🎙 "I Realized We Could Scale Play-to-Earn to Impact Thousands, Hopefully Millions of Lives:" YGG's Gabby Dizon
In this week’s episode, I speak with Gabby Dizon, co-founder of Yield Guild Games, or YGG. Long before Gabby was into crypto he was into gaming, and that’s how he started playing Axie Infinity, a blockchain-based game where players earn cryptocurrency just...
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In this week’s episode, I speak with Gabby Dizon, co-founder of Yield Guild Games, or YGG. Long before Gabby was into crypto he was into gaming, and that’s how he started playing Axie Infinity, a blockchain-based game where players earn cryptocurrency just for playing. Gabby eventually became a well-known figure in the Axie community, spreading the word especially in his home country, the Philippines, as he saw that crypto earned for playing was making a real difference in people’s lives.
He started doing so well, collecting Axies, which are NFT tokens linked to digital, mystical animals, that he started renting out his NFTs. He realized this could lead to an entirely new business model, and that’s how Yield Guild Games was born. YGG scholars, or those who lease out NFTs, generated about $3.3M dollars in revenue in July alone, 70% of which went to players.
Gabby believes YGG’s play-to-earn model, where groups of people put up the initial capital needed while others perform a job or task, and then split the revenue, will extend beyond gaming. Still, that’s way into the future. Right now he’s focused on making sure YGG becomes an on-ramp for anyone in the world to easily start earning from playing, even if they have never heard of crypto.
The podcast was led by Camila Russo, and edited by Alp Gasimov. Transcript was edited by Owen Fernau.
🎙Listen to the interview in this week’s podcast episode here:
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Gabby Dizon: I'm a lifelong gamer, and I always knew that I wanted to make games growing up. So I became a game developer in 2003, and was part of the team that created the first-ever game to come out of the Philippines. And in 2014, I started a mobile game studio called Altitude Games. So we were making mobile games for iOS and Android phones.
And three years later, in 2017, I first heard about Ethereum, and the concept of a smart contract or just the concept of having programmable money. And it was a very radical concept for me back then. And we started playing around with Solidity to see if it can change the game industry somehow. And it was during this time when we were playing around with Ethereum that CryptoKitties came out of ETH Waterloo in late 2017, and it crashed the Ethereum network, made a lot of news, and it popularized the term “non-fungible token.”
So that was really the aha moment for me, knowing about NFTs, and knowing that you could store unique tokens on the blockchain. So they could be game items, for example, that live outside the game that was truly owned by the player. So that was such a radical concept and even up to now it is. And that was when I decided to devote my career to NFTs. So I've been in the NFT scene since 2018. We made a game called Battle Racers that was on Decentraland. And I co-founded and helped start the Blockchain Game Alliance as well.
Camila Russo: So what were your first learnings with those early blockchain games?
GD: So the early blockchain games were very, very early. There wasn't much gameplay. For example, CryptoKitties had the concept of breeding, but there wasn't really a lot of utility to it. And because CryptoKitties got super popular, then a lot of people copied it with different kinds of animals or different themes.
And I was actually one of the very early players of Axie Infinity. It was around October 2018, so almost three years ago. And Axie started very simply, as a battle with breeding games. So they did an iteration of CryptoKitties and added the battle component. And it was quite simple back then. But even then, the Axie team really relied on its community, which has always been the strength and the hallmark of the Axie team, and they've iterated the way at the gameplay to make it what it is now.
“So they did an iteration of CryptoKitties and added the battle component. And it was quite simple back then. But even then, the Axie team really relied on its community, which has always been the strength and the hallmark of the Axie team...”
Blockchain Games & NFTs
CR: So can you go into why NFTs are an important part of blockchain games? Like you said, you saw CryptoKitties, and that blew your mind. What's special and important about this specific technology?
GD: So the concept of true ownership or the player owning the assets that can live outside the game, it is immutable, and it is on-chain, and the player owns it. If you delete the game, you still have asset. It's still a very radical concept that I think is still very unexplored today. So if I play a game today, any game and I delete it, or I delete my account, everything I bought is gone forever. So with NFTs, your assets are stored immutably on-chain, your wallet owns it forever, and the game may live or die, but the asset is still yours, and I think that's a really remarkable property of NFTs.
“...with NFTs, your assets are stored immutably on-chain, your wallet owns it forever, and the game may live or die, but the asset is still yours, and I think that's a really remarkable property of NFTs.”
