VeradiVerdict - Issue #183
In line with our long-term conviction on the blockchain gaming space, we recently invested in Ancient8, the largest and fastest-growing gaming guild in Vietnam.
As a quick refresher of the play-to-earn model and how guilds fit into it, here’s a quick summary from my piece earlier this year:
Play-to-earn, a type of blockchain-based gaming where players earn money based on their in-game activities, has certainly been one of the most significant industry themes of the year. Axie Infinity, at its peak, generated over $15M in revenue per day, illustrating the power of play-to-earn gaming experiences. Many other games, from Star Atlas to Genopets, have since been announced, emphasizing that this trend of vibrant in-game economies is here to stay.
To maximize performance—and earnings—in many of these play-to-earn games, players sometimes are required to make an initial asset investment to commence their play-to-earn journey. As an example, in the Axie Infinity model, users must own a team of three “Axies” to begin battling, which can cost hundreds of dollars. This problem motivated the creation of gaming guilds. Guilds lend out in-game assets—such as those Axies—to their network of “scholars,” allowing them to play the game and taking a proportion of their earnings in return. Many of the largest guilds, such as Yield Guild Games or Merit Circle, have thousands of scholars and are both valued in the billions.
We view guilds as essential infrastructure in the play-to-earn economy—connecting players with idle assets—and have made investments into a number of cutting-edge organizations, including Perion and GuildFi.
Ancient8 is unique in its deliberate focus on Vietnam, which is an underexplored geography for many rival guilds.
Why target Vietnam?
When you take a look at the data, the rationale for building a play-to-earn community in Vietnam becomes obvious. The country tops the charts in crypto adoption based on Chainalysis’s index, comes in second for DeFi adoption, and is the third-largest source of Metamask’s daily active users. Even though it’s rarely talked about, Vietnam is one of the most crypto-native countries in the world!
Vietnam is no stranger to blockchain gaming, either. In fact, Sky Mavis, the studio behind the play-to-earn titan Axie Infinity, is actually based in Vietnam, even though much of its user base hails from the Philippines. Inspired by the success of Axie Infinity, there’s even been a recent boom of blockchain games produced by companies in Vietnam.
Even with all of these ties to play-to-earn, there’s shockingly little coverage of the Vietnam gaming market by existing guilds. Ancient8 is well-positioned to fill this gap with its local presence—over 40 employees—and its close partnerships with Coin98 Labs and Coin68 Media, essential fiat on-ramps with over 5M users, respectively.
What does Ancient8 do differently?
Ancient8 has three different components.
First is the scholarship model. Ancient8 has a group of over 1,000 scholars, largely based in Vietnam, who are lent assets to use in various games. Similar to many other guilds, the initial focus is on Axie Infinity, but Ancient8 has close relationships with a number of exciting play-to-earn games on the horizon. In addition to the scholarship system, Ancient8 has also built proprietary internal software for managing the guild and executing high-performance strategies, allowing them to top the leaderboards.
Second is the Ancient8 Community Alliance, or the ACA. Community is the foundation for Web3, and guilds play an instrumental role as the community layer in GameFi as they sit right between gamers and games. With ACA, Ancient8 teams up with other leading blockchain thought leaders to reach, educate and empower millions of blockchain and GameFi enthusiasts. Community members who join the alliance will “benefit in several ways from our shared ecosystem activities,” including:
Exclusive access and early knowledge of new GameFi projects
Priority to join Ancient8’s scholarship programs
Access to the learn-to-earn “Ancient8 Academy”
Unique NFTs, with exclusive perks
Ancient8’s suite of blockchain and software products (to be announced)
These initiatives will ultimately expand the overall size of the play-to-earn economy and Ancient8’s place within it, delivering value to the games and studios that leverage Ancient8’s community.
Third is Ancient8’s upcoming blockchain and software products that are built on top of the strong community Ancient8 has formed, to serve as the infrastructure layer for the GameFi ecosystem. This is just the beginning of Ancient8’s development of software designed to enhance the tooling of GameFi projects.
How is the guild structured?
Ancient8 is structured as a decentralized autonomous organization (DAO), similar to other guilds.
This means that, ultimately, Ancient8’s initiatives and future direction will be driven by the community members themselves. The precise plan for Ancient8’s decentralized model is unclear, but it will leverage the “lessons learned” of past approaches, such as Yield Guild’s troubles with the “subDAO” model.
Further details about Ancient8’s governance design and tokenomics are forthcoming from the team.
The bottom-line: The guild model has shown great success as a way of bridging the gap between players and revenue-generating “play-to-earn” games such as Axie Infinity. Ancient8 is targeting players in Vietnam, a country that is highly crypto-native but has a low presence of rival gaming guilds; through their local presence and strong early growth, Ancient8 is well-positioned to become a dominant gaming guild not only in Vietnam, but globally.
- Paul Veradittakit
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Hi, I’m Paul Veradittakit, a Partner at Pantera Capital, one of the oldest and largest institutional investors focused on investing in blockchain companies and cryptocurrencies. I’ve been in the industry since 2014, and the firm invests in equity, early stage token projects, and liquid cryptocurrencies on exchanges. I focus on early-stage investments and share my thoughts on what’s going on in the industry in this weekly newsletter.