Happy New Year players. We wouldn’t be a crypto blog if we didn’t chime in with our takes for 2024. If you want a list of tokens, we got you at the end of this post, but I’d read through the rest just in case you pick up a nugget for your next bag.

While hopium is always appreciated, we’ll save the vagueness for horoscopes and fortune cookies. We’re steering away from the bare “web3 gaming is going mainstream” type predictions and focusing on trends we believe will lead in the next year.

Will we be wrong? Probably. But we’re not here to shill you the next sub-million memecoin or crypto exchange that will fundamentally change the world. Instead, we’re looking back at the past year in web3 gaming, evaluating trends, and trying to decipher where the future of the future of gaming is going.

Here’s where we are:

• The Death of Gaming NFTs. Traditional NFTs are great for PFPs and not so much for gaming assets. We’ll see the ‘death’ of NFTs in web3 gaming and a migration toward new, more rich NFT token standards like dynamic NFTs and executable NFTs (xNFTs).

• Governance Overthrow. ‘governance,’ ‘community,’ ‘player-owned,’ and other buzzwords have long been embedded into whitepapers and tokenomic overviews since the start of web3 gaming. As web3 gaming continues to emerge, players will start questioning why they have no say in its development.

• South Korea Takes All. There’s no question that the APAC region has led web3 gaming, but South Korea’s current legal framework has hindered its participation in the gaming world. 2023 will see a reversal of previous actions against P2E and other web3 gaming mechanics, making South Korea the new leader in web3 gaming.

• Moonbags. We put it at the bottom, so you at least need to scroll past the rest of this to see what we’re buying.

The Death of Gaming NFTs

2024 will be the end of NFTs in web3 games, or at least how NFTs are implemented in games today. Traditional NFTs are great for PFPs but not as helpful for in-game assets. With experiments like Smart Cats from Smart Layer and xNFTs from Backpack showing the promise of new NFT technology, we predict that 2024 will see NFTs phase out of web3 gaming in favor of more detailed token standards.

In particular, we're engaging in the developments and applications surrounding both Dynamic NFTs and xNFTs, alongside the challenges presented by introducing these new standards.

Dynamic NFTs

Dynamic NFTs (dNFTs) are NFTs that can evolve over time, reacting to a variety of triggers such as player achievements, in-game events, or even real-world occurrences. This adaptability makes gaming experiences more immersive and personalized. For players, dNFTs provide assets that grow and change, reflecting their journey and achievements within the game. This dynamic aspect also opens up new pathways for game developers, allowing them to create more intricate and engaging gaming ecosystems.

This allows leveling and progression to be represented on chain. Some may argue against this need, but I for sure would have loved to save some time grinding for the perfect OSRS pure, and there are services that do this for you, at the risk of losing your account or getting banned. With the breadth of the triggers available for dNFTs, developers have free reign to design assets that grow with a player's activity inside and outside their games. Projects like LaMelo Ball NFTs and NBA Top Shot have already demonstrated the potential of dNFTs in tracking real-world performances and translating them into digital value.

Executable NFTs (xNFTs) / Smart Tokens

Executable NFTs (xNFTs) and Smart Tokens are essentially the same concepts on Solana and Ethereum, respectively. Executable NFT (xNFT) is the Backpack Labs token standard on Solana, and ERC-5169 is Smart Layer's token standard on Ethereum for smart tokens. We will just refer to the general concept as xNFTs since blockchain 'smart' technology is getting out of hand, and we just like it better.

xNFTs introduce tokenized code into NFTs, allowing holders to execute the code and interact with a tokenized application locally in their wallet. In a general sense, you can think of xNFTs as applications downloaded to your wallet, similar to how you download games in the Nintendo Store.

Challenge: Token Standardization

The biggest hurdle to the adoption of these expanded NFTs will be standardization. Omnichain initiatives like OMA3 will be essential for ensuring that interoperability is possible not only between different networks but also between different games and metaverses on the same network. For web3 gaming to become just gaming, it must continue to deliver on its promise of decentralization and ownership while creating a frictionless environment with low barriers to entry.