CR: Very cool. Because in traditional gaming, what happens is that you often own assets inside the game, right? You own weapons and skins and things like that. And some people amass real wealth inside those Web 2.0 games, but they don't really own those assets. If the gaming company goes down, or they get banned, people lose whatever they bought in the game. But now with NFTs, people can actually take those to their wallet and sell them in secondary markets. And it's a whole different world, actual ownership is what's really changing here, right?
GD: Yeah, that's right. So if you look at the terms of service of any game, you actually don't own any of the assets that are owned by your account. It is actually owned by the publisher of that game, and they have the right to take away the assets any time if they feel like it's warranted. So they can't do that if your assets are on-chain. That's a very important distinction to make.
Axie’s Coming of Age
CR: Very cool. And then you said you were one of the first players of Axie Infinity. And you explained that it's a game that's like CryptoKitties, where you have cute animals breeding with each other, but with the difference that there is some battle going on between these animals. And then you got very involved in Axie Infinity. I think that's how I initially knew you. It was through your advocacy and involvement in that community. So can you tell me more about your experience there?
GD: Yeah. So Axiewas really the first blockchain game that I got into in a big way. And the community is very welcoming. And actually some of my closest friends today are people in the early Axiecommunity that I still haven't met in real life. And we're pretty much some of the closest friends that I have in this space. And so we've been playing the game for a few years, gone through the land sale, and seen all of the different developments in Axie. And now that Axie is a lot more popular, these people are now, I would say, like the elder statesman of the game that kind of help guide the culture of the community. So it's been a lot of fun watching the Axie community grow to what it is today.
“And actually some of my closest friends today are people in the early Axie community that I still haven't met in real life.”
CR: Very cool. So I think what's most interesting to me about Axie is how it's making an impact, like I said at the start of the podcast, on real people. Because we're so early in crypto, that most of the impact has been on crypto investors and traders, and whales, right. But with games, we're seeing that start to change. So can you talk about how Axie is impacting real people, especially in emerging markets?
GD: Sure. So Axie had always been pioneering the intersection of NFTs and DeFi. And one of the things that the team did early last year was to introduce a token called SLP, or Smooth Love Potion. So this is an in-game resource that if I go into Axie, and then win a match inside the game, I earn SLP tokens. And then when I breed two Axies to create a new one, I have to spend it, so I have to burn the tokens.
And this was initially created as a way to control inflation. Because what happened with the early CryptoKitties population is that people just kept on breeding and breeding and the population got too big relative to the demand. So Axie introduced this as a way to control inflation, wherein you had to play the game and earn SLP tokens and burn them to get the right to breed more.
And the interesting thing that they did was that you could sync your account into your wallet, and then this game resource would go into your wallet as a crypto token. And now once it's a token, you can put it on Uniswap for example, sell it for ETH, transfer it to another person. Now you can interact with the world of DeFi. And this was really groundbreaking last year. This is basically how play-to-earn started, people are able to use their time and their skill to earn a game resource that can then be sold to another person, or interact with DeFi.
“...the interesting thing that they did was that you could sync your account into your wallet, and then this game resource would go into your wallet as a crypto token. And now once it's a token, you can put it on Uniswap for example, sell it for ETH, transfer it to another person. Now you can interact with the world of DeFi.
CR: So cool. And so what you started seeing is that people started making money with these SLP tokens that people were earning from playing, not necessarily with the NFTs themselves, the Axie themselves, or both?
GD: So to start playing Axie Infinity, you need to have a team of three Axies. So it was your team of Axies that you needed. You had to buy the NFTs to be able to play the game and battle against someone else. And then when you battle and you win, then you earn the token. So it's using your NFTs to earn some form of yield.
CR: Got it. How much can people expect to earn from this?
GD: Okay, so going back last year, actually, it was this time last year in August that this first started happening. So the price of Ethereum was a lot lower back then. But what happened was that people were buying teams, and they were earning somewhere between $300-500 a month. And minimum wage here in the Philippines is around $200, so people were earning a multiple of the jobs that they were actually laid off from.
“...what happened was that people were buying teams, and they were earning somewhere between $300-500 a month. And minimum wage here in the Philippines is around $200, so people were earning a multiple of the jobs that they were actually laid off from.”
