Domi Online (DOMI, Blockchain Crypto)
An undervalued MMORPG P2E Blockchain game with great management exhibiting Iconoclastic behavior
Disclaimer: I have a position in Domi Online. Below is not financial advice and I am not a qualified licensed investment advisor. All information written below is for educational and entertainment purposes only and should not be used otherwise. Do your own due diligence or consult a licensed financial advisor before making any and all investment decisions. The items discussed are of my own views, ideas and opinions. All links included are for reference only and their respective organization is responsible for their content. I am not paid or sponsored for any of the ideas discussed.
In game snapshot from April 30, 2022 Developer’s Update.
In game snapshot from March 31, 2022 Developer’s Update.
Current Diluted Market Cap: ~$40 Million
Potential Diluted Market Cap in 1-3 years: $320 Million - $8 Billion
Introduction
This company and crypto has been on my radar since December 2021, pre IDO. I have been in discussions with @Benson40806688 and have to credit him for finding this opportunity and many of the ideas discussed below. We’ve explored a handful of Play 2 Earn cryptos following my discovery of Axie Infinity. Domi online stood out as an anomaly in terms of their business strategy and backgrounds.
Thesis
From an investor standpoint, Domi Online exhibits some iconoclast behavior. It is also a ‘Bet on the Man’ type of bet. Per Fredrik Pellek Aasly, the CEO and Co-Founder of Domi Online has his own skin in the game both monetary and reputation to make this game successful. Outside of Domi Online, he is a YouTuber with almost 4 Million subscribers. He has a solid fully-doxed team that is careful in how they develop and market Domi. They've exhibited two iconoclast behaviors. First, while many projects release NFTs before their game release, Domi Online decided not to release any NFTs until after they release their game. Second, while many projects market a schematic designed game, Domi instead wants to market a working game. In doing the opposite of what many other Play 2 Earn games do, they are building a playable, sustainable, and trustworthy game not fueled by get rich quick schemes nor speculation.
They are on track to release an Alpha game by Q3 2022 based on their roadmap. We can expect within the next few months, as their marketing efforts commence to introduce this game globally, their player count will increase well into the millions.
What is Domi Online?
There’s been a handful of videos and resources that describe Domi Online; whitepaper here, website here, YouTube here, Avalanche Summit April 2022 Presentation here, twitter thread here, AMA here, discord here, their soundtracks in Discord here, Polkastarter here, and Interview published December 23, 2020 here. In short, Domi Online is a Limitless (no level cap, no skill cap) 3D Play2Earn Blockchain MMORPG similar to Runescape and World of WarCraft. I won’t describe further, and instead focus on what makes this a compelling Company to invest in.
Management
Pellek is a Norwegian singer, composer, actor, and youtuber. His YouTube channel, separate from Domi online, currently has over 3.8 Million Subscribers with over 660 Million views. He started working on Domi Online in 2019 investing more than $40k of his own capital in addition to paying people he hired to work on the project mentioned here @ 14:05. On December 15th, 2021, he brought it online into the crypto world through PolkaStarter.
From this interview in 2015 we learned that Pellek is determined and focused on the long haul. When asked if people noticed him immediately on YouTube Pellek responded,
“There are millions that try to succeed on YouTube, and it is really hard to break through. In the beginning, I had 50 videos that no one watched and I practiced 10 hours a day for 2 years to become a good singer because my voice was very normal when I first started. After two years with practice I made a new video to show what I had learned and after that it all began.”
Fast forward to today, he’s created soundtracks for games like league of legends, power rangers, and path of exile. He’s also embraced innovation by being the first person in history to release an NFT music album.
In another interview published March 19, 2021, we see that his YouTube platform “means more to [him] than money.”
