3 points you have to crack to go viral on CT by Pandemic Labs
GC ALPHA 81
MARKET TALK
SPORTS.FUN LAUNCHES FUN
Last Thursday, Sports.fun (SDF) launched its FUN token. One of the first gaming (-adjacent) TGEs this year. So, let’s get into the details and mechanics of this launch
FUN used a broad CEX and DEX listing strategy that covered both Base and Solana. The token secured a Coinbase listing (CB) due to the team’s alignment with and success on the Base chain
The last time a gaming token got a CB listing (even though SDF is not only a gaming token) was in June 2024, with Pirate Nation’s PIRATE token
FUN has perps listings on OKX, Binance, Aster, and OrangeX. Perps drive much more volume than spot does
The token got listed on DEXs, including Aerodrome, Jupiter, and Raydium, among other exchanges
I assume the team wanted to tap into broader liquidity and a larger user base by bringing the token to SOL as well
In terms of floating tokens on TGE (in the hands of the community), there were three groups: Legion ICO participants and airdrop recipients from playing the game (outside any allocations to exchanges)
ICO participants invested at a $70M FDV, with 50% of the funds unlocked on the TGE. In total, the ICO bucket includes 7.5% of the total FUN allocation
A total of 25% of the token is allocated to the community bucket. 4% went to the Genesis Airdrop, with an additional 2% being distributed across the first 4 seasons (my initial airdrop is around $2,500)
To unlock additional tokens, the platform uses a retention mechanic, which incentivizes you to hold your FUN airdrop and score holder points
There are a total of 6 holder tiers, which provide benefits such as fee rebates, bonus TP, FUN incentives, and other random rewards.“Daily points = Average $FUN balance for the day ÷ Season length (in days)”
The bonus is lost if players decide to sell their FUN tokens, and is redistributed to holders, further incentivizing retention
Notably, the “FUN Rewards page” cleverly makes use of loss aversion by showing your current FUN bonus if you decide to hold
The page is also integrated into the platform itself. Usually, airdrop claims live on standalone pages. SDF’s approach is not only a better UX, but I would bet it improves holding as well
Onchain data shows how the daily deposit/withdrawal ratio went from 5.01 on the 14th to 0.23 on the 15th. I.e. players were funding their wallets (and buying players) to increase their airdrop pre-TGE, and withdrew more than deposit the day after (post-airdrop)
In terms of price performance, FUN’s listing price was at a $69M FDV (lol), it peaked at $120M, and is now trading at ~$84M. The chart is looking healthy so far, although I expected it to do better from the outset (note: selling pressure)
Now, it’s all about the team’s ability to keep improving the platform and scale to Web2 to claim their piece of the (bigger) pie
Plus, Adam has made it clear that FUN is the vocal point: “Our equity organizations are there to house ops and boring things, not value. We want to drive everything towards the token”
On the topic of token launches, I can’t recommend this article from Zak Cole enough: “The Fair Launch Handbook” for great insights, data, and rules of thumb for your TGE
TAKEAWAYS FROM PANDEMIC LABS
Pandemic Labs (PL) is an “ICM game studio” that was behind the launch of Infected and Addicted ($50M in volume and $4M in revenue). Now, the team is launching its largest title yet: Jailed.fun, in which you “Drop the soap to make money”
Tuna, one of the co-founders, describes the game as a Tamagotchi-like game, but with prisoners
Last week, we had Tuna on Sidelined to talk about Jailed, virality, (wacky) game development, and more. Here are the highlights of that conversation:
Creating Ponzi games:
“All of our tokens that we launch […] are designed to die at the end of the game […] we’re telling the truth”
“Most of the things that people enjoy playing are Ponzis, look at Axie or STEPN, they are literally Ponzis”
PL sees game development more as short-form content production. Ideas need to be viral, growth needs to be exponential, and the lifespan of the content is short. This also means the tokens they launch can catapult and die fast, so being transparent in that regard is important
Financialization is the “only” PMF crypto games have found (so far). And if we’re being honest, that’s why the first cycle did so well, before everything collapsed like a house of cards
Biggest takeaway from Addicted:
“The game only lasted for a couple of weeks. If you look at Axie, its size was 1000x bigger than Addicted. And the reason is that they lasted for almost a year”
“Our market cap hit 80M on day one, and that’s too high […] so we had to design in a way that can make sustainable and healthy growth”
For some additional context, the goal for Jailed is to last for at least 1 month
The (simple) takeaway is that short-term projects are capped when it comes to scale. Reaching a billion-dollar valuation takes time
To create a game that lasts longer than Addicted, the team would have to limit the reward output as well, which would limit (exponential) growth. So, I’d be curious to see how the team will strike that balance
Ingredients for virality:
“There are 3 points to crack to go viral. The 1st one is the concept […] you have to capture the attention within 1 second. How? It’s a one-liner. It’s like a YouTube video title”
“2nd point is the pre-launch strategy […] in the pre-launch phase, it’s 1000x easier to get attention than post-launch […] in crypto, people are always looking for alpha, people want to find you before shipping anything”
“The third part is a launch video […] In this attention economy, a launch video really works, because it makes people want to talk about your product”
I think the takeaways largely speak for themselves here, but to condense them: (1) virality starts with an idea, not necessarily the product, (2) attention is the cheapest pre-launch, and (3) a launch video is an attention multiplier
Short-form content x game development:
“I actually do study a lot of Roblox games, because those indie games, Roblox developers. They put a lot of effort into gaming ideas…”
“We came up with the idea of Jailed within 3 days after we finished Addicted. We designed the whole game mechanics, with the concepts…”
This gave some insight into how PL operates. The process is centered around the virality (controversy and stupidity) of the game idea, and then they try to build it out as quickly as possible. Akin to Roblox game development, e.g., “steal a brainrot”, and 6-8 week cycles
Overall, some great takeaways from a team with an unconventional approach to game development. Jailed’s first phase will be launching this week, and I’m curious to see how the PL will continue to innovate
ON THE RISE
Disclaimer: None of this information should be taken as financial advice. My writings only represent my personal opinions. DYOR + I will hold some of the assets mentioned in this newsletter.