Echelon Prime
Exploring the Frontier of Crypto, Gaming and AI
If you are like me, you’ve been hearing about Prime and Parallel for what feels like forever.
You’ve seen the card NFT drops, you’ve seen PRIME go up in a straight line (if you are smarter than me you bought in at some -any- point), you’ve seen the Parallel card game launch, the announcement of another game, an AI thingy and who knows what else.
At this point, you’re likely feeling drained, bamboozled and wondering what the heck Echelon Prime even is. How do all these different elements - the NFTs, tokens, projects- fit into the bigger picture? And have you missed the boat on the whole thing?
Fret not, for I have done the legwork and I’m here to break it down for you. And I can assure you that it’s not too late to get into the Prime ecosystem. You (we) are not early either, let’s not kid ourselves. But it’s definitely not too late.
Let’s get right to it.
What the heck is Echelon Prime?
Echelon is a decentralised, community-driven ecosystem created to support gaming innovation and play-to-earn economies. These efforts are led by the Echelon Prime Foundation, a non-profit developing a set of tools and a platform for game developers to build upon.
The project is set to decentralise over time via its ERC-20 token, PRIME.
There are three major stakeholder groups:
Players and collectors: by participating in games and engaging with the ecosystem, players can acquire PRIME tokens, which grant them access to various features and perks (government rights, access to NFT sales, etc). The P2E model incentivizes player engagement and rewards skill and dedication.
Content producers: by leveraging Echelon's smart contracts and the broader ecosystem, content producers can create games and experiences that are interoperable and share development overhead.
Ecosystem managers: PRIME token holders are the main agents of governance and management in the Echelon ecosystem. hey are responsible for community treasury allocations, system smart contract auditing, and electing foundation members known as Emissary Primes. Emissaries stake PRIME tokens as slashable collateral to ensure responsible behaviour and are tasked with overseeing the foundation and ensuring that community decisions are fulfilled.
The future of PRIME and the Echelon ecosystem will be determined by the community of stakeholders –players, collectors, developers and tokenholders– who will shape its evolution and priorities over time via governance.
Three major projects are being developed within the Echelon ecosystem: the Parallel Trading Card Game (TCG) and Colony games, and the AI-related project Wayfinder. We will review them all.
But first, let’s take a look at the cornerstone of the ecosystem: the PRIME token.
PRIME
He who controls PRIME, controls the Echelon universe
PRIME is the native ERC20 token of the Echelon Prime ecosystem, with a fixed total supply of 111,111,111.111. It serves as the cornerstone of the ecosystem's Play-to-Earn (P2E) economy, governance, and access to premium services.
The PRIME token facilitates community development, participation, and value transfer among stakeholders within the Echelon ecosystem. PRIME will be the primary tool in decentralising the Echelon ecosystem, empowering various stakeholders to decide on its future and the direction of its intellectual property (IP).
This is what the initial distribution of PRIME looks like:
PRIME was launched in July 2022 and later 'unlocked' through a community vote on March 1, 2023.
10 million PRIME tokens were distributed to Parallel card collectors across five snapshots, with only 7.9M claimed, or around 7% of the supply. A further 15.7 million PRIME (14% of the supply) was distributed to users that cached (another way of saying staked) their NFTs over one year, from July 2022 through July 2023.
Parallel Studios, which holds 19.7% of the total supply, began its unlock schedule on September 30, 2023. The unlock for investors, who hold 16.2% of the total supply, began in July 2023.
Both unlocks are set to last 2 years, with tokens being unlocked monthly. This represents a monthly unlock of 900 thousand and 750 thousand tokens for team and investors respectively, or $18 million and $15 million at current prices.
The rest of the tokens are reserved for future ecosystem development or as reserve, with a full 30% of the tokens reserved for P2E rewards.
You can check the current circulating supply here.
Play-2-Earn
Remember Axie Infinity?
The game with the chonky definitely-not-Pokémon creatures that players could train, breed and battle against other Axies for profit.
The game was all the rage in the previous bull market, with the number of players going into the hundreds of thousands, and the market cap of its coin AXS being worth over $10 billion (as much as Konami now, and half of Roblox).
The main issue with Axie Infinity was that it promised everyone a chance of earning a salary if only they played the game.
This works as long as more and more people get into the game, and the flow of money going into buying NFTs and tokens related to the game is larger than the flow of money back to the “real” world. If at some point the flow reverses, the ecosystem is doomed. And, if the promise is that anyone playing the game will earn a buck, you need a constant inflow of new players to keep the charade going.
It was all very pyramidesque, and it ended the way all pyramid schemes tend to end.
Well, the folks at Echelon Prime think they can do P2E better. To be frank, it should not be too difficult. From the Echelon whitepaper:
In P2E games, players can earn real-world value by participating in the gaming ecosystem. The P2E model distributes value among players, developers, and creators, rather than centralizing it with developers
To be fair to Echelon, their aspirations are laudable. They are also achievable.
