Unchained - How Yield Guild Games Is Revolutionizing the Future of Work and Investment - Ep.298

Starting point is 00:00:00 Hi, everyone. Welcome to Unchained, your no-hype resource for all things crypto. I'm your host, Laura Shin, a journalist with over two decades of experience. I started covering crypto six years ago, and as a senior editor at Forbes was the first mainstream media reporter to cover cryptocurrency full-time. This is the December 14th, 2021 episode of Unchained. My book The Cryptopians, Idealism, Greed, lies, and the making of the first big cryptocurrency craze is available. for pre-order on Amazon, Barnes Noble, Bookshop.org, or any of your other favorite bookstores. Go to bitly slash cryptopians. That's b-it.l-l-Y-c-T-O-P-I-A-N-S and pre-order today. Buy, earn, and spend crypto on the crypto.com app. New users can enjoy zero credit card fees on crypto purchases in the first 30 days. Download the crypto.com app and get $25 with the code, Laura. Link in the description. Brave wallet is the first secure wallet built natively in a Web3 crypto browser with no extension required.

Starting point is 00:01:08 You can store, manage, and grow your crypto portfolio all from a safer wallet. Visit brave.com slash unchained to get started. The Notal Cash app makes earning crypto on your smartphone as easy as turning on your Bluetooth. Notal Cash is private, secure, and available on iOS and Android. Visit nodal.com.io slash unchained. NODLE.io slash Unchained to start earning Nodal Cash. Today's guest is Gabby Dizan, co-founder of Yield Guild Games. Welcome, Gabby.

Starting point is 00:01:41 Hey, Laura. Thanks for having me. Let's start with your background. How did you get into games and crypto? Oh, wow. So the background actually goes all the way back to the early 80s. On a business trip to America, my dad took home a Commodore VIC-20. And yes, I know that that dates me. having a Commodore as my first computer.

Starting point is 00:02:02 But yeah, I started playing games there. And my parents always wanted us to have personal computers, not like consoles, like, you know, a PlayStation or Xbox growing up, because he thought that there's more educational value in having computers. So even though I was playing games most of the time, I learned how to program then. And then, yeah, took up a, like, a computer-related course. And I really just love games. So when I graduated from school, I knew that I wanted to make games.

Starting point is 00:02:34 And then how did you end up finding crypto? Oh, so I was making games, started a mobile game studio in 2014. So we were making games for iOS and Android devices. But in 2017, it was actually through Ethereum that I got into crypto. I of course heard about Bitcoin from my friends. and some of them had gotten into it as early as 2014. But the use case in the Philippines for Bitcoin had always been around remittances, which honestly just wasn't that interesting to me because I was a game developer.

Starting point is 00:03:11 And what really got me in was the concept of smart contracts. Or when I first took a look at Ethereum, it was the concept of programmable money. And the concept of adding programmable money in games, there's always been some form of money, points, resources, games that gamers are very used to. But the idea of having this kind of immutable money that people could take out of the context of a program or a game and just give to other people without permission, this seemed really exciting.

Starting point is 00:03:41 So we started taking a look at smart contracts to see how we could use them in the context of a game and how it could one day disrupt the game industry. And it was during this time that we were experimenting on this, that Cryptoketes came out in November 2017. They crashed the Ethereum Network, if you remember that. And they popularized the notion of the non-fundgible token or the NFT. And the NFT was super powerful because unlike fungible tokens, now you had a unique asset on the blockchain that could represent something

Starting point is 00:04:13 and that something could be a game item, for example. And that was just really so incredibly exciting for me. And so then how did you end up founding Yield Games? Okay, so when we found NFTs, so I've been incredibly active in the space, we started making a game called Battle Razors on Decentral Land, and then I started becoming an NFT collector, so I collect NFTs from, you know, game items, crypto art, I have land, I have an art gallery in DeCentral Land, for example, and then I started playing Axe Infinity in October 2018, so it became a friends with the founders, Gio and Psych Out in the conference circuit. It was very, very small scene back then. And I invited him to Manila to speak about Axi Infinity, a blockchain event that I organized. And in return, he gave me three axes to start playing. And that was the start of me playing Axi Infinity. The community then was less than 500 people.

Starting point is 00:05:16 And yeah, it was a great experience. And fast forward to 2020, I was still playing Axi Infinity. I was playing Axi Infinity. I was playing it a lot, actually. And what had happened was that this was during the start of the COVID lockdown. And a lot of people lost their jobs around the world, but particularly here in the Philippines. And what happened was that people in the rural area of the Philippines started playing the game as a way to earn money because they lost jobs. They were stuck at home during the lockdown. And they found Axi and they started coming in. And this was the explosive growth that really led to us founding Yield Guild Guild Games or YG as a way to kind of give access to people around the world to the NFT assets that they can use and play in order for them to get access to

Starting point is 00:06:06 the crypto economy. And so tell us what Yield Guild Guild Games does and how it works. Sure. So YGG is a what we call a play-to-earn gaming guild. The guild itself is set up in form of a Dow. so it's not a company, there's no underlying equity, and it has a treasury wallet, and then what we do is that we buy or breed or acquire NFTs in different games, starting with Axi, of course, but we're in a lot of different games now.

Starting point is 00:06:35 And then what we do is that we lend out these NFT assets to our player community so that they can use them. So, for example, if a player uses axes from our guild, in what is known as the scholarship program, or a lending program, they get to play the game without having to pay the upfront cost, the buying Axis.

