Our Investment in League of Kingdoms: The Perfect Combination of Crypto and Gaming
By: Seokwon Hong
Tags: Web3, Lok, Blockchain, Hashed, League Of Kingdoms

Disclosure: Hashed has established, maintained, and enforced strict internal policies and procedures designed to identify and effectively manage conflicts of interest related to its investment activities. This content is provided for informational purposes only, and should not be relied upon as legal, business, investment, or tax advice. Furthermore, references to any securities or digital assets are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services.

<League of Kingdoms>

Today, we are excited to announce our investment in the League of Kingdoms, the first blockchain-based MMO strategy game that creates a new paradigm for web3 MMO and aims to develop into a game metaverse.

In the League of Kingdoms, gamers can enjoy building their empires and armed forces to protect their inhabitants and fight against enemies. They can also own lands, items, etc. as NFTs, and trade them on decentralized marketplaces like OpenSea. Most importantly, it baked in a delicate but intuitive play-to-earn mechanism where land-holding gamers can receive DAI rewards from the game revenue. In addition, regular gamers can monetize their tokenized resources which they have labored to gather.

What is fascinating about the League of Kingdoms is that its game model, which seems obvious now for almost all blockchain games in the space, was already conceptualized and created by the team two years ago. They have been the genuine pioneer in popularizing blockchain games since the industry’s very early days, along with other pioneers like Axie Infinity and The Sandbox, in which Hashed also invested as a seed investor.

We are truly amazed by what they have accomplished so far and will achieve. We want to touch on below four rationales why we are doubling down on them:

Gaming veterans

Organic community growth & engagement

$LOKA tokens

Gaming Veterans

The team behind the League of Kingdoms has a proven track record of developing quality games and infrastructures. The founders effectively bring and marry the two worlds together, crypto and gaming. The CEO is a serial entrepreneur with experience in consumer app services, FinTech, and Blockchain while the CTO and his development team have more than 20 years of experience in gaming from world-class studios, including but not limited to Nexon, Com2US, EA, Netmarble, Smilegates.

Besides their professional backgrounds, another competency we want to highlight is the team’s emphasis on entertainment. The team has prioritized the fundamentals of gaming as an entertainment, as reflected in their product, which effectively attracts both crypto enthusiasts and mainstream gamers. When the rise of Play-to-Earn swept the market in the summer of 2021, League of Kingdoms was well-positioned to draw in and bootstrap large numbers of gamers. The team, unfazed by the market noises, carried out their mission to build entertaining games with the unyielding belief that gaming should always be about providing an enjoyable experience before anything else. We firmly believe their view will render the project long-term sustainability and defendability against market undulations.

Organic Community Growth & Engagement

League of Kingdoms had demonstrated some remarkable outcomes this year. As one of the earliest Yield Guild Games (YGG) partners, the number of daily active users has exploded from 4,000 in July 2021 to more than 80K in December, representing impressive 20X growth in about four months. Also, the total cumulative number of app downloads now exceeds 250K.

<DAU Growth of League of Kingdoms>

We want to address another meaningful metric, the Average Revenue for Paying Users (ARPPU). ARPPU is a crucial indicator to measure how much each gamer spends on average. In the traditional gaming industry, the ARPPU of lucrative MMO strategy games is around $60; however, the ARPPU of the League of Kingdoms is a stunning $123, which is more than double the benchmark. This effectively illustrates that gamers are willing to spend more on lands and items in the form of NFTs through the League of Kingdoms’ game experience with no strings attached. We expect the number to go up even further if its governance token, $LOKA, is released to activate a more sophisticated and elaborate game economy.

Furthermore, the League of Kingdoms was able to achieve this incredible growth not only through guild collaboration but also through organic community growth. Currently, the total number of community members it manages is more than 50K across diverse channels, including Discord, Twitter, Telegram, etc., which grew three folds in the last two months since October. In addition, third-party community projects are formed and prospering around the game. Some projects like NFG or YGGLOK even minted their DAO tokens to reward the community members playing the game. League of Kingdoms has always put community first from the start. Its endemic design adequately portrays the sophistication of human society by combining social, political, and economic elements into the game contents. This led to hundreds of in-game alliances growing out of the game and developed into dynamic social graphs, mostly existing in the form of individual Discord servers. We think highly of the project’s ability to incubate these communities and their role as gateways to engage with new gamers.

$LOKA Tokens

The launch of the LOKA token will be considered an essential factor in the future growth of the League of Kingdoms. As previously mentioned, the League of Kingdoms has achieved tremendous success without its native token. Now, the game is finally preparing to take another leap by introducing the governance token in the vibrant environment of the web3 gaming industry.

We anticipate that the LOKA token will gain significant impact by 1) further growing the community, 2) giving brand new ways to reward community activities effectively, and 3) accelerating DAO transition.

Many gamers will come for fun and stay for crypto when the LOKA token is released. As we are all aware, the native token can maximize community engagement and growth in blockchain/web3 games. We expect the League of Kingdoms will diversify the audiences with its combination of powerful game contents and token model they will be unleashing soon in early 2022, in a way that had never been possible before with GameFi projects. We do not doubt that League of Kingdoms’ recent veer to community-centric economic and incentive designs with its upcoming LOKA token will catapult the project metric to the next level.

<Token Flow of $LOKA>

We saw our first glance at the token model of $LOKA as a perfect embodiment of web3 vision.

League of Kingdoms is projected to generate roughly $12M annual revenue from its in-app purchases. And the monthly revenue stream has been growing more than 60% MoM in the last two quarters without a sign of slowing down. Furthermore, marketplace fees, NFT sale proceeds, NFT upgrading costs will increase across the game platform once the slated play-to-earn NFT system around Drago launches. The DAO treasury within the game will absorb all these values and give them back to the community.

<Drago NFT>

The strong drive for DAO transition is another aspect of the paramount importance of the League of Kingdoms. We firmly believe the more authority games give to the players, the more successful they will be. In a sophisticated game like League of Kingdoms, gamers represent varied interests for their alliances. When communities can genuinely have their say and skin in the game, we expect them to exhibit more affection and endowment. These powerful gamers-turned-stakeholders will champion the League of Kingdom’s next growth phase.

Looking Forward

The blockchain game has the potential to onboard billions of people into crypto and provide unprecedented experiences for them. It is mesmerizing that blockchain games like Axie Infinity are now entirely transforming the economic patterns of people living in specific regions or countries.

League of Kingdoms skillfully harmonizes the two worlds of web3 and web2 gaming. Therefore, we are confident that the League of Kingdoms will play a significant role in bringing mass adoption of crypto and blockchain and reshaping the entire gaming industry.

And, Hashed will always be supporting them as their fan.

Co-authored by Ethan Kim, a Partner at Hashed, and Edward Hong, a Head of Growth at Hashed.