Zima Red ep 107: Beryl Li - The Evolution of Play-To-Earn
Primer: Beryl Li comes from a line of entrepreneurs. This motivated her to major in economics and finance and led her down the rabbit hole of cryptocurrencies. In this episode of the Zima Red podcast, she shares her journey and how she came to co-found Yield Guild Games and her thoughts on the GameFi space.
Background
Started career in early stage investments
Subsequently, she joined Coins.ph, the largest cryptocurrency exchange in Philippines, as a founding member
Started Capchain, a tokenization platform, in 2016
Sold Capchain and started consulting for the Union Bank of Philippines
When the pandemic happened, Gabby and herself started yield farming
They set up Yield Guild Games
What Attracted Her To Finance
Her father and his siblings were all entrepreneurs
Learned a lot from their journey
Felt it was practical to study economics and finance as her major
How Did She Know About Bitcoin?
Her friends who came back from Silicon Valley were talking about Bitcoin
Did not buy any Bitcoin but was intrigued with the concept of decentralization
Founders of Coins.ph were trying to help friends and family acquire Bitcoin
Joined Coins.ph in 2014
“I was curious about Bitcoin as an infrastructure to move funds, just because 10% of our population are working abroad. And one of the biggest GDP drivers in the country was in remittances. And so this was something that I wanted to tap.”
- Beryl Li
Coins.ph was acquired by Gojek, a company similar to Uber that was based in Indonesia
Doing Her Postgrad In Cambridge
Left Coins.ph in 2015 to do her postgrad in finance Cambridge
Her thesis was on secondary markets on the blockchain
Was looking at coloured coins
Met her co-founder in the Bay area. He shared that Ethereum’s ERC-20 standard is much easier to work on
Started Capchain in 2016
Eventually sold it to a payments company in Canada
Yield Farming With Gabby
Knew Gabby since 2017
Gabby was busy building gaming products
During the pandemic, Gabby brought up the idea of building a protocol for lending NFTs
Gabby was already in Axie and have these NFTs. Doubled down into it
In August 2020, Leah Callon-Butler wrote about an Axie player in Cabanatuan City, Philippines who put food on the table by playing Axie Infinity
It inspired Gabby, Owl of Moistness, and herself to look into it and start Yield Guild Games
Yield Guild Games (YGG)
Introduction
A gaming guild structured as a DAO
Main objective: Acquire play-to-earn NFTs and lend them out to their community of players
Players earn in-game rewards from playing. 70% goes to them while the remaining goes to the manager
What Does YGG Enable That Wasn’t Possible Before?
To play Axie Infinity, you need 3 Axies to battle with
Axies are expensive, but people are eager to earn income from the game
YGG enables players to earn in-game rewards. These rewards can be converted into fiat and help them to make a living
YGG And Financial Exposure To The Crypto Gaming Space
They can be considered an index of all the gaming activities
Have invested in over 3 games right now. They will launch in Q1 2022
How Does She Explain YGG To People?
YGG has 4 pillars:
Have a fund where they invest in NFT assets
SubDAOs, which are responsible for acquiring community players
Reputation system of their players, to provide other forms of services in the future
A DAO tooling system
Their Reputation System
Users earn non-transferable badges/NFTs
Over time, they can build a profile of themselves:
Which games they are playing
Number of tokens they average in a week
Why Are SubDAOs Important To Their Strategy?
Their SubDAOs are organized by geography
They trust the locals to know their community much better than they do
Potential Plugins For Their DAO Tooling
Staking ETH/YGG on SushiSwap to earn YGG token rewards
In the future, they could partner with off-ramp solutions that’s retail focused (e.g. health insurance, savings accounts, DeFi protocols, etc.)
How Does YGG Operate?
Have 6000 scholars today
Their tooling system and their managers help them to manage their scholar base
On average, a manager would be handling 500 scholars
Have 20 managers to date
How Did They Find Their Managers?
They are mostly successful players who have mastered the game
These players eventually started acquiring their own axies and onboarding others to their own scholarship programs
YGG provides them with the tools and the funding to expand their scholarship programs, so that the managers can focus on onboarding and education
Managing Platform Risk
Done through diversification
Invested in 30 games to date
When they invest, they make sure that those assets can be lend out to their community to be put to work
What Are Some Upcoming Games That Will Be Able To Offer Play-To-Earn Opportunities?
Seeing a thriving community in Splinterlands
Personally likes ZED RUN because of its prediction markets, but this attracts a different kind of market
Invested in Cyball, Vulcan, Genopets
How Do They Value The Assets Within Their Portfolio?
Have a VC-like strategy
Initially, they invest in $25,000 - $50,000 chunks. They have grown to invest in $100,000 - $200,000 amount each time
Makes sure that:
Blockchain-based play-to-earn game
Potential thriving community around it
Sound tokenomics
Acquires assets early on to beta test the game
What Contributes The Most To Their ROI?
It’s just Axie for now
What’s Their Moat?
Balancing the 4 pillars and investing in a number of games early on
Their SubDAOs are able to acquire community members
Over time, it’s about building the reputation system so that other services could be built on top of it
Long-Term Future Of YGG
Thin line between gamified applications and games
Activities in the real world will move to the metaverse
Drawbacks To Play-To-Earn Gaming Today
Players do not want their income to fluctuate
One of the largest challenges is to perfect the tokenomics
Thoughts On Pay-To-Win
Thinks that it needs to be skill-based
Does Play-To-Earn Affect The Fun Of A Game?
The rewards incentivize people to keep trying, making it fun
What Is The Most Difficult Thing Being A Founder In Crypto/NFT?
YGG has entered its growth phase
Have to think of many things in the growth phase:
Manage investors
Recruitment and increasing the size of your team
Managing
Marketing
Regulations
Thoughts On The Current Market Environment
Very different from 2017
Excited to see what games come out in Q1 2022
The quality of the games either make or break the space
Single Favourite NFT
World of Women
They are a batch of NFTs featuring women, to support women in the blockchain space
Most Controversial Thought On NFTs
Could not relate to people who are spending more than 100 ETH for an art piece
If She Could Improve Something In The Space
Better tokenomics
A better play-to-earn space
Who Does She Look Up To And Why?
Vitalik Buterin
He started as a young entrepreneur and has built a good community with a great culture
NFT Ecosystem In 3 Years
More projects and games
Will start seeing gamified applications designed as a game. For example, education in the Metaverse where people control their avatar, build their profile, and earn badges for completing exams
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