On-chain Analysis: Drawshop Kingdom Reverse
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Introduction
Drawshop Kingdom Reverse (DKR or Drawshop) is a Play-to-Earn (P2E) game that combines the unique utility of NFTs and DeFi all together. The 2D metaverse runs on the decentralized autonomous organization (DAO) platform of the Klaytn network. DAO enables token holders, in DRK case - JOY holders, to participate in the decision-making process of the system.
In DKR, players are tasked with building their own virtual lands using different NFTs so that they can earn JOY tokens through various Player-versus-Player (PvP) in-game activities and events. JOY tokens can then be used for purchasing other NFTs or staking in the governance pool to receive voting powers as well as a part of the revenue generated from the protocol.
Developed by a team of gaming and cryptocurrency experts from South Korea, this GameFi project has received backing from leading investment firms such as Krust Universe - who has also invested in M3TA, F3V, Presto Labs, ATTN, Sky Vision Capital, and others.Â
The game requires players to have a Klaytn network-compatible wallet, such as Kaikas, Klip, or Metamask, and to own an Avatar NFT (which will be explained further in the article).
Playing Components
Avatar
Players can use Avatar to explore and visit other players’ land. The Avatar consists of different components, including a head, body, gender, parts, and accessories. Each of these components impacts the players' skills and traits, including a decrease in drawing time, and an increase in income and movement speed, among many other things. Players can use these skills while they take part in events like PvP arena matches, festivals, and world land.
Players can breed new Avatars by paying an amount of JOY tokens if they have both male and female avatars. The offspring's traits and skills will be affected by its parents. However, keep in mind that the newly minted avatars cannot be transferred to others or roam around the World Land as they are bound to the player by a smart contract.
Land
The Word Map contains different lands that players can utilize. Each land has different rarities: normal, rare, epic, and unique which determine the size of the land and the number of avatars that can operate a store. Players can begin in Local Land that serves as a tutorial area for operating a store before obtaining a Land NFT.
Festival
There are 2 types of Festival that take place in World Map which progress 24/7:
Regular Festival: All lands in the World Map will take turns hosting Regular Festival.
Voting Festival: Players will use the sJOY token (the token users receive after staking JOY in the governance pool) to vote which Land to host the festival.
Regular Festival and Voting Festival share similar fundamentals; however, Voting Festival can take place in the same land multiple times. When participating in the Festival, players can pay a set of JOY tokens to play mini-games and earn a portion of the JOY tokens if they win. Another portion will be paid to the land owner for providing the location.
Machines & Dolls
These are two main features required to run a store. Dolls will be put in the Machines for other customers to draw them.Â
Machine
At first, the machine defaults to a 1-star level and can upgrade up to a 6-star level. The higher the level, the more revenue, durability, and probability of catching a doll the players can have.
Dolls
Dolls will give players buff if players place different dolls with the same synergistic effects. Same as machines, dolls can evolve to a higher tier which starts at the D level and max and U++ levels. Their efficiency and price in the marketplace will increase as they level up.
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Machines and Dolls cannot be minted into NFTs from the start, but the process looks like this:
When you first join the game and place Machines in your Local Land, other players who start drawing Dolls from the machine will pay with coins and popularity currencies (different from JOY).
You then use these to level up Machines, Dolls and expand your store.
You now can mint these advanced Machines and Dolls into NFT by spending some JOY tokens.
Only NFT Machines and Dolls can be displayed in the World Land (World Map) and grant you the NFT Gacha Contract. The contract enables you to have full control of the Machines: from the drawing chance of Dolls, the number of rewarded Dolls each time, to the playing cost other players have to pay before playing.
