With the rise of NFT games such as Axie Infinity, we take a look at other NFT games that have not gotten mainstream or have not seen a meteoric rise in price recently, but have the potential to. One such NFT game is called Aavegotchi which is similar to Tamagotchi, or essentially digital pets.
The price recently begun its move upwards but have not yet exploded up, so potential for large gains is still there, and AAVE is the #1 lending protocol with a large user base, allowing them to tap on their brand and community to quickly onboard a mass amount of users as they deploy more features into their Aavegotchi universe (gotchiverse).
The product is also functional, and the NFT also has an intrinsic financial value from its DeFi capabilities, allowing it to leverage on both the NFT and DeFi hype train, which could create massive growth opportunities.
Introduction
A non-fungible token (NFT) is a unique asset that is not directly replaceable with another asset. As reported by NonFungible.com, the NFT market tripled to a little more than $250 million in 2020. The number of active wallets to buy and trade these things nearly doubled. Today, the NFT tokens market cap is around $19,250,667,986.29 with a total trading volume of $3,707,786,836.70 in the last 24 hours. (Link)
Similarly, the Decentralized Finance (DeFi) ecosystem has seen unparalleled growth in 2021, with Total Volume Locked (TVL) surging from 15 billion USD to more than 72 billion USD, as of August 5, 2021. (Link)
Previously, each space has been experiencing massive exponential growth on their own, but no project has emerged that leverages the explosive potential of both combined. Until now.
Aavegotchi is a DeFi-enabled crypto collectibles game developed by Singapore-based Pixelcraft Studios. Aavegotchis are rare crypto-collectibles living on the Ethereum blockchain, backed by the ERC-721 standard used in popular blockchain games such as CryptoKitties, Axie Infinity, and Cryptovoxels. To put it simply, they are game avatars that can be used as DeFi collateral to earn staking rewards.
Capturing the value of both DeFi and NFTs, the game allows players to stake NFTs with DeFi-enabled ERC20 tokens powered by Aave, known as aTokens. The native utility token of the Aavegotchi ecosystem is the $GHST token.
Link: https://aavegotchi.com/resources
Whitepaper: https://docs.google.com/document/d/186zOapKeHNNJ9y8LIByQQ64rs0eJUlEF/edit#
Product Analysis
Let's explore the various features the Aavegotchi universe has to offer, starting with their wallet.
Wallet
An ERC20 token operating on the Ethereum blockchain, $GHST can be stored on a wide range of wallets of both the hardware and software variety.
Interestingly, Aavegotchis can also act as NFT wallets, holding unlimited amounts of ERC20 collaterals, such as $GHST, $MATIC, $AAVE, and others. Although this has yet to go live, each Aavegotchi has its own escrow contract, allowing deposits of any ERC20 collaterals. Dubbed the “Gotchi Pocket,” this NFT wallet will soon go live on Polygon with an upgrade that enables ERC20 withdrawals.
Instead of receiving the $GHST from Rarity Farming directly into its metamask wallet, rewards earned will be directed straight into the Aavegotchi’s pockets. A new approach to the distribution of assets, this is the first time on the Polygon network that an NFT also serves as a wallet, making it a true decentralized companion for players.
Link: https://aavegotchi.medium.com/the-first-nft-wallet-on-polygon-is-aavegotchi-b24cac01a1d9
$GHST Token
The $GHST Token serves both as the primary utility and the government token within the Aavegotchi ecosystem. $GHST will be distributed in two main phases -- via the initial token distribution event, and via governance rewards and rarity farming.
In terms of utility, $GHST operates as the base ecosystem currency for the purchase of various digital assets, which includes Aavegotchi Portals, wearables, consumables and collectibles. To commit to the ecosystem and safeguard against malicious behaviour, players are also required to stake $GHST to mint REALM, the land parcels of the Aavegotchi Realm.
$GHST is inherently transferable to other users, and also fully exchangeable with various supported ETH and ERC20 tokens, such as DAI, LEND (AAVE), and so on.
