Shrapnel thesis by Slowmad

Published: November 2023

In the 2021 bull market, two GameFi projects stood out above the rest: Axie Infinity and DeFi Kingdoms (DFK).

I missed the Axie Infinity train but got into DFK early when JEWEL was trading at $1.20.

People often tell me they wish they also got into DFK early... but the truth is they're only saying this with the benefit of hindsight.

In reality, it was scary to bet on such a new and unproven project back then... which was why most people didn't.

slowmad enters dfk

I had early conviction in DFK because I'd been an avid gamer all my life and understand the subtleties of game design and gamer psychology. This allowed me to see things about DFK the average crypto investor didn't, and gave me the confidence to bet big when others hesitated.

Today, I'm getting a similar vibe with Shrapnel. I think it's an underrated project that people do not yet sufficiently appreciate.

To understand why, let me start from the beginning.

📜 Read the whitepaper

Before we get started, make sure you've read the Shrapnel whitepaper to get a sense of the project. Otherwise, much of what I say might be confusing to you.

🦖 Prior cycle failures

In the aftermath of the 2021 GameFi bubble, we learned two things:

  • The play-to-earn model isn't sustainable
  • None of the games launched back then were actually fun (most people joined only for the farming yields/gains and left once both were gone)

The industry has since evolved for the better and investors have become less naïve.

In the coming cycle, the projects that do well will be those with players that participate primarily for its own sake (i.e. fun) rather than as a means to earn money.

This may seem like common sense but I can assure you... this view was anything but common two years ago.

So with this in mind, what game genre is the most fun and engaging?

We turn to to find out.

📺 recommends

Twitch is the largest game streaming platform on the internet. It provides real-time data on the most popular games being played right now.

Among the 10 most popular games today, 7 are PvP shooters with 5 of them being of the first-person variety.

twitch tv shooters

This is one reason why I'm more bullish on Shrapnel than other GameFi projects - it's one of the few first-person shooter (FPS) games in web3 and the only one of AAA title quality.

So far, there are no comparable alternatives in this segment. Shrapnel has the first-mover advantage that can conceivably grow into a monopoly in this category.

🔫 Shooter games FTW

The great thing about shooters is the low barrier to entry for prospective players.

Anyone who's played a shooter before can start playing Shrapnel right away. We all know the deal: Run, point and shoot. Everything else can be learned along the way.

Compare this, for example, to strategy card games where one has to take time to learn a new set of rules and card mechanics before getting started. This is friction that slows the onboarding of new players and will cause many to quit before even playing their first round.

The point is that shooters are the easiest type of game to get into. This is an underrated characteristic that will facilitate the rapid induction of new players into the Shrapnel ecosystem.

Shooters are also highly addictive. They're proficient at delivering quick dopamine hits that keep players coming back for more.

Especially when played together with friends, this is the most addicting game genre there is.

💵 Players are spenders

In the online gaming world (web2), PvP shooters like CounterStrike attract players who are willing to spend big. In that game alone, highly sought-after weapon skins are being sold between four to six figures.

This CounterStrike weapon skin fetches between $50,000 - $150,000

counterstrike 2 ak-47 skin

A more recent example

The willingness of players to spend exorbitant amounts on vanity items is good not only from a marketing (viral news) perspective, but also for supporting a cottage industry of the creation and trading of such items. This is something Shrapnel is planning to capitalize on - an important topic I'll talk about later.

shrapnel callsign spending

Shrapnel Discord chat

The point here is that PvP shooters like Shrapnel appeal to a player segment that's willing to spend large sums to enhance their gameplay experience.

This 'whale' segment will give rise to a sub-industry of player-created maps and cosmetic items, the significance of which I will soon touch on.

💪 Actual experienced game devs

Unlike the teams behind Axie Infinity, DFK and almost all other GameFi projects launched in the last cycle, the developers behind Shrapnel were building AAA games before GameFi even existed.

They've worked on titles like Halo, Bioshock, Call of Duty, and are more "game developers" than "crypto builders".

In fact, the Shrapnel team has partnered with Radon Network Guidance precisely because they're new to crypto relative to their working experience in the traditional game industry.

I see this as a good thing - this is a team whose competence lies in building actual games, not crypto applications overlaid with simple graphics to look like a game.