Pixel Arts
Pixel Arts are NFTs that can be used to decorate virtual stores within World Land. These NFTs often possess special effects and can be created by players who develop various Decor and Movement Objects (called ‘UCC'). For these UCC to be minted into an NFT, a player must first have their Pixel Arts listed in the ranking system through a voting process.Â
The Governance Pool and Festivals will hold periodic UCC Polling events, where the highest-quality UCC that receives the most votes will be minted into NFTs and sold through either a Dutch or English Auction on the Marketplace.
Analysis
M3TA conducted a comprehensive analysis of the game's on-chain data from its moment of launching in January to mid-November in 2022, which serves to uncover several intriguing insights.
Judging from the unique features of the DKR ecosystem, we have chosen to analyze this metaverse project on 4 main dimensions:
Users
In-game NFTs & how they perform on listed marketplaces
Comparison of different game modes
JOY token
With so much hype and noise from thousands of projects out there, the purpose of our analysis is not to speculate on the pricing movement of the JOY token or the in-game NFTs. Quite the opposite, it is to construct an informative and easy-to-understand evaluation of the project itself so that you can consciously decide for yourself where your investment should go.
Note: ‘User’ and ‘Player’ terms are used interchangeably in the analysis, although we prioritize using the term ‘User’ in User Analysis, NFT and JOY sections and ‘Player' in Game Mode section.
USER ANALYSIS
Daily Active Users: sustaining users was a tough nut to crack
DKR was launched at the start of 2022 (Figure 1), which immediately garnered significant attention. During its first month, the project registered almost 6,000 new users, reaching a peak of nearly 3,000 Daily Active Users (DAU) in March (Figure 1.1).Â
This surge in user count can be attributed to a number of factors, such as the excitement and anticipation surrounding the launch of a new GameFi project, and intense marketing efforts aimed at increasing its visibility and attracting new users.
It is typical for the launch of a new game to generate excitement and anticipation among users, leading to a high number of DAUs in the early stages as users would eagerly want to test the game out.
However, the project's level of user attraction may have decreased gradually over time. As soon as February - the month of airdropping, whitepaper release, and NFT presale - came to pass, more than half of users were observed to withdraw from the project, 3.54K Churned users out of the initial 5.42K New ones (Figure 1.2). For the following months, not a lot of those who left came back, either, as displayed in the weak support of Returned element.Â
This trend can be attributed to the initial hype that has started to wear off, causing the user base to shrink. Additionally, at the time of its release, the game still lacked substantial gaming features (DKR Metaverse was only released 7 months later), which could have resulted in users who came to play losing interest.
Users’ Geographical Location: South Korea and the UK topped the chart
Figure 1.4 presents a geographical breakdown of Drawshop's user base, which can be accurately measured through the game's web browser traffic. The analysis reveals that Korea was the leading region for Drawshop, accounting for a staggering 31.49% of total traffic. This dominance of the South Korean market is not surprising, considering the fact that the game was developed in Korea. The UK was a close runner-up, accounting for 29.79% of total traffic.
Surprisingly, we also found that Drawshop extensively spent physical marketing efforts in Southeast Asian markets such as Indonesia, the Philippines, and Thailand in late October and early November. If the aim of these efforts was to recruit users from those untapped markets, it seemed that not much conversion was reflected on-chain. The actual population distribution does not reflect any significant growth in the user number from the SEA region during the mentioned period.Â
This may indicate that there is room for further optimization and improvement in Drawshop's marketing strategies in order to effectively reach and engage with users in the SEA market.
For User Activity Heatmap metrics and insights, please follow the link to M3TA DrawShop Dashboard.
NFT
NFT Point of view: Off-chain factors drove on-chain results
FT & NFT Transaction Count
The DrawShop ecosystem was experiencing impressive growth from March to August, with a consistent 30-50K monthly token & NFT transaction count (Figure 1.3). This was a clear indication of its stability and popularity among the community.Â
However, in September, the transaction count took a sharp dive, dropping to only a quarter of the previous month's count (Figure 1.3). When combined with a specific off-chain event, we found that this sudden decline could be attributed to the suspension of the popular game event "NFT-Fi" by the end of August. The impact of this suspension continued for the next two months as the transaction count remained low.
