Introduction
About a year ago I wrote the article in the link below in which I expressed how I saw this investment opportunity. One of my strategies, which has been proven successful thus far, is to invest a significant part of my portfolio in high-risk/high-reward opportunities. Getting in early and getting in big after deep due diligence is key. Furthermore, patience and a long investment horizon are equally as important. And then, in case the bet eventually turns out to be right the payoff can be very very large.
One year later I still believe $SHROOM and $GSWAP offer one of the most compelling investment opportunities in crypto today. Currently, NFTs are going mainstream and tens of millions of people are learning about this breakthrough technology. At the same time gaming is a $100bn+ global industry that has the potential to become the Trojan Horse for crypto adoption. There will be many in-game assets marketplaces and the top 5 ecosystems will most likely become billion-dollar protocols. Both $SHROOM and $GSWAP are currently trading at a mere $20M-25M market cap.
About 14 months ago the vision for an NFT gaming ecosystem was shared by the $SHROOM team. Since then, a lot has happened in the background and there has been some controversy.
In this update I’ll share my point of view on where the project stands. I will provide arguments why I believe it’s 100% legit and, why I believe there’s a reasonable probability this ecosystem will become a significant player in the NFT category and therefore has a good shot of pulling a monster run somewhere in the coming year. Especially now that the whole world is watching Metaverse plays after the Facebook to Meta rebrand.
Disclaimer: I hold both $SHROOM and $GSWAP tokens, I kept adding to my positions the past year and in recent months and this is not financial advice
Content:
1. Developments of the past year
- Rebranding announcement to NIFTYX Protocol
- Extension of DEX’s beyond Gaming into Music and Fashion
- Launching on Avalanche
- Gameswap DEX preview
- Launchpad (IDO platform) & Gameswap’s upcoming FPS Game
2. Scam, Rug, or the biggest opportunity of this bull market?
3. Price swings $SHROOM and $GSWAP driven by illiquidity
4. Expectations coming year and beyond
5. Summary
Developments of the past year
In the past year a lot has happened in the background. The team, which currently consists out of 20+ part-time and full-time members is building the protocol and its ecosystem in silence, to make sure that their competitive edge and intellectual property stays protected. I believe this is the right strategy, you can doubt the intentions of the team but what I believe it all comes down to are the core values of the project. I’ve spoken in length with Joey (founder SHROOM/NIFTYX) and other team members the past 12 months and there’s no doubt in my mind that their intentions are rock solid.
What’s important to understand is that The NIFTYX Protocol and its ecosystem are community-driven projects. $SHROOM, the meta token has not been sold to the public. Every token has been farmed following the fair launch principle which is a more fair and regulatory safe way of distributing tokens. The same goes for $GSWAP where except for a small sale to bootstrap liquidity most of the tokens came to market via a farming incentive (2nd farming round is still coming up).
Why is this important? Projects that haven’t done any seed, private and pubic sales are in absence of large fiat reserves to build the project with. Therefore they rely much heavier on their respective communities. This approach is in-line with the core values of the NIFTYX team which are illustrated in the statement below from their February update:
“We are on the verge of the great NFT Cambrian explosion. NFTs are permeating the mainstream and our vision for a global, community-driven, neutral and truly distributed protocol for gaming assets is being validated by industry pioneers and thought leaders who are starting to reach consensus that an open Metaverse like the one Shroom Protocol proposes is quite likely.”
Rebranding announcement to NIFTYX Protocol
On April 1st SHROOM announced to rebrand to NIFTYX Protocol and all hell broke loose. Expectations were set high and were not delivered on.
My take: the strategy and intentions were great (and still are), the execution however was poor.
The team’s vision:
“We started Shroom during the past DeFi Summer, our goal was clear: bootstrapping via fair launch a community of vested users who share our vision of a global, open, and neutral layer for NFT in-game assets trading.
During the months that we have been building, we have grown more and more convinced that the infrastructure that we are building for P2P in-game assets trading could be beneficial for many industries beyond gaming, and that open sourcing our work could catalyze global NFT and crypto adoption, sparking a new era on how NFTs are minted and exchanged globally.
We believe that NFTs only make sense when they are part of a global open ecosystem and standard. It’s clear that an open, neutral, and inclusive player will prevail in the long run, and from today we will move in this direction even more aggressively with the mission of promoting and enabling standardized NFT trading protocols for several industries beyond gaming.”
