The blockchain gaming guild sector frequently raises funds. What are the reasons behind this?

There is no doubt that GameFi will take over DeFi and become the hottest track in the crypto circle in the second half of 2021. According to DappRadar statistics, in mid-July 2021, the number of interactions between blockchain games and wallets was 3.31 million times, exceeding DeFi for the first time.

However, in addition to the attractive P2E concept, what really brought blockchain games into the mainstream vision was Axie Infinity, which completed performance optimization with the help of Ronin sidechain upgrade at the end of April. After becoming popular in Southeast Asia, its token AXS has increased by nearly 100 times this year, and its daily turnover once exceeded that of Honor of Kings. At the same time, the YGG guild, the promoter behind it, also became popular.

The popularity of Axie Infinity is inseparable from the full-process incubation of the YGG Guild. In the early stage, YGG eliminated all barriers between the grassroots people and Crypto through one-stop services such as lending, training and promotion, and quickly completed fission through an attractive profit-sharing model. Under the enhanced loop of the simultaneous explosion of revenue volume and player scale, the YGG Guild has also straightened out a complete business line from player recruitment, training, competitions to lending, covering all aspects of blockchain game gold farming.

After quickly becoming popular, YGG completed a $4 million financing led by a16 in August, and had previously completed a total of more than $5.3 million in financing. Referring to the benchmark effect of Axie Infinity, YGG has also single-handedly derived a more segmented track: the blockchain game guild.

More Crypto than traditional game guilds,

Attracting capital pursuit

The relationship between blockchain games and guilds is more like that between start-ups and venture capital institutions, with the latter playing the role of value discoverer and incubator.

According to incomplete statistics, the number of blockchain game projects included in DappRadar has exceeded 1,200 so far. With so many players flocking to the platform, it has become a difficult problem for them to choose the project that best suits them in terms of gameplay and benefits, which has spawned a large number of blockchain game guilds.

In fact, similar guilds have been popular since the popularization of online games, and the small workshop-style "gold-making studio" is the most typical form. However, the Crypto background and DAO attributes of blockchain game guilds make them clearly different from traditional game guilds.

First of all, traditional game guilds have absolute voice and monopoly on revenue in front of players. The two are essentially an employment relationship, and employment will lead to exploitation and uneven distribution of revenue. However, blockchain game guilds are born out of the crypto world, adopting the community governance method of DAO, and allowing players to participate in revenue distribution and community governance by issuing tokens. This is the essential difference between the two. For example, the blockchain game guild Avocado Guild recently revealed that its upcoming native token AVG will be used for DAO governance, rewards, mortgages, liquidity mining and platform ecosystem construction.

Secondly, traditional game guilds only empower players from the hardware level, that is, they simply provide players with places and props for gold farming, with a single service and limited to players with a certain gaming foundation. The blockchain game guild empowers players at all levels in a multi-dimensional and comprehensive manner through a variety of forms such as recommendation incentives, full-time training, low-interest loans, profit sharing, scholarship support, hosting game events, and developing SubDAO. In this process, the community consensus driven by the P2E model will be strengthened, which will then trigger a significant fission effect. The most typical example is the emerging blockchain game guild UniX Gaming, which has more than 190,000 community participants, surpassing YGG's more than 80,000. Therefore, the user growth rate of the blockchain game guild far exceeds that of its predecessors, which is also the core indicator for capital valuation of projects.

Finally, in the traditional gaming world, there is a serious conflict between gaming guilds + gold farmers and gaming companies. This is because such large-scale, assembly-line operations will cause massive outflows of gaming assets, which will in turn cause inflation within the ecosystem and impact the gaming order. In response, the default approach of gaming companies is to cancel player accounts and bear the losses themselves.

However, in the follow-up investment + incubation model, the interests of blockchain game guilds and blockchain game projects are bound together. For example, Trung Nguyen, the behind-the-scenes developer of Axie Infinity, is the main angel investor of YGG. Therefore, all operations of players under the guidance of blockchain game guilds are aimed at expanding the scale of games and revenue. Therefore, under the specific token incentives and economic model design, projects, guilds and players form a stable community of interests. In addition, blockchain games use blockchain as the technical foundation, NFT as the form of game assets and tokens as the value medium, making the security, stability and liquidity of players' revenue stronger, which meets the expectations of the Crypto world for value.

Of course, the blockchain gaming guild not only carries the Crypto temperament that Generation Z prefers, but the blockchain gaming track behind it also has great potential for imagination.

