Mechaverse: A Pioneer of the "Renaissance" in the GameFi Track under the Japanese Web3 Trend

Written by: 0xcena

The Japanese government's "All in Web3" strategy is making Japan a new fertile ground for the development of the Web3 sector. In addition to highlighting cryptocurrency legislation for regulation since 2017, in 2022, Japan's new Prime Minister Fumio Kishida made profound projections for Japan's Web3 strategy and launched a series of initiatives, allowing the world to gain a new understanding of Japan's development in Web3.

Since last year, Japan has established a Web3 Minister and special zones, released the "NFT White Paper," and proposed policies such as "Stablecoin Proposal for Opening Web3 in Japanese Society." They also introduced the world's first stablecoin legislation, the "Revised Fund Settlement Act," to support the development of the Web3 industry and promote Web3 transformation across multiple fields, helping them further explore business models.

Notably, in addition to the economic, financial, cryptocurrency payment, and e-commerce sectors that are expected to further embrace Web3, Japan also intends to promote the organic integration of its strong IP culture and gaming industry with Web3. The "NFT White Paper" clearly states, "Japan has rich and high-quality intellectual property (IP) (such as internationally competitive animation and games) and has enormous potential to lead the NFT industry and Web3 economy." This suggests that Japan is likely to achieve a "Renaissance" through Web3 and enhance its international competitiveness in the cultural industry on the new track.

Amid this trend, Japan's largest e-commerce platform, Rakuten, has decided to launch the NFT trading and issuance platform Rakuten NFT to further participate in the trend and expand its business ecosystem. On the other hand, Japanese NFT projects like Azuki, which is based on the anime culture, and the collaboration between Takashi Murakami and RTFKT Studios to launch the NFT project CLONE X have become blue-chip assets in the current NFT sector, with Azuki particularly representing Eastern art IP and forming a strong Web3 community effect.

In the GameFi sector, the AAA-level GameFi ecosystem Mechaverse, also from Japan, is the most representative and one of the early promoters of this trend. Mechaverse promotes the deep integration of Japan's top anime IP with GameFi by collaborating with well-known local artists and uses culture as the main driving force for ecological development. It is reported that the Mechaverse ecosystem currently has authorized NFT IP resources that can be sold globally, including works by Osamu Tezuka such as "Astro Boy," the "Gambling Apocalypse Kaiji" trilogy by Nobuyuki Fukumoto, and works by "Ultraman's Father" Akihiko Iguchi, among other national-level IPs.

Mechaverse is becoming a pioneer ecosystem in the "Renaissance" of the GameFi sector under Japan's Web3 trend.

The "Enduring Prosperity" of Mechaverse

Launched by Mechaverse Labs, the Mechaverse ecosystem has been market-facing since 2021 and has maintained a high level of interest in the Japanese market since its early days. We believe there are three main factors contributing to this, including the use of well-known IP as the main cultural driver, high-quality game production, and top-tier resource support.

Japanese anime has a significant influence globally, with data showing that the Japanese anime market reached a peak of $23 billion in 2019 (gradually declining after the pandemic), with IP derivative sales amounting to $14.3 billion. Anime IP occupies a very important position in Japan's cultural industry and has significant influence worldwide. Series such as "Astro Boy," "Gambling Apocalypse Kaiji," and "Ultraman," despite having decades of development history, remain timeless and are widely recognized by the market. Therefore, Mechaverse's ability to obtain authorization for these anime IPs and apply them to ecological game characters and NFT derivatives serves as a cultural endorsement.

Both players and investors have an inexplicable "sentiment" towards these top-tier IPs, which has become a solid bond between the Mechaverse ecosystem and players/users. This culture-driven ecosystem is demonstrating a lasting and valuable vitality, countering the erosion of P2E on the gaming ecosystem.