Starting point is 00:06:57 A good team in Axi Infinity might cost somewhere between maybe $800 to $1,000, which is just out of reach for a lot of people who are just starting out to play a game, especially in developing countries, such as Philippines or Venezuela.

Starting point is 00:07:11 So we democratize the access by lending them the assets so that they can play the game, they can earn money, and we just do our revenue share. So 70% of that, the SLP or smooth love potion tokens earned by the player goes to them, 20% goes to their community manager, and 10% goes to us, the Guild.

Starting point is 00:07:30 And so at the moment, how many scholars do you have and how much have people earned via yield guild games? We have over 6,000 scholars now, and we've paid out more than $13 million in SLP, and that's just in the course of a year. And we're really going to wrap this up aggressively in the next year. So let's talk about, you know, you have this experience, obviously, in traditional games. What problems do you think blockchain-based games solve that exist in traditional video games? Right.

Starting point is 00:08:05 So something that people haven't really thought of when they play a game. Because when you play a game, you're thinking about, you know, you're playing it for enjoyment. But in games that have virtual economies, you're actually putting in a lot of time and effort, building up your character. getting items, maybe getting land in the game. And with putting these assets on the blockchain and kind of in a sense imbueing them with a financial value, now the effort that you can have in those games is something that creates value that you can take out.

Starting point is 00:08:39 So the game developer makes all of the money from the work that you're doing inside this virtual economy. And what this does by putting assets on chain is that you can own that value for yourself or you can trade it with others. And this is actually great for the game itself, because if I am putting in value in your game and I am getting money or assets out of it, that means I'll stay there longer because I'm actually getting something for the effort that I'm putting in. So let's talk a little bit about what this means for somebody who participates in Yield Games.

Starting point is 00:09:16 How do they start? And then what is their kind of like life cycle in Yield Guild Games evolve as time goes on? Yeah. So there are many ways to participate. I guess if you're just coming in without any knowledge of blockchain, you're probably coming in as a scholar, which means that you apply to different community managers. One of them selects you and then gives you access to assets, just axes, and you start playing the game. But what we really like to do is to kind of have. have people really find what kind of creative jobs they like to do within the community.

Starting point is 00:09:53 So people may start as a scholar and then they earn enough money after a few cycles to pay off their debt, pay off their bills, put food on the table. And then their world opens up. They can start doing different things. For example, they can buy their own axes and just play for themselves and get 100% of the SLP they produce. Or they can start breeding axes to sell them for more money or breed the axes or become a scholarship manager themselves, providing scholarships for other people who might want to play the game.

Starting point is 00:10:24 Some people become streamers, content creators, or community helpers who are helping other people. So that's the lovely thing about it. There's just so many ways for people to get involved. And can you give any real life examples of different players who have had their lives changed by participating in Yield Games? Oh, wow. Yeah. There are so many of those stories. you won't even believe. So one of our players who goes by the name Young Yujiro on Twitter and Discord, he was a player who really did not grow up with much. And he became part of the early community.

Starting point is 00:11:03 I tapped him as a freelance graphic designer making Twitter banners for our YGG Twitter account. And he ended up receiving the Founders Coin. So the Founders Coin was an NFT that we rewarded all of our early community members. back in January. And if you own a Founder's Coin, you'll constantly get amazing, like, freebies, NFT AirDrops, Special Things for Life. So it turns out that that's coveted highly by our members and the value of that Founders Coin just kept increasing.

Starting point is 00:11:35 At one point, this free AirDrop, and we minted 300 of them, was worth 30th each. He was in a financial rut because he had a death in the family, and he had to sell his founder's coin for half an eath, but that enabled him to kind of pay for a burial of his family member, pay down some debt, and put himself in better financial footing. And by participating in the different events of the gale, he was able to build up his financial life where he's able to buy a house and car. And there's just so many of these different stories from people who come from very modest backgrounds, who decide to show up and participate in the network and have their lives vastly

Starting point is 00:12:17 improved as a result. And so people are earning, you know, as you mentioned, things like smooth love potion in Axi Infinity, how easy is it for them to cash out, especially if they are, you know, in these more developing countries? Yeah. So cashing out is, is not super easy. I think the easiest way to do that is via the crypto exchanges that support tokens like SLP. So for example, Binance listed game tokens like SLP. So it's relatively easier to cash out. But now we're actually working with partners to make it easy for you to use the tokens that you've earned and use it to pay for real world financial services. Like we have a partner that comes in where you can use the SLP earned and pay for your phone bill, for example.

Starting point is 00:13:07 And that's just incredibly amazing to see. Is that the partner XLD or I saw that. Yeah. a little bit more about, like, how are they making that work? Yeah. So the magic there is where kind of crypto meets fintech. And in fintech, you can apply for different kinds of licenses, which are kind of vary by country to country. But if you have the proper licenses, it is just similar as making like a bills payment for your bank.

