RESEARCH REPORT

FEBRUARY 14, 2022

VLADISLAV MILKOV
vladislav.milkov99@gmail.com
Contents
Overview ....................................................................................................................................................... 2
Founders and team ....................................................................................................................................... 2
Community Activity....................................................................................................................................... 3
Tokenomics ................................................................................................................................................... 3
Market Activity and Technical Analysis......................................................................................................... 3
What is TOWN? ............................................................................................................................................. 3
Burning mechanism .................................................................................................................................. 4
TOWN Staking ........................................................................................................................................... 4
Airdrops or giveaways............................................................................................................................... 4
DAO-Style community voting for TOWN?..................................................................................................... 4
Is Town Star P2E (Play to Earn) or Town Star P2P (Pay to Play)?.................................................................. 4
How much can you earn? ............................................................................................................................. 5
Does Town Star mine cryptocurrency when it is running? ........................................................................... 6
VC involvement? ........................................................................................................................................... 6
To acquire TOWN .......................................................................................................................................... 6
Play-to-Earn Rewards................................................................................................................................ 6
Node Distributions .................................................................................................................................... 7
Leaving supply ............................................................................................................................................... 7
Current Exchanges with TOWN..................................................................................................................... 7
Top 5 holders of TOWN: ............................................................................................................................... 7
How to play ................................................................................................................................................... 7
Roadmap ....................................................................................................................................................... 8
Accessibility ................................................................................................................................................... 8
Game Reviews ............................................................................................................................................... 9
Sentimental analysis ..................................................................................................................................... 9
Conclusion ..................................................................................................................................................... 9
References .................................................................................................................................................. 11

1
Town Star Research
Chain: Ethereum ERC-20

Token: TOWN

Token contract address: 0x3Dd98C8A089dBCFF7e8FC8d4f532BD493501Ab7F

• Handles the main ERC 20 functions for TOWN

Overview
Town Star is a competitive farming game developed from Gala Games, which is a company started by Eric
Schiermeyer. He is one of the co-founders of Zynga, the same company that created Farmville, one of the
most popular farming simulators on Facebook. Town Star is built on Gala’s decentralized network, and it
is utilizing the Ethereum blockchain. Every decision in the game has impact, from the location you choose
to start in, to the placement of your buildings and roads. There are many mechanics to consider such as
building shade that affects crop growth rates, wind power efficiency and road placement which affects
the speed at which your workers travel.

Similarly, to all of Gala’s games, Town Star makes use of NFT assets which can be purchased and traded
on secondary marketplaces. Player-owned NFTs offer in-game advantages which can help players with
their progression. In Town Star each week, the top players on the leaderboard win prizes, and every day,
players complete challenges to unlock and collect TownCoin (TOWN) play-to-earn rewards. The goal is to
grow, gather and craft your way to building the most efficient and productive town.

Founders and team

Developers: Gala Games

Co-Founders:

• Eric Schiermeyer
o Co-founder at Gala Games 2019 - present
o Founder at Zynga 2007 – present
o LinkedIn
• Michael McCarthy
o Studio Director and Co-Founder at Gala Games 2019 - present
o Game Director at Sandbox Games 2017 – 2021
o Director of Creative at Zynga 2009 – 2015
o LinkedIn
• T. Elliot Cannon
o Game Director Town Star and Publishing Play-to-Earn 2021 – present
o Leidos Studio Director 2019 – 2020
o LinkedIn

Team: https://www.linkedin.com/company/gogalagames/people/

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Community Activity
Official site: https://townstar.com/

Discord: 144k members in the Gala Games discord. There is not a separate discord for Town Star.

Twitter: 9.5k followers

YouTube: 19.5k subscribers on the Gala Games YouTube Channel. Again, no separate channel for Town
Star.

Are moderators active? Yes.

Community: Community looks strong and provides a lot of feedback.

Tokenomics
Ticker: TOWN

Blockchain: Ethereum ERC-20

Utility: Play-to-Earn reward token

ICO: Tokens were not sold or offered in an ICO

Price: $0.17 - 0.000062 ETH

Market Cap: $27,448,124

Fully Diluted Market Cap: $27,448,124

Circulating Supply: 164,134,422 TOWN

Total Supply: 164,134,422 TOWN

Holders: 10,579

Token contract address: 0x3Dd98C8A089dBCFF7e8FC8d4f532BD493501Ab7F

Market Activity and Technical Analysis

TOWN price today is $0.17 with a 24-hour trading volume of $894,303. As of now Uniswap (v3) is currently
the most active exchange for trading the Town Star token. At its all-time high value, the token was around
$2.11 while its lowest point is about $0.13.

