What is Initial Game Offering (IGO)?
Initial Game Offering (IGO) is a new business model that has emerged with the rise of Non-Fungible tokens (NFTs) and the blockchain-based gaming industry. Basically, IGO is a method for these gaming projects to raise funds in its early development phase in a similar vein to Initial Coin Offering (ICO). For now, let’s get into the details.
Table of contents
What is it all about?
What is a Token? What is a metaverse token?
What is the metaverse tokens value?
Some examples of metaverse tokens
Sandbox
Decentranland
How are tokens created?
Closing thoughts
What is it all about?
The IGO embraces the crowdfunding model and applies it from the perspective of the blockchain gaming industry. Basically, IGO is alternative finance for gaming projects that are based on NFTs or tokens as their in-game currency and rewards. This process helps game developers raise funds for their projects while giving IGO participants early access to the in-game assets. Depending on the project, participants can gain early access to the game’s tokens or NFTs or some other special features such as discounts, free services, or early access to content once the project goes live.
Thus, IGO allows projects to raise funds in order to go live and be fully operational, while early participants put in their funds anticipating a significant return once that gaming project is launched.
What is the difference with ICO?
The main difference separating the two is an investment. Initial Coin Offering (ICO) is used as a fundraising mechanism that allows companies to raise funds for a project in the cryptocurrency space. In contrast, IGOs are intended purely for the gaming industry incorporating the play-to-earn business model. The core idea of this model relies on an open economy where players are rewarded in the form of tokens and NFTs for bringing value to the gaming metaverse. In this case, you are investing in a blockchain game. Thus, assets offered by IGOs most usually consist of mystery boxes, characters, skins, accessories, weapons, and other items that come in the form of NFTs for in-game purposes.
How does IGO work?
IGOs are usually organized through launchpad platforms. Different launchpads have different configurations for an IGO, but it usually requires participants to purchase the launchpad platform’s native token in order to participate.
Participation requires you to lock the native tokens in the pool. In fact, once participants have got the required tokens, typically they need to lock them in a pool for a certain period. Depending on the allocation algorithm, participants will then receive the project’s token or NFTs based on the amount of tokens locked. In some cases, participants are required to hold or stake the purchased gaming token or NFTs for some period of time before it can be traded in the market. In other cases, the pursued tokens could be used to control the blockchain game’s governance.
Initial Game Offerings generally have a whitepaper that explains the business plan, the technology, and how tokens will be distributed after the IGO is complete.
IGO launchpad platforms
There are currently a variety of IGO launchpads available on the market. Here's a look at several IGO launchpads that have surfaced.
GameFi
The GameFi ecosystem includes 5 major pillars including an IGO launchpad for game projects allowing participants to get first access to game assets and engage with the gamers in the GameFi community. GameFi collaborates closely with Icetea Labs, DAO Maker, Animoca Brands, and other reputable partners to grow and diversify the GameFi game community.
GameFi offers different Pools to the participants. Each pool has a different slot value. In order to become eligible for participating in IGOs, users need to stake $GAFI (platform’s native token) into the GameFi staking pool to acquire any of the platform tiers. In the GameFi ecosystem, investors are categorized into four tiers namely Legend, Pro, Elite, and Rookie. Each level requires a different amount of $GAFI token to stake and offers different facilities and benefits. Indeed, the projects use a tier/ ranking system to categorize their investors.
You can take a look at the list of projects and information about IGO pools in the Token Sales section on their official website.
Seedify.fund
Seedify is a decentralized blockchain gaming incubator and launchpad. It uses a decentralized autonomous organization (DAO) to govern its ecosystem and regulate community organization.
In order to participate in the IGOs, users need to stake SFUND (platform’s native token). Seedify has a 9 tier system where the more SFUND you have, the higher sizes of tokens you get from IGO. Each tier has a different pool weight.
Enjinstarter
Enjinstarter is another IGO launchpad for blockchain-based games and metaverse-related projects. The launchpad also facilitates other ways of raising capital. It is built on Enjin's Jumpnet, gas-free Jumpnet blockchain.
What should you be aware of when investing in IGO?
Before investing in IGO you should be aware that there is no 100% guarantee that IGOs will give a profitable return. So, it is mandatory to take your time and do your own research regarding the project you are interested in.
The choice of the launchpad is very important. For instance, you should pay attention to the allocation algorithm: whether the IGO launchpad is providing guaranteed allocation or using a lottery mechanism.
Consider the planning process for the project. You must check the project's development roadmap, its whitepaper, eventually, the partners backing the project, and the community involvement. The large community behind the project means there is enough interest and it has a robust user base.
Closing thoughts
IGOs represent an innovative approach for game developers to raise further funding for their projects by leveraging blockchain technology. Although IGOs can be a good way for participants to support early-stage game projects, and make benefits. However, anyone interested in investing should always do their due diligence before committing.