Opinion: NFTs vs tokens or just ticket allocation?

BlockchainGamer.biz editor-at-large Jon Jordan has been writing about the games industry since 1999. He predicts blockchain is the next great disruption and in our weekly column he shares his views on everything web3 games. You can read more in his Substack and contact him via [email protected].

Grinding up data and attempting to extract themes, one interesting titbit I thought worth sharing — although I’m still pondering its significance — arose from looking at the public performance of two gaming guilds.

Perion currently claims around $10 million AUM, although its token’s mcap is only $1.5 million, while Merit Circle operates around $95 million AUM on a token mcap of $80 million.

Both release the public numbers of their investments and it’s from these I’ve generated the following graphs, which reflect the performance of a certain portion of their blockchain gaming assets — notably broken down into live NFTs and tokens.

Investments made are shown in red, while current market value is shown in green.

Given market conditions since the end of 2021, it’s no surprise that all asset classes have been heavily hit. In the case of NFTs, Perion and Merit Circle invested heavily in Axie Infinity NFTs to run scholarship teams. For both, it was their largest single investment and the value of these NFTs has reduced substantially since.

In contrast, it’s interesting to note the relative stronger performance of Merit Circle’s tokens. However drilling into the detail, this is purely down to a single $150,000 investment in TreasureDAO’s MAGIC token, which has generated +700% growth.

I’m not sure tokens as an asset class perform better than NFTs, although they clearly have the advantage of being more liquid.

More likely, the takeaway is — so often the case when it comes to investing — that the problem isn’t that you don’t invest in some great companies. The problem is that you don’t invest enough in those great companies (and invest too much into the dogs.)

Ticket allocation remains the most difficult investment discipline and one few crypto investors seem to spend much time discussing. Let’s hope they’re learning from it the hard way, nevertheless.

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