Knights of Degen (KOD) launched in 2021 with an initial NFT collection of 8,888 collectible Knights. KOD was created to combine the passions of the founding team—sports and web3—and extend them to a larger community. At its core, the project aims to build a community-led sports and entertainment ecosystem and innovate on-chain communal sports fandom in a community-friendly way.

Despite their admirable vision, passionate community, and strong team of builders innovating for the future of Web3, Knights of Degen has largely gone underappreciated by the broader NFT community—a frustrating situation seen far too often in today's Web3 environment that is notorious for chasing hype instead of riding with steady value creators and true innovators.

At the end of 2022, the KOD vision became clearer than ever before with the launch of an official whitepaper—the primary focus of our analysis.

Degens Seize the Moment and Dare to Break New Ground

The Knights of Degen have identified an opportunity solved at the intersection of Web3, gaming, and sports fandom. Sports fandom and online sports betting, fantasy sports, and Esports have soared in popularity in recent years.

Fans no longer accept simply watching; they are itching for more action. Interest in VR, crypto, and blockchain use cases in sports are all on the rise as sports fans anticipate new ways to participate in the games they cherish.

The future of sports consumption is at the intersection of a wide variety of emerging technologies. Drew Austin and the Knights of Degen team recognize this and have constructed a framework for their ecosystem built around three user experience pillars: socialize, compete, and earn. That ecosystem maintains a resource economy run by players (users), power (decentralized governance via DAO), and games (the experience).

The Headquarters of Degen

The home base for members of the Degen community will be the Knights of Degen mobile application. Access to the app is gated—users will need to have a valid Degen Identity. Degen Identities are a combination of numerous personal identifiers including: “your username, avatars, web3 wallet, applicable NFT characters for the game experience, and your authorized 3^rd party apps.” The identity is what connects everything in the ecosystem for each user.

Within the app, the “Degen Feed” turns individual “action” into a social experience. Since the Degen Identity connects different 3^rd party sports betting applications, once a user connects to the KOD app and places a bet, it will appear on the Degen Feed for the community to follow.

The app also allows for users to create and join “Degen Tournaments.” These are play-to-earn competitions and contests that anyone within the KOD ecosystem can create, not just the Knights of Degen team and Degen DAO. Tournaments will feature customizable settings such as how to win, format, and how many users can join.

Degen Fantasy

Fantasy sports are a huge part of modern sports that fans participate in to add to their experience, and their growth is predicted to continue to skyrocket. According to technavio's 2022 research report, the market will grow by over $6 billion by 2026.

For any team with a unique enough perspective on the industry and a fresh idea, now is a prime time to enter and make a big splash among a growing consumer base. Enter "Degen Fantasy".

KOD's Degen Fantasy will allow users to join and create their own fantasy leagues within the ecosystem. In utilizing Web3 technology, Degen Fantasy uniquely eliminates many pain points from traditional fantasy league systems, such as prize distribution, collecting payments, and dispute resolution.

Web3 integration also enables Decentralized Finance (DeFi) to play a role in league rewards. Tokens collected as league entry fees are automatically deposited into a 3rd party pool. Over the course of the season, additional tokens are generated that can be used for additional winners prizes, commissioner compensation, or any other way the league wishes to disperse them.

DeFi also opens up the opportunity for “No-Loss Fantasy Leagues.” Under this system, the league's winner would receive the “yield” from the DeFi pool while everyone else receives 100% of their entry fees back at the end of the season.

$DGEN

The $DGEN token is KOD's native ERC-20 governance, utility, and rewards token that is “the equilibrium underpinning the KOD ecosystem." It maintains four primary objectives:

• Facilitate the governance structure for the DAO Treasury via the Degen DAO in a way that delivers "power to the people" by enabling participants to vote and shape the evolution of the project.
• Power games, leagues, tournaments, etc. in the Knights of Degen ecosystem.
• Grow the ecosystem.
• Through the Degen DAO, fund the creation and development of new products and services that enhance the community experience when interacting with the ecosystem.

The utility for the token, aside from being used as in-game currency for tournaments, transacting free agent player NFTs in fantasy leagues, determining draft orders, game rewards, and content purchases, is pretty standard-issue as far as governance tokens go. Tokens can be staked, used to vote, and delegated to fund new initiatives.

Tokenomics

$DGEN will have a max supply of 150,000,000 tokens that will be distributed among four stakeholder categories. From the distribution numbers, we derived two main takeaways.