In terms of game design, in addition to using the aforementioned classic IPs as a foundation, Mechaverse has also invited Iwai Lincoln as a game designer. Iwai Lincoln has participated in the development and service of several well-known Japanese game companies such as Nintendo, SQUARE ENIX, BANDAI NAMCO, and From Software, responsible for visual design and UI design, and has contributed to the development of games like "Final Fantasy" and "Dark Souls," accumulating rich IP resources in Japan. Iwai Lincoln provides Mechaverse with AAA-level visual effects and game quality that most games (even Web2 games) do not possess.

With the excellent quality of the game itself, Mechaverse also achieved a Top 9 project in TWSH (Japan's first hackathon event).

Mechaverse itself has received support from numerous top-tier resources. At the end of 2021, Mechaverse secured $1.2 million in funding from IFG Corporation, a private equity fund under the Mitsubishi Foundation (Japan's largest conglomerate) that primarily invests in fintech innovation projects, with early operational management overseen by the head of financial innovation at Mitsubishi UFJ Financial Group. Mechaverse is one of the few GameFi projects they have invested in.

In February last year, Mechaverse received millions of dollars in investment from the FOF fund CGV FoF, bringing numerous resources from the cryptocurrency industry. CGV FoF is a compliant cryptocurrency research and investment institution based in Japan, with an investment portfolio that includes well-known Web3 projects such as Republic, CasperLabs, AlchemyPay, The Graph, Bitkeep, Pocket, and Powerpool. It is also an early investor in the yen stablecoin JPYW and SONY Tokyo Tower's metaverse REDO, both of which are regulated by the Japanese government.

After receiving investments from IFG Corporation, CGV FoF, and others, in August last year, Mechaverse secured millions of dollars in strategic investment from the cryptocurrency investment institution MetaSense, which stated that it would bring higher-dimensional expertise and resource empowerment to Mechaverse's chain game ecosystem.

In addition to investment support, community investors such as AlchemyPay, Mint Ventures, Cryptobuddy, JDI Capital, Starwin Capital, 7'o clock Capital, and Tritium Capital have also participated in the development and construction of the Mechaverse ecosystem. Furthermore, in September last year, Mechaverse received support from Kucoin and was the only metaverse project launched by Kucoin last year in the form of an IEO, indicating that the Mechaverse ecosystem itself possesses a certain uniqueness in its narrative. The governance token $MC launched on Kucoin saw an opening increase of over 790%.

With the support of top-tier industry resources and numerous industry partners, Mechaverse has achieved impressive operational results and garnered widespread attention. Mechaverse has over 50,000+ community members in Japan and Southeast Asia, with its official Twitter, Discord, and other communities boasting over 140,000 real fans globally. Mechaverse has operational teams in Japan, Turkey, Bangladesh, India, and the Philippines, each responsible for local community operations, with community user scales exceeding 10,000, making it one of the most popular metaverse ecosystems currently.

Sustainability of the Mechaverse Ecosystem

GameFi allows players to compete around limited resources and combines gaming with cryptocurrency, making tokenomics a part of the game economy. This further grants ownership and trading rights to game assets (NFT/FT), while the circulating and usable game currency plays a crucial role in user retention and the business cycle of the game.

The characteristics of GameFi itself are its advantages, but the relatively short development time of the GameFi sector means that there are flaws and deficiencies in the early stages, leading to an imbalance in the supply and demand of system resources, weakening incentive effects, and creating a vicious cycle that ultimately results in a death spiral. The factors causing GameFi to fall into a death spiral are often the result of multiple combined factors. After observing and researching the market, we found that these factors mainly revolve around the sustainability of the in-game economic model, game playability, and the efficiency and security of the GameFi system. We see that the design of the Mechaverse game ecosystem is addressing the issues faced by traditional GameFi with new ideas to further ensure the vitality, competitiveness, and player engagement of the ecosystem.

As mentioned earlier, by integrating traditional Japanese anime IP into the game, forming a cultural driving force, and achieving top-tier visual experiences through renowned visual master Iwai Lincoln, the playability and game quality of the Mechaverse ecosystem have significantly improved, which is one of its advantages.