Starting point is 00:13:39 So they kind of abstract away the exchange from SLP to Philippine pesos or U.S. dollars and then just use that to pay for the bill on your behalf. And when it works, it's just amazing where you think of yourself as playing a game, you're earning tokens, and then I'm using that token to pay for a phone bill or get airtime load. That's, I think, where crypto has a real use case that helps people in the real world. And which countries are they in right now or in general? Like, you know, which countries do you have these services to make it easy for people to

Starting point is 00:14:15 cash out. So it's in beta right now, so it's in the Philippines, but they're going to roll it out to over 100 countries. Okay. So I'm sure you're aware, and I know, here we are just talking about this one game, Axi Infinity, but obviously it's kind of the main one, or it has the most

Starting point is 00:14:33 traction. But as I'm sure you're aware, the value of SLP has been dropping earlier this year, it was like 35 cents, and now it's closer to five cents. How do you, why do you think that has happened. Let's start there. Why do you think that's happened? Sure. So, so SLP is different from other tokens in that it's an infinite supply reward token. So it's not a cap token. It's meant for people to

Starting point is 00:15:00 earn value in game. And then when, when you breed Axis, you burn, you burn SLP. So that's how the tokenomics work. It's important for a game like Axi to have some sort of reward token that has that has inflation so that new people can come in and start early in value. Unfortunately, when Axi started really growing, like, mid this year, when everything started exploding, I think speculation on the exchanges got ahead of where the price was of SLP or the good range was. So it went to like really high levels where, for example, at 30 cents, people were earning, for example, like over maybe $2,000 a month playing the game,

Starting point is 00:15:48 and it was probably unsustainable because it was driven by speculation. And what you want for a game reward token is to be driven more by internal, like, game economy rather than kind of external forces. So I guess that's one thing that all game designers have to think about is that how do you mitigate the volatile nature of cryptocurrency? because people can and will speculate on your token, and that might end up hurting the game economy that you have in the long run.

Starting point is 00:16:21 And are there any thoughts on how to prevent that from happening? Because, I mean, you're right, if these tokens are basically trading on these markets that are open 24-7, 365, then I could imagine it might be difficult. Yeah, it's kind of a tough game design question. And I think this is where the kind of game, economy designers come in where you have to design economy mechanics where you limit the volatility of token, whether tokens are redeemable and the developer takes them at a certain cap price,

Starting point is 00:16:57 or maybe you're giving out some form of a stable coin or something that has kind of low inflation rate. So there are several ways to do this, but it also depends a lot on the context of the game. One of the advantages that the game developer has is that they almost can, kind of act like a central bank where they can change the utility of the token itself. So for example, this week, SkyMavis, the developers of Axi, they up the breeding costs in SLP tokens and dropped it in AXS tokens, which means that it now costs a lot more SLP to breed new axes. And that means that there'll be a higher price support as more SLP gets burned when new axes are created.

Starting point is 00:17:37 So just in general, for yield-guel games, as you're adding games, I'm sure there's a way that you evaluate game economies, how do you do that? And are there any particular game mechanisms that you think just outright do not work well in general for game economies? Yeah, yeah, absolutely. So we have a foreman team that just does nothing but look at games that might be a good fit for yield-guil to invest in. So first of all, we look at games that have some form of kind of play to earn tokenomics, meaning that I play the game, I earn some form of reward because that is how our players earn something from it. Second is that the guild structure or lending is very important for us. So I want as a guild to be able to buy, for example, a million dollars worth of assets in a game, whether it's like heroes or land, items, armor, and be able to lend them out to players. without having to trust them and to return it back to us.

Starting point is 00:18:40 So that kind of trustless lending is really important. And right now it's being done more in an application level rather than from kind of wallet level. But if they're kind of a lending or asset delegation is possible, then it's easier for us to come in and invest heavily. And it's not just us. It'll be like other guilds that have pooled their money to buy assets for their player base. So we like to talk to developers as early as possible. and kind of work with them through, like, what is important about a guild model, how can we invest assets and have our players play them,

Starting point is 00:19:14 what kind of rewards are our players earning, and where's the money coming from, what's the utility of, for example, a token that is being rewarded, which gives it value if other people want to buy it. So there's just examples of the things that we take a look at. And you talked about how one of the features that you need is to be able to trustlessly lend out these assets. So how does that work? How do you lend them out and not worry about people either losing the private keys and then being like, sorry or, you know, lying about that? Yeah. So there's a short-term and long-term solution to this short-term and what is happening now

Starting point is 00:19:52 is that the assets are on the wallets that the guilds own and that we create accounts in games like Axi Infinity. And then we give other players account-level access, which means, they can log in with a username and password, but they don't have access to the private key. So they can access the assets, but they can't run away with them. Long term, what we'd like to see is an extension of the NFT, of the ERC 721 standard,

Starting point is 00:20:19 where you can have delegation mechanics right now. There's no mechanics in the ERC 721 standard for me to put, for example, an NFT in your wallet and have certain conditions to take it back. And I think that's just incredibly important because if we enable that, then you can enable things like land rental contracts, allowing people to build on land and then be able to take it back when certain conditions are met. If you enable this from a smart contract level, then it just becomes so much more powerful.

Starting point is 00:20:50 Yeah, yeah. I could see how that could unlock a whole new set of different business models. So one other thing I'm curious about is so obviously, you know, we have these different types of games. and I'm sure some games are more popular than others, which affects the asset prices. But in general, what would you say tends to make a game asset valuable? Is it something that makes you more powerful in the game?

Starting point is 00:21:18 Or is it something that's simply rare, like a profile pick? Or like what factors are giving value to these different assets? Right. There are several factors that affect value. Scarcity is definitely one of them. aesthetics is another one, something that looks good, that is scarce, maybe desired more by other people. In games, particularly, utility actually trumps all of them.