And these people who were earning this money, they weren't super savvy technological people. These were basically regular people who are gamers, who were able to onboard into a game, learn how to play and to win the tokens. And then now that they had tokens to cash out, that's how they learned about crypto. So that was the really cool part about that. And of course, the amount of money that you can earn in fiat terms changes. But what these people found was that in places such as Southeast Asia and Latin America, it was actually a multiple of the earning that people got from their local opportunities.
The Start of Yield Guild
CR: Very cool. Okay, so how did your role at Axie then develop into co-founding Yield Guild?
GD: Okay. So, around this same time last year, the concept of a scholarship program happened. So the interesting thing about Axie is that there are two ways to log into the game: one, with your user account, username and password, and the other one is signing with your crypto wallet, signing a transaction basically. And what people found out was that I can give you, for example, my username and password, you can log into my account, use my Axies, and then you can start playing the game and you can start earning SLP. But you can't run away with the Axies or SLP that you learn, because you don't have access to their private key.
“I can give you, for example, my username and password, you can log into my account, use my Axies, and then you can start playing the game and you can start earning SLP. But you can't run away with the Axies or SLP that you learn, because you don't have access to their private key.”
So this is how the lending started. People who had a lot of excess Axies started lending out their excess Axies and their accounts to other people who then had the time and the ability to play but they couldn't afford the upfront cost of buying Axie teams. And then there's revenue sharing going on. And usually the majority of the revenue share actually goes to the scholar or the player playing these games.
CR: Okay. So there was this model of renting out Axies going on. And did you start renting out your own Axie?
GD: At first, I started selling a lot of Axies, and then I started renting out some of my own. And then I realized that we could do this in a scalable manner, in a way that can impact thousands, and ultimately, hopefully, millions of lives around the world, if you do this by technology automation, if you have venture capital. So that's how Yield Guild started. I saw the model of scholarships happening organically in the community, and I decided along with my co-founders to turn it into something much bigger that could scale.
“I realized that we could do this in a scalable manner, in a way that can impact thousands, and ultimately, hopefully, millions of lives around the world, if you do this by technology automation, if you have venture capital.”
CR: Okay, so is the initial idea of Yield Guild games to go into all these different blockchain games, I imagine not just Axie, and getting the assets, the NFTs, the players or whatever asset it is that people need to play these games, and then rent those assets out at scale for more people to be able to access these games and play?
GD: That's exactly right. So we're what we call a play-to-earn gaming guild. So the guild itself has funds that it uses to invest in NFTs that earn yield. So it could be Axies and Axie Infinity. We have land in Sandbox. We have cars and Revv Racing, for example. And then we lend these out to our players. So the players are the ones that play the games. They earn an income, and we take a small slice out of it. And this is something that we've been scaling for since the end of last year. And now the guild has over 50,000 members. We’re in 12 countries mostly across Southeast Asia, India and Latin America. And we're just looking to scale it further and scale it as a DAO as well.
Yield Guild Operations
CR: Oh, very cool. So how many scholars are there?
GD: So the Axie scholars, there's around almost 5,000, so around 10% of the player base. And the rest, some of them on their own assets, some of them are there because they want to learn about our latest game, some of them are NFT investors. But yeah, we have a super, super active community in our Discord of play-to-earn enthusiasts from around the world.
CR: Very cool. Okay, so how much money are our players making, how much money did YGG make in August?
GD: So, we are doing a GMV right now of somewhere between $100,000-200,000 every day. And of that, 70% goes to our scholars, 20% to the community managers, so the community managers are community members around the world who are empowered with our technology to recruit and train the scholars under them. And then 10% goes to the Guild, so we get the smallest share, and pretty much everything that we pay out, almost everything, 90% goes to our community.
CR: Got it. And in all, how much have you made in gaming since you started?
GD: Okay. So I have to quote this in SLP because we make our revenue in SLP. So we've done 51 million SLP lifetime since we started, and I actually don't know what the price of SLP is now, but it's probably somewhere between like $7-9 million. And most of that has happened in the last two or three months when Axie has really taken off.
CR: Wow. Okay. And that’s split among around the 5,000 players?
GD: Yeah, that's right. That's right.
CR: That's very cool. Okay, would you say most people playing with YGG, are they doing this full time? Are they making a living off of playing these games?
GD: So, not full time. We estimate that people are playing somewhere between 2-4 hours a day. Some of them have jobs and are using it to augment their income. Some of them are basically jobless, or they’re laid off or stuck at home, and then using this as a primary means of income. But it's all over the place. And even the age demographic, we have people who are teenagers to eighty-years-old who're playing the game, it's such a wide range of people who are actually playing Axie Infinity.