This means we can expect the Shrapnel to turn out more like Call of Duty and less like Crabada.

shrapnel call of duty

Call of Duty


Shrapnel's launch will be a big step forward for the industry - It will show the world that web3 games can look and play just like a AAA title, if not better.

To get a sense of the devs' professionalism and skill, check out their YouTube channel.

Here's one of the videos that demonstrates their competence:

🌎 Compelling world, storyline, atmosphere

Shrapnel's world setting invokes all the right emotions.

The audio and visual effects create the right mood that blends well with the dystopian storyline. Together, they conjure a feeling that is difficult to describe to non-gamers. 

It's a highly immersive experience.

shrapnel game story

In Shrapnel, you play a mercenary entering a dangerous arena to find and extract valuable items and resources.

The fun part is that this arena is filled with other mercenaries (players) who want to kill you and environmental hazards that get increasingly more deadly as the game progresses.

And this is all creatively executed in a way that's very compelling to gamers.

To get a sense of it, check out the trailer:

The vibe is one of those intangible things that true blue gamers will appreciate. The devs have knocked it out of the park on this one.

🔬 Real gaming innovation

Most GameFi projects today are really just web2 games with a token slapped on. There's no innovation or advancement of the game medium.

Shrapnel bucks this trend by being the first game with that allows gamers to play for real stakes. This will make games 100x more thrilling.

Think about it: Poker without financial stakes is boring. With financial stakes, it becomes an exciting, challenging and addictive game.

shrapnel poker

You see, when real stakes are added to any game it becomes something very different. Then, every decision you make is consequential which impacts how you think and act.

This dimension of real stakes is something web2 games cannot incorporate... but with web3 it can be done. And Shrapnel is one of the first - if not THE first - game to do it.

Imagine playing Shrapnel at a high level, where your gear is made up of valuable NFTs that you lose if you die. And if you kill someone in-game, you can loot their NFT gear (that you can KEEP, USE, or even SELL).

This will fundamentally change how people think about and approach this game.

Imagine watching an FPS game where a player "dies" and loses a bunch of NFT gear worth tens of thousands of dollars to his opponent. Viewship for such games will EXPLODE.

shrapnel fortnite championship

Web3 makes playing for REAL STAKES possible, and Shrapnel is at the forefront of this new paradigm.

This is the gaming revolution that NO ONE sees coming... YET.

Many crypto influencers who shill Shrapnel miss this crucial point. They think it's just another "web3 game with good graphics". But it's MUCH MORE than that.

At the time of this writing, Shrapnel is the FIRST AND ONLY game that utilizes web3 tech as a core component of its gameplay design.

This is something most crypto investors have yet to appreciate... but soon will.

🎮 Access to web2 gamers

Quick history lesson: During the last crypto bull run the price of GPUs doubled because crypto miners bought up all available units to mine for coins.

This drew the ire of every gamer on earth because it priced them out of upgrading their computers and playing their favourite new games.

Since then, web2 gamers have developed a special distaste for everything crypto... and all attempts by game companies to incorporate NFTs into their products were met with disdain.

nft games flop
square enix nfts
gamers hate nfts

This is a major obstacle for web3 gaming because it means the total addressable market (TAM) is largely limited to crypto enthusiasts rather than the whole gaming industry.

With Shrapnel however, I've noticed a growing number non-crypto gamers who are venturing into the ecosystem and asking questions about how to join.

From the Discord chatrooms:

gamefi onboarding
shrapnel web2 web3 player
shrap wallet dashboard

This might just be anecdotal but my gamer intuition aligns with the sentiment I'm seeing on the ground: Shrapnel appeals so much to traditional gamers that many are taking the effort to learn about web3.

If this trend continues, the TAM for this game will vastly surpass that of any other crypto game before it.

I do not know any other crypto-enabled game that commands such attention from regular (non crypto native) gamers. Do you?

As far as I can tell, Shrapnel has a winning formula that puts it at the forefront of being the first web3 game to massively attract and onboard web2 gamers.

🗝️ Player retention system

This is what differentiates Shrapnel from its web2 counterparts and a major reason why I'm bullish on the project.

You see... even the most popular games struggle to stay relevant amidst the shifting tastes and preferences of players.