Starting point is 00:21:45 Utility is very important because if you play with things from in a game environment, rather than, for example, like collectibles, pure collectibles that just rely on traits, utility is really important because it works within kind of a greater ecosystem and what a virtual world or game economy does. that this is where really experienced game developers can come in because they are designing assets with utility. For example, if I have land in the game, what can I build on top of it? Can I rent it out to someone? Can someone come in and farm on my land and then can we do an automated rev share?

Starting point is 00:22:22 So these are things that are being explored in games right now. And yeah, it's just really interesting to see what experiments people are coming up with because these kind of blockchain games are still. very new and I would say that yeah we're still very much in the experimentation phase of what's possible. Yes, I'm quite certain of that. So Axi Infinity is known for being popular in the Philippines and I know that it's already started to spread to some other countries but in general, you know, and I'm sure Yield Gild Games is interested in doing this in general, how do you plan to spread more of these different play to earn games to other countries or economies. Yeah, so we're leaning very heavily on the community model.

Starting point is 00:23:11 So what we've done was that we rely on community managers who have knowledge in the game and to go out and recruit people in the local community. So for Web3 to be really felt by billions of users, it has to be hyper-local. And so that's what we do. We find and recruit community managers in different countries around the world. So now we're in Indonesia, we're in Thailand, we're in Brazil, we're in Venezuela, we're in Colombia. And we find the community managers that we start with AXI, that no AXI want to play it and know how to work with community. And then we give them access to our platform and assets.

Starting point is 00:23:51 And they go out and find the users, train them, we give them access to a wallet, train them how to play the game, teach them how to use crypto, how to keep your private key. how to not get scammed in a community environment. So you have a very localized setting on how you are learning in your crypto journey. So we do a lot of these innovations and content in the Philippines where we're creating guides, manuals, almost like a guild operations playbook. And then we kind of franchise it out to the rest of the managers and sub-dousand guilds that we work with across the world. So we're primarily expanding now across the rest of Southeast.

Starting point is 00:24:33 Asia, India, Latin America. We invested in a guild in Brazil. We invested in a guild that helps students specifically graduate via and afford their tuition via Play to Earn. Wow. Wait, which country is that in? They're in Southeast Asia as well. So the companies, the guild is called Akkad Arena and they're focusing on bringing students to Web 3 via Play to Earn. Wow. It's super interesting. And so out of those economies or countries, which ones are are you finding there's kind of more uptake? So the thing about this is that the more volatile a country's currency is, I think the better play to earn does.

Starting point is 00:25:13 So we've done extremely well in Venezuela because their currency is very unstable. And from what we've heard from our scholars there, people might be earning somewhere between $1 to $50 a month. So the monthly income is a lot lower even than in the Philippines. But they have a crypto exchange, which means. means that we can go in there and give people axes. They can start earning SLP and then turn the SLP into their local currency. And ironically, I think SLP is even less volatile than their local currency. Yeah. And in terms of cashing out, like I know that you have built that

Starting point is 00:25:54 infrastructure in the Philippines, but is that either being built in Venezuela or has it already been bills? Well, it depends on country to country, but we always look for partners that are able to help us facilitate kind of crypto to Fiatheat Gately. So mainly those are exchanges, but it might be wallets, it might be some of these neobanks. So we always look for those kinds of partnerships in the countries we operate in. So something else that Yield Guild Games did recently was introduced the YGG token this past summer. How does that work and what effect have you? it have on your community? Sure.

Starting point is 00:26:32 So YG itself is membership governance and ownership token. So let's tackle all those three membership in that if you own YG tokens, you have access to different things that only members of the protocol have. So it starts very simply like with other people. There's token-gated Discord channels where there are things that are only available to our players. then you're able to do to get like exclusive NFTs as well. So we have, for example, a guild badge that you can mint from our website that is free to mint.

Starting point is 00:27:08 You just need to pay for gas. And that gives you access to surfing things within the guild. So that's the idea for the guild itself is that your participation in the guild gives you greater access to things that are not available to people who are not as participative. So we have the Founders coin, we have token gated Discord, we have the Guild badge, the NFT Sword and Shield, and we'll be integrating this across the different games and protocols that we work with, where you might need to have, for example, a certain NFT, maybe a YGG sword, for example, to be able to enter a certain part of a game. And then for governance, we're working towards a progressive decentralization model.

Starting point is 00:27:55 which means that slowly will kind of open up more and more parts of YG towards governance. So right now we have sub-dows, which are like DAOs under YG, that represent, you know, a certain number of assets in the game. For example, we have a YG-L-O-K sub-Dow, which contains our land assets in the Game League of Kingdoms. It has its own token, and now there's governance, there's a snapshot page against it, and the players themselves are voting on how to kind of direct our assets or our guild in the game. What are they going to do with the yield? When are they going to play the game? How is the leadership set up?

Starting point is 00:28:36 So we're letting the players do that and we're going to do this for another game, Splinterlands as well. And yeah, and ownership, just think of owning a token of YG as having a slice of all of the activities we do from the assets that we have to the activities that we're doing. e-sports, tournaments, the fees that are being accrued from gameplay. And just one question I wanted to ask about when you were talking about how you could have a YG sword that gives you access to, you know, a certain part of a game. I mean, since you are not creating the games themselves, would it be that in conjunction with the game developers that you develop kind of a special part of the game just for people with those special YG, you know, assets or whatever?

Starting point is 00:29:24 Yeah, yeah. So that's the magic of composability in crypto, which is very hard to do otherwise, where I can have a game asset or an NFT that I minted, then it has utility in a game that someone else developed. So for these games, the draw for that is that if they enable that functionality within their game, they get our users, our player community, who would be interested in going to their game to check it out?