• Layered Game Mechanics Design

In terms of game design, Mechaverse focuses on the Mechaverse mech warfare game as its main game and will successively launch various gameplay types such as space auto chess, battle royale, 3D fighting, UFO CATCHER, and open world. The Mechaverse game centers on organizing one's mech heroes (NFT) to battle aliens along an invasion route, allowing for PVP, PVE, and other gameplay styles, defeating opponents through strategy and formation to earn $MM game token rewards.

In other gameplay types, traditional SLG and RPG models are referenced to further enhance the gaming experience for players. For example, in a battle royale gameplay similar to "PUBG," each of the 100 players can choose a mech and form a team with three other players to survive in the wilderness. Teams can assist each other and fight against other teams, with the last surviving team receiving generous rewards. The space auto chess involves eight players competing, each with different strategies and tactics. They will select heroes from a shared random card pool and establish their battle camp. Heroes will engage in fully automated attacks, and players will achieve victory through excellent strategy and gameplay. The main Mechaverse mech warfare game has not yet launched, but it is highly anticipated.

In addition to the main game, Mechaverse has launched two lightweight mini-games: Mecha Fight (a puzzle dodge mini-game) and Mecha Gacha (a capsule toy machine). Players need to use $MC/$MG tokens to participate in the games and receive different fragment rewards. Ten identical fragments can be redeemed (fragments include mech NFTs, mainstream assets, blue-chip NFTs, etc.). The random number generation for the two mini-games comes from Chainlink's Verifiable Random Function (VRF) to ensure fairness and justice in the games. The Mechaverse game ecosystem itself possesses layered and diversified characteristics, allowing players with different gaming preferences to find their gaming positioning.

Additionally, Mechaverse Labs has innovatively expanded the GameFi ecosystem to offline experiences, building an offline Web3 entertainment venue at Tokyo Tower for consumer experiences. Holders of Mechaverse NFTs can participate in entertainment facilities, offline esports seasons, and meet-and-greet events with top anime IP creators, helping players establish offline communication channels to promote player interaction, cultural dissemination of the ecosystem, and strengthen the cohesion of the gaming ecosystem.

• Ethanim Provides an Efficient and Secure On-Chain System

From a technical perspective, Web3 infrastructure still suffers from inadequacies. For example, Layer 1 camps represented by Ethereum, Solana, and Avalanche, and Layer 2 camps represented by Polygon, Arbitrum, and Optimism have not been practically validated (due to their own shortcomings, they have also caused many issues). Therefore, for GameFi itself, there are numerous interactive scenarios, and the quality of the game also puts pressure on on-chain operations. Thus, we see that the vast majority of GameFi games tend to favor simple game logic while overemphasizing the "Fi."

Mechaverse is currently collaborating with the metaverse infrastructure platform Ethanim to address the issues arising from on-chain native operations. Ethanim is solving problems such as slow transaction speeds, low concurrency, and the inability to support large complex calculations through trusted computing technology, enabling rapid consensus completion among nodes in on-chain games. Additionally, technologies such as edge computing, virtual GPUs, and decentralized storage are creatively implemented in a modular manner (more akin to Layer 3), allowing the system to scale infinitely and enabling decentralized chain games to achieve performance comparable to traditional centralized games, enhancing user experience and allowing users to easily earn corresponding profits through NFT transactions in the game.

Currently, Mechaverse has also joined the zkSync Era mainnet, and its digital assets will be integrated with this protocol to build a multi-chain system. Joining the zkSync Era mainnet is expected to further enhance transaction response speeds and potentially provide transaction privacy features to meet the privacy needs of more players.