There are various elements within the Aavegotchi ecosystem which utilises $GHST as the medium to align incentives between the AavegotchiDAO, Aavegotchi holders, and $GHST holders. Players purchase and spend $GHST in order to summon and train Aavegotchis. A portion of that value generated goes directly back to the AavegotchiDAO to fund further development of the Aavegotchi ecosystem, while the remainder will be distributed as token incentives to reward wise governance of the AavegotchiDAO, as well as for rarity farming rewards.
Gameplay
Summoning of Aavegotchi - Portals
To even begin participating in the Aavegotchi universe, you first need to have an Aavegotchi.
They can be summoned from the Nether realm to your screen using the following steps:
1. Buying a portal: Before we can begin raising our pixelated ghost baby, you will have to summon it via a Portal. This can be acquired either from the official Aavegotchi Dapp, or an external marketplace such as OpenSea.
- Each portal will cost approximately 100 $GHST.
- These devices will also be released in events called ‘Haunts’ (editions).
- The first haunt will offer 10,000 Portals up for grabs.
- Thereafter, the AavegotchiDAO will make decisions relating to separate haunts based on votes.
- The upcoming haunt 2 starting on Aug 26 to Aug 29 of 2021 will offer 15,000 portals. Details: https://aavegotchi.com/haunt2
2. Opening of portal: After purchasing the portal, the very next step is to open it. Opening the portal occurs on Polygon where gamers have to sign a transaction. Thereafter, the portal will be assigned a random number, ensuring that the Aavegotchi's traits will be random.
3. Choosing an Aavegotchi: After opening, you will have to choose 1 out of the 10 of the given Aavegotchis, all bearing different randomly generated traits, to summon from the Nether realm.
- As you toggle through your options, you can view these traits and your Aavegotchi’s Base Rarity Score.
This is a rarity score that is initially given to your Aavegotchi, based on the initial traits it has upon summoning.
This rarity score can later be modified through a range of activities, such as equipping your Aavegotchi with wearables.
4. Claim the Aavegotchi: To claim an Aavegotchi from the portal, we will need to stake the required amount of Spirit Force (aTokens) to the Portal. These aTokens can be acquired directly via Aave or DEXes like Uniswap.
- In addition to their monetary value as dictated by scarcity and market forces, each Aavegotchi also has an intrinsic value. The aTokens you stake to it provide this intrinsic value.
- Generally speaking, the minimum amount of Spirit Force (collateral) depends on the Base Rarity Score of the Aavegotchi you want to summon. The higher the score, the more collateral it requires.
- The minimum amount of collateral required is 10 DAI worth, while the maximum is 1000 DAI worth of collateral.
The formula which is used to determine the amount of Spirit Force (collateral) needed is as follows:
- For instance, if the Base Rarity Score is less than 300, you need to stake at least 10 DAI worth of the collateral to summon the Gotchi.
- You can increase or decrease the Spirit Force (staked aToken amount) of your Aavegotchi later via the Aavegotchi Dapp UI.
- To claim your Gotchi, you need to perform 2 transactions. First, you need to approve the smart contract to spend the aToken in your wallet. The subsequent transaction allows you to claim the Aavegotchi and move on to interact with them.
Aavegotchis are also transferable to a new owner (when traded) in an online marketplace such as OpenSea. This also transfers the staked collateral behind it, as well as any items and wearables in the Aavegotchi's inventory. If you wish to retrieve the staked collateral backing the Aavegotchi, you have two options:
- Reduce the amount of collateral in your Aavegotchi (but not below it's minimum stake).
- Burn your Aavegotchi, releasing it back to the Nether Realm and returning all of your collateral.
Aavegotchis possess three attributes that determine their overall value and rarity within the ecosystem - spirit force, traits, and wearables. The Aavegotchi Realm is a 2D pixelated metaverse where Aavegotchis can encounter each other, participate in mini-games, call smart contracts, and participate in governance of the AavegotchiDAO.