“[NFTs give] me more freedom to create stuff for the people who support my NFTs instead of producing what I kind of have to do to get a certain million amount of views every month to make money on ads. It makes it so much easier for me to give more back to my NFTs holders and also makes my life so much better. I’ve been getting so much love in my community too now and *inaudible* because I'm doing so much and that comes from me just creating non-stop. Like I said, last year I did 112 Disney songs like one every day for 112 days. Very costly project because I didn’t do the music. I didn’t have time because I was singing every day and now I’m at this point where I don’t have to push out one song every day instead I can create what I want to do what I want to create. And it feels so natural too to just give back so that’s why I’ve been giving all my NFT holders all these Polka Pets and extra NFTs. All this Stuff that I’ve been doing for them. I think it shines through in that way like people can see okay so this is, it’s something that’s really cool for artists…I’m one of the first so we haven’t seen this a lot yet, but I think this is going to be the trend moving forward because I see how much it makes my life better and how I can also give more value to the people who support me with buying my NFTs and be in my community…
…I’m so extremely thankful for that too which is why I all the time try to give back to my community by doing giveaways and voice chats and all these things are like I’m trying to do all I can.”
When Pellek gains traction he likes to give back to his community and is incredibly thankful. It’s as if he is a CEO returning money to shareholders of a public company through dividends. From an Acquired Podcast, Taylor Swift does something similar with her fans when she invites her top followers to a VIP experience at her home. In positively interacting with her fans, her fan base grew into over 200 million followers today.
The team is fully doxed. There are a few notable individuals within the team, David E was a technical developer at Jagex working on Runescape who joined early on in 2021. Bret Dunham joined in 2022, and is a senior game developer who worked for games like Activision/Blizzard. There is an interesting story about how the team was brought together. At 16:00 minutes, Pellek described how the team grew. As Pellek and his small team were looking for placeholder assets they came across Enhanced Studios consisting of 30 employees. Pellek was able to convince their CEO (likely Aleksei Ovchinnikov) to work for Domi instead of creating Unity Asset store models. Just like that, Pellek hired an Art Director along with his 30 employees.
Innovation - Defi-Injection & Quadratic Governance Approach
Domi is looking to create a sustainable game through what they call “Defi-Injection.” Instead of rewarding players directly with Domi which could quickly deplete the amount of tokens available or cause a pyramid-scheme like game where the early adopters benefit the most while it becomes expensive for late adopters. Harley Swann, their COO, said Domi is looking to “set aside a large portion of funding into various dapps/projects such as TraderJoe, AAVE, Nexo.io, Curve, Launchpads, and NFT’s. The rewards earned throughout each season will be locked and cast to our community to vote on how they wish the rewards to be distributed.” In other words, DOMI could use their token and stake it into other cryptos like TraderJoe or Nexo.io to generate income. They then use that income to reward DOMI players. Thus, the majority of DOMI tokens dedicated for rewards remain untouched. This allows for a more sustainable game especially for late adopters. This concept is similar to how the Nobel Prize has been able to reward money for so long, by rewarding only the interest yield and preserving the principle.
The next concept is undergoing proposal and development. Instead of the typical 1 vote per coin ratio commonly used in Crypto Governance and public companies, Harley Swann proposed a “Quadratic approach” to community governance where each wallet is ultimately capped in votes and prevents any significant DOMI holders from a majority control over the game. “Vote distribution will allow everyone a voice, ensuring everyone feels valued and their decision/vote matters. It's important for us at Domi to recognize every player's thoughts/suggestions at all times, as a community-focused project.”
Catalyst and Tailwinds
In addition to their Innovations and in no particular order of importance, there are significant catalysts that could increase the value of the game.
1. Marketing has not begun. The company continues to quietly develop their project while the community grows. As of May 2022 they have 34,000 followers on twitter, 14,500 discord members over 3000 crypto wallets holding DOMI. They want to "market a product not a dream" unlike many other Play 2 Earn games who often market a schematic design first. Pellek initially wanted to go full stealth, but had to come out of hiding by making a website, some media pages like twitter, and a discord channel in order to hire developers as the game became more difficult to develop with a small team. The team also has undisclosed partnerships ready to market the game once it is released. In an Interview with Pellek on March 3rd, 2022, Pellek said,
“Before we talked to any investor or made a discord channel, we made sure we had a game client and a networking team and so when we went into meetings with VCs and stuff and showed them DOMI Online we already had a game…we were in stealth for many months while developing and we were going to keep it in stealth…the plan was actually to have DOMI in stealth because I always thought maybe we can have it in stealth until the game is ready almost right? But we built out the team a lot, the team is absolutely fantastic. I’m super proud of them by the way, but we needed more people. We needed more developers and we came to a point where our lead game developers said hiring people is getting hard because most people who worked on big games before and network engineers, etc. they want to join a game that has a community or that has a website. So they know they’re working for something that’s going to become a game. So that’s why we had to do it.”