What is TOWN?
TownCoin (TOWN) is a fungible ERC-20 token built on the Ethereum blockchain. Its exclusive purpose is
to act as the official play-to-earn reward crypto of Town Star.

TOWN was not sold or offered in an ICO (Initial Coin Offering) but instead began being created on October
5th, 2021 as a reward for players participating in early access playtesting of Tonw Star Play to Earn.

According to Town Star’s website the total maximum supply of TownCoin is 1 quadrillion
(1,000,000,000,000,000 tokens).

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Burning mechanism
Tokens may be burned in the future but as of now there is not a burning mechanism.

TOWN Staking
There is no information on staking TOWN.

Airdrops or giveaways
No airdrops are announced, but there is an ongoing Town Star NFT and GALA token giveaway valid until
18/02/2022.

DAO-Style community voting for TOWN?

There is no information about DAO style community voting. Probably no.

Is Town Star P2E (Play to Earn) or Town Star P2P (Pay to Play)?
Town Star is a free to play game, meaning that you can start playing the game without the need to invest
anything. However, in order to start earning and engage with the Play to Earn model there are two
requirements which you have to complete in order to start earning daily TOWN rewards.

First, you need a Gala power level of at least 1. Your Gala power level is determined by how much Gala
you are holding in your account. This power level determines how many Town Coins you can earn per day,
and how many NFTs you can have in play in your town at a time. To reach Power level 1 you only need to
be holding 1 Gala coin in your account. Gala Power Levels can be calculated using the following formula:

Gala Power = Gala Coin + (TOWN *2)

Example: If a person has 10,000 GALA and 5,000 TOWN, the Gala Power would be:

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 10,000 + (5,000 x 2) = 20,000 Gala Power

20,000 Gala Power means this person has a Gala Power Level of 5.

The following link shows the minimum amount of Gala Power required to reach each Gala Power Level:

https://support.gala.games/en_US/play-to-earn-town-star/calculate-a-gala-power-level-with-gala-
power

Second, you must have an NFT in-game asset placed in your town. The amount of TownCoin you earn is
based off both your Gala power level and how many NFTs you have placed. For each level that Gala Power
increases, a player can play 1 additional NFT eligible to earn TownCoin rewards. For example, a player
with Gala Power level 1 can earn from the placement of 1 NFT and a player with Gala Power 7 can earn
TownCoin from the placement of 7 NFTs.

The TOWN a person can earn is limited to the rarity of the NFTs that a person owns and the amount of
Gala Power that they have. A player with 20 rare NFTs but a Gala Power Level of 5 won’t make as much
TOWN as a player with 10 rare NFTs and a Gala Power Level of 10, assuming they both complete the same
number of goals in Town Star and the rare NFTs make the same amount of TOWN. This is because the
player with more NFTs, but a lower power level will not be able to earn from all of the NFTs they place
down. This is why players should take note of how many NFTs they have, their Gala Power Level, and the
rarity of their NFTs in order to maximize their play-to-earn potential.

In addition to the TownCoin, Town Star players can also participate in weekly competition to earn GALA
token rewards. At the end of the weekly competition, 198,000 GALA are divided among the prize-winning
places. The number of paid places can sometimes change week-to-week, as can the way the prizes are
distributed among the winners.

How much can you earn?

Name of NFT TOWN NFT Daily return Daily Days to Breakeven at Days to Breakeven
Earnings market at $0.17 per return at $0.17 per Town at $1 per Town
per day price TOWN $1 per
TOWN
Basketball court 2 $168.00 $0.34 $2.00 494 84
Mr. Puddles 9 $720.00 $1.53 $9.00 471 80
Epic Wheat Stand 20 $3,000.00 $3.40 $20.00 882 150
Rare Lolli and Pop 55 $5,500.00 $9.35 $55.00 588 100
Shop
Haunted Main Tower 140 $12,700.00 $23.80 $140.00 534 91
Legendary Simplex 3027 $56,000.00 $514.59 $3,027.00 109 19
Sugarcane

The above table shows some of the Town Star’s NFTs which are available to buy, and their potential
earnings based on the price of the TOWN token. The NFT market price shows the latest price that the item
has been sold on Opensea as of 14/02/2022. Moreover, on Opensea the NFT prices were lower than the

5
prices in the Gala Games NFT store for Town Star. It is visible that at the current price levels in order to
start making profit after investing in NFTs you have to play for more than a year. However, this is totally
dependent on the price of the TOWN token which is highly volatile. At $1 per town most of the NFTs will
repay themselves in around 2-3 months while the most expensive ones will require less than 3 weeks.
Even though the token had dropped in value the NFTs did not drop to the same extent. This is odd since
they are not bringing the same amount of return which should bring their price even further down.
Therefore, right now the incentive to invest in Town Star NFTs is not clear and it is hard to justify.