Traits
All Aavegotchis are born with a combination of randomly-generated traits, which influences their Trait Base Rarity, performance in mini-games, and wearables that they are permitted to equip. However, these traits can change with level, equipped wearables and consumables used.
To randomly generate the traits, Chainlink’s VRF random number generator function is called upon the opening of the portal to assign Aavegotchis with random trait values. These trait values are distributed on a bell-curve, and each trait is assigned a value of Common, Uncommon, Rare, or Mythical, depending on its rarity.
The chances of getting each trait rarity is as shown:
The tables below detail each trait by rarity:
More on: https://wiki.aavegotchi.com/en/traits
Spirit Force (aTokens)
Trait values are also influenced by the type of spirit force that Aavegotchi possesses. Spirit forces are aTokens, also known as interest-bearing tokens from the Aave Protocol. These spirit forces are minted upon deposit and burned when redeemed and they can be freely stored, transferred, and traded. The aTokens are pegged 1:1 to the value of the underlying asset that is deposited in the Aave protocol.
Because of the high gas fees on Ethereum Mainnet, the launch of the Aavegotchi game was shifted to Polygon, a layer 2 solution that allows near-zero transaction fees and near-instant transactions. This move would mean that we would require aTokens to be on Polygon as well. The aTokens on Polygon are known as maTokens. Essentially, the terms "Spirit Force", "Collateral", "aTokens", and "maTokens'' mean the same thing in the Aavegotchi ecosystem.
A more complete list on: https://wiki.aavegotchi.com/en/traits
Kinship
Kinship represents your Aavegotchi’s feeling of loyalty towards you, existing as an internal balance on the Aavegotchi smart contract. It is not randomly assigned, but rather starts at a fixed value (50) upon summon. Depending on various factors such as how long the Aavegotchi has been with you and how often you interact with the Aavegotchi, the kinship value can increase or decrease accordingly. The minimum kinship value is 0 and there is no maximum kinship value.
A maximum of 1 Kinship point is accrued for every 12 hour period in which you interact with your Aavegotchi. Conversely, there will be a -1 Kinship point penalty if your Aavegotchi is left unengaged for 24 hours. Potions could also be used to improve kinship scores. However, they may not always be available in the Aavegotchi store as they are limited edition consumables. More details on potions will be released in the near future.
High kinship values accumulated can boost your Aavegotchi’s performance in mini-games, and may also act as a multiplier for $GHST rewards on governance and rarity farming. Low kinship levels will result in a reverse effect.
Some ways to boost your Aavegotchi’s kinship level:
- Take your Aavegotchi to City Hall and let it vote in AavegotchiDAO;
- Feed your Aavegotchi with consumables;
- Equip your Aavegotchi with new wearables;
- Take your Aavegotchi out for a romp in the Aavegotchi Realm and level it up by playing mini-games.
The table below shows the kinship level and their value range.
Experience
Aavegotchis receive experience points (XP) for voting in AavegotchiDAO and participating in mini-games. They can also be sacrificed to remove their collateral stake and have it transferred to another Aavegotchim, which will receive 100% of the sacrificed Aavegotchi’s accrued XP. XP exists as an internal balance on the Aavegotchi smart contract.
Haunts
Like pioneers to the New World, Aavegotchis travel from the Nether Realm to the Ether Realm in groups known as “Haunts”. The first Haunt brings in 10,000 Aavegotchis and any subsequent new Haunts must be discussed and approved by the AavegotchiDAO. Gotchis that belong to their respective Haunts will have that Haunt number indicated on them. Although there will be no stats differences between Haunts, some wearables can only be worn by Aavegotchis belonging to a certain Haunt. The team is also looking into introducing bodyColor on Aavegotchis to differentiate between Haunts.
Wearables
An important component of the Aavegotchi game, wearables can do much more than endowing your Aavegotchi with a sense of fashion. In fact, wearables also boost the Aavegotchi's traits and rarity score, enabling them to perform better in mini-games and rarity farming. All wearables conform to the ERC-1155 standard and can be equipped or unequipped anytime.