As said, I believe this is a strong vision and when they eventually deliver on this vision the ecosystem will probably be valued multiples more than it’s valued today.
At the same time, the community (including me) was disappointed. High expectations were set but not delivered on.
My conclusion regarding this specific part of SHROOM’s history:
Building a business isn’t easy, building a decentralized, censorship-resistant, fair-launched community-driven protocol without a significant budget is 10x harder. Every team makes mistakes, good teams reflect, pick themselves up, improve and eventually deliver. I believe this is exactly what this team is doing now.
Extension of NIFTYX’s DEX beyond Gaming into Music and Fashion
“We have grown more and more convinced that the infrastructure that we are building for P2P in-game assets trading could be beneficial for many industries beyond gaming”
The above-described vision has led the team to develop an NFT Music DEX and an NFT Fashion DEX. The underlying tech for the DEX’s is the same, therefore the barrier to develop the other 2 is low. From behind the scenes I’ve seen some interesting developments regarding the new DEX’s. The intial focus will most likely be on launching Gameswap, after that the other 2 will follow.
Gaming, Music, and Fashion are amongst the main categories where NFTs will soon make a big impact. NFT technology will redesign how users of services and owners of content interact, get rewarded, and govern their respective platforms. This can potentially lead to an explosion of value and wealth in which users and creators will be rewarded more equally for their work and contribution. It’s all part of the bigger picture that blockchain technology offers: a more open, equal, free, and inclusive world.
Below you’ll find the updated NIFTYX Protocol and DAO structure and a few screens of the Musicswap DEX.
NIFTYX Protocol and DAO Structure
Musicswap DEX screens
Launching on Avalanche
On February 13 in the platform development update, the team announced they chose Avalanche as the go-to Layer 1 protocol to build its ecosystem on.
Mind you that at that time very few were talking about Avalanche. It took a couple of months before the market found out how groundbreaking the Avalanche protocol is and many teams announced to start building on it. But it was SHROOM/NIFTYX that was one of the first with this strategy and foresight. This again to me is a sign we’re dealing with a team that knows what they are doing.
Currently, the wait is for Avalanche to finish its Subnet technology. When that’s done NIFTYX can start deploying its first DEX, the Gameswap in-game assets DEX, on Avalanche.
Finally, a nice insight I can share is that I have a direct line with credible guys at AVA Labs (Avalanche team), have fact-checked the collaboration between NIFTYX and Avalanche and can confirm this is all legit.
Gameswap DEX preview
The Gameswap DEX has been built and as said the wait is for Avalanche to finish its Subnet technology. Below you can find two Gameswap tutorial video’s on Buy/Sell orders, bidding and NFT minting
If you look closely you’ll see that the DEX interacts with the Avalanche blockchain and transactions are finalized.
Buy/Sell orders and bidding
NFT minting
Launchpad (IDO platform) & Gameswap’s upcoming FPS Game
Next to the two DEX’s the team has extended its developer capacity towards building an IDO platform (launchpad) and their own First Person Shooter Game that will exclusively work with Gameswap.
Ok, I hear you think, wait what!? First, the idea was to launch an in-game assets DEX and then they extended it to 2 other DEX’s and now they added a game and a launchpad, this must be a joke?
Well, it’s not a joke and I have to say that at first this strategy also made me doubt if they will ever launch or that they are making it too difficult for themselves.
However, after many conversations with the team, I concluded that we’re dealing with a team that has a vision for an entire ecosystem and that wants to keep its competitive edge by protecting its IP and code. Furthermore, I’ve seen enough evidence that a lot has been built in the background and many skilled professionals are building and contributing to the ecosystem.
One of these professionals is the person that’s leading the game’s development. I’ve spoken to him on several occasions and know his track record. He has a visual effects and gaming background and has been responsible for the visual effects of at least 5 top Hollywood blockbusters. I know he doesn’t want me to share who he is (yet), so I respectfully won’t but I’d say there’s a high probability that down the road this becomes public and if you do serious DD and check out the TG channel you might already find out yourself.
So why a launchpad and why an exclusive game?
The launchpad will be used to bootstrap projects that want to integrate with all 3 DEX’s, so all 3 DEX’s will get their own launchpad as part of the UI. The game that’s being developed isn’t just a regular FPS game, it’s a game with key Play 2 Earn (P2E) mechanics built in that will serve as one of the largest marketing initiatives for the Gameswap DEX. When this game gets adoption and other game developers see how Gameswap is providing value for the new P2E FPS game it will drive awareness and demand to integrate with Gameswap.
