Merit Circle (MC): A Leading DAO for Play-to-Earn Crypto Games

What Is Merit Circle?

Launched in September 2021, the Merit Circle crypto protocol is a decentralized autonomous organization (DAO) focused on facilitating the play-to-earn (P2E) gaming economy. Merit Circle seeks to make P2E gaming more of a reality for more people, transforming gaming from a leisurely activity to a stream of generating revenue. To do so, it attempts to align the interests of investors, players, and gaming platforms themselves through innovative industry partnerships and a decentralized governance model.

Why Should Gamers Join Merit Circle?

Gamers participating in Merit Circle are commonly referred to as “scholars.'' The term “scholarship” was originally employed by the Axie Infinity gaming platform — when individual Axies became expensive to buy on popular marketplaces, the barrier to entry for new players to join the crypto game became quite high. Players then discovered it was possible to play Axie Infinity without needing wallet access. Shortly thereafter, the “scholarship” model came to life and people started renting out accounts with their non-fungible tokens (NFTs) to other people, using a profit-sharing mechanism. In this way, existing players with excess Axies were able to sponsor new players via these “scholarships.”

With Merit Circle, those who apply for a scholarship and fit the requirements are able to play decentralized P2E games using the Merit Circle DAO’s NFTs. By doing so, they are rewarded with a percentage of their earnings. The remaining percentage is transferred to the DAO treasury. In return, the Merit Circle DAO invests in providing one-on-one coaching to scholars, hosting educational classes, and offering other means of improving their teams.

Merit Circle offers its scholars competitive in-game assets that may provide optimal gameplay conditions. Beyond that, Merit Circle is building a meta-game on top of existing decentralized games, adding another layer of earning potential to the P2E enterprise (e.g., a weekly leaderboard amongst scholars for the most Axie Infinity battles won). Lastly, Merit Circle has reserved retroactive airdrop rewards, which will be distributed to scholars in the future. How this will be done has yet to be shared.

Token holders and scholars may also be eligible to receive token prizes and exclusive access to NFT drops and upcoming blockchain games. For example, scholars with excellent performance may become coaches within the community, for which they can receive additional rewards. Already, this mutually beneficial scholarship model has attracted over 2,721 scholars to the platform as of January 2022.

Players looking to get onboarded to Axie Infinity through a Merit Circle scholarship must apply directly with the DAO. “Managers” are responsible for vetting applicants, placing them on teams, and helping them with the initial steps of the game. After they’re successfully onboarded, it’s entirely up to scholars to start earning their rewards. Merit Circle does, however, monitor scholars’ performances with advanced tracking tools, hoping to quickly target and remove any potential roadblocks to their success.

Merit Circle DAO Structure

At the base level, Merit Circle is represented by a DAO and a treasury.

The Merit Circle DAO is composed of a main entity responsible for overall platform governance (the MainDAO), as well as several subDAOs that operate underneath it, each catering to various parts of the P2E industry it supports. More specifically, the MainDAO is responsible for managing subDAOs, generating revenue for the treasury, and platform governance. Merit Circle subDAOs, on the other hand, represent individual games that the protocol supports and are tasked with promoting earning strategies within these particular games.

For example, a secondary Axie Infinity earning strategy includes strategically breeding Axies for desirable traits so that they can be sold at a profit. The profits from these strategies are collected in “vaults'' which are then funneled back to the relevant Merit Circle crypto stakeholders. An example of a vault strategy could be that 70% of the P2E gaming profits go directly to gamers or scholars, while 20% is returned to the treasury, and 10% is directed to managers (who are responsible for overseeing the everyday operations of gaming operations and teams of gamers).

The Merit Circle crypto protocol is also backed by a treasury that holds valuable in-game assets for all kinds of different platforms. The treasury balance is represented by a combination of cash, NFTs, tokens, and staking tokens. All Merit Circle strategies are targeted at increasing the size of the treasury and increasing profitability for stakeholders in the ecosystem.

MC Token: Governance and Staking Options

Merit Circle has its own native utility and governance token, MC, which plays a fundamental role in the operation of the Merit Circle DAO. MC has a total supply of one billion tokens. Of that total amount, the initial MC token distribution is designed as follows:

• 20% is reserved for the founding team and advisors

• 15% is reserved for the Merit Circle DAO treasury

• 7.5% is available for public distribution

• ~29% is earmarked for community incentives

• ~14% will be allocated to early investors

• ~14% is to be used for platform rewards

In an effort to enable token holders to support the Merit Circle crypto protocol and overall ecosystem (and to earn rewards for doing so), token holders are able to deploy their MC tokens across two main staking pools supported by the Merit Circle DAO. The first is an MC staking pool, and the second is an MC/ETH liquidity pool on Uniswap, a popular decentralized exchange (DEX).

Users are able to contribute to either of these two pools on a flexible schedule without any lockup periods, or they can opt for scheduled staking (for up to 12 months) in order to increase their potential annual percentage rate (APR). In either scenario, a user’s staking rewards are vested for a 12-month period after they are claimed.

Future of Merit Circle and the P2E Gaming Industry

P2E gaming experienced an initial explosion of activity during 2021, offering an attractive new revenue and asset-ownership model for gamers and game developers alike. Axie Infinity, for example, started 2021 with about one thousand users, and closed out the year with over 2.5 million active daily users. And while (as of early 2022) the Merit Circle protocol only supports Axie Infinity, it has imminent plans to offer support for other play-to-earn crypto games like Star Atlas, Illuvium, and Hash Rush. In addition, Merit Circle has announced specially curated partnerships with game developers such as Cyball, Nyan Heroes, Vulcan Forged, UFO Gaming, Sipher, and others.

Besides its scholarship operations, the Merit Circle DAO aims to grow in many additional directions, incorporating multiple revenue streams and bridging the gap between traditional gaming and blockchain gaming.