kenw 台灣🇹🇼

THE DANGER OF WEB3 GAMING PRIVATE SALES AND PRESALES Many web3 gaming mints raises this year, few, few playable games. Be you all careful now. Want to give a word on protecting your capital. You've struggled hard during the bear. Don't go and LOSE it on a string of bad investments that will lock your liquidity out of the upcoming bull. I see a LOT of private sale offers for new games. And I turn down almost all of them, unless there is real bluechip potential or the project has something special going on. There are a lot of new investors who think this is the shortcut to gen wealth. Maybe, but it's just as much a shortcut to getting rekt too. My investing rule of thumb here for gaming private sales: Don't invest in any project, especially private sales, that do NOT have an imminent incoming game to showcase. If you are going to degen into gaming bets, I would choose NFT mints over private sales. At least with an NFT mint, you can get back some of that liquidity by offloading the NFT or holding for the token drop (assuming the gaming token drop meta still holds in some months), if such is delivered. You can play the degen game with new gaming mints and calculate a return based on tokenomics if there is a token drop to reclaim your principal if the math works out, but I think it's still a risky bet if the market turns sour. You will go from speculator to unwilling bag holder. But at least you do have the option to try and exit. You can't with a private sale! But locking your capital into one of these web3 gaming private sales I see being hawked all over the space now (usually with the alpha group syndicates being last as the final buyers) is risky as fuck. Be very careful here and know what you are potentially locking your capital into. It's a long term marriage with these private sales, not a short term fling. You are going to be stuck together for years. Private sales often have 6-12 month token locks for investors after the TGE. And there is often a 24-36 month distribution period for the vesting. You will be getting 1/24 or 1/36 of your tokens each month. THREE THINGS TO THINK ABOUT BEFORE YOU DEGEN INTO A GAMING PRIVATE SALE The question you need to ask yourself if you are going to bet on a token drop or private sale with tokens: 1) HOW will the gaming market, the overall crypto market, and overall world economy look WHEN your first tokens are unlocked? Shitty market means your token price won't be something to take screenshots of. 2) What will the circulating supply be when the unlock happens? Some projects will trick you with very low circulating supply on TGE to ensure the token price pumps, BUT 6 to 12 months after, the token supply could well be 2-10x HIGHER. What do you think happens to the token price when over 6 months the token supply doubles, triples, or quintiples? Nothing good I assure you. I will point out @playSHRAPNEL here which has some of the worst tokenomics I've seen. I like what the game is doing for the space, but the tokenomics are not good. It's bad and are going to need to show a lot of success to sustain the current token valuations given the upcoming token inflation. The entire token supply will 3x in a month or two due to investors getting some huge unlocks. And the TGE with investor unlocks started when the token was not even circulating as a means to basically deliver tokens to investors faster. Why? To get that exit liquidity sooner on your poor fools buying. 3) What are the token sinks to absorb the token inflation. If you do what @yugalabs did to @apecoin by launching a token with absolutely not game or utility, you are going to destroy your token. Once you drop a token, you can't take it back. Unchecked token inflation with no utility will wreck your entire ecosystem. Once you open pandora's box, you can't close that. This is why it's critical that a GAME is launched within a reasonable period of time (months!) after a TGE. 4) What is the Fully Diluted Valuation (FDV) and the upside potential. You also need to consider the FDV very carefully. As the market conditions improve, projects will raise at higher FDVs (selling less tokens, for more). If the FDV is too high, you run the risk of NOT making returns if the market changes. Consider this: investing 10k into a gaming project with an FDV of $10M. The token comes out at 100M FDV and the project manages to sustain this over two year period. Your token distribution lasts for 2 years. You are able to liquidate around 70-100M FDV and lock in 7-10x gains. But what happens if you invest at a 150M FDV? You better ask yourself if the project will have the ability to maintain at least that FDV you buy in OVER the multi year period of your token distribution. Take it from someone who did quite a few private sale investments over 2017 and 2021 periods and LOST a shit ton of capital when those FDVs were bull market valuations. When the market turned those FDVs could not sustain and I lost 50-90%. If a project raises too high an FDV, avoid. Typically, I look for STRONG gaming projects that have an FDV between 20-60M with 60M being on the higher side and 20M being on the value side. If we have a crazy bull market, I suspect we will see fund raising at 100M+ valuations, which is risky as fuck for investors if market conditions change. THINGS TO THINK ABOUT Any raise now promising to build your dream web3 game will, if anything is actually delivered, face a completely different set of market conditions in 1-3 years, and likely a LOT more competition. If you don't have a product playable this year in some form by the public and don't have significant funding or hype to sustain the 2-3 year development cycle required to deliver a quality game, your chances of success are pretty dire. Getting into the right private sale can be a life changing experience if you hit a winner. But it's not a gauranteed money hack here. There is a lot of risk. And I wanted to give this warning to save some of you from potentially getting rekt. IF you take anything from this, make sure you don't buy in at some crazy FDV cap and make sure there is a game that has been worked on for at least 12 -18 months that will be launched in some form THIS year.