Until they have their Alpha game released, marketing won't start because again, they want to "Market a product not a dream."
2. NFT Sales have not begun - Domi doesn’t want to issue any NFT’s until the game has utilization the first day it is bought. This is opposite of what many play 2 earn games such as Treeverse, Elumia, Mirandus, and Big Time have done. Before any of their games and even before their tokens are released, they would issue NFTs with no utility besides ownership rights and a promise of a game that is often a year out. Often these NFT would sell for tens of thousands of dollars. Ludicrous amounts on a speculative promise. In the same interview on March 3rd 2022 Pellek Said,
“In the same sense…we haven’t sold any NFTs yet. We keep being asked about it and with projects like these you see NFT sales pretty early on…For me, the players experience and the game’s reputation means so much to me so it’s very important to me that we don’t do any NFT sales until either the game is out or until at least we have the NFTs 100% working in the project. Then we can let people test them, we can show video plus testing, etc. We are in no rush to do any NFT sales…”
When they do issue NFTs it will have first day utility within a working game. The plan is to reinvest the NFT sales revenue back into the business towards ongoing game development. As Harley mentioned in Discord,
"Revenue will be split into various areas of Domi online, development to build the greatest MMORPG, funding towards token utility, development, marketing, upkeep, maintenance. Overall, funding goes directly to development."
Given Pellek's track record, reinvestment will be likely as Pellek's community is incredibly important to him.
3. Ease of Access to the Crypto Game - Two things will happen that will make this coin and game easily accessible to the masses. Central Exchange Listing and an ‘on-ramp’ solution within their game client. Domi Online’s coin DOMI isn’t on any central exchange (excluding gate.io). Domi hasn’t revealed which exchange they will be listed on but they mentioned they are currently in talks with central exchanges to be listed. A central exchange listing will drastically reduce the difficulty of obtaining DOMI as many users already have a central exchange account such as Coinbase or Binance.
There are currently many hoops to jump through to obtain the crypto, especially for individuals unfamiliar with crypto, crypto wallets, and blockchain. They are currently exploring an ‘on-ramp’ solution that allows, according to Harley Swann, the “...user - such as a traditional player to log into Domi Online via email/password - which then ‘generates’ them a wallet to sign on. So their login details are then secured by a wallet address (with a seed). This means that the user will ultimately create a username/password (like any game) then enjoy…the game. Any drops, NFT’s, Tokens, Cosmetics, Skin collections will be stored on that wallet address, linked with their email. Allowing them to play seamlessly without even noticing the underlying assets. If a user decides to educate, get more crypto-savvy, we can allow them to migrate assets over to their own wallet of choice giving them control…”
4. Pending Recession - Axie Infinity is a Play 2 Earn crypto which grew out of a recession and Covid19 Lockdowns in the Philippines in 2021. When many individuals were out of a job they found a way to make significant life changing money playing a crypto game. This craze lasted no more than a year, however. Reasons for the downfall could have been due to; its lack of utility, gameplay becoming focused on money making over entertainment, and expensive onboarding which required 3 NFTs costing upwards of $1000 before any gameplay. With current macro market and economic conditions we potentially have an everything bubble ready to burst anytime now which could lead to a recession. So with a recession looming and Domi Online Play 2 Earn game release coming, it is possible Domi will follow suit with Axie Infinity, with the exception that Domi's gameplay will be sustainable. This is not guaranteed but a possibility.
5. Exceptional Soundtrack - Games are often remembered along with their soundtrack, especially emulator games like Pokémon and Super Mario Brothers. Kellen Beck wrote an article on Mashable where he discusses the importance of music in a game. He wrote,
“Video games consist of three components. The first two, visuals and interactivity, form the essential core of games, but the third component, sound, and specifically music, transforms games into something beyond an activity. Music can turn games into unforgettable experiences.”
