The Pomp Podcast: Why Yield Guild’s DAO and SubDAO Model is Thriving with Gabby Dizon
In this podcast, YGG co-founder Gabby Dizon joins Anthony Pompliano to explain the YGG DAO and subDAO model and how it will evolve to embrace gamers around the world.
The Pomp Podcast invites the most influential industry leaders in finance, business, and crypto to share insights on the latest developments in the space. With over 650 episodes, the podcast has featured guests including the founder of Real Vision, Raoul Pal, founder of Strike, Jack Mallers, and CEO of Coinbase, Brian Armstrong.
The show is hosted by Anthony Pompliano, an entrepreneur and investor who has run product and growth teams at Facebook and Snapchat, and also invested over $100 million in early-stage technology companies. Anthony also produces the “Pomp Letter” a newsletter for investors interested in learning about Bitcoin, finance, and technology. The newsletter has over 190,000 subscribers that include some of the most seasoned investors on Wall Street.
This episode of the Pomp Podcast features Gabby Dizon, co-founder of Yield Guild Games (YGG).
Gabby talks about YGG’s different subDAOs, covering their purpose, their governance models, and how they help YGG reach a wider player base while adhering to the core principles of the overarching guild.
The following is an excerpt from the discussion. Listen to the full podcast here.
Anthony (11:49): When you think about the structure of YGG, you have a DAO, and then you have these subDAOs that have a gig economy component where people can come in and play, and do a revenue split. Is it fair to say that the more things change, the more they stay the same, in terms of the legal structure, but it is really using the internet and this gig economy interest to make the whole thing work?
Gabby (12:29): So if you look at the structure and the business models, I don’t think it's very different from what you see in the real world except that all of it is very crypto native, in that, YGG is a DAO instead of a corporation. There are subDAOs that contain assets and have their own wallets, and the tokens represent ownership and governance or whatever is in the subDAO. There are also activities that the subDAO does that people can govern via token ownership on what assets will be bought, etcetera.
Anthony (13:08): So when you start to think about YGG you have obviously Axie Infinity, I believe there are 12 different subDAOs under you currently and each one of these is a different game that the subDAO is focused on. Is the model the exact same for each game where it is the 70-20-10 split, or do the economics change based on the game and various other inputs?
Gabby (13:31): Yeah, it's different depending on each game, so there are some subDAOs that are organized around assets of a game, for example, League of Kingdoms is a subDAO and we are in the process of creating one for Splinterlands.
We are also forming some subDAOs that are based on people that are organized around a particular region around the world, for example, it may be Southeast Asia or South America.
Anthony (14:21): What’s fascinating to me about this DAO and subDAO structure is that you are optimizing so that you don’t get 50,000-100,000 people inside of a guild. Having smaller numbers is important from a community standpoint.
My understanding is that each of these subDAOs have their own P&L, wallet, etcetera. So maybe talk a little more about this structure of why you chose subDAOs and what are you optimizing for each one, and why handover so much autonomy to the subDAO?
Gabby (14:56): So the basic unit of the DAO that generates value are players that are playing a game. When these players are organized to play a game they might feel lost in a guild of 100,000 people that wouldn’t be interesting or fun because they are not part of a small tight-knit community.
So each community is split into its own sub-community or subDAO, for example, Axie Infinity has 19 managers which is basically 19 sub-guilds that have their own structure, leadership, so we may be connected from the technology and assets that we have, and maybe on a cultural level of what YGG stands for. But a lot of these guilds actually operate on their own and have their own ways of doing things in different parts of the world.
Anthony (17:19): Right now, Yield Guild is paying out six figures, in some cases $1-2 million USD per month to the players. Obviously this is working to some degree, so how do you measure success moving forward, is it the number of scholars, is the amount of assets, is it how much you pay out? What are those KPIs moving forward for Yield Guild?
Gabby (17:43): We first take a look at how big the community is, right now, it is over 60,000 people, then we take a look at the number of scholars, which is very important because the scholars are the people that don’t have the means to buy these assets, and we are the ones serving these assets, and onboarding people to YGG and these play-to-earn games. From these scholars we take a look at how much revenue they are producing in SLP might be the same for other games and in the near term we are more interested in player engagement than revenue because it takes some time for games to figure out a revenue model that really works. For example, Axie Infinity took two and a half years of iteration before the game really started to take off, and before it did, we had already acquired a significant number of Axies and land plots.
So games that have really great engagement with the players, we start investing in their assets, and the hope is that as they take off, we already have a good position and because we see the community actively playing these games, we are able to detect immediately if some of these games hold promise, and we can invest additional funds into buying assets of these games before they take off.
You can check out the full podcast on Spotify.