According to DappRadar statistics, as of October 2021, the number of transactions in the blockchain gaming sector reached 480.7 billion US dollars, and the number of online users increased by more than 290 times compared to the beginning of the year. With the superposition of the two positive factors, capital has poured in. The blockchain gaming circle has frequently reported large financing news around December:

Brazilian blockchain game guild BAYZ completed a $4 million financing round, led by Yield Guild Games;

AAG Ventures, the entity behind AAG Guild, completed a $12.5 million private equity financing, with HashKey Capital participating in the investment;

Rainmaker Games announced the completion of a $6.5 million seed round, with Animoca Brands participating;

UniX Gaming recently announced the completion of US$28 million in financing, of which US$8 million came from private equity financing and US$20 million came from Copper public offering. Investors include LD Capital and others.

Refer to YGG,

New players have started more diverse explorations

While YGG is opening up a niche market, it has also provided a model for newcomers with its successful experience. Currently, most blockchain game guilds use YGG as a model for their model design, but they also make adjustments based on regional characteristics, project attributes, and player types. Below is a rough inventory of YGG and other leading blockchain game guilds:

1. YGG Guild

YGG is the leading project in this field. Its economic model is that investors are responsible for the initial investment, players are responsible for participating in the game to earn gold, and the guild's surplus is reinvested to purchase virtual assets and land in the game. After Axie Infinity became popular, the YGG guild launched a scholarship program to provide loan services for players who want to enter the game.

In terms of governance, YGG deeply practices the DAO concept, and members can form sub-guilds (SubDAO) based on different game projects. The governance functions of sub-guilds and parent guilds are roughly similar, but are limited to specific projects or fields. YGG, which is well aware of the psychology of players, allows SubDAOs to issue tokens to inject liquidity into different blockchain game projects.

YGG also holds various types of assets including SAND, AXS, Zedrun, etc., totaling more than $850 million. YGG currently has more than 18 games in its portfolio, including MOBOX, which was popular some time ago, and Thetan Arena, which is even regarded by investors as a substitute for Axie Infinity. According to official data, since its launch at the end of November, the number of active players of Thetan Arena has exceeded 6 million, and it has received investment from professional institutions such as Animoca Brands.

2. Rainmaker Games

Rainmaker Games focuses on the free concept, players can try the game for free and get free training. In the game, players can choose to use the NFTs provided by the platform to play the game, or use their own NFTs, and the fee threshold is relatively low.

In addition, Rainmaker Games has a rich game library, which is suitable for players who have high requirements for gaming experience. On the Rainmaker Games platform, games are divided into three levels: entry-level, intermediate and advanced. Entry-level players can start with non-NFT games. After entering the intermediate level, players can participate in NFT games, and advanced players can also apply for guild certification, which will help players obtain rankings and reserve points from top guilds.

Rainmaker Games hopes to use this to obtain more granular user data, so as to more accurately recommend games to players and maximize user retention. Rainmaker Games also plans to build the most comprehensive blockchain game database, provide player data to game project owners, and build data portraits of game teams for guilds.

It is worth mentioning that Rainmaker Games will also personalize the game UI interface for each player to match their preferences, game skill level and training content. Players can also directly find reviews and evaluation videos of various games on the platform and learn to play games with top coaches.

The total amount of Rainmaker Games platform token $RAIN remains constant at 100 million and will not be issued in excess. It will also be widely used in community governance.

Currently, Rainmaker Games has 1,200 players, its Discord community has 21,000 members, and the platform's monthly revenue exceeds $700,000.

3. AAG Guild

The initial form of AAG guild is similar to that of YGG, mainly earning income by leasing NFTs to users. What is exciting enough for players is that the player share ratio is 60%, which is significantly higher than YGG's 30%.

On this basis, the AAG Guild focuses more on the user education module, which is to encourage users to receive game training or learn advanced computer languages ​​to earn guild tokens. However, this function has not yet been opened to the public and is expected to be tested early next year.

It is worth noting that AAG Ventures, the operating entity of the AAG Guild, is the first project to receive support from Harmony. AAG Ventures can cross-chain to mainstream public chains such as ETH through Harmony's trustless Horizon bridge. AGG's assets can be bridged to multiple chains and their users, and reduce the transaction costs of game assets.

As of December this year, the AAG has more than 2,000 members covering seven countries: the Philippines, Indonesia, Brazil, India, Colombia, Nigeria and Argentina.