Pellek's background is in music. The team at Domi with Pellek in charge of music, are composing and curating soundtracks for the game. You can listen here in their discord channel, if you don’t have Discord, you can get a preview of them in their developer’s updates posted monthly. The latest from April 2022 is here. They are on track to create a theme song for each place within Domi Online which could easily be in the dozens per their world map found in their whitepaper.
6. An MMORPG in a social media world - Social media Platforms like Twitch and YouTube didn’t exist when MMORPG were popular. Back then, users would often refer to online guides, forums, or guide books to play and understand a game. Today, there are individuals who stream their gameplay live for entertainment, there are live action packed Esports competitions, and many youtubers provide video tutorials on how to play games. Domi isn’t set up like League of Legends nor is it like Counter Strike, both ideal for an Esports Arena. Rather, it has potential for its own live competitions. It could be a Hunger Game like gameplay that could last days as the stakes are high. If you die, you lose your hard earned gear and experience as "Domi is an unforgiving world." It will be interesting to see how individuals adapt this to social media platforms and how competition will be streamed or recorded.
We do know at the end of each season, top players will be allowed votes to determine how rewards will be distributed. This will likely be an incentive for competition, especially when large pools of money are at stake thanks to Defi-Injection.
Valuation
Using World of Warcraft, Runescape, and Axie Infinity as precedents to value Domi Online, this company if successful can be worth $320 Million-$8 Billion+.
The closest non crypto game, World of Warcraft currently has 4-5 Million monthly players. “During 2016 it was estimated that World of Warcraft has earned more than $9.23 billion in revenue since its debut in November 2004.” That is $769 Million per year.
In 2019, Runescape had over “1.1 Million subscribers while many millions more play the free version.” This was an all-time membership high and would equate to about $88 Million per year on subscriptions. It’s notable to add “The mobile version of Old School RuneScape alone had 8 Million installs in 2019. It is attracting a lot of nostalgic fans.” The game is almost 20 years old, and lifetime revenue has exceeded $1billion.
If Domi becomes a popular game, this company could be worth $1-2 Billion with at least 100 Million monthly players. In 2021 League of Legends had 150 Million registered users, and 125 Million monthly players. In 2020, they had $1.75 Billion in revenue. Roblox made over $2billion and has 200 Million monthly players. Pokémon Go made $1.92 Billion and had about 80 Million monthly players. Pokémon Go at its peak had over 200 Million active players.
The closest crypto precedent is Axie Infinity. Its peak market cap hovered over $30 Billion diluted and $9 Billion undiluted. In 2021 Axie Infinity’s daily users had a peak of 2.7 Million users in November 2021. In another article, it said the game earned close to $2.3 Billion in total sales volume since its launch in 2018. In October 2021, they “raised a $152 million Series B round at a $3 Billion valuation. This is a basic 2D click to play game, not a 3D game.
For a Bear Case, if it turns out to be another Runescape we could get close to $90 Million in one year of Cash flowing into the game.
For a Base Case, with World of Warcraft at its closest precedent, If the average spend per player is about $80 as of April 2021, and about 4-5 Million users onboard into Domi, we can anticipate $320 Million-$400 Million of Cash flowing into the game.
For a Bull Case, if Domi gains significant popularity, 100 Million+ users onboard into Domi, about $8 billion+ of cash could be flowing into the game.
Keep in mind these are only examples of successful games. If Domi isn’t successful, these valuations would be meaningless.
Conclusion
Once they gear up their marketing campaign the Defi Play 2 Earn game will gain a user following. Domi Online can develop into a powerful brand from nostalgia as both old-time players join from World of Warcraft and Runescape as well as new players from around the world. They are innovating through defi-injection and governance voting. They are creating a game that has excellent visuals, interactivity, and music. With an existing game client undergoing further development, there will be ease of access for the general public to play the game upon launch of their Alpha. With more adoption from both investors and players, the value of DOMI will increase in both crypto utility and gameplay.
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