“...even the age demographic, we have people who are teenagers to eighty-years-old who're playing the game, it's such a wide range of people who are actually playing Axie Infinity.”
CR: Very cool. What do you think is missing for this to reach a wider number of people? Anecdotally, I've seen people maybe struggle with onboarding to the game, for example. I mean, there's multiple tutorials and videos on just how to start playing. So I’d imagine that's a pain point. But yeah, what are the next steps for YGG to really kind of reach a mainstream audience?
GD: That's where really the power of community comes in. You're right in that the onboarding is a little hard, especially if you have your own Axie, you have to figure out how to do a Ronin wallet, a Metamask wallet, how to cash out. So there comes the power of community that is helping each other. There's a lot of content creators creating tutorials. But what we do at YGG is that we're actually really easing the onboarding flow because we create the accounts, and now we just let the player log in and play. So they don't actually have to know blockchain when they start playing. And they start playing the game and then when it's time to cash out and they receive the SLP in their wallet, then they're very motivated to learn how to use crypto.
“...what we do at YGG is that we're actually really easing the onboarding flow because we create the accounts, and now we just let the player log in and play. So they don't actually have to know blockchain when they start playing.”
CR: Oh, that's cool. That's interesting that YGG is serving as this interface for users who might not be as knowledgeable in crypto. And then maybe SLP might be a stepping stone into these gamers just like getting into crypto more broadly, maybe after that they can start using DeFi or getting more used to crypto, right?
GD: Yeah, so my favorite thing about what we're doing is that for a lot of our demographic, it's the first time in their lives that they've actually had extra money. So the first time that they have extra money, they pay off their debts, they put food on the table, they pay for medical bills of their families. And then after a few cycles of that, they actually start getting savings. And when they get savings, then they think about what do I do with my excess SLP? Do I buy AXS, the governance token of Axie? Do I buy land in Axie Infinity? Do I buy more Axies and then start my own scholarship program? Or do I turn it into Ether, go into DeFi? So now the world opens up when they go from a situation where they don't have any money and to now, through the playing because of their time and their effort and their skill, for the first time they get to have like excess income in their lives.
“...my favorite thing about what we're doing is that for a lot of our demographic, it's the first time in their lives that they've actually had extra money. So the first time that they have extra money, they pay off their debts, they put food on the table, they pay for medical bills of their families.”
CR: So interesting. Do you have any specific stories about your community that you can mention?
GD: So my favorite story is the grandmother and grandfather, Lolo and Lola from the play-to-earn documentary that we released last May. The interesting thing was that they had a small store in their house that they were selling to other people, but they were augmenting their income by playing Axie, and it was actually enough to kind of pay for their medical bills. And we checked up on them a few months later to see how they were doing and we learned that their daughter who had migrated to Canada for a better life and better income had actually come upon some financial aid. And they were able to send money to their daughter in Canada and help her financially because of them playing Axie Infinity.
CR: Oh my God. So it's the opposite of what you'd expect. I'm sorry, where were they based?
GD: Yeah, they were in the Philippines. That’s right.
Gateway to the Metaverse
CR: Oh, in the Philippines, you said. Right. So yeah, the opposite of what you'd expect, people in an emerging country helping out someone in a developed country, a family member. That's really cool. Okay. So this is taking off, even though it's still not mainstream, but still impacting regular people in emerging countries. And you recently raised a big round, 4.6 million was it? With a16z, with Andreessen, so super reputable Silicon Valley VC backing this new way of gaming, this new model of gaming really, with this kind of guild enabling other players? What’s the big vision? What are you planning to do with this raise?
GD: Okay. So we’re really trying to kind of blanket the world with these digital assets. So it might be Axie, it might be NFT cars, it might be virtual land. But we see ourselves as the gateway to the Metaverse where people can earn an income no matter where they are in the world, it doesn’t matter what country you're from, what race you are, and what gender you are. As long as you have access to the internet and a wallet, you should have equal access to the income earning opportunities in crypto via these games. So that's really the big vision. It shouldn't matter whether you're in the Philippines, or you're in Argentina, or in the US, or you're in Kenya or in China. As long as you have access to these games and a wallet, you should be able to earn the same amount of money and that really democratizes the income earning capacity of people around the world.