4. UniX Gaming Community

UniX Gaming's basic model is consistent with the industry, that is, to set up a fund pool to rent NFT prop assets to players, and players will share the profits in proportion. Interestingly, UniX Gaming plans to invest a large number of in-game NFTs so that more players can rent them to generate more sublease premiums. In addition, UniX Gaming is also actively seeking in-depth cooperation with other games to achieve the goal of attracting traffic to the community.

According to the official website, UniX Gaming has more than 190,000 community participants, with a total of 1,200 bonuses awarded, generating more than $280,000 in profits per month, and more than 10,000 hours of free education, making it one of the fastest growing gaming guilds. According to official plans, UniX Gaming plans to award 10,000 bonuses by the end of 2021, and is expected to generate $70 million in revenue each year in the future.

5. Merit Circle (MC)

Merit Circle is a Metaverse decentralized autonomous organization (DAO) launched by the founder of the Axie 420 scholarship program and incubated by Flow Ventures. It mainly invests in the Metaverse, including scholarship programs, purchasing Metaverse land, etc., and provides educational services to its own community. Merit Circle's slogan is: Make Axie Infinity affordable for users in low-income countries. Its intention to cling to YGG is obvious, but it has also gained a group of fans in Southeast Asia.

In addition, Merit Circle has also set up a subDAO structure modeled after YGG. Specifically, Merit Circle DAO consists of a mainDAO (main guild), which manages many subDAOs (sub-guilds), which serve as the tentacles of the entire blockchain game industry. However, unlike YGG, Merit Circle does not allow subDAOs to issue tokens, and all guilds share MC tokens. MC token holders can vote on amendments to game strategies.

It is worth noting that Merit Circle focuses on linking capital parties to obtain huge financial support to incubate more high-quality blockchain game projects. Based on this, Merit Circle has established cooperative relationships with well-known blockchain games such as Star Atlas and Illuvium.

The reason why the blockchain game guild is so popular,

It can also explain the popularity of DAO, Metaverse and Web3.0

Kain, the founder of Synthetix, once said on a social platform: DeFi belongs to the financial field. Finance has a great impact on the world, but games and art NFTs will win more attention than finance. This explains why GameFi can take over the traffic and popularity of DeFi.

The earn-while-playing model, which is deeply aware of the underlying desires of human nature, has quickly stimulated the needs of crypto players after being ignited by the explosive point of Axie Infinity. As a key supporting component of GameFi, YGG and other blockchain game guilds, whose business model and profitability have been verified by the market, have naturally entered the rhythm of positive cycle business operations under the boost of capital and the enthusiasm of players.

Of course, the reason why blockchain game guilds are so popular also applies to the recently popular new concepts such as DAO, Metaverse and Web3.0.

The underlying narrative logic of DAO, Metaverse and Web3.0 is to use decentralized blockchain technology to allow ordinary users to stand on an equal footing with Internet giants, equally participate in the distribution of ecological dividends, and fully control their personal data information in the digital age instead of using it for other purposes.

Although the current business of the Chain Game Guild is still limited to GameFi, and the sustainability of this track cannot be judged at present, it also bundles the interests of players, platforms and communities through the token economic model, and allows players to participate in the formulation of game strategies through DAO operations. In addition, all assets in the game ecosystem exist in the form of NFTs, and users' ownership cannot be shaken.

In addition, in this process, more crypto-based blockchain game guilds are also more actively embracing the Metaverse. Just last month, YGG reached a cooperation with Genopets, the leading blockchain game on Solana, to promote this Metaverse game globally. To this end, YGG also purchased $25,000 worth of Genopets governance tokens GENE to help launch the game's scholarship program.

According to reports, the Genopets game can extract data from the user's mobile phone or wearable fitness device, convert the user's life status into the status of the pet in the game, and can obtain token rewards. This game is most closely connected to the metaverse. Although it may be submerged in the hustle and bustle of the gold farming trend due to its own design, we can see from it YGG's determination and desire to embrace the metaverse.

More importantly, the blockchain game guild can focus on adjusting the player share ratio to 30%-40%, which is a huge improvement compared to the Web2.0 game world. According to a report released by the World Bank in 2011, the average monthly income of each game gold farmer is less than RMB 1,600, but the working hours are more than 10 hours a day. In comparison, the profit sharing model of the blockchain game guild aptly demonstrates the core spirit of Web3.0: to transfer as much platform revenue as possible to players who contribute.