Equipping/unequipping wearables may affect the overall rarity of an Aavegotchi:
With the passing of AGIP 9, wearables now have voting power in AavegotchiDAO. The voting power (measured in $GHST) of a given wearable is based on its Rarity Type/Maall price.
A complete list of every wearable: https://wiki.aavegotchi.com/en/wearables
Maall & Baazaar
The Aavegotchi Maall is the official Aavegotchi shop that sells wearables and consumables at the price of $GHST tokens. A shop that will be restocked from time to time, there will be totally new wearables each time, making them much more valuable. Once out of stock, they can only be procured from others on secondary marketplaces such as the Baazaar and other online marketplaces.
Incentives
AavegotchiDAO
The community-governance model of the platform is supported by the AavegotchiDAO protocol, which allows users to vote and decide on governance proposals. Decisions made include the list of collaterals that can be staked in NFTs, amend gaming parameters, and even limit the number of Aavegotchis that can be created in the future. To incentivize token holders on community governance, they are rewarded with $GHST.
Staking with Metaverse/Realm
The metaverse for Aavegotchis, the Realm is the digital world where Aavegotchis can interact with each other, join mini-games and execute smart contracts. It is also the social layer for the AavegotchiDAO, aimed at creating a more visual experience for community voters and governance functions.
To date, most DAOs have focused on technical and incentive-based approaches to address voter apathy. While AavegotchiDAO makes use of those emerging best practices, it also leverages social engagement to deliver a delightful voting experience that could redefine what it means to “participate in a DAO”. Within this digital experience, Aavegotchis gathers in a 2D town square to review proposals, debate and cast votes - all in real time.
Users can purchase parcels of land, or REALM, in the Aavegotchi world by staking $GHST tokens. Owners of Aavegotchis can stake $GHST token to unlock parcel tokens within the Aavegotchi Realm known as REALM. REALM holders can call smart contracts directly from their parcels, unlocking an entire new universe of possibilities.
In addition, $GHST can be staked in the Staking Contract as $STKGHST to earn FRENS. FRENS are a non-transferable balance within the Aavegotchi Staking Contract and cannot be purchased. They are meant to reward stakers for their contributions to the Aavegotchi project.
FRENS can be converted into Raffle Tickets or Drop Tickets:
- Raffle Tickets can be entered into periodic Raffles to win Wearables.
- Drop Tickets can be entered into NFT Raffles to win Portals and REALM Parcels.
More on: https://wiki.aavegotchi.com/en/metaverse & https://wiki.aavegotchi.com/en/staking
Mini games
Certain mini-games will be played using simple random number generators (RNGs), while some will offer more immersive, player-controlled experiences. To ensure a fair gameplay to cater to the wide variety of trait distributions, each mini-game will use different Aavegotchi traits. For instance, a HYPER-AGGRESSIVE Aavegotchi may excel in a game of Aavegotchi Fight Club, but may not be suited to play well in a cake-baking mini-game.
For users who feel that there can be more games introduced, they can even jump in to create their own mini-games. To encourage and help developers building Aavegotchi mini-games, AavegotchiDAO V2.0 will manage a Development Fund to support development work carried out within the Aavegotchi ecosystem. So long as mini-games conform to trait distribution standards, winners will be rewarded with XP.
When Aavegotchis participate in a mini-game and wins, they will earn the accrued Spirit Force of their opponents (not including the initial balance), and gain XP based on the amount of Spirit Force earned.
When more XPs are gained, Aavegotchis level up and with every three levels increase, Aavegotchis receive one Spirit Point that can be allocated towards increasing or decreasing a certain trait. This enhancement in trait would be crucial for rarity farmers to be rewarded more $GHST tokens during rarity farming events. Some wearables can only be worn by Aavegotchis of a certain level.