Starting point is 00:29:48 And this is the kind of composability that is actually very hard to do outside of crypto because it needs a lot of meetings, handshakes, access to each other's private databases. And crypto just enables this composability wonderfully. It's so cool. It reminds me of those like picket path books, you know, that you used to read it. Or I, well, at least I used to read as a kid. Choose your own adventure. Yeah, yeah. Because basically what it would be like is so the author writes the book.

Starting point is 00:30:18 book and then they have their own, you know, different choose your adventure endings. But then you, the reader, could basically be like, hey, I have an idea for another ending and basically kind of propose that. And that's kind of, it sort of, you know, reminds me with that. Am I right in thinking that's kind of something like that? Yeah, it's an act of co-creation and letting players have their own stories. And what does, it gives them a greater sense of ownership in the game that they're playing in the assets that they're owning and also with like the the guild specific assets that are in the game. So yeah, people just love it when there's kind of content in the game that's just for them. Yeah. So, okay, I think it's super fun. I'm not even that into games, but I would, I would want to do

Starting point is 00:31:06 that. All right. So we're going to talk a little bit more about the YGT token, but first a quick word from the sponsors who make this show possible. With nodal cash, you can earn crypto on your mobile device for free with no hardware to purchase. You just download the Nodalcash app, turn on your Bluetooth, and start earning. Notal Cash is private, secure, and easy to earn, whether you're on the go, stuck in traffic, or even while you're sleeping. You can even repurpose your old smartphones to earn Nodalcash. Visit nodal.io slash unchained to get started. That's NODLE.com.com slash unchained. Join the Citizen Network to earn crypto on your smartphone 24-7. Web3 means freedom from big tech and Wall Street, with more control and better privacy.

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Starting point is 00:33:42 distributed this YGG token earlier this year. How did you think? about how to allocate that supply. I know that there's a lot that goes into, you know, forming like kind of a good economy and stuff like that. And obviously with all these, what's the word, debates in crypto about things like fair launch coins versus VC coins. We're sure there's a lot of opinions about how much, you know, different entities get. So how did you guys think about that? Well, yeah, there's definitely more than one way to do tokenomics. And for us, we developed our tokenomics very closely with the Delphi Digital team. You've had Jan on your show, and he designed both the AXS token for Axi Infinity

Starting point is 00:34:28 and the YG token for YGGGT token for Yield GuildG Games. So one of the things we did actually was that we set aside 45% of the total supply of the token for player rewards. for play-to-earn reward so that our engaged player community can earn the tokens over a long period of time without needing to buy into it. So you're seeing a Chen in Dallas now that value contribution over merely buying into a token or financial speculation. And this is something that we really want to emphasize. People can have greater ownership of the Guild with actions that are good for the GILSF.

Starting point is 00:35:09 So whether you're a community moderator, you come up with a community moderator, you come up with show or you're a top esports player within the guild, you have the opportunity to earn ownership in YGG itself without having to pay for it with money. Yeah, well, you, I know that there is this like mining program, so how

Starting point is 00:35:29 does that work exactly? Yeah, so we call it a community mining program and it just means that there's a lot of different initiatives that allow you to earn the token. And we, like the team, we set of initiatives where if you're in the esports team, you may receive a stipend in YG

Starting point is 00:35:47 tokens. If you win a tournament, you may be able to earn more. If you are a community helper, then you may be able to get tokens this way. So yeah, so we just try to identify the points where people are really giving value to the community and we want to reward that. And so, I mean, so Yield Guild Games is also, of course, investing in its own tokens. And so when the value of the Treasury goes up, is there any direct correlation to the value of the YGG token? Or are they just kind of separate? Or how does that part work? I guess in the same way that you might view a balance sheet and kind of make up your mind about what a company may be valued,

Starting point is 00:36:33 it's not the correlation is not 100% direct. Like it's not, I would say, done from, you know, an algorithmic perspective. But what we do is that we publish very publicly all of the assets that we own. We try to do that every quarter. It's like here we have 35,000 axes. We have this many pieces of land. Here are the tokens that we're holding. And here's how much they're worth.

Starting point is 00:36:54 Oh, by the way, here's all of the wallets for all of our different assets. And it just gives people a very clear idea of what we do, what assets we hold. And they can make their minds on how. much that is worth, right? Like, we're not going to tell them that a token is worth a specific amount of money because that's not what the token represents for us. It's about, like, really being an owner and participant in the guild. But we, yeah, we just publish this information as publicly as possible so that people can kind of derive their own assumptions on how much the guild treasury itself is worth. And so we did talk earlier about how,

Starting point is 00:37:36 when you're choosing which games to invest in, that you're looking at the kind of game economy or the tokenomics within that game. But obviously, we have all these different games that are sprouting up on different chains as well. Do you guys evaluate the chains? Does it seem like there are certain chains that are just going to be better for gaming

Starting point is 00:37:58 or in general for the ownership economy as opposed to other chains? Sure. So every chain makes certain chains. trade-offs, right? And Ethereum has maximum security and programmability. And that may be fine, for example, artwork, which is more static or collectibles that are high value. And you want to secure them on a chain. But it doesn't work for games because a lot of the time you need high throughput. So game assets have mostly been moving to different chains such as maybe a polygon