Overthrowing Governance

At the end of Q4, we saw a resurgence in gaming tokens, with some projects outpacing the gains seen in Bitcoin as ETF approval momentum started growing. Native governance tokens should, by their name, allow their holders to have their say on the project they own a portion of; however, can you name a project that has perfected the balance between game development, investor needs, and playbase needs? We can't.

There were a lot of questionable decisions and lackluster game releases from game studios across web2 and web3. Many games are losing loyal fans after poor update schedules and giving the cold shoulder to their player base (I'm looking at you, Valve - CS2 feels so bad). Gamers want to voice an opinion, but where do feedback and constructive social media responses go - into the garbage probably?

Actual governance enables active players to have their voices heard, building value on top of the core gameplay and improving engagement with people who care. This allows players to actively participate in their favorite game's development without having to be a developer or core contributors.

While we've seen many whitepapers and tokenomics outlines highlighting the 'utility' of governance tokens within their ecosystem, the ability to act on those governance rights has yet to materialize. GODS, for example, has been dubbed a 'governance token' by the Gods Unchained team since its launch in 2021, but there has been no progress on providing voting rights to token holders since. Illuvium's ILV holders, on the other hand, have been voting on marketing and funding initiatives for over three years, even though it only recently released its beta.

Governance not only allows players to have their voices heard but also gives purpose to many of the gaming tokens we're seeing on the market today. Governance provides dedicated players with a legitimate reason to buy and hold a game's native token, providing value to both players and traders.

In 2024, we anticipate that web3 gamers will revolt against the sham governments that are infringing on their right to vote on key game features and updates. Projects that recently released tokens, such as BIGTIME and SHRAP, will either need to make a big commitment toward keeping their promises or write off governance rights altogether (though we'd strongly prefer the former).

South Korea Takes All

There's no question that APAC has been a dominant force in the global gaming industry. The region leads with the most active gamers, with over 1B gamers from China, Japan, and South Korea alone. Japan and Korea also capture nearly 30% of the global gaming market share, at 16% and 10%, respectively.

This dominant success is not isolated to the traditional gaming industry. In fact, it's more prevalent in the world of web3 gaming. APAC is leading the way in terms of web3 game developers, with 40% of game devs in the APAC region and half of web3 titles released in 2023 coming out of Asia.

While Japan has enacted public policy measures to strengthen its position as a global leader in web3 gaming, Korea has notably lagged behind. Rather than promote it, the Korean government has actively pushed out web3 gaming with laws blocking a range of web3 gaming features like P2E. Even NFT-based prizes have been found to 'encourage gambling': last January, Klaytn-based RPG Five Stars was found to have violated the Gaming Industry Act by implementing NFT-based rewards.

The near ban on web3 gaming in Korea is at odds with its position as a global leader in the space. Korea is the second largest hub for web3 game developers, with 12% of development teams, second behind the United States with 28%. NHN most recently announced its decision to build web3 games on Sui, joining Nexon (Maplestory), Neowiz (Bless), WeMade (MIR4), and other major game developers in building titles that can't be played in the country without modifications.

In a country where web3 game development is experiencing exponential growth and DOTA 2 is a state-sponsored sport, it seems inevitable that the government will shift toward a more accepting stance on the industry. South Korean President Yoon Suk-Yeol campaigned on the promise of lifting the country's web3 gaming ban in May 2022 but has since made no efforts to keep that promise.

In 2024, we expect more successful web3 game releases in South Korea and the eventual adoption of more supportive legislation within the country. The latter will become a significant catalyst in Korea's web3 gaming market, bringing in new talent and startups, and moving South Korea to the forefront of web3 game development.