Echelon is not claiming that everyone can make money and earn a living from its games. Only a small subset of players will be able to do so. This is kinda what happens in Web2 games, where only the best of the best can edge out a revenue stream, while most players play because they enjoy it.
Echelon wants to distribute the value created in the game in a fairer and more distributed way among players and members of the community, but it seems to be acutely aware too that not all players can extract value from a game. And that’s okay.
These are the main changes that Echelon is introducing to try to balance and improve its P2E component:
Rewards are reserved for a subset of players who own NFTs.
Rewards go only to players who win matches and are weighed according to certain factors.
PRIME has a fixed supply and is not inflationary.
The first two changes are easy enough to understand and we can basically lump them together.
Only players that have particular NFTs released by Parallel get to be awarded in-game rewards. Also, only players that win ranked games get PRIME, with boosters based on things like winning streak, their and the opponent’s rank, etc. Rewards are also capped daily.
It’s more a Play-and-Earn than Play-to-Earn, in which only the better players will earn most rewards and a large subset will not earn anything or very little. It’s not the utopia of all players earning a living that other P2E games promise but the thing is, utopias tend not to work in real life.
The last change needs a deeper analysis. How can Echelon promise continuous PRIME rewards if the token has a finite supply?
Well, in the beginning, rewards will come from a pool of tokens reserved for this purpose (as we saw before in the initial distribution). Easy enough.
In the future, rewards will come from PRIME tokens that have been spent on different sinks and re-distributed.
And what are sinks, you may ask.
Sinks are game mechanisms that remove tokens from circulation, reducing the circulating supply. They are often done to maintain the token's value, prevent inflation, and create a more stable economy. Echelon will focus on optional and utility sinks, which means that users can choose to spend their PRIME tokens on services or assets that provide value to them. These are some of the ideas for token sinks:
PRIME tokens used on sinks are not burned or removed from circulation. They are redistributed to players through play-to-earn (P2E), staking, etc. In doing so, Echelon aims to create demand for the token while also providing value to its users.
This is how the curve of PRIME awarded to players is expected to evolve, going from the reserved tokens in the initial distribution to PRIME redistributed from sinks:
Will this all be enough to avoid a similar outcome to that of Axie Infinity?
Only time will tell.
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Parallel TCG
Parallel TCG is a digital card game where players can earn, collect, and battle with unique cards, similar to Magic The Gathering.
The cards are NFTs on the Ethereum blockchain, and players can trade them through marketplaces, its value deriving from the forces of supply and demand.
You don’t need to buy any of the NFT cards to play it. Heck, you don’t even need to buy the game. It is fully free-to-play, and you just need to travel to this website and download the game to start playing.
You do need the NFTs if you plan on earning PRIME rewards. The more NFT cards you hold on your deck when playing, the more PRIME you are set to receive if you win the match.
Now, I have not played the game (make it available for MacOS already!). But from what I have gathered talking to people who have, and from what these reviews say, the game is actually fun to play! This is no small feat for a crypto game. Oh, and the art looks insane too.
It’s still early days, and we can’t really say how much of a success the game is. It’s also relatively difficult to get data on how many times the game has been downloaded, daily active users, etc (if you know where to get this, feel free to contact us).
The game is set to launch on Steam at a later date, and when it does so we will probably be able to better gauge how successful the game is.
Wayfinder
Artificial Intelligence (AI) today finds itself in a situation comparable to the early days of the internet in the 1990s. Despite its immense potential to transform society, it is primarily limited to content creation and information sharing. For AI to fulfil its promise and leave its mark on the economy, similar to how the internet did in the 2000s, two major hurdles remain:
Large language models (LLMs) that power today's AI agents are not designed to handle value or facilitate commercial transactions, and
The opaque nature of AI applications and their inherent unpredictability pose a challenge to integrate them with the traditional financial system.
For AI agents to become autonomous actors in the economy, they must first have direct access to resources within a financial value system. And this is what Wayfinder is aiming to solve.
Wayfinder aims to be the primary gateway for AI agents to operate with blockchains.
First, a network of “wayfinding paths” will be developed; these will represent edges in a node of a map of blockchain destinations, such as bridges, DEXs, lending protocols and other applications. These destinations will be an ecosystem graph of smart contracts, known to the LLMs running on Wayfinder. Developers will be able to add new nodes and paths to the network and earn rewards.
Users can interact with this ecosystem via Wayfinder shells. This will be similar to a GPT-chat interface paired with a Web3 wallet. Via these shells, users can ask AI agents to interact with the smart contracts in the Wayfinder ecosystem path. Users will also need to fund the Web3 wallets of these AI agents with the gas tokens of the chains they intend to use (ETH for EVM chains, SOL for Solana, etc).
Once an order is emitted, agents will try to fulfil it according to their abilities and using the wayfinding paths and nodes they have access to.