Starting point is 00:38:31 or an immutable or a BSC or Solona. We don't take sides. So when it comes to chain, As long as games work there, we will go there and we bought assets in all of these different chains. I would say that the tooling side is not as built out when you leave Ethereum. So for example, we want to have a multi-sig in every different chain to hold our assets, and it's not just possible in all of them yet. So the developer ecosystem has to be really strong for us to kind of have things like governance, multi-sigs, hardware wireless support in the ecosystem outside of Ethereum. So at the moment, do you have any particular theories on which chains you think might emerge

Starting point is 00:39:16 is particularly good for gaming? Or do you feel like right now it's just equal opportunity and you're open to whatever? Yeah, it's so incredibly early. I mean, you've seen some take the lead such as, for example, a polygon or a solilo. Lana, but I really wouldn't count anything out at the moment. So as you mentioned, Yield Guild Guild Games is now a Dow, or you're transitioning to becoming a Dow. At the moment, I don't know how decentralized you would say you are.

Starting point is 00:39:50 So maybe you could answer that. But then on top of that, what lessons do you feel you've learned so far in terms of, you know, trying to go from more centralized to decentralized? We think about this a lot. And I think there's a lot of people in crypto that believe for decentralization, for decentralization's sake. And for us, we have a mission, which is like, in my head, it's a 10 to 20 year mission that we want to build. And of course, the community really matters.

Starting point is 00:40:21 And the community's input is something that we look for. But we want to decentralize around the economic aspect first, meaning. that we want to give as much ownership as possible to our player community. If we have game assets, we want them to decide how and when that will be played on what will do with the yield. In terms of the product vision, it's something that I guess the team is still kind of holding internally and it's something that will be decentralized slower over time. But we want to really decentralize the economic aspect first because it's what brings freedom

Starting point is 00:40:57 to people. And then as people get freedom, then they have the ability to make longer-term decisions, especially as we kind of imbue the community with the values that we want to bring over a long period of time, values such as helping others, us being here for more than the money, being able to help people have a better life because of access to crypto and play to earn. This is something that I think is a more long-term journey for us. Yeah, yeah. Well, I think for a lot of these different entities that are trying to decentralize, it's definitely a process. So we have talked a little bit about traditional video games. We are seeing that some of them are now getting into NFTs. You probably saw that news about, is it Ubisoft?

Starting point is 00:41:45 I don't know how to know. Yeah, there's Ubisoft. That's right. Okay. So they are now creating an NFT platform. I did notice that they're saying that their NFTs will only be. cosmetic items that have no impact on gameplay. And I wondered if you, you know, what you thought about that choice.

Starting point is 00:42:03 Like, why do you think they might have done that? And do you think that's a smart move or does it not really matter? Well, first of all, Ubisoft is actually one, have been looking at blockchain for a long time. I co-founded the blockchain game alliance with different people in the crypto and gaming industry. And Nicholas of Ubisoft was one of the founding board members. So he's been looking at this for a very long time. The biggest challenge, if you're an established company,

Starting point is 00:42:33 is that you risk upsetting your current player base or your user base over something that you might do that may be innovative. And you're seeing this happen a lot with NFTs, where, for example, Adobe is introducing a way to mint NFTs, and then there's a lot of backlash, or DeviantArt was going to add support for NFTs, got a lot of backlash. And there's just a lot of backlash in general in crypto and NFTs among, I would say, kind of the general consumer market. And the way to do this if you're a forward-thinking company like Ubisoft is to kind of very lightly touch it in the products that you have first and get your existing customer base to get used to it before you do more of the kind of stuff that has more utility.

Starting point is 00:43:21 So I think this is the track that we're taking. They chose Tezos as the chain, which is a proof of stake chain. And it shows that they're very conscious of the environmental concerns that people have on crypto and proof of work chains in general. So I think it's a very measured move for them. I know that they're capable of doing a lot more. But there's also the notion of bringing your user base with you on this journey. And when you talked about the backlash, was it due to environmental concerns? Well, a lot of it at the surface looks like environmental concerns.

Starting point is 00:43:58 I think people are generally or generally don't like things that they don't understand that are new. We saw this with new technology, free-to-play games, even people thinking internet was a fad 20 years ago. It's just a natural cycle of things where if you introduce a concept that is kind of hard to understand, And you've seen this Lauren Crypto, right, from your entire journey. I think this is just an extension of it where if you don't understand it, it's easier to hate it than to really kind of try to wrap your head around it. But once you do, then you go out, like you go down the rabbit hole pretty deep. Yeah, well, at least you and I did.

Starting point is 00:44:42 So for a centralized company like that, I just wondered how you thought, the fact that NFTs enable you to take ownership of your game assets, how do you think that will affect those platforms? Because, you know, I guess what it would likely mean is that it gives their users more ability to kind of leave those platforms. Or you tell me, I don't know, that's just what I was thinking. So how do you think this will affect centralized video game platforms? So I think this will go towards the greater trend of going back to open versus close

Starting point is 00:45:17 platforms. The web start with very open standards. And in the last 15 years, we've seen close platforms like a Facebook or a Google, but also in video game ecosystems, they all work within their own ecosystem. And there's no such thing as kind of like items from a game jumping to another game. So I think you need to have a very different mindset in designing these open worlds where you have assets that can jump from game to game. but the reason that all of these big game companies are paying attention now is actually because of Axi infinity, because coming out of seemingly nowhere, Axi has jumped to a multi-billion dollar valuation. I think their token is probably trade is doing 20 to 30 billion FDV and it's making like 20, 30 million dollars on their marketplace every single day. And ultimately, that's what gets these big companies to pay attention.