Below you’ll find a couple of sneak peeks of the in-game asset NFT weapons that are custom-built for the game. It’s clear we’re dealing with AAA game quality. Look at the level of detail, the fingerprints, and the residue on the guns. This is the level that NIFTYX is aiming for with its entire ecosystem. The three DEX’s, the launchpads, and the FPS game., All build with the highest standards to become one of the market leaders.
Good to know is that the in-game NFTs will benefit $SHROOM and $GSWAP token holders. There are no specifics yet but token holders will be able to mint these NFTs at attractive terms and can re-sell them to gamers.
Scam, Rug Pull, or one of the best Metaverse plays of this bull market?
Let me debunk the main FUD narratives that have been going around the past year. I understand that people that haven’t done significant due diligence are still not fully convinced this project is 100% legit, it’s one of the downsides of being an anonymous team.
So why stay anonymous?
Until a few months ago this was also one of the bigger question marks for me, and then it hit me. Many teams and founders that are publicly known are at risk of eventually being summoned by the SEC and/or other agencies around the globe. Especially in the case where a protocol is aiming to share transaction fees with its token holders, this basically makes it a security. A recent example of this is Hayden Adams, founder of Uniswap who got summoned by the SEC. This combined with the fact that some people just want to build and don’t want to be the public face of a large protocol had me convinced that it’s not a bad thing perse to be an anonymous team. It’s something we see happening a lot more in the space the past year. It’s true some projects don’t always act in the best interest of investors, however in this case I believe the NIFTYX team is.
Let me share with you the reasons why I believe the NIFTYX team acts in the best interest of the community and operates with a strong set of core values (like addressed in the intro of this article).
Github video
Back in April when the relaunch to NIFTYX was announced and the community went haywire I asked the founder to show me their Github repository to see for myself if the work was done and the code was there. Conclusion: it’s there, see video below
$SHROOM foundation (team) tokens
Back in September 2020, the team locked the 7M SHROOM team tokens for exactly 1 year to increase the confidence of the community. Fast forward 1 year later and those tokens have been unlocked and most still are untouched. Only 1M out of the 7M tokens have been used to fund development and if the team would have wanted to bail on the community (Rug Pull) they would have done it by now.
See Etherscan link below, 5.8M SHROOM team reserves still there:
https://etherscan.io/token/0xed0439eacf4c4965ae4613d77a5c2efe10e5f183?a=0xa4fc358455febe425536fd1878be67ffdbdec59a
Gameswap DEX Previews
Earlier in this article, I showed the Gameswap DEX previews. The NFTs that are minted in the 2nd video are minted on the Avalanche blockchain. See the visual and link below to see for yourself. The fact that these are really minted on the blockchain shows the technical capabilities of the team. These guys are not messing around.
Qualitative proofs
To top it all of let me sum up and share some of my own experiences regarding communications with the team and others that are connected to them.
The Avalanche (technical and business development) teams are working closely together with the NIFTYX team to have them launch on an Avalanche Subnet. This has been confirmed many times.
I’ve been in contact with a Hollywood Visual Effects professional that has a gaming background and that’s leading the FPS game for the Gamewap launch. He has been leading VFX for some of Hollywood’s biggest blockbusters.
And finally, in my own experience talking with NIFTYX’s founder, I’ve spoken hours and hours with him, tested his point of view, his strategies, and his ethics. To me, it’s clear what his intentions are.
All in all, this makes me confident that the interest of the team and investors are aligned and the team will do what it can to deliver on the technology. There are always risks involved, perhaps the team is too ambitious or a potential crypto winter can make it hard for the team to manage costs. However, these are all general risks that apply to many projects. This is the game of investing in early-stage high-risk/high-reward projects, do your own research, your own due diligence, think hard and make your investment decision. As you can tell from this article, I went deep on my DD and that’s why I kept accumulating and this investment eventually became one of my biggest bets in this space.
Price swings $SHROOM and $GSWAP driven by illiquidity Uniswap liquidity pools
Something to be aware of is that $SHROOM and $GSWAP currently have very low liquidity. 95% of the volume comes from Uniswap and only a few percent of the SHROOM and GSWAP circulating supply is in the liquidity pools of Uniswap. As a consequence both tokens are highly volatile, it’s simply impossible to accumulate or sell large amounts of SHROOM and GSWAP without heavily impacting price. So know that the reason why both tokens show large price swings, is due to its illiquidity.