Users can customize and train shells for specific tasks. Shells can also learn from their experiences and the experiences of other shells.
Wayfinder’s native token will be called PROMPT. Hell of a ticker if you ask me.
PROMPT will serve multiple purposes: purchasing AI shells and engaging with the network; serving gas within the network, with gas fees being shared between the developers of wayfinding paths and the protocol; purchasing private wayfinding paths; and last but not least, working as a governance token.
Governance has some interesting quirks in Wayfinder. Yes, it will work similarly as for other projects, in that tokenholders can submit and vote on proposals to govern the project.
But it stands out in two ways.
First, since AI agents (shells) will have access to Web3 wallets with PROMPT on them, they can also participate alongside humans in governing the network. As token holders, AI shells can vote and submit governance proposals. However, to maintain network stability and avoid sybil risk, their aggregate voting weight will be limited to around 20%.
Second, Wayfinder will feature an "AI Constitution" that establishes overarching governance principles for AI agents on the network. These will include access to LLM instances, prohibited actions and instructions for "pausing" all shells if necessary. If you are thinking about Asimov’s Three Laws of Robotics, you are not alone.
This is what the preemptive PROMPT distribution looks like.
Investors will get over 25% and the team over 15%. Developers who contribute new wayfinding paths to the network will get 5%, while future unnamed incentives also get 5%.
The 40% set for “Cached” is meant to reward existing communities within the Echelon Prime ecosystem. Holders of PRIME and Parallel NFTs will be able to stake/cache their tokens and earn PROMPT over three years.
If you ask me, awarding insiders and token holders over 80% of the supply, while only reserving 10% for all future incentives is a bit skewed. Some might even call it predatory. But what do I know.
Anywho, Wayfinder looks like a very solid project at the intersection of crypto and AI, and a credible path for AI agents to become economic actors. But the folks at Echelon Foundation are not happy with creating just the rails for AI agents to operate in crypto. They also want to build their first use case.
Enter Colony.
Colony
Colony is a survival simulation game with autonomous AI agents or "avatars." Human players must guide these avatars in a future Earth divided into distinct colonies competing for resources and survival. Think the Sims meets Fallout.
Unlike in the Sims though, players will only give avatars general instructions. It's up to the avatars to decide how to solve a task. They will also interpret instructions in ways they see fit, sometimes even rejecting the users’ suggestions.
And since it’s a Web3 game, Colony avatars will be able to transact digital assets and interact with smart contracts through their own Web3 wallets. This will be powered by the Wayfinder project we described above. As opposed to Parallel TCG, all transactions and NFTs in Colony will settle on Solana.
Players can create new AI avatars in Colony by paying in PRIME tokens. Initially, avatar creation will require the player to hold a Parallel Avatar NFT. A new series of Parallel Universal Avatar NFTs might be created later on Solana to increase the player base.
When a player creates a Colony avatar, they establish the avatar's core identity and objectives. While all avatars share a core knowledge and skill base, they can learn from their experiences and develop their individual identities and characteristics.
As for Parallel TCG, players will be rewarded for good play with PRIME tokens; in-game NFTs will also be tradable and hold value.
Colony will offer a “Free-to-Play” version in which users can create any avatar they want without having to spend PRIME or hold the Parallel Avatar NFT. I use quotes because it won’t be 100% free; users still need to fund the Web3 wallets that avatars will use to interact with smart contracts. Free-to-play players cannot earn PRIME rewards, retain in-game items, mint items as NFTs, or transfer items out of the ecosystem.
Players must also still provide funding to cover fees associated with their agent's use of the underlying large language models (LLMs) during game sessions.
Colony is expected to be available for public alpha gameplay between Q4 2024 and Q1 2025.
Is PRIME a good investment?
As we wrap up our deep dive into the Echelon Prime ecosystem, it's clear that PRIME is perhaps the only credible play at the intersection of crypto gaming and AI. The Echelon Prime Foundation has laid the groundwork for a decentralized, community-driven ecosystem that not only supports gaming innovation but also explores the potential of AI agents as economic actors through projects like Wayfinder and Colony.
It is important to note that PRIME is no longer a cheap investment. Since the crypto-wide rally started in October, PRIME's valuation has skyrocketed from $80 million to $800 million, surpassing the valuations of most crypto games like Big Time, Heroes of Mavia, and Crown, which are all hovering around $200 million. PRIME now stands shoulder-to-shoulder with the much-hyped Iluvium in terms of valuation.
However, "dinosaurs" in the space, such as Decentraland and Sandbox, are valued at over $1 billion. Both Axie Infinity and Ronin also command valuations exceeding $1 billion (with Axie having been worth over $10 billion in the previous bull market).
So there is still room for price appreciation, especially if we enter a full-blown AI bubble, but it may be difficult for returns to be exceptional unless the valuation comes down first.
If the price of PRIME does come down at some point, buy it hand over fist. Your future self will thank you.