Most recent update: [March 11th, 2022]
No securities regulatory authority has expressed an opinion about the Crypto Contracts or Gala, made available on the VirgoCX Platform, including an opinion that Gala is not itself a security and/or derivative.
What Is Gala?
Gala Games is a project designed to take the gaming industry in a new direction, enabling players to take back control over the games that they choose to play. Gala Games has stated in its mission that it intends to create blockchain games that players would actually want to play, giving players control of the games and in-game assets through the use of blockchain technology and by bringing back creative thinking into games.
Gala allows players to own non-fungible tokens (NFTs), allowing them to participate in the governance of games in the Gala ecosystem. Players can vote on key decisions, such as which games should be developed or receive additional funding through the Founders Nodes voting mechanism. Gala Games also has its own utility token, GALA, and so far, the project has released an NFT collectible series called VOX, and a playable game, Town Star. There are plans afoot to launch more games in the near future, with a sci-fi strategy game, a tower defense game, and a fantasy RPG game in the pipeline.
Since its launch, Gala has grown significantly and currently has 1.3 million active monthly users and over 26,000 NFTs sold, with the most expensive NFT valued at $3 million.
How Does Gala Work?
Gala Games focuses on decentralization, which is an integral part of its roadmap. The project gives the gaming community a significant say in developing games in the Gala ecosystem. It achieves this through Gala Nodes. These nodes support the network for exclusive NFTs, voting power, and the native token, GALA. The Gala network is supported by a triple-proof node system consisting of three different consensus protocols.
- The Gala Network utilizes the Proof-of-Work consensus mechanism to provide computing power to the system. The hardware running Proof-of-Work is also called the Founder Nodes, as these are all early supporters of Gala.
- Certain nodes are Proof-of-Stake nodes, these nodes operate specific games by renting smart contracts.
- The last type of node is the Proof-of-Storage node, these nodes are free nodes with storage capabilities, allowing games to be hosted on the node system, removing the reliance on centralized hosting solutions.
Eric Schiermeyer founded Gala Games. Schiermeyer was also the co-founder of Zynga, one of the most popular mobile games companies. Under his guidance and leadership, Zynga had launched a slew of massively popular games such as Mafia Wars, Poker, and the hugely popular Farmville. He launched Gala Games back in 2019 to create a blockchain-based game network that would allow gamers to have more control and ownership of the games that they play. Gala Games currently has over 90+ team members, with 1.3 million active users.
History Of Gala
The same team behind Zynga created Gala Games. Founded by Eric Schiermeyer in 2019, Gala has grown to 1.3 million active monthly users, with over 26,000 NFTs sold. Currently, Gala Games has one NFT collectible series called VOX and a playable game called Town Star under its belt. There are several more games in the pipeline which will be launched on the platform soon.
What Makes Gala Games Unique?
Gala Games offers a host of blockchain games that focus on putting the gaming experience first and putting the blockchain in the background. Town Star, Gala Games’ first offering, is a game based on gameplay similar to SimCity and can be played through the browser, with the key difference being that they actually own the town. Gala Games also has its NFT collectible series called VOX, each VOX is unique, and some are rarer than others. During the initial airdrop, 8800 VOX were distributed at an average rate of $0.0888 ETH.
Although Gala Game’s first game inspires the collectible series, it does have utility. VOX holders can lock up their GALA tokens and earn VOXcoin by playing with their VOX avatars, VOX owners can also animate their VOX avatars through their FBX files. Gala games also has several other games in the pipeline, such as;
- Fortified - A player vs. player tower defense game. The game is set in a fantastical medieval world, with players competing amongst each other to create the best tower defense strategies.
- Echoes of Empire - Echoes of Empire is a sci-fi game set within a galactic war. Players in the game can have their own spaceships and be able to control parts of the galaxy.
- Mirandus - Mirandus is an RPG set in a world ruled by five monarchs. Players in the game can own in-game assets and also own the in-game landscape.
- Spider Tank - Spider Tank is a free-to-play game that allows players to compete against one another. While the game is free-to-play, it will also contain in-game earning mechanisms.
Users can also support the Gala Network by running Gala nodes. Users that run Gala nodes are eligible for different types of rewards such as GALA tokens, NFTs, and other rewards. Gala also utilizes a triple-proof node system that consists of Proof-of-Work, Proof-of-Stake, and Proof-of-Storage, Proof-of-Work nodes are founder nodes, receive all NFTs from games released by Gala, and receive GALA tokens allocated to their node license. The Proof-of-Stake nodes are paid nodes utilized for specific games through the renting of smart contracts. The Proof-of-Storage nodes are free nodes that allow the games to be hosted on the node system, removing any centralized storage system.
How Is Gala Games Secured?
GALA tokens are based on the Binance Smart Chain and Ethereum blockchains. Gala’s Network is secured by the Founder Nodes, with 50,000 Founder Nodes validating in-game transactions to secure the network. Nodes on the Gala Network also have voting and governance rights, allowing them to vote on which games should be funded or which games should be released on Gala.
Users can purchase an account and run their node, with node operators being rewarded GALA tokens based on a points system adopted by the Gala Network.
The GALA tokens have a total supply of 35,240,112,493 GALA, with a circulating supply of 6,977,205,436 GALA. There is also a daily distribution of 17,123,286 GALA, out of which half is distributed to the Founder Node operators, and the other half is distributed to the Gala Games Conservatorship. The distribution of the GALA tokens is halved every year on the 21st of July. The token serves as a utility token that players can use to purchase in-game assets. Users can earn these tokens by running nodes on the Gala network.
Risks Associated With Gala
As with any crypto-asset, it is important to understand the risks involved. Regulatory authorities in Canada have not expressed any opinion on GALA as an investment. Like most coins, GALA also has associated risks such as risks emerging from price volatility, the risk from regulatory authorities, and hard forks. There is also the risk that Gala Games could cease to function, leaving token holders with no means of recourse.
Recently, Gala Games has also been facing an increase in hacks, and with an inadequate response from the team, several users have been affected. The affected users have also alleged that several of their wallets were hacked despite setting up 2FA.
Prior to listing Gala on the VirgoCX Platform, VirgoCX performed due diligence on Bitcoin and determined that Gala is unlikely to be a security or derivative under Canadian securities legislation. VirgoCX’s analysis including reviewing publicly available information on the following:
- The creation, governance, and location of Gala and/or its primary development team;
- The supply, demand, maturity and liquidity of Gala; and
- Legal and regulatory risks associated with Gala.
Statutory Rights under Securities Legislation
VirgoCX is offering Crypto Contracts on crypto assets in reliance on a prospectus exemption contained in the exemptive relief decision Re VirgoCX Inc. dated May 30, 2022 (the Decision). Please be aware that the statutory rights in section 130.1 of the Securities Act (Ontario), and, if applicable, similar statutory rights under the securities legislation of each other province and territory in Canada, do not apply in respect of the Crypto Fact Sheet to the extent a Crypto Contract is distributed under the prospectus relief in the Decision.