Starting point is 00:46:15 It's that, like, yeah, Axi is now one of the largest games in the world, and they're doing it with a new model that has not been possible. And these companies never figured out before. So something that you have talked about in other interviews is that earlier before you found crypto, when you were trying to create your own gaming studio in the Philippines, that you felt that creating your own intellectual property in the Philippines was difficult. Can you talk a little bit more about why that was at that time and how you think crypto could potentially change that? Yeah. One of the things that really frustrated me was that there are certain industry norms of, you know, if you come from a certain place, like maybe Hollywood, you're the ones that are creating the value or the IP. And if you come from a certain place, like, for example, the Philippines, you're kind of the back office or the execution office where just the work gets sent out to by the people who are creating the ideas and you just, get to do them. And that had been incredibly frustrating for me because I didn't just want to

Starting point is 00:47:19 make games that other people thought of. I wanted to make my own game IP. So that's actually what led to me co-founding the Game Studio Altitude Games in 2014. And the amazing thing about crypto is that it just democratizes access to markets around the world. So you see this, for example, in crypto art where you might not even know where an artist is, because they're anonymous. They might just look like a frog on the internet, but their work is amazing. And they get a lot of value.

Starting point is 00:47:50 People pay like tens of thousands or hundreds of thousands or even millions of dollars for art, for an artist they've never known. Pak, who is probably one of the best-selling living artists in the world, just sold this last collection for, I think, over $90 million. They don't even know where he or she is from. And I think that's just incredibly democratizing. And this is one of the things that I love the most about crypto.

Starting point is 00:48:17 Yeah, so I actually want you to elaborate on that a little bit because so as, you know, you said, people often talk about how this technology could democratize finance. But I'm sure you're aware that there are a lot of critics that say that actually crypto shows that it's just making already wealthy people richer. So I was curious, yeah, to just hear more. I'm just wondering, do you think that this? playing field is being leveled in a global way, or is it just like within each local kind of geographical area? I absolutely do think that crypto is leveling the playing field all across the world. And I think that people who are kind of criticizing it that the richer, getting richer,

Starting point is 00:49:03 are just looking at like the top level news and not really looking into communities of lives being changed because I can offer up stories. or personal connections of artists who are now self-sovereign, meaning that they can do whatever they want because of the art they've sold in crypto, because they now know how to manage their own money, of people in our player community who are basically gamers, ordinary people whose lives were saved, and they're able to build better lives for themselves.

Starting point is 00:49:34 So this kind of participation to have ownership in a network is for anyone across the world where you don't even, even have to divulge your real name or what country you're from. It's just amazing. And there's just so many stories of this around the world. And people sometimes are just honestly not looking hard enough. So let's talk a little bit about how you think the nature of work is going to change in the future. I've seen you tweet about job openings in the metaverse.

Starting point is 00:50:06 So yeah, tell me how you think all this will change how people earn in the future or how they're already earning. So honestly, I think I work for one company, 95 is dead. Of course, it's still around, but the model is already dead. What we're seeing is that if you can come in, participate in a network or a Dow and earn ownership instead of just fees, for example, then it enables you to create a lot of value and participate in an upside by doing something that only you uniquely can do. And this enables you to do a lot of different things. Like we're already seeing streamers, content creators who are playing on like five different phones at the same time because they may be playing AXI and then they run out of energy here. They're managing their land there. They're in a different

Starting point is 00:50:57 Dow somewhere else. And this is, I think, going to be more of the nature of work where a lot more people will be self-sovereign. They may have specific skill sets that they're doing, participating in two, three, four, five dows, owning your own NFT assets. Yeah, I think this is where people are going in the future where you're really honing your unique creative talents and finding a way to not just get paid for them, but also gain ownership of what you're creating and the protocols that you're interacting with. And in terms of like, you know, when you tweeted about the new job openings, what are some new jobs that will exist in the Metaverse or that do it?

Starting point is 00:51:38 exist in the metaverse that did not previously exist. So example, a good friend of mine is the best landbroker in Axi Infinity. So yeah, so there's a virtual landbroker. There are people who are now virtual fashion designers who are creating clothes for avatars and they don't even do this for, I guess, physical clothing. There are people who are creating cars in the metaverse. So and a lot of content. So these are just some examples.

Starting point is 00:52:11 And it just endlessly fascinates me because we're kind of recreating the nature of work, but we're doing it in a very global level. And we're not beholden to kind of physical, I guess the loss of physics in the real world, which means, you know, I can design a kind of a city in the sky and populate it and have people go there. The creativity that people are just bringing into the metaverse is just astounding. Can you extend a little bit on what the land broker does? Because I guess I would have thought that in a virtual world, it would be maybe more similar to an open sea type situation or like a smart contract.

Starting point is 00:52:54 You just make a bid. And then you don't have to deal with humans. So I'm kind of surprised. Yeah. What do they do exactly? Well, OpenC does exist, but the virtual land broker has relationships with the whales, the big large owners in, for example, the central land or an Axe Infinity that may not necessarily have listed their lands for sale. And then when a new buyer comes in and they don't want to tip their hand on the market of how much they have or they're looking for something specific, they need someone a deep domain knowledge in the field. So that's why specialists, brokers exist because they have the relationship.