Different NFT Types
In DKR, Avatar and Land NFTs hold significant value and utility importance for players. This is because of some key reasons:
Every player must have at least one Avatar in order to participate in the game. This requirement ensures that Avatars are constantly in high demand, making them an integral part of the DKR ecosystem.
Lands are where players can build their stores and compete for JOY tokens. Although players can also access the Local Land or visit other players’ Land to participate in mini-games, attend Festivals, and earn a moderate amount of JOY, owning Land provides players with additional opportunities for profit.
For example, they can earn JOY tokens by letting other players play Gacha games on their Land, becoming a host for a Festival or staking their Land and Avatar.
These factors could help explain why Avatar and Land account for the majority of transaction count and volume (Figure 2.3.1 & 2.3.2) among all NFT types in the DKR ecosystem.Â
The declining transaction count for Land and Avatar NFTs (Figure 2.4.1) can be a result of the mentioned decrease in the number of daily active users (Figure 1.1).
Despite this, their floor price (Figure 2.4.2) and sales/listing count ratio have remained stable (Figure 2.4.3), indicating a consistent demand for these NFTs over time. This is a significant contrast to other crypto games, where NFT prices tend to plummet drastically in a fair amount of time. The fact that Drawshop has been able to sustain its NFT prices even with a decreasing player base is concrete proof of the strong value proposition of its NFT offerings.
Additionally, the developers of DKR have played a crucial part in keeping the game's popularity intact by consistently upgrading its features and adding new content to ensure that the game remains engaging for its players. These efforts have allowed DKR to not only withstand the decline in transaction counts but also maintain a stable NFT market compared to other crypto games.
For Trading Volume, Transaction Count, NFT Floor Price and Avatar & Land Transaction metrics and insights, please follow the link to M3TA DrawShop Dashboard.
GAME MODES
DKR comprises up to 4 Game Modes: Gacha, MegaJOY, Land-Fi, and NFT-Fi. The figures below will continue to explore and evaluate their effectiveness throughout time.Â
Gacha VS. MegaJOY
Firstly, we will compare Gacha and MegaJOY, as these two modes involve the deployment of the JOY token for gameplay.Â
Gacha players can deploy their $JOY tokens to draw random in-game NFTs as well as $JOY tokens from the machine. On the other hand, MegaJoy is a lottery game where players can earn rewards, such as $JOY tokens, NFTs, and in-game items.Â
By comparing the two modes, we aim to uncover which one is more effective in terms of generating demand for the $JOY token.Â
Despite being relatively new in the market, MegaJOY has proven to be a more effective game in generating demand for JOY tokens compared to the Gacha game.Â
As shown in Figures 3.1.1 and 3.1.2, MegaJOY's performance is remarkable considering its launch date was in August, which is two months later than Gacha's launch in June.Â
The decline in monthly JOY spent for Gacha mode as seen in Figure 3.1.3, can be attributed to the decrease in Daily Active Users (DAUs). On the other hand, MegaJOY saw a significant increase in monthly JOY spent in October 2022, when it released its second version that offered higher rewards to players.Â
The chances of winning first and second prizes in MegaJOY have been increased by at least 30x, and this update proved to be a major success, with monthly JOY spent reaching a peak of 620K JOY.
Land-Fi VS. NFT-Fi
On March 11, 2022, DKR introduced its beta version of the NFT-Fi staking program. This program allowed players to earn DKR Credits by staking various types of NFTs through specific quests. These earned DKR Credits could then be used to redeem rewards such as NFTs or tickets for lucky draws featuring NFTs.Â
However, by August 25th, NFT-Fi and DKR Credits were discontinued and replaced by the new Land-Fi staking mechanism on August 28, which was introduced with the alpha version of DKR World (the Metaverse). Unlike NFT-Fi, Land-Fi only permitted players to earn rewards ($JOY) by staking their Land and Avatar NFTs.
