Edge of NFT: The Merits of Play-to-Earn, DAOs and SubDAOs
In this podcast, Gabby Dizon and Miko Matsumura, with the hosts of the Edge of NFT podcast, discuss the impact of DAOs and gaming guilds to the general public.
The Edge of NFT podcast brings guests with expertise in Web3, to explore the business elements as well as the human-centred side of NFTs. The podcast is hosted by three entrepreneurs: Jeff Kelley, Eathan Janney and Joshua Kriger. Beyond their entrepreneurial endeavors, Janney is an investor and creator, Janney a neuroscientist, and Kriger a data analyst.
In this episode, the hosts are joined by Gabby Dizon, co-founder of Yield Guild Games (YGG), and Miko Matsumura, general partner at gumi Cryptos Capital (gCC), a Silicon Valley investment fund with over $500M in assets including early-stage investments in unicorns like OpenSea, Yield Guild Games, Celsius Network, VEGA Protocol, Qredo, Agoric, Astar and 1Inch Network. Miko was previously a Chief Developer Evangelist for the Java Programming Language and Platform at Sun Microsystems. Since then, he has been building open-source software startups in Silicon Valley and raised over US$50 million in venture capital.
The group talks about the growing industries of gaming and DAOs, how YGG’s DAO and subDAO system works, how YGG recruits players from all over the world, and controversies surrounding the NFT and play-to-earn space.
The following is an excerpt from the discussion. Listen to the full podcast here.
Miko Matsumura & Gabby Dizon Of Yield Guild Games – The Play To Earn Gaming Guild, Plus Azukis NFT, NFT VAT Fraud, Fayre’s $3.8M Raise, And More…
Joshua (19:33): I’ve got to ask Gabby — with regard to that transition to play-to-earn and you having been in the gaming industry for so long — how do you respond to the naysayers that talk about this tension with traditional gamers? How do you think all that’s going to play out?
Gabby (19:49): A lot of this tension — and, actually, Miko and I had a really wonderful conversation about this — is a lot of people who play games use it as a form of escapism. A lot of the time, they want to separate playing the game from the commercial part, especially from these people who have felt like the publishers have been squeezing them for money to play the games that they enjoy. They see NFTs inside games as, I guess, the overt financialization of the games.
But if you look at the people who are enjoying these games and benefiting, there’s a massive benefit and people in the provinces of the Philippines aren’t asking, “is play-to-earn ruining my game experience?” They’re playing it and enjoying it. It’s making their lives better at the same time. Honestly, I don’t think that games that you will play for pure enjoyment will ever go away. But here, now, is a different type of game with an added purpose, which is a pretty noble one, and one that can spread gaming to more people around the world because people can feel productive earning money while learning skills doing it. I think this will just continue to grow over time.
Joshua (21:03): Everything will coexist. Speaking of purpose, you did some pretty major relief efforts around Typhoon Odette. Is that correct?
Gabby (21:13): That’s right. In December 2021, a huge typhoon rolled around the Philippines, where a huge part of our player community is at. This is the week before Christmas 2021. A lot of people pretty much lost their homes. We helped coordinate the efforts of the community and raised around $1.5 million from the crypto, NFT, play-to-earn communities to help with the relief efforts. We were able to channel that towards various aid organizations on the ground to help people get back on their feet.
Joshua (21:43): You are used to organizing in a decentralized way for a clear purpose. It’s a great way to pivot that energy of the community.
Gabby (21:53): Honestly, I never thought that it would be part of our job description to organize aid and relief efforts, but it turned out raising money from the crypto community that wanted to help other players was something that we could do.
Jeff (22:09): I hear there’s a subDAO strategy for international rollout and rapid expansion here. It sounds like another implementation of your fantastic abilities here. Can you tell us a little bit more about that?
Gabby (22:23): The subDAOs are regionalized versions of YGG that are implementing specific strategies for spreading play-to-earn across different parts of the world.
There’s no one-size-fits-all strategy to expansion, especially with different countries, cultures, and languages. The way that you’re spreading play-to-earn, for example, in Indonesia is going to be different than India, which is going to be different from Brazil.
The subDAO is a way of us creating the guild structure in different parts of the world and finding the best partners. For example, the BAYZ guys in Brazil know the ground pretty well and what games would work well with the Brazilian market. They have a heavy focus on mobile esports because most of the people there own Android phones and love to play these competitive games. That’s an example of us personalizing so that we can relate better to the players in those countries.
Jeff (23:32): We see that in the corporate world, where going into different markets has to have a completely different marketing strategy message in those different places. This is interesting too. I wonder if this will have an impact on politics, watching the way this type of thing evolves and being able to access unique markets and let people build localized campaigns around a specific movement.
Gabby (23:58): Politics is something we think about. There’s a huge philosophical discussion here. When you give people income that is sovereign from the country that they live in, then they get loyalty around the guild because the guild made them live a better life. What does this mean for politics and these countries involved? It’s crazy to think about. Some of our local Scholarship Managers are able to accrue some loyalty from the people that follow them in these regions around the world. That usually means political power if you look at the arc of history.
Jeff (24:38): Miko, how are the intricacies of DAOs involved in the decision-making and how can that influence an organization, and even subDAOs? How does that influence your thinking from an investment perspective when you’re thinking about whether you’ve put dollars into capital, time, and companies where you’re not necessarily just talking to a CEO or a board that’s guiding the direction of a company?
Miko (25:04): One of the things that still remains is a desire for leadership. We are all still mammals. We were born to parents who care for us. We look up to people.
Even with DAOs and subDAOs like YGG, there’s still a strong need for humans, human examples, and leadership. This is an essential thing that we will never separate from. I see that even with this maximal decentralization, we still have the stories and the realities. That’s the way I reason about this. Trust still remains. You can trust code, open-source, blockchain ledgers, and this trustless infrastructure but you can also trust humans. It’s still possible. Institutions are losing trust, but humans are still able to retain trust, some of them.
Jeff (26:12): The centrepiece of most healthy cultures is a good environment of trust. It goes to the transparency we were talking about.
Gabby (26:19): There’s transparency, trust and communication. We are not set up like a typical profit-maximizing corporation. We don't exactly tell the subDAOs what to do, but we are incentive-aligned. We have the common culture of wanting to help make the players’ lives better first. From there, because we’re incentive-aligned, we have the same values and we’re transparent about it too, it helps people move in the right direction without a traditional command-and-control type of company.
You can listen to the full discussion on Spotify.
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