Deep Diving: The Bull Case for Sanko GameCorp & DMT

Disclaimer: This post contains the thoughts of a medium stupid person (me) on crypto, a volatile and risky asset class. It is not investment advice, and you should do your own research. All information is for educational purposes only. Please don’t take risks with money you’re not willing to lose.

Disclosure (Updated 4/9/2024): I now own about 9,600 $DMT or slightly under 1% of total supply, I minted 3 of the Sanko NFTs (floor about .07 ETH at the time of this writing), and I am biased in favor of projects run by green cats.

$DMT and Sanko GameCorp have taken over a small portion of crypto twitter over the last few weeks and months. I’ve seen a fair bit of confusion over what it is/what they’re building, and why I keep bull-posting about it. So I decided to lay out the full thesis and explain why I allocated a decent chunk of my portfolio (now my 4th biggest position) to $DMT.

The Basics of Sanko GameCorp:

Sanko is, at its most basic level, a gaming platform that combines SocialFi (their newly launched crypto native Twitch) and a game studio with five games live on-site, and a few currently in development. To date, the games launched are lighter weight, but quite fun. There’s a Street Fighter Style Milady game, Pinball, and a few others to showcase the team’s basic capabilities.

They’ve made broad allusions toward Runescape in the marketing of one of their games in development, Sankoscape, but nothing is known concretely about what the game is or what it might become. It sounded from the Twitter Spaces yesterday like it’ll be some kind of Old School Runescape private server integrated with their native DMT token in some capacity.

In general, the branding is retro and interesting. It harkens back to a time that most crypto-native people grew up in, and I think the allusions to Runescape showcase that same idea. I personally love it.

It’s always hard for me to bet on a crypto-native company developing any kind of blockbuster gaming success, especially after the last few years of attempts. Sanko however is much more akin to a platform. They’re creating a number of different projects, most notably their streaming platform Sanko.tv, and they’ve shown a clear instinct for capitalizing on trends like SocialFi.

Crypto-Native Streaming App:

Sanko.tv officially launched yesterday, and it’s incredibly cool. At its core it’s a crypto-native version of Twitch, with Friend.tech style passes that provide access to streams and allow individual streamers to decide what benefits pass holders receive over time.

Z tested the beta a few months back, and it’s fairly obvious how impressive this is for a crypto project to actually get to market.

The site design is very cool and while bugs are still being worked out and new features added, the overall feel is very slick and comfortable.

I tried my best at streaming for a bit on launch night. I plan to potentially host a quick podcast-type stream or AMA every so often. It was fun to respond to the chat and LARP as Cobie for a little.

The mechanics are very similar to Friend.tech. You trade the “passes” (analogous to the FT keys) and half of the 10% fee on each trade goes to the creator and half to Sanko. There’s a chat along with the streaming capability, so it can function as a kind of direct FT alternative in that sense.

It launched yesterday, so trading early top streamers will definitely be profitable if it gets any sort of traction. That said, owning the token is likely the cleanest way to profit from the ecosystem long-term if you’re not much of a streamer, though I had more fun with it than I thought I would.

They’re working on non-gated streams (no pass required), to be released in short order. Over time the streamer will be able to decide whether or not you need a pass, or how many passes are needed, to access a stream or chat. It’ll be fully in the control of each individual creator.

Twitch is entrenched in the gaming community, and this is certainly a crypto-native-focused product for the time being, but you can see an easy path toward wider adoption if they keep executing. So far the product is impressive and I don’t see why they wouldn’t keep shipping.

The Future of $DMT:

$DMT is the native currency of the Sanko ecosystem. Right now it can be used to transact on the main games and will be featured as a larger piece of future games like Sankoscape. It will also likely be used for transactions in some capacity on Sanko.tv, though that wasn’t working for me as of the time of this newsletter send.

But the immediate use case is that a portion of the funds earned by Sanko TV from the pass trading fees will be used to auto-buy back $DMT on the open market. As Sanko TV scales, the price of $DMT rises, even if the rest of the thesis doesn’t make it.

It’s very cool to watch these small buys tick on Dex Screener live. This is an incredible example of the ways crypto can directly return value to users through legitimate services. It’s exactly what excites me about crypto in general, and it can serve as a case study of the superiority of launching the next generation of apps on crypto rails.

Currently, about half of the total circulating DMT supply is staked on Sanko for future rewards, and while the price has gotten beat up the last few months, it looks pretty well bottomed to me as someone who admittedly can’t draw lines on charts very well. They pulled off an impressive launch with Sanko.tv, and at a $15 million market cap, more people will start to notice how cheap this thing is compared to what they’ve already shipped.

Sankoscape & The Long Term L3 Thesis:

The immediate use case of “Friend.Tech for streaming, but with a token and a buy-back mechanism” is a slam-dunk investment on its own in my mind. But the vision Smoovie laid out on Twitter Spaces yesterday, and in various posts from the team, is incredibly exciting. The launch of Sanko TV is impressive and feels more tangible than anything I’ve seen come out of crypto to date.

The team has discussed plans for an Arbitrum Orbit chain, which is an L3, or functionally an app chain built on top of Arbitrum. My understanding is DMT can be integrated essentially as a gas token, and it could power the engine behind Sankoscape, the Runescape private server, plus whatever other games Sanko develops over time.

There are always a lot of unknowns especially with crypto gaming projects. I am comforted though by the fact that devs were streaming on launch night. They were very responsive to live questions and input. They clearly care a lot about this thing, and based on the products released to date, they seem competent. It’s a risky proposition, but of everything crypto is churning out right now, this is the one I think has the best shot of turning into something massive. I’ve allocated to $DMT accordingly.