The following link provides a full breakdown of all NFTs and how much TOWN you earn with them:

https://learntownstar.com/nfts/town-star-nft-town-coin-value/

Does Town Star mine cryptocurrency when it is running?

No, Town Star does not mine cryptocurrencies while it is running. However, users can be rewarded in
TOWN from running their Gala Node software with a valid Town Star node license. The current model
involves the TOWN allocation for Town Star Nodes being based on two variables: (1) Daily Active Users
(DAU) for the prior day in Town Star, and (2) TOWN allocation to Founders Nodes. This will be a sliding
scale that is equal to 0.25x-1.00x the TOWN allocation for Founders Nodes. For example, on 11/14/21
Founders Nodes were rewarded a total of approximately 47,000 TOWN. If Town Star Nodes were in
operation on that date, the TOWN distributed amongst Town Star Nodes would be between 11,750 and
47,000 TOWN. Assuming there were 400 Town Star Nodes sold AND fulfilled operational requirements,
each node would have received between 29 and 117.5 TOWN. If only 100 of the 400 met the operational
requirement, then each of those Town Star Nodes would receive between 117.5 and 470 TOWN, while
the non-operational nodes would receive nothing.

Additionally, the number of Town Star Nodes will not exceed 10% of the highest number of Daily Active
Earners (those participating in play-to-earn). This is intentionally designed so that the Town Star Node
network will grow in proportion to the growth of the game. The Town Star Nodes may be a useful indicator
in order to gain a better idea of the number of Play to Earn users. Therefore, if more nodes are released
in the future this will mean that the player base is growing.

VC involvement?
None.

To acquire TOWN
Play-to-Earn Rewards
Tokens will enter circulating supply when they are earned by players with the appropriate level of Gala
Power, when they complete Daily Town Star Challenges and claim rewards. These tokens are awarded to
the player's GalaChain Inventory (formerly known as Treasure Chest), and Ethereum network fees must
be spent in order to convert the tokens to the Ethereum blockchain. Once converted, TOWN tokens may
be transferred out of the Gala Games ecosystem to be held in external web3 wallets or traded on external
exchange markets.

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Node Distributions
Additionally, all Gala Games Founder's Node operators will receive daily distributions of TownCoin when
their node meets daily operational requirements. The amount received by node operators will be a share
in the daily distribution pool, a percentage of all TownCoin earned in Town Star Play to Earn through the
previous day. The more TownCoin earned, the more TownCoin will be distributed to and divided evenly
among nodes.

Leaving supply
TownCoin will be removed from the circulating supply through various methods. Some of the current
methods include:

TownCoin Exclusive Items NFT items playable in Town Star and eligible for play-to-earn rewards that can
only be purchased with TownCoin.

Holding of TownCoin for Gala Power - Players are rewarded for holding TownCoin in their player wallet
with increasing levels of Gala Power, which allow them to place more NFTs in-game eligible to earn
rewards.

In the future in-game upgrades may be implemented in Town Star. These can include Various upgrade
systems such as the player's ability to pay TOWN for in-game perks or upgrades to certain NFT in-game
items. Some such examples may cause TownCoin to be burned and permanently removed from supply.
As of now such features are not available.

Current Exchanges with TOWN

• Uniswap (v3)
• OKX
• Bitrue
• TOKENCAN
• Jubi

Top 5 holders of TOWN:

Address $TOWN Balance

0xf34f0420b588b6cf956f66beabab3f75deb10a63 37,052,263

0x39e68191259d322afd02408b4588e32c9dcd6db9 23,541,334

OKEx 16,833,125

Bitrue 3,889,153

Uniswap V3: TOWN 2 1,488,282

How to play
Guides: https://townstar.com/guides

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Roadmap
Unfortunately, there is not a clear and published roadmap on their website nor announcements or future
updates about Town Star on their social media pages or Discord server. However, these are the potential
changes that could be made according to the information on their website and blog:

• In-Game Upgrades – ability to pay TOWN for in-game perks or upgrades to certain NFT items
• Burning mechanism for TOWN
• Buildings will be upgradeable by spending TownCoin
• More items will be released on the Gala Games store which are purchasable with TownCoin
• Purchase Season passes with TownCoin
• Release of Town Star Nodes Round 2 - these will cost between $14,000 and $17,000 depending
on the currency used for payment. An exact date will not be announced but Gala Games suggest
that potential buyers should be paying attention to their platform and Discord.
• Rental system for NFTs – people will be able to rent NFTs to other players and both parties will be
able to split rewards. This feature is expected sometime in 2022.