1. A highly-organized DAO treasury will prove to be a wise decision.

Typically token allocations reserved for a DAO treasury is vague and undetailed. In a sense, what usually happens is the team decides to throw a lump sum of tokens at the community and let them figure out how to allocate it. Without any guidance, the funds have the freedom to become mismanaged and messy.

The Knights of Degen team has acutely categorized (presumably set up in distinct wallets) the DAO treasury allocation into five purposeful categories that will guide its usage. Any wise finance professional will say: "Tell your money where to go" and that's exactly what has been done here. Bravo!

2. The team and contributors allocation is quite high

Some people tend to overanalyze token allocations and unnecessarily use them as their make-or-break for projects. We're not those kinds of people, but at 40%, the allocation set for "Knights of Degen Inc." + "Contributors" is double what is typically accepted as best practice in the industry.

Any team/contributor token allocation above 20% runs the risk of potentially being perceived as greedy, especially by Web3 participants who are more skeptical than ever. For perspective, Filecoin allocated 4.5% to team & contributors and Solana allocated 12.8% to the team pool.

Knights of Degen NFTs

The KOD ecosystem NFTs are the Gen I Knights, the Steedz, Goblets, and the "coming soon" Gen II Knights. All NFTs in the ecosystem possess different benefits and privileges outlined in the whitepaper, but the Gen I Knights are clearly (to no surprise) the must-own NFT in the ecosystem.

Before we jump into what owning a Gen I Knight will grant access to, let's first set the stage with an overview of current blue-chip NFT offerings.

In today's market, the typical blue-chip NFT will cost between $8,000-$100,000+. For that staggering cost, holders have typically been provided the following:

• Additional NFTs in the form of airdrops and claims
• Native cryptocurrency tokens
• Merchandise
• Community
• Access to IRL events

The reality is that most of the top NFT projects are at the height of Web3 simply because they found appeal with an irrational market that decided they were "it". It's very rare that any of them truly launch something revolutionary or provide holders with a benefit that has a rational, tangible value unrelated to the largely unfounded speculative mania machine that has already been established for the project.

Knights of Degen are different.

At just around a .30 ETH floor (~$450), Gen I Knights are a tiny fraction of the average cost to buy a blue-chip NFT.

To start, Gen I Knights immediately match the utility of the typical blue-chip by receiving the following benefits:

• NFT ownership rights
• Degen DAO rights: ability to make proposals, ability to participate in committees
• Exclusive airdrops
• Exclusive rewards
• Exclusive events
• Exclusive space in Discord and future digital community locations including Metaverse lands

On top of those benefits, add in the fact that the team is building a revolutionary Web3-integrated, decentralized sports ecosystem that has the power to touch the lives of millions of fans around the world in exciting new ways when there is a growing, proven demand for such a thing, and the overall picture of this project becomes very clear.

The Verdict

Knights of Degen are an obvious victim of Web3's alignment to hype-fueled speculation as one of the most underappreciated builders in the entire industry.

The proof is in the floor prices.

At around .30 ETH, Gen I Knights are far less valuable than plenty of projects that have delivered less, have no real business model to generate revenue, have a far less ambitious vision, and are simply in the space to exist.

In bear markets, the fakes fade away and the real builders survive to prosper when the bull returns. If you're looking for a fun Web3 ecosystem to get involved in with a bright future of innovation run by true builders, Knights of Degen should be considered.

Everyone in the NFT space is looking for a project providing sensible and real utility. The compounding ecosystem Knights of Degen is building has a highly-focused target market and consumer experience in mind. They have found their niche and, with the means and opportunity to truly innovate within it, are now looking to establish a lasting presence as a brand with a proper revenue-generating model that touches the lives of millions. As lifelong sports fans and believers in Web3, this whitepaper hits close to home for our team. This is what we want the future of fandom to become.

The views and opinions expressed here are for entertainment purposes only and should, in no way, be interpreted as financial or investment advice. Always conduct your own research when making an investment or trading decision, as each such move involves risk. The team members behind Triana are not financial advisors and do not claim to be qualified to convey information or advice that a registered financial advisor would convey to clients as guidance. Nothing contained in this e-mail/article constitutes, or shall be construed as, an offering of financial instruments, investment advice, or recommendations of an investment strategy. If you are seeking financial advice, find a professional who is right for you.

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