Rarity farming
Rarity farming is an innovative game mechanism pioneered by Aavegotchi that strives to reward users for their thoughtful and enthusiastic engagement with the ecosystem. As suggested by its name, rarity farming is a process where users try to raise the rarest Aavegotchis, and get rewarded for doing so.
Rarity farming can be exercised in the following ways:
- Carefully selecting an Aavegotchi with rare traits during the summoning process
- Equipping wearables to modify the traits of your Aavegotchi
- Engaging in mini-games
The rarity level of a single Aavegotchi is dynamic and can vary from time to time along with changes in the distribution of traits and wearables in the Aavegotchi universe. This means that it would not be sufficient to simply max out certain traits of your Aavegotchi. You should also take into account the strategies of other players. For example, if too many players try to grind it out for a war-like gotchi with high aggression scores, this trait becomes less rare, and your Aavegotchi's rarity level goes down.
There are 2 types of rarity scores in play here - Base Rarity Score (for traits and wearables) & Absolute Rarity Score. Base Rarity Score (BRS) is derived from the overall rarity of both the Aavegotchi's traits and equipped wearables. Absolute Rarity Score (ARS) is derived from the particular rarity of the Aavegotchi's traits in the overall Aavegotchi ecosystem.
More information can be found on https://wiki.aavegotchi.com/en/rarity-farming
Rarity farming rewards
40% of all $GHST spent on wearables, consumables, and other game items are redirected into the Rarity Farming rewards pool. In each period (length determined by AavegotchiDAO), the rarest Aavegotchis will receive a predetermined distribution of $GHST rewards (derived from all sales involving $GHST).
As the final rarity score is constantly shifting when players summon more Aavegotchis, equip more wearables, and level up their Aavegotchis, players must make strategic decisions on how they train and equip their Aavegotchis. That is how Aavegotchi's rarity farming encourages thoughtful gameplay and active participation, while rewarding the best farmers for their ghostly harvests.
As of now, there are no limitations set on the number of interactions an Aavegotchi can perform per period. However, if bot activity becomes problematic, the AavegotchiDAO could vote to add circuit breakers to reduce bot activity.
Initially, there will be three categories of Player Rewards that will total up to 40% of all $GHST earned:
- Top 100 Rarest Aavegotchis (by Base Rarity Score)
- Top 100 Kinship Scores
- Top 100 Experience (XP)
The proportion of rewards allocated to each of the categories have not been set and will be discussed by the AavegotchiDAO.
As the Aavegotchi ecosystem continues to develop, more reward categories will be added. All rewards will be awarded every two weeks via onchain snapshots. Initially, this will be handled manually by Pixelcraft, but this can eventually be automated by AavegotchiDAO. After each snapshot, all successful rarity farmers can claim their rewards and the next round would commence immediately.
Competitors
In July 2021, NFTs enjoyed over $1.2 billion in sales. Much of the boost is attributed to the success of play-to-earn games such as Axie Infinity, a blockchain-based game that was launched in 2018. It quickly became the most valuable NFT collection ever, surpassing perhaps the most recognizable marketplace of the sector, NBA Top Shot, with more than $830 million in trading volume ($600 million registered in July alone). This shows how gaming collectibles can be very popular if done well.
Another strong contender in the market would be the upcoming Illuvium, a decentralized, NFT collection and auto battler game built on the Ethereum network. Although not officially launched yet, it has quickly gained popularity as one the coolest play-to-earn projects in development. Illuvium is tackling a genre that is going to be very large, the RPG and the battling side of gaming. From the charts below, we can see that in just a short span of 2 weeks, the price of ILV has significantly increased from $85.02 to $286.65 today (August 5 2021). This shows how strong of a contender Illuvium is to Aavegotchi, with an overwhelming explosion in popularity.
Overall
Just like how the original Tamagotchi introduced the world to digital pets, Aavegotchi introduced the world to playable NFTs backed by a digital value. The various ways to strategically enhance the rarity of Aavegotchis and the novelty of mini games can be both fun and challenging, and the rewards it brings about makes it addictive and incentivizes players to play everyday.