Other possible updates:

• Possible feature to gift Season Passes

• Auto renew feature for Season Passes

Accessibility
The game is compatible with:

• iOS
• Android
• Windows
• macOS

Available languages:

• English
• Korean
• Japanese

Taking into consideration that the game is available on both computer and mobile devices it can be
assumed that is easily accessible for a larger audience of players.

8
Game Reviews
In IGDB, Town Star scored a rating of 93 based on 33 member ratings, meaning that the overall perception
about the game is mostly positive. Most of the players stated that they liked the game because of the
engaging gaming mechanics and the level of sophistication when it comes to building their town. In the
following table you can see the positive and negative aspects of the game stated in the reviews:

Positive points Negative Points

Addictive Repetitive menu clicking

Accessible Low quality graphics

Runs well on older hardware Difficult to compete against players who invest
on in-game NFTs
Good variety of in-game resources Game can be difficult for new players

Good art style

Competitive

Play to Earn

Game is fun every time you play

Sentimental analysis
There are mixed opinions about the game not only from a design or mechanics perspective but also its
Play to Earn and NFT aspects. Both on Reddit and Discord people are concerned about the future of the
game. This is mostly because there is not a clear roadmap about the game and also no news when it comes
to what updates players should expect. Another concern according to players is the price of the TOWN
token and the lack of its utility. The general point of view is that players do not have faith in TOWN as an
investment and its impact on the game. However, they are relying more on potential game updates and
added features. Some examples include the ability to rent your NFT to other players, use NFTs from other
games in the Gala ecosystem in Town Star and buy NFTs on a discount when paying with TOWN. In general,
users are not happy with the current Play to Earn model and are expecting more utility from the TOWN
token. Moreover, they also think that NFTs are too expensive, and it is hard to find any valid financial
incentive to why is this happening. If things for Town Star do not change players may start looking for
other Play to Earn games where they can eventually earn more with cheaper NFTs.

Conclusion
The TOWN token is highly inflationary with a total max supply of 1 quadrillion (1,000,000,000,000,000
tokens). Unfortunately, the game has another big issue because there is not enough utility for the token
which drives its price down. In addition, there is also a lack of financial incentives to invest in NFTs. One
of the reasons for that is the low ROI compared to other Play to Earn games where players can spend less
on NFTs and also have a better return on their assets.

9
Another issue is that there is not a clear roadmap about the game which makes it difficult to predict
whether it is going to receive new features or updates regularly. Because of that, players are uncertain
about the future of the game.

Considering Town Star or the TOWN token as an investment is highly risky due to the weak tokenomics
and the high value of the NFTs compared to the expected returns. Even taking into consideration the
features that are going to be introduced in the game, the added utility may still not be enough. It is certain
that as of now there are way better places to deploy capital in the Play to Earn space.

Finally, I want to bring attention to the potential implications for Town Star in DeQuest. Due to the deeper
gaming mechanics quests can be designed in the form of tutorials. For example, a quest where players
watch videos about how to manage resources or secure their in-game earnings.

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References
https://townstar.com/

https://etherscan.io/token/0x3Dd98C8A089dBCFF7e8FC8d4f532BD493501Ab7F

https://coinmarketcap.com/currencies/town-star/

https://www.coingecko.com/en/coins/town-star

https://ethplorer.io/address/0x3dd98c8a089dbcff7e8fc8d4f532bd493501ab7f#chart=candlestick

https://dex.guru/token/0x3dd98c8a089dbcff7e8fc8d4f532bd493501ab7f-eth

https://townstar.com/gameplay/What%20is%20TownCoin/4258a59f-7f54-4c35-90f5-1395fed98c7f

https://support.gala.games/en_US/play-to-earn-town-star/calculate-a-gala-power-level-with-gala-
power

https://twitter.com/VersaGamesHQ/status/1491229242956599303

https://townstar.com/gameplay/Weekly%20Competition/f3318720-e7d3-4e62-9bd4-2609dc6648a4

https://learntownstar.com/nfts/town-star-nft-town-coin-value/

https://support.gala.games/en_US/town-star-nodes/town-star-node

https://townstar.com/play-to-earn

https://support.gala.games/en_US/play-to-earn-town-star/play-to-earn-faq

https://blog.gala.games/town-star-nodes-faq-7dc27f7f451e

https://blog.gala.games/town-star-nodes-round-2-january-12-2022-2e42ff8c7a2e

https://learntownstar.com/announcements/get-ready-town-star-nft-market-board-rental-and-lease/

https://www.igdb.com/games/town-star

https://support.gala.games/en_US/play-to-earn-town-star/how-much-towncoin-can-be-earned-per-day

https://www.reddit.com/r/GoGalaGames/comments/meejev/so_what_exactly_is_the_appeal_of_town
_star/

https://www.reddit.com/r/GalaGames/comments/sb6x0d/towncoin/

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