2024 Moon Bags

NFA, DYOR, and all of those other boilerplate disclaimers that your favorite moonbois on CT like to add at the end of their undisclosed shills. We're not taking money from anyone here, but if 2024 goes to plan, we won't have to.

We're packing our bags into the new year and sharing our predictions for the top 5 best-performing assets.

Beam (BEAM)

It's no secret that we are fans of Beam, the gaming ecosystem developed by the Merit Circle DAO. The only regret so far has not been buying more since we first talked about the project in August. Since the migration from MC to BEAM back in October, the token has nearly 4x, sitting at around $0.02 at the time of writing. 90.4% of MC has been migrated to Beam, with the final 10% having ten more months to bridge to the new network.

Beam's thriving network and creative initiatives position it as a leader in the Web3 gaming space. The Beam subnet on Avalanche has shown significant activity, with hundreds of thousands of blocks and transactions and over 20 games built on Beam. Collaborations with industry giants like Immutable and Polygon for multichain expansion and product development further enhance Beam'sBeam's capabilities. The studio arm of Merit Circle DAO, with projects like Edenhorde and Forgotten Playland, highlights the creative potential within the ecosystem. These achievements, combined with the DAO's focus on community engagement and innovative marketing, give it a place in our bags.

WEMIX (WEMIX)

WEMIX is the blockchain gaming subsidiary of publicly traded South Korean game developer WeMade, known for their popular game series Legend of Mir (MIR).

If you aren't familiar with their gaming chain and the WEMIX token, you're not alone. WEMIX was almost exclusively traded in Korea prior to a decision by Digital Asset eXchange Alliance (DAXA), a trade group of Korea's top exchanges, to delist the asset. Though the decision toppled the price from a high of $22 to $0.15, all hope is not lost for the project.

In November, Coinone became the first member of DAXA to relist WEMIX. Soon after, Mercado Bitcoin, the largest exchange platform in Latin America, also listed the token. Though the initial delisting dented the project's reputation, a return to Korean and international exchanges in 2024 and WeMade's consistent developments in both web3 and traditional gaming will make WEMIX a top performer in 2024.

One of the most exciting developments we are watching from WEMIX is the international release of its latest MMORPG title, Night Crows. Night Crows is an MMORPG based on Unreal Engine 5, with cross-play between mobile and PC platforms, a multi-token ecosystem, and NFT-based in-game assets. The game will also test the launch of the WEMIX Streamer Support System (SSS), which enables streamers to receive support from a streamer fund and a percentage of in-game purchase revenue spent by their supporters.

Night Crows achieved early success in its regional release, reaching the top of the Apple and Google Play Store in Korea in popularity and sales within its first month on the market. Ahead of the global release slated for March of this year, the game has already amassed over a million mobile downloads and a strong PC-based community.

Like WeMade's MIR4, the game needed two separate version releases to comply with Korea's ban on P2E gaming. That said, we believe this ban will be lifted in 2024, as we discussed earlier in our predictions.

Shrapnel (SHRAP)

We've been waiting for a AAA web3-enabled game that can shake off the stigma of crypto for wider player adoption. Although there is a potential for this to evaporate with the bankruptcy and corporate takeover nonsense that happened at the end of last year, the opportunity is there. We could've suggested just loading up on operators, but SHRAP gives users more than just exposure to growth in the game. A native token such as SHRAP should not only fulfill that itch to degens and speculators but also enable active players to have their voices heard. Plus, Griff got in one of their promo videos during a playtest, so that's some signal right there.

Ultra (UOS)

We featured Ultra in one of our first posts about web3-enabled launchers in July last year. 2023 was a big year for the project, from launching the open beta test launch of Ultra Games to launching their esports platform Ultra Arena, offering players a chance to compete for glory and rewards. Ultra's Uniq token standard is a huge milestone, and Ultra made history with the first tradable digital game. We believe in Ultra as they are trying to redefine the value distribution across publishers, creators, and gamers while providing tooling and support for each user type.