Moreover, the compliant yen stablecoin JPYW has also reached an official partnership with Mechaverse, and both parties will explore and implement practical applications around the yen stablecoin for settlement, payment, liquidity injection, and staking derivatives within the Mechaverse metaverse series of games. As a compliant stablecoin based in Japan, JPYW is backed by a strong local user base, and it is expected to help Mechaverse attract new users from the real world and well-known anime IP images to quickly and conveniently enter the Web3.0 metaverse entertainment world. Under the high responsiveness of policies and compliance, this will bring a massive influx of Web2 users to Mechaverse. The collaboration with JPYW also represents a significant advantage for the Mechaverse ecosystem to benefit from Japan's policy dividends.

With the support of system security, efficiency, and compliance, Mechaverse is expected to build retention through a good gaming experience and continuously attract incremental users from the Web2 world.

• Innovative and Forward-Looking Economic Model

Mechaverse is one of the few game ecosystems currently adopting a three-token model, including: governance token $MC, game output token $MM, and in-game token $MG.

The governance token $MC has a total issuance of 200 million tokens, with 55.95% of the output ratio allocated for Play to Earn & Staking. This asset can be used to purchase genesis NFTs, mech NFTs, and for DAO governance.

The game output token $MM has a total of 2 billion tokens, all generated from PVE, and can be used to purchase NFTs, equipment, upgrade NFTs, and star-upgrade NFTs, among other consumables. NFTs in the game will also be priced in $MM. $MM has also created a liquidity pool on DEX, allowing players who continuously provide liquidity to earn $MM in the game.

The game token $MG has no total issuance limit and is a necessary game asset for participating in Mecha Fight and Mecha Gacha.

$MC, as the main governance token, is primarily generated through Play to Earn & Staking (secondarily), while purchasing genesis NFTs, mech NFTs, DAO governance, and participating in mini-games will further restrict the market circulation of the $MC token. $MG is mainly used for participation in Mecha Fight and Mecha Gacha, and the game will airdrop a certain amount of $MG to active community members and players participating in various Mechaverse activities, which is the main source of this token.

In contrast, $MM plays a more significant role in the ecosystem, serving as the primary P2E output asset (with lower early output), and its value base is crucial for the health of the game economic ecosystem.

Regarding the economic mechanism surrounding $MM, in addition to $MC, $MM is also the main asset for staking to obtain governance rights. To participate in the construction of the game ecosystem, one must hold $MM assets, which means that the process of community proposals is deeply tied to the $MM token, and governance is expected to promote $MM to gain substantial deflationary scenarios through staking.

In terms of incentive models, Mechaverse will regularly allocate 20% of protocol revenue for dividends, with the condition for receiving dividends being the holding and staking of $MM tokens. Additionally, the game will initiate single-token staking of $MM for mining, unlocking in-game stablecoins/game vouchers, attracting whale users to obtain stable annualized returns, while also launching LP liquidity mining, where participants can earn NFT and other token rewards. The rich incentive scenarios will encourage $MM holders to build staking motivation.

The Mechaverse Foundation will also regularly allocate 5% of revenue for the prosperity of $MM and NFTs to promote deflation.

In terms of utility, $MM is also a necessary asset for purchasing NFTs, equipment, upgrading NFTs, and star-upgrading NFTs. Through a series of market deflation mechanisms, $MM will form a rigid demand, creating a balance between output and consumption, avoiding a death spiral. $MC and $MG will complement $MM better, each fulfilling its role, together stabilizing the economic system of the Mechaverse ecosystem.

Conclusion

Combining Japan's strong anime IP culture with Web3 to achieve a cultural renaissance is one of the major goals of Japan's Web3 strategy. Mechaverse is also a responder and the biggest beneficiary of this trend.

With the backing of Japan's classic IPs and top industry resources, along with the game's top-tier AAA visuals, gameplay, and economic model design, Mechaverse's user base is no longer limited to Web3 users and is expected to continuously attract Web2 users. Mechaverse is becoming a potential ecosystem that thrives in the GameFi sector and is also a pioneer of the "Renaissance" in the GameFi sector under Japan's Web3 trend.