paper or roadmap, although I can somewhat understand the reasoning behind not having these two things. I still think it makes it difficult for us to assess the project's potential. However, one convenient result of this is that it keeps opportunistic investors away and increases the likelihood that those holding GALA are doing so for the games rather than just for profits. In this regard, I really don’t understand what the founder nodes are currently doing. The requirements for hosting GALA node software are surprisingly low, indeed too low, leading to an inability to host any high-powered gaming infrastructure.
I also found that the software used to run founder nodes is owned and operated by the company behind Gala Games, which is a bit unsettling. If that were the only issue, it wouldn’t be a problem, but "if for any other reason, GALA determines that a user is in violation of any of the above licensing terms, GALA may suspend or terminate the user's access and immediately use platform services without notice." In other words, if you violate the terms and conditions of the licensing agreement, Gala Games can revoke your right to run a node. At least from a legal perspective, that’s what this provision means. This relates to what co-founder Michael McCarthy said in the Gala Games group interview in March, that they can detect players using bot operations in their games and ban them from doing so. This is particularly concerning, but it does raise questions about content control in a decentralized environment, which deserves its own video. Finally, I want to say that what impresses me most about Gala Games is its ecosystem approach and the unparalleled experience of its founders. If it can adequately address its frustrations while leveraging its greatest strengths, Gala Games could easily become one of the top cryptocurrency projects in the blockchain gaming space.