As previously shown in Figure 2.4.1, there was a correlating surge in August NFT transaction count upon the imminent closure of NFT-Fi game mode within same month. It is possible that many players were unstaking NFTs from the NFT-Fi pool and started changing NFT hands in preparation for the following launch of the alpha version of DKR metaverse.
The beta version of NFT-Fi attracted a significantly larger number of players compared to Land-Fi in the alpha version (Figure 3.2.1 & 3.2.2). This could suggest that the NFT-Fi program was more appealing to players during the beta phase. The decrease in DAU after August in Figure 1.1, when the alpha version was released, further supports this argument.
NFT-Fi seems to have driven a higher demand for Drawshop NFT with more Land and Avatar NFTs staked (Figure 3.2.5 & 3.2.6), compared to the Land-Fi staking. It is also worth noting that at the time of analysis, there was a one-month gap between the 2 game modes' in-operation timeline, which could limit us from making a precise conclusion for this case.
Generally, the mentioned evidence suggests that the mechanism allowing DKR players to generate more in-game items (in NFT-Fi's case, NFTs & Gold Tickets to run lucky draw machines) would gain a better foothold in retaining players, rather than its native token (JOY).
For other Game Mode comparison metrics and insights, please follow the link to M3TA DrawShop Dashboard.
JOY TOKEN ON CENTRALIZED EXCHANGES
Users' wallets refer to the wallets users have connected to the DKR ecosystem in order to play.
Inflow Transaction indicates the flow of JOY going from the exchanges to users' wallets. Outflow Transaction indicates the opposite direction, the flow of JOY going from users' wallets to the exchanges. The higher Inflow Transaction Count or Volume, the higher the user demand for JOY tokens.
As reflected in Figures 5.1 & 5.2, the transaction count of JOY token transferred back to users' wallets rallied in June, August and September. The positive phenomenon could possibly attest to an increased demand for JOY tokens because of three consecutive events:
the listing of JOY on MEXC and Houbi Global in June
the release of DKR Metaverse Alpha version in August
the release of the MegaJOY v2 game in September.
Regarding the count and volume each exchange had processed ever since, it appeared that Gate.io processed a larger volume while MEXC processed a higher number of transactions (Figures 5.3 & 5.4).Â
This suggests that a typical transaction on MEXC was smaller in volume compared to Gate.io, making it the preferred exchange for retail traders. On the other hand, Gate.io seemed to be favored by larger holders of JOY.
Conclusion
Drawshop Kingdom Reverse's launch in early 2022 was met with significant attention and enthusiasm although there were signs of gradual deceleration towards the end of the evaluation period.Â
At its peak, the Drawshop ecosystem experienced impressive growth, but some off-chain adjustments in DeFi programs and features may have caused the once robust dynamics to become less bustling.
Throughout the analysis of this elaborate project, we found that the case study of DKR has proved one thing right: as you design a P2E game, you have got to know your players' taste. What kind of behavior do they exhibit? What drives them to depart on the web every day? What are their goals and priorities: profits, arts or gaming features? And then initiate gaming modes that can achieve the balance among those.
From a data-driven perspective, it is safe to say that DKR clearly accomplished the mission with the latest launch of MegaJOY v2. With such a dedicated, community-oriented operation and development team, it would be fascinating to observe the future outcome of the Drawshop Kingdom Reverse project.
Until the next dashboard!
Disclaimer
The views expressed herein are for informational purposes only and should not be considered as investment advice. They may not necessarily represent the opinions of M3TA. As every investment and trading opportunity carries risk, you should conduct your own research before making any decisions. M3TA assumes no responsibility for our users' investment activities or their profits or losses. The articles, data, and content provided by M3TA should not be relied upon for any investment-related decisions. We do not advise investing funds you cannot afford to lose.
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