Gameflip, a company founded in 2014, has completed their pre-sale and is gearing up for their ICO on December 4. The sale will run until January 29 and offers bonuses of up to 20 percent during the first two weeks of the sale.
Gameflip currently operates a marketplace for in-game items (weapon skins, etc.), Steam keys, and other video game related merchandise. The company now wants to set up an Ethereum powered, blockchain secured marketplace for the exchange of in-game digital items. According to its website, the platform currently supports popular games like Dota 2 and Counter Strike GO, among a dozen or so others.
The company states in their whitepaper that currently there are a large number of problems encountered when trying to trade digital assets. There are issues relating to fraud, gamers inability to move in-game items to other players, and platform restrictions preventing players from exchanging items for cash (only store credit, in the case of Steam). Gameflip claims that their blockchain secured platform will resolve all of these issues, and create a new multi-billion dollar post-sale video game market.
Utilizing the Ethereum network and the ERC-20 standard, Gameflip will create a total of 100 million FLIP tokens that will be used to facilitate transactions between buyers and sellers of digital items. Of those tokens, they will be distributed as follows:
- 43.2 million to be sold during the ICO,
- 40 million reserved for what they call “network growth” and to “incentivize developers,”
- 16.8 million to be kept by Gameflip and its partner companies.
Gameflip states that during the ICO, the base value of one FLIP token will be 0.005 ETH (about $1.50 or so at press time) and that 1 ETH will be worth 200 FLIP. The company had a pre-sale event which has already concluded, in which early buyers were awarded up to 340 FLIP per ETH. For the ICO, only funds in ETH will be accepted.
The whitepaper does not go into much detail on what the 40 percent of the total FLIP tokens that are set aside for network growth are for. Some passages imply that they will simply be given out to developers in exchange for participating in the network, i.e., coding their games so that they are compatible with Gameflip. Other passages imply that the tokens are to be held in an escrow of sorts so that they do not impact market values of the FLIP that are available from the ICO onwards.
Another section of the white papers explains that each time a buyer and seller make a transaction, the developer of the game that the asset came from will be paid a commission. The paper does not detail what percentage such a commission represents, and it’s possible this could be variable depending on the contract set up between Gameflip and the developer.
An upcoming augmented reality mobile game called Reality Clash, self-described as “Pokemon GO with guns,” had an ICO three months ago for its own in-game currency. The idea behind the project is that players can earn in-game items through gameplay, and then sell and exchange them with other players, sometimes to earn a profit. The ICO was arguably successful, pulling in close to $3 million before the game has even launched.
Some game critics, however, have been very harsh on the concept. Famous, outspoken games critic Jim Sterling called the idea pre-ordering microtransactions. And while critics like Sterling may have valid objections against the concept, it’s clear that enough people are interested in the idea of participating in a platform that is themed around the exchange of digital items for cryptocurrency.
Source: Reality Clash
At this point, we still have a number of unanswered questions about the platform. Specifically, we do not know much in the way of specifics regarding the 40 percent of tokens reserved for network growth. We also don’t know how much of a cut game developers will get, or expect, when participating in the platform.
Finally, we, of course, do not know what the community will accept as a value for these FLIP tokens. There is also nothing stopping another developer from creating a similar platform that instead of using proprietary currency, uses a standard cryptocurrency such as litecoin or ether to transact.
As Gameflip is already an established company and is well known among those looking to trade in digital in-game assets, it’s safe to say that their new platform will see some adoption. What we don’t know, is if gamers at large will show enough interest in the platform at large to see it succeed massively.
With 100 million tokens in the wild, and valuing them at around $1.50 each, that constitutes a nearly $150 million market cap. For those interested in the platform, it may make more sense to wait until the ICO is finished to see how the market at large values the tokens.