Lessons Learned & Revised Vision

In 2024, Pixels experienced rapid growth, becoming the top web3 title by daily active users and generating $20 million in revenue. However, we also faced significant challenges:

• Token Inflation: Excessive token emissions led to inflationary pressures.

• Sell Pressure: Many players were extracting value without meaningful reinvestment or contribution back to the ecosystem, negatively impacting the token economy.

• Mis-targeted Rewards: Our reward distribution lacked precision, often rewarding short-term engagement rather than sustainable value creation.

Recognizing these issues, we’ve pivoted strategically toward smarter, data-driven incentives designed to improve our ecosystem's fundamental economics. Key changes include:

• Data-Backed Incentives: Leveraging advanced analytics to precisely target rewards, ensuring tokens flow to users most likely to reinvest and support the ecosystem long-term.

• Liquidity Fees: Implementing heavier withdrawal fees for $PIXEL to discourage extraction and to redistribute fees back to stakers.

• A New Publishing Model: Rolling out a phased, stake-to-vote-and-earn system where players directly influence and benefit from the success of individual games.

Our revised vision extends beyond optimizing a single game - it’s about creating a robust, decentralized growth platform and prioritizing an ecosystem. Pixels is building what we envision as a decentralized AppsFlyer or Applovin for both Web3 and Web2 games, driven by our North-Star metric, RORS. By systematically improving RORS, we ensure every token spent generates sustainable, measurable returns.

In practice, for the ecosystem this means:

• Prioritizing high-quality DAU over mere quantity, focusing on engaged players who genuinely support the ecosystem

• Introducing $vPIXEL, an ERC-20c spend-only token, allowing seamless transactions across partner games without additional fees.

• Reinforcing growth-focused incentives such as referrals and content creation.

And more specifically for Core Pixels this means:

• Gating core features and earnings behind VIP structures to encourage deeper engagement and spending.

• Enhancing core game loops and reintroducing popular social and casual mechanics that initially propelled Pixels’ growth.

• Automatically staking in-game balances of active users, boosted by holding our Farm Land NFT.

These strategic shifts may temporarily affect our user metrics, but they lay the foundation for a fundamentally healthier and more sustainable $PIXEL ecosystem. Our long-term goal remains clear: to build the definitive, decentralized user acquisition and reward platform that empowers both Web3 and Web2 gaming economies.