Crypto Games Keep Shutting Down. This $500K Fund Aims to Help Players Recover

Blockchain games are shutting down in droves so far this year, as hype and funding fade and crypto investors turn their attention elsewhere. But one long-running crypto game hopes to draw some of those players affected by shutdowns by offering free NFT assets for affected users.

Crypto trading card game Splinterlands is inviting the players of failed blockchain games to apply to its newly formed recovery fund, in which $500,000 worth of crypto tokens and in-game assets can be unlocked over the next seven years.

The project told Decrypt that it is currently in talks with other projects based on the Hive blockchain to allocate assets to the fund—and invites the broader industry to join in to save crypto gaming by giving burned users a bridge to new games.

Currently, only the players of the defunct crypto titles Pirate Nation, Tokyo Beast, and Walking Dead: Empires can access the Crypto Gaming Recovery Fund. Affected players must create a Splinterlands account, purchase a $10 item (which provides in-game credits of the same value), and submit their wallet address containing items from eligible games—which they get to keep.

Then they can start gradually unlocking assets over the next seven years from the $500,000 fund. The assets are released as long as the player remains active on Splinterlands, which is measured by a series of monthly challenges—such as playing five battles.

“I welcome any of our competitors who would want to be a part of this to come and join. Why would they want to? Because they want to see the space grow,” Dave McCoy, Chief Operating Officer at Splinterlands, told Decrypt. “We are just the first, but hopefully we have many other people join us.”

An epidemic of crypto games shutting down has struck the industry this year, with countless notable projects closing shop. That includes Deadrop, Ember Sword, Nyan Heroes, Realms of Alurya, Symbiogenesis, Raini: The Lords of Light, and MetalCore—just to name a few. 

While all of these games have cited slightly different reasons behind their crashouts, one thing they all have in common is that they leave behind a player base with no game to play. And many of those players sunk cash into supporting the project, and are left with tokenized assets that no longer have utility.

“I’ve been in hundreds of communities over the years. […] When a project gets rugged, it’s a horrible feeling. Especially when you have high hopes for it,” Blaze, Splinterlands’ pseudonymous sales and marketing lead, told Decrypt. “We just put our foot down and said: Hey, enough is enough. Somebody has got to step up here and help these people who are getting crippled.”

The Crypto Gaming Recovery Fund is governed by a decentralized autonomous organization, or DAO, that votes on which games will be eligible for the fund. Each supported game has a specific portion of the fund that is allocated to it, although Splinterlands did not confirm the exact division per game.

In the first year, 2 million SPS tokens worth over $16,000—plus 5,000 Rebellion packs—are allocated to the fund. This scales up to 10 million SPS (currently about $82,000) and 25,000 packs by the seventh year. Rewards are then divided among the number of players that were active, meaning if only one person is active within a specific pot, then they will get everything, McCoy said.

“The design is for seven years, because we’ve been around for seven years,” McCoy explained. “So the point we’re trying to make is we’re going to be around seven more years, as well.”

Splinterlands is a strategic trading card game with NFT cards minted and tradeable on the Hive blockchain. It originally launched in 2018 as Steem Monsters—based on the Steem crypto social network—but was rebranded to Splinterlands in 2019 and has been steadily building ever since.

The game’s SPS governance token first debuted in July 2021 and quickly reached its peak of $1.07, according to CoinGecko. The token is now down 99%, however, valued at $0.008. 

McCoy told Decrypt through the game’s lifespan, it has battled its way through “everything” that a crypto game can face. He explained that “it’s not easy to manage,” and suggested that other games haven’t survived so long because of unsustainable game models—with Blaze pointing to Pirate Nation’s $150,000 per month expenses. 

Unfortunately, to McCoy, the wave of crypto game shutdowns is a necessary purge of the industry. But he hopes that the Crypto Gaming Recovery Fund is the first step to building the industry back up, potentially with more contributors alongside.

“Again, this isn’t about Splinterlands. This is about the whole industry,” McCoy told Decrypt. “If [any game] wants to be part of it, if they want to contribute, we would love to have them.”