Around a month ago I posted a blog on why I purchased a GALA games node.
To recap, GALA games aims to be a fully decentralised gaming platform where node operators are responsible for maintaining the server and governing the platform. In return node operators may receive rewards such as the GALA cryptocurrency or NFTs (non fungible tokens) for games that will be launched on the platform.
A lot has happened in the GALA world since my last blog so I thought it would be appropriate to provide an update here. However, I do suggest you take a look at my previous blog for a better understanding of this article.
Games
GALA announced that they will be adding another game to their platform called Fortified - a tower defence game. No release date has been given but hearsay is Q2 2021.
Mirandus continues to create great excitement and a snippet of what the game will look like has been released, you can check out the video here. There is still no concrete date for beta or alpha testing, but given the magnitude of what GALA is trying to create here, I think we can expect most of 2021 to be game development stage.
Townstar is the only active game on the platform and continues to attracts a large number of players, with even weekly cash prizes (in the form of GALA) for the top 100 players.
Furthermore it was announced at GALACON that several other games are already in the pipeline.
My financial returns on my node to date
As previously stated, I purchased my node for just over $4k, well $4,238 to be precise. My purchase was made on 12th February 2021. Since that date, I have earned 38,575 GALA for operating my GALA node every day for 6 hours (this is the sole requirement in order to earn GALA). GALA is currently trading on bitrue at just over $0.03, so this equates to approx $1,157. In addition, I have also earned just over 20k GALA for two referrals (which includes the x10 one off reward and the 0.1 perpetual). This adds a further $600, bringing my total returns as at 9th March to $1,757 (or 41% of my initial investment).
Today I received 1176 GALA for operating my node which equates to around $35.
At this daily rate my node would be paid back in 70 days from now ($4,238 less $1,757/$35).
However, the daily rewards will drop because more and more people are joining the GALA node eco system each day, thus diluting the daily reward attributable to node holders. Nevertheless, with these calculations and some assumptions on the near future GALA rewards, I expect to fully recover my investment within the next 3 months, subject to the GALA to USD price.
So in conclusion, a payback period of 4 months is pretty good going if you ask me. This excludes the additional benefits of future GALA , NFT drops and the potential to sell the node in the future.
Should I buy a node now?
The price of a GALA node has shot up to around $7,600. To refresh your memory, the price increases by $100 for every 100 node sales. The 50,000th node (there will only ever be 50,000 of these founder nodes available) will be sold for $33,000.
The daily GALA rewards (as at 9th March) for operating 1 node with no referrals is 980 GALA/$30. At this daily reward rate, it would take 253 days to repay the node ($7,600/$30) However, with around 100 -150 node sales each day we can categorically say that this daily amount will drop. I would not be surprised whether it would now take at least 1 year to repay the node.
Currently 8.5m GALA is distributed to node holders each day and this will half to 4.2m GALA in July 21 thus further adding to the erosion of the daily rewards.
Therefore, whilst I hate to admit it, the increased node cost has really dented the guaranteed return on investment here.
Nevertheless, there are still other aspects we need to consider;
This payback period is on the assumption of the price of GALA remaining at $0.03. There is an argument that as more nodes join the system and more games are added, the price of GALA should rise (remember GALA will be the in bridge currency for all games developed on the platform).
The above does not include the possibility of NFT airdrops to node holders, which can be sold on an open market place such as opensea. GALA have already made it clear that node holders will be eligible to receive NFTS for all games that are being launched on the platform.
Once the entire 50,000 founder nodes have been sold, the nodes will be converted into NFTs meaning they can be sold. The price of a node will obviously be driven by supply and demand dynamics. However, if you were to purchase a node now, and assuming all 50,000 nodes are sold, you would be in the first 25,000 node holders, meaning the remaining 25,000 people would be purchasing their node at a higher price than you.
There could be further financial benefits of operating a founder node such as revenue driven from in game advertising, or earning a fee for processing transactions on the network. This is my own highly speculative point of view and should not be taken as guaranteed.
The node should not be considered an investment?
This next topic is probably a little contentious and may not be welcomed by some, but I believe that both the good and bad of a project should be discussed.
When I acquired my node I saw it as an investment, and still consider it an investment today. However if you join any of the GALA discord chats you will notice a lot of people saying that the node should not be considered an investment (including the GALA team), and more a way of supporting the GALA eco system. Even the founder of GALA games, Eric Schiermeyer, has explicitly stated that they are more concerned about developing a decentralised gaming platform than generating return on investments.
In my opinion, I am sure the majority of people (me included) have purchased their node because of the financial benefits mentioned above, and not just to “support what GALA is trying to achieve”. It is hard to believe that if there were no GALA rewards, or NFT drops, people would fork out thousands of dollars, and potentially tens of thousands of dollar just to “help a gaming platform”. I expect some people will argue that they did in fact purchase the node merely to support the system and I appreciate that, but I believe they will be in the minority.
Having said this, I am aware of the regulatory lens that people within the community might be looking through here. If the nodes are considered investments, they could be seen as in investment in GALA itself, which could then raise the debate that it is the sale of a security. For any of you who are familiar with the recent ripple and SEC lawsuit, then you will know what I am getting at. For those who are less informed, if an entity sells a security to the general public, it should register with the regulatory body (E.G the Securities Exchange Commissioner in the USA) that it plans to sell such securities. Failure to do this can have severe consequences.
In light of the common interpretation that the node is an investment, the GALA team have recently introduced a 7 day no questions asked refund policy. Therefore if someone purchases a node under the assumption that it is an investment (or for any other reason), they can request a refund and walk away.
Whilst I do not think this refund policy will get rid of the “elephant in the room” here, I do appreciate what the GALA team have done, effectively giving node holders a chance to get out unscathed if they are not comfortable with the long term vision of the GALA community.
Binance Smart Chain and Flare Networks integration
The GALA platform is run on an ERC-20 token which is run on the Ethereum platform. One problem the GALA community is facing is the high gas fees (gas fees are the amount paid to miners for confirming transactions on the Ethereum network). For example, last week I wanted to purchase an NFT for the upcoming Mirandus game. The cost of the NFT was around $40, but the gas fee was $9. I am sure you will agree that paying $9 in transaction fees for a $40 purchase is simply absurd. Consequently, the GALA team recently announced integration with the BINANCE Smart Chain and Flare networks. Both should result in minimal/barely non existent transaction fees.
Final thoughts
I am still incredibly confident in the future of the GALA platforms and really do think this decentralised concept with the ability to own your in game assets is a revolutionary change in the gaming world. However, this step into unchartered seas is by default, a risky one. What's more the “fixed” risk of purchasing a node today is a lot higher than when I purchased mine. This risk will continue to increase as the cost of a node will rise and the daily rewards will fall. Nevertheless, if you are a firm believer in the long term future of GALA, or a hard core believer in decentralised gaming, or whether you simply want to help the eco system, then you can sign up using my link here.
I am now offering 75% of the referral fee (paid in GALA) to anyone who purchases a node using my referral code. This is worth around $225. For the skeptics out there thinking “why is this guy so nice”, I will retain 25% (so $75) and I also receive a small additional daily reward perpetually, so I too will benefit. Note the daily reward that I receive will not affect your daily reward.
but PLEASE PLEASE PLEASE do your own your research before purchasing a node, this is a large sum of money and your capital is at risk.
In order to receive your 75% cut of the referral reward, please send me your GALA username on twitter (handle chris_crypto1).
