Disclaimer: this proposal is only the initial draft for community discussion. The analysis below is only based on the last 15days of data.
Blockchain gaming and metaverses, in particular, are an ambitious category of the crypto ecosystem in general and within ethereum. The combination of virtual reality and crypto, where ownership inside the virtual world is retained by users is a match made in heaven. By some, this is considered to be the natural evolution of MMORPGs and more generally social games, especially in the intersection of e-sports, online betting, and the ownership economy.
Take into consideration these data points:
- +$55 million on metaverse digital land / in-game items to date.
- +$150 million in total NFT sales volume. (digital land / in-game items accounts for 1/3)
- Atari planning to launch the VCS console a blockchain-enabled console. (link)
At this point in time, there are no clear winners just yet, as a matter of fact, a diversified allocation to get broad exposure to the blockchain gaming industry would be extremely compelling.
The draft composition for PLAY includes some of the most relevant projects in the segment, including metaverses and infrastructure like L2 solutions which enable this new generation of games possible. Following a brief description, to be expanded if the proposal gets momentum.
3 - $SAND from @TheSandboxGame: It’s a sandbox virtual world Minecraft-style. They have a Game Maker that anybody can use to build their own game on top of their land with pretty quests, grades, equipment and combat.
4 - $GAME from @gamecredits: It’s an old project which did not gain much traction in the past, however most recently the project has been acquired and pivoted to a e-sport platform powered by MATIC for the ownership economy.
8 - ENJ from Enjin: Enjin is all-in-one blockchain game development platform comprised of the Trusted Cloud, Blockchain SDKs, Platform API, and the Wallet Daemon.
Here some additional details on the proposed index allocation, as you may find in full on the spreadsheet
The current max allocation proposed (cap) is 20%, computed using the 30 average market cap, with weights capped at 20%.
The 20% cap provides good scalability to the Pie until the $40M range, an even higher cap could be considered, see the stress test below.
Good news from a risk perspective as the risk analysis presents a very-low cross-correlation between assets which overall minimizes the portfolio risk, not very common on crypto (yaay!).
Below a visualization of the % risk contribution for each asset of the index, compared to their % allocation.
The entire portfolio in the (very-short) back-tested period shows low standard deviation, high Sharpe ratio, and returns. A must-have for crypto exposure.
Specifications are easy, no specific strategy has currently being envisioned for the pie.
Strategies: None for now