CryptoBlades is a NFT game developed by Riveted Games and was launched in April this year. The medieval-themed game revolves around a player building a team of up to four characters in an account, fighting battles and earning rewards and experience points for defeating enemies.

Players can equip their characters with unique weapons that augment their fighting power, with each character and weapon assigned an element which increases or decreases the chances of success when battling. Players are also able to trade these characters and weapons on an open marketplace.

Similar to other play-to-earn games such as the wildly popular Axie Infinity, players are able to earn the native token (SKILL) for battle victories, which can be traded on various decentralized exchanges or staked within the CryptoBlades protocol for additional rewards.

Where CryptoBlades differs from games like Axie Infinity is the relative simplicity of its mechanics. At the time of writing, players are currently only able to battle pre-generated enemies, with PvP battles still to be launched.

What are the essential game mechanics?

Players start their journey in the Plaza, where they can mint their first character, which has a randomly assigned element. Each player is able to build a team of up to four characters, which can either be minted or acquired from the open marketplace from other players.

In parallel, players can also mint or acquire weapons, each of which also has a randomly assigned element and a tier level. Each player receives a free weapon when their first character is minted, with all weapons rated from a scale of 1 to 5 stars, in a tiered system.

Players are also given to option to reforge weapons, which involves destroying a weapon to boost the attributes of another existing weapon.

Armed with characters and weapons, players pair a single character with a weapon and enter the combat section of the game, where they are given the option of choosing one or four enemies to battle.

Enemies are randomly generated and have different elements and attributes, with players given a victory probability for each potential battle. To start a battle, players simply click a button and pay a gas fee in BNB to enter combat.

For each successful battle, the player receives both SKILL rewards and experience points, the latter is used to level up a character. As characters level up, their overall power increases, which has the effect of increasing average rewards over time, as players are matched with stronger enemies depending on their level and weapon. Players are not awarded anything if the battle outcome is a loss.   

SKILL rewards are accumulated and only claimed when users exercise the function, with a 15% withdrawal tax that reduces by 1% daily.

Each battle uses up stamina, with a single battle costing 40 stamina. Characters start with a total of 200 stamina (sufficient to compete in 5 battles), with stamina points regenerating at a rate of 1 every 5 mins, effectively limiting the maximum number of battles a player can participate in any period.

Recent in-game developments

Characteristic of many NFT games which are continually evolving, the CryptoBlades ecosystem has seen several new features launched, with others still in development.

While players were only able to engage in single battles previously, the developers recently introduced a new feature under which players were able to engage in multiple battles with a single enemy. Players are now able to choose the amount of stamina (in multiples of 40) they want to use in a battle, with rewards and experience scaling depending on the choice.

The team also launched a new in-game skill shop where players are able to purchase Tags which have varied users, such as changing character names, weapon names, and character elements. In preparation for the future launch of PvP, the Crytoblades team also launched a new item, Shields, which can be used by characters to defend enemy attacks.

The development team is also launching a new token, DUST, which will be used primarily for reforging and upgrading weapons.

Why is Crytoblades significant?

Cryptoblades made multiple headlines over the past weeks having shot up rapidly to become the highest volume game on the Binance Smart Chain (BSC). As of 6 August, CryptoBlades had over 444.6k active users and USD16.3m of volume, based on BSC Daily data.

Crypto data platform Coingecko listed SKILL as the #3 trending coin in the US from 31 July to 6 August 2021, ranked just behind Bitcoin and Ethereum.

SKILL also saw an exponential price spike from 20-27 July, peaking at around USD184.46 per token at its all-time high, although this has corrected significantly since then.

The token’s recent price compression is closely linked with concerns about the economic sustainability and future development of the game. A closer examination of the underlying factors behind CryptoBlades’s recent exponential growth also reveals some interesting facts which have been masked behind the game’s sky-high user metrics.

Is CryptoBlades’ growth inflated?

While CryptoBlades seems to have attracted a large number of new users to the platform, and has been hyped as one of the fastest growing NFT gaming projects on BSC, it is important to note that user figures are typically measured in terms of the number of unique wallet addressed interacting with the smart contracts on the protocol.

This is critically relevant in the context of CryptoBlades as users are allowed to create multiple accounts to play the game. In essence, a single player can create an unlimited number of accounts to play the game if different wallet addresses are used to connect to the platform.

From mid to late July when the price of SKILL spiked significantly, the game mechanics were not adjusted to account for the rapid and sudden price increase in SKILL. The developers had earmarked a mechanism, termed ‘Oracle’, which would regulate rewards dynamically based on the price of SKILL.

Essentially, as the price of SKILL increases, the Oracle is meant to adjust rewards downwards, such that the dollar-value of rewards remains consistent, and vice-versa. However, the implicit price of SKILL had been set manually in practice at an artificially low price, which resulted in players being rewarded with disproportionate SKILL rewards for each victory. This has since been adjusted.

This, coupled with the ability for players to create multiple accounts to play the game, likely inflated the growth experienced by the platform in the period. Players were also rewarded 1 free SKILL for minting a new character in a new account, which further incentivized account creation.

This was a likely factor in the rapid price growth of SKILL to its ATH, as players acquired SKILL to mint characters and start new accounts, while achieving artificially high returns due to the Oracle situation. A user in the Philippines claimed to have cashed out 2 years of annual salary in 2 weeks playing the game, in a post which remains pinned to the CryptoBlades Twitter page.

Is play-to-earn sustainable?

Since early August, rewards had begun shrinking for users, with the CryptoBlades team urging for patience as the previous incentives were not realistic in the medium term. While the price of SKILL has fallen significantly, the implicit price of SKILL set in the Oracle is substantially higher, resulting in players expressing concerns about the incentive system.  

On 12 August, users on CryptoBlades began reporting issues with claiming rewards from the platform. It was confirmed by the developers that the rewards pool had effectively been depleted, with the team putting out a statement stating that they were ‘working on sorting out the reward pool’.

While players can continue playing and accumulating rewards and experience for their characters in-game, the depletion of the rewards pool has raised serious concerns about the sustainability of the game economy.

The current issues faced by the game demonstrates the challenges in building sustainable play-to-earn models for NFT game. Developers need to balance the goal of user growth and engagement with longer-term stability of the game economy.

It will be interesting to observe how CryptoBlades navigates these challenges as the development team continues to press ahead with new features and solutions.

Featured Image Credit: Level Dash

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