CR: That's a huge vision. So do you foresee YGG becoming this global employer, like a new kind of employer?
GD: Yeah. So I would say that’s an evolved version of the gig economy, wherein, like with the gig economy, you had Uber and Lyft with drivers around the world. Here, of course, we don't employ them, but we provide access to a lot of these creative jobs that are in crypto via these games. So you could be a player in Axie Infinity. You could be a content creator. You may be creating avatars in the Sandbox. You may be creating digital fashion. We are the ones to provide access to these games. And oftentimes you need to have some form of investment in the form of NFTs before you start playing. And we remove that barrier so that all you really need to bring is your skill to these games to start earning.
Play-to-Earn Games
CR: That's so cool. Can you talk more about the kinds of games that exist out there?
GD: Okay. So the most exciting part of it for me as a gamer is that there are so many ways you can express yourself by playing these different games. So of course, a lot of people now have heard about Axie Infinity. And there's Formula One Delta time, which we're into, which is like a licensed Formula One racing game. There’s Sandbox, which is a virtual world where people can come and create content, similar to a Roblox, I would say, but people own their own land, and their assets.
And there are other games that we've invested into that will be coming out, either later this year, or sometime next year; games like Guild of Guardians, which is a role-playing game similar to Diablo, Star Atlas, which is like a full space opera SciFi game, which is super cool. Games like Illuvium, NFT Island. There are actually so many games to look forward to, and so many creative ways to earn an income.
CR: Do these games, in terms of just graphics and complexity, compare to traditional games, or would you say there’s still work to do on that front?
GD: So they're complex, but they're complex in a different way. So for me, if I wanted to be entertained with a good story, and top notch graphics, I would just turn on the PlayStation and play a game. So I play blockchain games for a different reason, in that I want to be immersed in the kind of economic world that these games and these assets bring me and the community as well, which is one of the most important parts. So with the early state of blockchain games, the polish might not be there as you would see from a typical Xbox or Playstation game. But they're actually innovating on a different front, which is the economic model, which is the important part. Because if I have really nice and polished graphical game, but NFTs are not used in a creative way, then like it doesn't really matter to me.
“...if I wanted to be entertained with a good story, and top notch graphics, I would just turn on the PlayStation and play a game. So I play blockchain games for a different reason, in that I want to be immersed in the kind of economic world that these games and these assets bring me and the community as well, which is one of the most important parts.”
CR: So can you expand that a bit more on that? What do you mean? How are they innovating in economic models? Because they need to find ways to make these in-game assets and tokens work, like you were saying, with making sure there's not too much inflation, for example, and how does the player live that?
GD: Right. So with play-to-earn, you're taking your game economy, and then you're putting parts of it on the blockchain so that your players can own those assets, and easily trade it amongst themselves. So these might be NFTs. These might be fungible tokens like SLP. And it takes a lot of work on the game design and tokenomics front. You actually have to understand not only game economy, but also tokenomics, to figure out what makes for a good play-to-earn game.
And that's the truly groundbreaking thing about Axie Infinity, for example. It's one of the top earning games in the world right now, it has over 1 million daily active users. There is, I think, between $30-40 million of trading volume every day, which makes it one of the top games in the world. And they did it without being available on either Google Play or the iOS App Store. They're not on Steam. So there's really a new innovative model that came out.
CR: That's amazing. So, the way that they're incentivizing players is because there's this economic potential, and that's driven it to be one of the top games?
GD: That’s right.
YGG Token
CR: That's remarkable. Yeah, we're seeing this across crypto, right, just how well incentives work. You know, we saw this was yield farming and how lending protocols were able to get hundreds of millions of dollars in assets in just a couple of days by incentivizing people with their tokens. So now games are doing the same thing by incentivizing their players with the chance of getting economic returns from playing. Yeah, these cryptos incentives are really changing the game for every industry. Okay. And speaking of economic models, I am interested to hear more about the YGG tokens. So you had a token sale for YGG’s own token, how does that fit in with everything else?
GD: Okay, so you can think of the YGG token as an index of all of the productive assets that we have in the guild. So all of the NFTs we have, the fees that are earned. So we're set up as what we call a DAO of DAOs. So YGG itself is the mother DAO. And we have sub-DAOs which are their own DAOs that are composed of the assets of, for example, a particular game.
“...we're set up as what we call a DAO of DAOs. So YGG itself is the mother DAO. And we have sub-DAOs which are their own DAOs that are composed of the assets of, for example, a particular game.”