Starting point is 00:53:32 and they can kind of route people who are finding each other who may not necessarily want to be public about buying or selling something. Okay, yeah. Well, immediately when you said that they have access to whales, I was like, oh, oh, of course, of course. This is not just any old regular land, I guess, that people are buying. So speaking of, you know, high-end things you might be buying, I noticed that you are an avid NFT art collector.

Starting point is 00:54:03 And I'm sure you're aware at this moment, there's, I mean, this space is so new. And so it's kind of confusing to figure out like, you know, what's going to have value in the future. Are you buying for investment? Are you buying for enjoyment? And if for investment, then how do you kind of figure out what makes a good NFT investment? Okay. So the thing about NFTs that is very counterintuitive is that the way to make money, money in it is to buy the stuff you love.

Starting point is 00:54:32 So I only really buy NFT art that I enjoy. I like to think myself sometimes as like an angel investor to up-and-coming NFT artists and the way that I invest in them is to buy their art and hold them for a long period of time and kind of help them gain more exposure to other collectors.

Starting point is 00:54:52 And the reason it's really important to buy the NFTs that you love is that if it goes down to zero, it's not worth anything, or you can't sell it. At least you still love it and it's in your wallet. But if you buy something that you love and other people like it, for example, like aboard apes, then it starts to gain financial value. And that's how you make money.

Starting point is 00:55:11 So you have to be incredibly patient in NFTs and be willing to sit on these pictures on your wallet for a long time. And maybe some of them will be incredibly valuable one day. Maybe they won't. But yeah, if you love them and other people do, then there's a good chance you might be able to make money on them. And out of curiosity, were you interested in art before the NFT art movement took off? Or did this get you interested in art?

Starting point is 00:55:38 Not in the same way. Like, I don't really have a background in kind of classical art. I deal with art because I work in video games and I work with a lot of artists. And a lot of the art that's popular in crypto are kind of the same kind of art, maybe fantasy, science fiction that is kind of popular with the collective. set because a lot, like, crypto people are just huge nerds and they, they buy the art that they like. So it's not kind of the same wherein you're buying a lot of contemporary artists. Of course, that's happening now, but it's actually opened up the field to artists that may never have been able to display their art in a museum or a gallery, but people are buying their

Starting point is 00:56:20 NFTs. All right. So we're going to switch back to games. Obviously, as we've discussed, most well-known play-to-earn game is Axi Infinity. But what other play-to-earn games are you interested in or do you think we'll take off in the next year or so? Sure. So we've invested in assets in over 15 games at this point. And we like them all, but I guess I'll name some. Guild of Guardians is something that we're pretty interested in.

Starting point is 00:56:52 It's kind of Diablo-ish, like action RPG. Yeah, that is very exciting. Embersword is going to be kind of a full, like fantasy, massively multiplayer game. Yeah, we're very excited about that and own a lot of land in that game as well. Games like Cyphor, Cyball, which is 3V3 soccer. Wait, what's a 3B3? It's a Cyball.

Starting point is 00:57:22 It's like 3 versus 3 soccer. So it's like Axi Infinity, but you're playing soccer against each other. But yeah, there's just so many different games coming out. And the kind of variety is great because some people may not like the gameplay of Axi, even though it's a good game. So they can find another game that suits them, that they can be good at. And are you finding that these creators are from across the world and that they're not in the traditional areas that, you know,

Starting point is 00:57:53 as you said earlier, are the ones that have been. the game creators? Oh yeah, absolutely. Like, I think it's really opened up where we are seeing teams from all across, like, Vietnam is pretty strong. There are teams in China. There's, of course, a lot of teams in, like, the L.A., but what we're also seeing is that a lot more of these teams are more remote and global as well.

Starting point is 00:58:15 And this is a trend that's been kind of blown up since COVID started where people realize we actually don't have to be in the same office to get stuff done. So more and more, even though. parts of the team, for example, like YG, a lot of the kind of core community members and the founders are from the Philippines, but we consider ourselves a global community, a global network as well. All right. So this is coming out at the end of 2021.

Starting point is 00:58:42 Do you want to make any predictions for 2022 in terms of either NFTs or blockchain-based games? Okay. So, wow, for 2022, I think we're probably going. to see over 10 million people playing a blockchain-based game every day. Yeah, we'll see when this happens, but I think it's going to happen next year. Oh, okay. All right. Well, we'll have to check back. Where can people learn more about you and Eild Guild Guild Games? Sure. So, Discord.g.g is where the core community lives. If you want to read more about articles about us, you go to

Starting point is 00:59:22 our medium page yieldgild.media.media.com or the website gilgill.io. And you can find us on Twitter, Twitter.com slash yield guild. And lastly, we have an 18-minute documentary called Play to Earn on YouTube that documents the initial community members in the Philippines that found Axi Infinity and started playing the game as a way to escape poverty during the COVID lockdown late last year. So yeah, just go to YouTube and look for the Play-to-Earned documents. man, are you there? Yeah, and for those of you who may recall the director, I believe, Leah Callan, I'm just blanking on her last name. That's Calen Butler. Butler, right. She was on the show, and so you can, I will put that in the show notes so people can check that out. All right, Gabby,

Starting point is 01:00:13 thank you so much for coming on Unchained. Thank you so much, Laura. Thanks so much for joining us today. To learn more about Gabby and Wheelgill Games, check out the show notes for this episode. Unchained is produced by me, Laura Shin, without from Anthony Yun, Daniel Nuss, and Mark Murdoch. Thanks for listening.

Unchained - How Yield Guild Games Is Revolutionizing the Future of Work and Investment - Ep.298

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