Planned roadmap
According to the project's recently unveiled roadmap, there is much more to anticipate from them. A complete list of of the latest roadmap can be found on https://defireport.io/defi/aavegotchi-v2-roadmap-developed-by-polygon-and-aave/.
As of now, they have fulfilled the following milestones on time:
✅ Launched GHST token via bonding curve DAICO
✅ GHST listed on almost all major global exchanges
✅ Created staking contracts with more than 10M TVL
✅ Held four raffles for fair, transparent distribution of NFTs
✅ Successfully migrated GHST from Ethereum to Polygon
✅ Held six DAO votes, all which reached and far exceeded the quorums
✅ Held Portal sale on Polygon, sold out within minutes
Exciting upcoming milestones for the rest of year 2021 includes:
🔜 Q3 2021: Haunt 2 (26th to 29th Aug 2021)
🔜 Q3 2021: GHST Token Listed on Aave
🔜 Q3 2021: REALM Gotchiverse Presale
🔜 Q3 2021: Aavegotchi Aarcade Mini Game Center
🔜 Q4 2021: REALM #1 Public Land Sale
🔜 Q4 2021: AavegotchiDAO V2 (metamorphosis)
Fundamental Analysis
$GHST Market Stats
The live Aavegotchi price today is $2.01 USD as of 5th August 2021 with a 24-hour trading volume of $84,388,318 USD. Aavegotchi is up 8.46% in the last 24 hours. The current CoinMarketCap ranking is #288, with a live market cap of $119,987,618 USD. It has a circulating supply of 59,715,045 $GHST coins and the max. supply is not available. (Link)
Aavegotchi Token Supply Dynamics
The Aavegotchi Bonding Curve was created on 14 September 2020 via a bonding curve smart contract powered by Aragon Fundraising. After the conclusion of a presale for 500,000 $GHST, the bonding curve was immediately opened.
The bonding curve is unlimited in size, has no time limit, and offers an opening price of 0.2 Dai per $GHST. To purchase directly from or sell to the curve, users will have to complete KYC (“know your customer”) to verify their identities.
When investors use their DAI to buy $GHST from the bonding curve, new $GHST tokens are minted and the total supply of circulating $GHST would increase. The price of GHST then goes up in correlation with the new supply. On the other hand, when investors sell GHST back into the curve, it is burned, thus reducing the total supply and its price. That said, there is no supply cap on GHST and the value of GHST rises and falls to reflect demand from the community.
Members would not have to worry much about price volatility — meaning a more sustainable community, given the lower likelihood of individuals being understandably shaken out of or unwilling to join the ecosystem due to attempts at market manipulation or quick pump-and-dumps.
Macro Analysis
Global Gaming Market
With more than 2.5 billion players across the world, the Global Gaming Market was valued at USD 173.70 billion in 2020 and is expected to reach a value of USD 314.40 billion by 2026, registering a CAGR of 9.64% over the forecast period (2021 – 2026). With more staying home due to nationwide lockdowns, many are turning to gaming platforms to pass time and destress. These platforms are attracting more than hundreds and thousands of new visitors in online traffic. (link)
Global Mobile Gaming Market
In Aavegotchi’s planned roadmap, they planned for the Alpha launch of the Aavegotchi mobile application in phase 2. Hence, we also look at the outlook of the global mobile gaming market, which is already bigger than the console and PC gaming markets combined, contributing nearly 57% of the USD 173 billion global video games revenue in 2020. Worth USD98 billion in 2020, the mobile gaming market will grow to USD 272billion by 2030, at a compound annual growth rate (CAGR) of 11% over the period, according to forecast. (link)
NFT Market
Trading volume of NFTs hit just under $2.5 billion for the first half of 2021, according to DappRadar, which aggregates sales figures across multiple blockchains. OpenSea’s NFT sales hit a record high in June, with volume reaching almost $125 million. The boost of the entire industry is largely credited to the surge of play-to-earn games, along with the establishment of high-value Non-Fungible token (NFT) collections. (link)
Although the sales volume of NFT games is still lower than that of non-NFT games, the tremendous growth in sales volume in the NFT market shows just how much the market can grow. NFT games offer both thrill and potential profitability. Playing these games to potentially earn crypto requires users to learn about the game and how to win to receive monetary rewards.