On the other hand, this is also a sign that current investors are holding on strong to their tokens and are not willing to sacrifice them for the LP incentive in expectation of higher prices.
The team is aware of this dynamic and there’s a clear strategy on how to solve this. This solution will only come when the team decides to put on the marketing engine, launch the product, show what they’ve been working on and publish updates. Only then will they make sure that there are enough ways to buy both tokens and they’ll make sure there’s enough liquidity to do so.
One of the most obvious solutions is to create incentives and liquidity pools within the Avalanche ecosystem. Furthermore, down the road, I also expect several CEX listings, but this may take a while.
Expectations coming year and beyond
So what’s going to happen in the coming year? Does it really matter? We’re in it for the long run right? For me that’s definitely the case, however, it’s always nice to see some return and progress in the short- to midterm.
On the macro side, my base case is that there’s a reasonable probability (>60%) that this is the crypto SuperCycle, meaning we’ll see a sustained bull run with occasional multiple months corrections for at least the coming 12 to 24 months. At the same time, there’s a major trend called “The Metaverse” going on. Yes, a lot of us already saw this coming and this was part of our investment thesis to invest in $SHROOM and $GSWAP in the first place. However, after Facebook’s HQ’s most recent rebrand to “Meta” and focus on the Metaverse the awareness of the Metaverse narrative has exploded.
I believe this is something not to be underestimated. There’s a wall of money waiting to enter crypto and slowly that wall of money will trickle down to the higher Beta investments like Metaverse plays. After the first products have launched and liquidity has improved it’s not unrealistic these flows will also benefit $SHROOM and $GSWAP.
Then looking at the NIFTYX $SHROOM and $GSWAP ecosystem specifically. As discussed the team has been developing the products in silence with the objective to keep its competitive edge and protect its IP. I believe within a couple of months this is going to change and multiple products will be launched (in beta). Most likely before the end of this year, the team will start sharing updates on where they are, when product launches will happen, which collaborations are coming up, and what the roadmap looks like.
Another interesting point of view is the idea that NFT protocols will decouple from the crypto cycle altogether and that the ones gaining adoption and creating value through transaction fees will still accrue value and increase their market cap, even when crypto goes through a potential crypto winter (bear market). The jury is still out on this one, but I can imagine something like that could become reality. In the previous bear market there were also a few assets that kept on going, Chainlink is an example that comes to mind.
All in all, I expect $SHROOM and $GSWAP to do very well, I believe this is the inflection point and that in 3–6 months both assets could be multiples higher than where they are today. And above all, I expect that both will outperform many other assets, even many assets within the Metaverse category. I have this point of view due to the fact that both assets have been developing under the radar for such a long time and in my view are significantly undervalued when compared to other competitive plays. Some are 10x till 80x higher than these two, which illustrates the potential when products get launched.
Summary
The objective of this article was to share my thoughts on the NIFTYX protocol assets. Since I’ve had a strong focus on this investment, I’ve done a significant amount of due diligence. Furthermore, since all eyes are now on Metaverse plays it was time to level the playing field, debunk misinformation and present the facts.
I hope it’s clear to most of you why the team has chosen to stay anonymous, why to build in silence, how large this ecosystem can potentially become, that the FUD surrounding NIFTYX is mostly nonsense which I debunked with the proofs in this article and last but not least how compelling this investment opportunity actually is.
NFTs have the potential to become a trillion-dollar category over the coming decades. Next to digital art, gaming, fashion and, music will be large subsegments within the NFT category. Gaming alone is a $100bn+ global industry and the top in-game assets protocols will most likely accrue $billions in market cap. NIFTYX is developing products at a high standard and is going to cover all three subcategories. The sky’s truly the limit.
As said in the first article, which I wrote almost a year ago and which is still true till this day: I’m not being paid for this, this is just my point of view, which I truly believe in and am happy to share with others because I want us all to maximize this bull run.
Disclaimer: Please do your own research, this is not investment advice, there are still lots of risks involved. Make your own investment decisions.
NIFTYX / SHROOM / GSWAP Medium articles:
https://niftyx.medium.com/
CoinGecko overview
SHROOM: https://www.coingecko.com/en/coins/shroom-finance
GSWAP: https://www.coingecko.com/en/coins/gameswap
Telegram:
https://t.me/niftyxprotocol
