Yield Guild Games (YGG) has raised $4 million to accelerate its mission of bringing the “play-to-earn” phenomenon to more players around the world, the decentralized autonomous organization (DAO) announced today. The Series A investment is led by BITKRAFT Ventures, a global investment firm for gaming, esports and interactive media. The round was also participated by A.Capital Ventures, IDEO CoLab, Mechanism Capital, and ParaFi Capital as well as existing investors Animoca Brands, Ascensive Assets, and SevenX Ventures.
YGG, co-founded by Gabby Dizon, Beryl Chavez Li and Owl of Moistness, is a 15,000 gamer community and as a DAO, it looks for games with promising economics and yield generating opportunities. An example of such a game is Axie Infinity by Sky Mavis. YGG invests in Axies that will be lent to players so they earn income by playing the game. This represents an updated gaming revenue called “play-to-earn” where players are finally able to monetize the time they spent in-game without fear of violating any terms and conditions. In an interview with this writer, Gabby said these types of activities are already happening in massively multiplayer online games (MMOs) albeit in player to player transactions or in the gray market. “So it’s not like, this is a new thing, it just legitimizes the business model that the assets that you pay for inside these games are really your own, and you can trade them at any time without having to ask permission from the developer,” he said.
At its core, YGG is a community of play-to-earn gamers. “Think of it as a massively multiplayer online (MMO) guild, for example, but operating across several games, investing in yield-generating NFTs within those games, and lending those in-game assets and inventory out to our player base,” Gabby said further.
YGG has since partnered and invested in games like Sandbox, F1 Delta Time, League of Kingdoms, Illuvium, and Guild of Guardians.
“Play-to-earn” is made possible by NFTs or non-fungible tokens, which in turn, was made possible by the blockchain. A digital asset that is an NFT is unique, verifiable, and cannot be replicated. Even if the digital asset is copied and pasted to create another version of it, tracing them through the blockchain will allow one to verify which version of the digital asset is true and authentic.
One of the biggest use cases of NFTs is in-game assets, such as Axies – digital pets or monsters inside the game Axie Infinity. Players earn the cryptocurrency SLP by winning battles using a team of three (3) Axies. The SLP can be sold in exchange for ETH or cash. The value of SLP is derived from the fact that this cryptocurrency is needed as a fee for breeding new Axies, which can be sold or played with. As more and more players and breeders participate in the Axie economy, as the game becomes more popular, so does the price for each Axie increases. This is not unique to Axie Infinity, as other NFT games have seen the value of their in-game assets increase as they become more popular.
But despite the appreciation in prices, the earning opportunities remain true. Yield Guild games has onboarded and lent in-game assets to players, many of which from emerging countries, whose lives have definitely changed because of the earning opportunities that NFT games brought to them. YGG even produced a documentary, in collaboration with Delphi Digital and directed by consulting firm Emfarsis, which revealed the story of a rural community that weathered the pandemic by earning income through “play-to-earn.”
According to Jens Hilgers, the 24-year esports veteran and founding partner at BITKRAFT Ventures, which led the Series A, games and virtual worlds are increasingly becoming hosts of real economic activity. BITKRAFT has previously led or participated in funding rounds to what are now successful gaming companies like Epic Games and Southeast Asia’s Tier One Entertainment.
BITKRAFT’s funding to Yield Guild Games is recognizing that real economic activity can be enabled and accelerated at scale through blockchain technology. It also represents BITKRAFT’s commitment to blockchain and crypto technology.
“Yield Guild is serving as a catalyst to this transition with very forward-looking concepts around the novel play-to-earn model. What Gabby and his team are building, the web 3 infrastructure stack they’ve assembled, is a glimpse at the future of work,” Hilgers said. BITKRAFT most recently announced a strategic partnership with Delphi Digital, a blockchain advisory firm, to help identify investment opportunities at the intersection of crypto and gaming.
For Gabby, no matter how many members join the YGG community or players that become “Axie Infinity scholars,” — which right now numbers 1,900 — it’s important to realize that the number isn’t just a metric. “These are surely 1,900 people whose lives are getting better because of what we’re doing, because of the scholarships in countries like the Philippines, Indonesia, Venezuela, India, Brazil. These are actually making a huge impact and people are able to lift themselves out of poverty.”
The need to scale quickly and acquire users — people whose lives will be changed by the NFT opportunity — is at the core of YGG’s decision to raise funding. “The reason we’re able to scale very quickly and serve so many scholars now is [because] we have investment from these VCs. We can breed a lot of Axies and actually serve scholars right now, whose lives are getting better because of the scholarship program. It’s impossible for us to do this without the VC funding” Gabby noted in an interview with this writer.
The Series A round was also participated by angel investors including GGWP Co-Founder and CEO, Dennis Fong, G2 Esports CEO and Founder, Carlos Rodriguez, Sky Mavis CEO, Trung Nguyen, and Sky Mavis Co-Founder, Jeff Zirlin.
This article is published on BitPinas: Filipino-Led Yield Guild Games Raises $4M in Series A Led By BITKRAFT Ventures