Opportunity
Double high-growth sector
Aavegotchi is uniquely positioned to capture the growth potential from two high-growth sectors, NFTs and mobile games. Currently, there are already a few popular NFT games like Axie Infinity, Sorare, Cryptokitties, etc. From the screenshots below, we can see that Aavegotchi’s $GHST token balance increased from 507,716 to 525,494 in the last two weeks.
Aavegotchi is still new to the market, but we are still seeing some growth. With strong competitors such as Axie Infinity and the upcoming Illuvium, there is still potential for Aavegotchi. In their first ever haunt in March 2021, 10,000 portal NFTs were dropped on a first come first serve basis and it only took 60 seconds for the drop to sell out. Proposals for more Haunts have been launched ever since, with Haunt 2 targeted for launch in late August 2021. With more and more Haunts, it will definitely help to enhance the value of $GHST as well as increase adoption. (link)
Target Audience
Primary audience:
- Gamers, Mobile gamers (growing trend)
- NFT / crypto fanatics (growing trend)
- All of the above
Secondary audience:
- DeFi farmers / breeders (early trend)
Community
The Aavegotchi community is relatively okay, with 15,679 members on discord, 43.4k followers on Twitter and 6,330 members on Telegram. Illuvium, a competitor that has also yet to launch, Illuvium has 54,747 members on discord, 41.4k followers on Twitter and 6,792 members on Telegram.
Currently, Aavegotchi has got plenty of user generated content (UGC) from the community. This ranges from explanation videos, platform utilization tutorial, rarity farming strategies to dedicated websites that go in depth into analyzing Aavegotchi as a whole. This shows how the active community is willing to commit their time to provide free advertising and marketing that attracts new players into a game. This ultimately would help Aavegotchi in enhancing their brand recognition.
Traffic/Daily Active Users
We now look at the traffic, trends and daily active users for Aavegotchi.
Google Trends
Past 3 months:
Past 1 year:
From google trends, we observe that the interest for Aavegotchi is relatively stagnant over time, as compared to competitors like Illuvium that have seemingly gained much more interest across the world.
Similarweb
Web traffic to Aavegotchi reports only about 170k total visits.
Subreddit
From Reddit, we can see that the daily chart of the subscribers is still going upwards and has not topped out yet, indicating further potential. Despite the crypto crash, this trend has not been too negatively affected which could be a positive sign of uncorrelation.
Site Active Users
On 6 Aug 2021:
On 9 Aug 2021:
We can observe a slight increase in site statistics, which is probably because of the news of the upcoming Haunt 2.
Link: https://dao.aavegotchi.com/about
Team
The founder and COO, Jesse, AKA GldnXross is a product centric founder who has had a leadership role developing some of the most well known NFT platforms to date including the very first NFT minting platform, Mintable, which is now available on both Ethereum and Zilliqa blockchains. He is also the creator of the Value-Staked NFTs concept mentioned above as the creator of Bullionix.io which was the first to offer 3D, high resolution digital collectibles staked with gold stable coins.
Dan aka Coder Dan, is a full stack developer and the creator of Yield Hero, a DeFi dapp that enables users to redirect their AAVE yield toward any address they wish. He is also known for his lead role developing the first ERC721 staked with ERC20s NFT platform, Bullionix. Daniel is based in Fujian, China and fluent in Chinese. In addition to his work in tech, Dan is a tier 1 growth hacker leading Aavegotchi’s initial growth to over 10k Twitter followers and 6000 active Discord citizens. His previous work saw his brand’s Weibo, Bilibili, and WeChat Official account balloon to over 1.5 million followers.