So we have a game called League of Kingdoms, for example, that we have spun out into its own sub-DAO. It has its own token, and different players have bought into the token which represents a fraction of the ownership of the land that we have in the game. And now they have localized governance, where the people who are playing the game actively can do governance on how we play this game? What do we do with the yield that comes out? So they have their own kind of localized governance. And this is something that we're going to replicate across the whole of YGG. So, on the top side, on the token, think of it as like an index of everything that we own underneath. And then on the sub-DAO level, there is localized ownership and governance by the players who are actively playing the game.
CR: Oh, that's interesting. Okay. So, for example, players of Axie Infinity in the Philippines, they can own YGG token, and by owning YGG token, they get some sort of exposure to all the actual Axies that YGG owns, and they get to maybe vote in governance on what YGG does with those Axies, maybe they can vote on whether you will increase breeding, how much Axies you’re breeding and so on? Is that the idea?
GD: Yeah, that's the idea. And the best part about what we're doing is that 45% of the entire token supply is actually reserved for players to earn via playing rather than having to buy it. So right now that represents over $4 billion worth of that token. So what we call this is community mining. So instead of liquidity mining, where the whales can come in and get most of the token rewards, in community mining, we have some quests that are overlaid on top of our partner games. Our guild members can go in and do those quests and then they earn our token in exchange. So that's how we want to empower all of the players within our community to earn our token, basically with their skill and their effort and their contributions rather than simply with money.
“...the best part about what we're doing is that 45% of the entire token supply is actually reserved for players to earn via playing rather than having to buy it. So right now that represents over $4 billion worth of that token.”
CR: Very cool. Okay. Something else about the YGG business model, I also read that you are participating in DeFi in different yield farming platforms, and that you are investing, like you said, in other games’ tokens. So it seems there's a YGG fund that's part of the broader organization?
GD: So part of the money we raised is used as a fund to buy tokens and to participate with DeFi so that we can invest in new and upcoming games. So we don't just buy assets that are already live. We've also participated in early stage deals alongside VCs in games like Illuvium, for example, Star Atlas, and we are going to participate in DeFi with the tokens that we have. So for example, we own a fairly large amount of Axies’AXS token. And when staking comes out, we plan to be very active in the staking and governance of Axieas well.
CR: Got it. So you're actively managing your token treasury using DeFi? Is that something that YGG holders can vote on? How you’re using the treasury?
GD: Not at the moment. The way we think about decentralization is that we want to decentralize from the gaming side first, like how the game assets are being used, and then slowly make our way up to, I would say, what the core team are doing with the funding. So right now, we're focusing on the economic decentralization, having players earn the economic upside, and then the sub-DAO governance of how the game assets are being used.
NFT Promise and Hype
CR: Got it. Okay. And then I want to ask you about the broader NFT space. It's really been blowing up these past couple of weeks. There's CryptoPunks going for several million dollars, every drop is selling out. It seems we're in this weird frenzy. I covered ICOs at my time at Bloomberg, and it's starting to feel a bit like that, like a lot of hype. Want to get your thoughts on how much of the current NFT space you think is hype? And if and when it blows over, what do you think is here to stay?
GD: So, the interesting thing about NFTs is that it's starting to cross over into culture. So we've seen earlier this year with, for example, NBA Top Shot, and with art being super popular, now it's more like collectibles with CryptoPunks, and of course, with Axie Infinity as well. So it's not just DeFi anymore where there's a lot of, I would say financial applications that are happening. It's a lot more playful now where people are basically using these NFTs as culture, as something that people are proud to own. And that's why you're seeing a lot of frenzy. And a lot of times people use NFTs as a status symbol. They buy a $2 million punk to show that they can buy and own a $2 million punk. And I would say that the psychology about owning rare NFTs is a little bit different just from simply owning a token.
CR: Yeah. So I mean, do you expect all these people buying NFTs now, do you see more staying power there than people who bought just random tokens in the ICO boom? The fact that you can do stuff with these NFTs seems a bit different to me, you can belong to a community, though, of course, it depends on whether that community grows and develops over time, what happens to those tokens. But just the fact that these things are interesting and they're artistic and playful, and they're different characters. At least, you know, they look nicer in your wallet than just some random token, do you see that making a difference?