A triple-A title can start out as a massive success, but after a few years innovation inevitably slows and gameplay starts becoming repetitive (and boring) for long-time players who then move on to newer, fresher games.

This is essentially an issue of player retention; It's a problem that plagues all online games and is a hard one to solve.

One game that has successfully mitigated this is Fortnite. It was launched in 2017 and continues to be one of the most popular games even now, six years later (which is generations long in the gaming industry).

The key to Fortnite's longevity is its ability to quickly adapt to the changing needs of players. The developer (Epic Games) updates the game every week, showcasing new events, items and game modes. With so many new things going on all the time, it's hard for players to get bored and leave for another game.

And this brings me to the next important feature of Shrapnel...

👑 The Player-Created Content economy

Player-Created Content (PCC) refers to game maps, game modes, and vanity items that are created by people not affiliated with the game developer.

In Shrapnel, anyone can create their own PCC to be sold to other players. Unlike most other games that ignore (or sometimes even punish) modders, Shrapnel encourages people to come up with their own designs and be financially rewarded for their effort.

And this is not just a tacit nod in agreement. The devs are serious about fostering a community of game modders that continuously come up with new ideas and initiatives to improve the gameplay experience.

To that end, professional-grade tools will be be provided to support creators.

One example is the Insignia tool:

Later on, other tools will be provided for the creation of game maps, new game modes, and in-game item skins.

Why is this important?

At this point I should highlight the significance of the PCC feature.

Not many people know this (especially non-gamers), but many of the most popular games today started out as a mod.

For example, the original developers behind DOTA, CounterStrike and Fortnite did not design the base game to be played the way they're being played today -- they were mods created by fans.

DOTA became so popular that it overshadowed the game it was based on (Warcraft 3) and lived well beyond it, even going so far as to birth a whole new game genre that didn't exist before (i.e. MOBAs).

The developers behind Shrapnel clearly realize this opportunity and wish to encourage and capitalize on it.

Now - the creation of PCC is just one part of the equation. The other part involves a marketplace of buyers, traders, curators, voters and investors of PCC.

shrapnel creator map
shrapnel curator flow

This is all part of an ecosystem within which new game content is constantly being created, tested, and then accepted or rejected by the community... with every participant along the process being financially incentivized to play the role(s) of their choosing.

There is much to discuss about the PCC economy - including the mechanisms and incentives that drive it - which warrants a full and separate article.

For now though, it's sufficient to understand that Shrapnel isn't just looking to be a fun web3 game; It's also looking to build an entire sub-industry of creators, traders and investors of PCC to keep the game relevant to ever-changing player preferences.

In summary, Shrapnel is pioneering a new way of decentralizing the game development process via a self-reinforcing loop where the community is financially incentivized to constantly build, innovate and decide how the game should best be played.

It remains to be seen whether this initiative will succeed... but in any case the speculation potential of this alone is enough to send Shrapnel's valuation to much higher levels.

📈 Investment thesis

At the time of this writing, the price of SHRAP is $0.20 with a circulating market cap of ~$46M.

shrap market cap

This is paltry compared to many other GameFi projects that are sitting at a market cap between $100M - $300M... which alone suggests that SHRAP should be priced at least 2 - 6 times higher than its current level.

And this doesn't take into account how Shrapnel is - in my opinion - a much more compelling, higher quality game than practically all others in the market right now.

As sentiment in the crypto industry improves, I can easily see the SHRAP market cap going up to $400M, an 8x from these levels.

And as the bull market kicks in over the next 2 years (assuming no major disasters), I can reasonably see the market cap going into the single-digit billions.

⚠️ Risks

As far as this thesis is concerned, there's only one major risk to be concerned about: That gameplay is clunky, or there are too many technical issues that hinder players' enjoyment.

In other words, the biggest risk is that the gameplay isn't fun. As long as the devs can deliver a fun game, all other issues can be solved relatively easily.

Unfortunately, we can't test out the gameplay until early access is available late next month (December).

However, given what is known about the project and the current low market cap, the risk-reward of SHRAP is considerably positive even now.

🙏 Thanks for reading

I hope this has been helpful.

If you'd like to hear more about my views on crypto and GameFi, join my free newsletter and follow me on Twitter.

Cheers 🥃

P.S. If you have any questions or feedback, let me know at: chris[at]digitalslowmad[dot]com