Nick Mudge is one of Ethereum’s most accomplished solidity developers. The ERC998 composables standard was authored by Mudge and is among the most important aspect of the Aavegotchi game, allowing a “parent” NFT to equip and carry “child” NFTs with them. More recently, Mudge has headed Ethereum research and development for what has been dubbed the Diamond Standard. This standard offers major breakthroughs for upgradeable contracts and is quickly being adopted by governance focused DAOs.
Jc is a business development strategist and blockchain enthusiast, with a wealth of experience connecting and networking with some of the brightest minds in the cryptocurrency space. An entrepreneurial and self-motivated team player, he has demonstrated talent for building relationships, influencing strategic partnerships, developing new sales channels, and using social media and viral marketing with remarkable effectiveness. One of his biggest passions is introducing and promoting new companies and assisting them with their start-ups. His enthusiasm for the space is based on an unshakable belief in the disruptive power of blockchain technology.
Historical Analysis
Haunt 1, an event where Aavegotchis are summoned and participants can buy them by buying the portals, happened around March 2021, we saw the price going up prior to the Haunt and dropping about 40% after the Haunt goes live.
The circle below is the first Rarity Farming event which started around 20 April, which led to the price pump, and after the first round of rewards allocation around 4th of May we can see the price of $GHST dropped.
With the next upcoming Haunt 2 event happening around 26th August, a similar pump leading to the event could happen / might have already happened.
However after the first rarity farming event happened, we can see the decline in the price of $GHST as profit taking or lack of interest caused the price to drop. Something similar could happen in the next rarity farming event so it is something to take note of.
Risks
Issues with pumps and dumps
From our technical analysis, we saw how the rarity farming events could lead to attempts at market manipulation or quick pump-and-dumps. Pumps and dumps target low capitalization cryptocurrencies and digital tokens that can easily be manipulated with low trading volumes and GHST can be affected by it.
Conclusion
The project has a large potential and big ambitions with the gotchiverse roadmap. The intrinsic financial value captured in the Aavegotchi itself could potentially be used as collateral to borrow against in the future which makes it a unique type of NFT. It also leverages off the AAVE branding, which is the largest lending protocol with thousands of active users, which could allow it to gain trust and popularity quickly.
The first Aavegotchi summoning (known as a Haunt) was around March 2021 so it has been 5 months since. The player base is still small with less than 300 a month, probably due to the scarcity of Aavegotchis and how expensive it is to obtain version 1 Aavegotchis.
There are only a small variety of less than 10 basic mini-games that mimic old-school arcade games such as space invaders, basic tower defense, pacman, etc. I personally feel that these games are unlikely to generate mainstream adoption anytime soon. Current fees generated by the protocol are quite low, projected around 900k a year (@ $2 per $GHST), with a PE ratio of around 240 as the activity and liquidity for aavegotchi is lacking with only a few dozen aavegotchi buy sell transactions happening in a day.
Also I think there isn’t a core game that Pixelcraft is developing themselves, and most of the games are mainly by third party developers, which is not the best sign as the gameplay is a core component of an NFT game, and having multiple minigames developed by multiple parties can result in a disjointed gaming experience if there are no strong creative lead / quality assurance lead for the games.
The ecosystem itself is rather confusing and hard to understand as I had to read through lots of Aavepedia articles to grasp what was going on and what they were building, which can be a barrier to entry to many.
Additionally, the Aavegotchi themselves have wearables with inconsistent designs that may not appeal to many people, although this is highly subjective.
With the upcoming Haunt 2 in August, there is potential for the price to pump (which might have already happened). The 2nd Rarity Farming event is expected to arrive around 1-2 months after Haunt 2.
There is also a dinoswap partnership staking $STKGHST-$WETH on Dinoswap exchange to earn additional yields while waiting for Aavegotchi events to happen.
Project appears to have big potential if it catches on, however the price of an Aavegotchi is appears to be high at the moment and is likely a barrier to entry to most retail and there are too little rarity farming events to make the P2E model viable at the moment.