GD: So there’s definitely speculation going around and NFTs as well. And sometimes it does feel like people are playing a hot potato game across these profile picture collectibles or that one. But I think that is the nature of any technology that undergoes mass adoption. I think the speculation really comes hand in hand with it. I guess, if you are coming in, you do have to be discerning and really also study and have a thesis for what you are investing in.
“...sometimes it does feel like people are playing a hot potato game across these profile picture collectibles or that one. But I think that is the nature of any technology that undergoes mass adoption.”
So, for example, I own some mystic Axies which are quite valuable. I don't really trade them and I know they'll be worth a lot more someday, because as Axies grows in adoption, these rare Axie collectibles will become rarer and rarer as compared to the general population. And CryptoPunks has basically crossed to the level of culture where, you know, you have pop stars buying them, millionaires buying them. They're now being sold in the major auction houses. So CryptoPunks have kind of elevated to a different stature.
But I would say that's not going to be the case for all of the different NFT projects out there. I think a lot of them will also dry up in liquidity and communities will die around them. So people also have to be careful about what they're buying into. Because not everything will make money.
NFTs in the Metaverse
CR: Totally. Okay. And then to wrap up, what are you most excited about that you're seeing in the space? Anything new that you think has been maybe underreported?
GD: So, well, this is the opposite of underreported. But I'm really interested in the projects that are exploring the Metaverse concept. So this concept of these assets and projects working with each other so that you can bring your asset, for example, from one game or one virtual world to another and have it represented there. So it might be an avatar, for example, that you bring across Cryptovoxels to Decentraland and to other virtual worlds as well. It might be NFT clothing that you can wear in an avatar in one game and then it could also be in another virtual world.
There's so much kind of fertile cross-collaboration going on right now, which is made easy because the assets are NFTs. And for me, this is really the most interesting thing, because now we have open economies because the assets are on-chain. It's easier for different projects to work together, take the assets from one game and then bring it into their world. And that's really the most exciting thing for me.
CR: Yeah, so there's been so much talk about the Metaverse, and I think everyone has a different vision or view of what this actually is. What does the Metaverse look like for you?
GD: Okay. So I have a slightly different take on it, it's not about virtual reality. I think it's about the shared internet economies that people can participate in. It matters that people can participate at the same time and the economies are open. So blockchain is the economic backbone of it.Then you have the NFTs that are the assets that people can own and then take with them to different worlds. Play-to-earn is like the backbone of the economy, where people can use these assets and earn some kind of income or yield because of their skills.
“I have a slightly different take on it, it's not about virtual reality. I think it's about the shared internet economies that people can participate in. It matters that people can participate at the same time and the economies are open. So blockchain is the economic backbone of it. Then you have the NFTs that are the assets that people can own and then take with them to different worlds.”
And then there are different interfaces to it. You could say that Twitter, for example, is like your 2D interface to the Metaverse because you interact with different avatars there. And then you go to Discord for deeper communities. And then you go into the different games, virtual worlds where you bring your assets with you that are in the wallet. So I think we are very early in the stages of the Metaverse. But as we go along in time, and these richer virtual worlds are being built, the core of it will still be there that I go in with my friends, maybe show myself into the world as an avatar using the assets of that I own in my wallet, and I use those assets in the game world to earn some form of yield or NFTs.
CR: Very cool. So do you foresee YGG or maybe DAOs similar to being used not only in gaming, but like you said earlier, something like a gig economy where people are facilitating people to other people to earn an income with having upfront assets? Maybe taking Uber as an example, maybe in the future, there will be a YGG organization who maybe owns those cars, and then that allows drivers to start making an income that way? I don't know, just thinking maybe play-to-earn is wider than just play in this Metaverse?
GD: Yeah. So I seeyields as like the core unit of people that you want to interact with the entire Web 3.0 world. So it could just be games. It could be virtual worlds. It could be going into DeFi applications. And I think the distinction between an NFT world and DeFi will just blur at some point. Maybe you have to go into a 3D world to interact with a DeFi application, or maybe the DeFi application has some minigames in it. So I think it's actually just part of the same thing; you're just approaching it from different ends. For me, DeFi is like gamified finance, and then play-to-earn is like financialized gaming. And I think at some point these are just going to converge.
“For me, DeFi is like gamified finance, and then play-to-earn is like financialized gaming. And I think at some point these are just going to converge.”
CR: Totally. So interesting. Gabby, thank you so much for joining me, this was an amazing conversation.
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