Web 3 Native: Unraveling the Community Mining Program with Gabby Dizon
In this podcast, YGG co-founder Gabby Dizon talks about the various arms of YGG and how they help create a community-governed guild that rewards its members for their contributions.
Web 3 Native is a podcast that explores the truly innovative models in Web 3 that are here to stay, and the people building them, regardless of bull or bear cycle.
The podcast is hosted by Shi Khai, who is the COO at LongHash Ventures, a venture fund investing in Web 3 technologies. The fund has also partnered with Polkadot and Filecoin to accelerate more than 40 global Web 3 projects that have raised more than US$100 million in the past 2 years. Shi, who has been featured in Asia’s Forbes 30 Under 30, has also managed over 30 early-stage blockchain startups whose investors include Binance and Google. In addition to that, he also operated as a management consultant at McKinsey.
This episode of the Web 3 Native features Gabby Dizon, co-founder of Yield Guild Games (YGG).
In this interview, Shi and Gabby discuss how YGG was founded, why the play-to-earn model is a “game-changer,” the structure of Yield Guild, and the contribution of the people to the community. Gabby also talks about the role investors play in this new economy. This short segment of the podcast explains the various arms of YGG and how they cooperate with each other to fulfil the DAO model.
Shi (38:55): There are just so many ways to get involved, and I think the way you put it is very nicely done. YGG itself can be thought of as an index of the Metaverse, both the assets and the activity.
So if you are interested in a particular game, perhaps what I get from you is that if you think that the game itself can capture a lot of value, then the governance token may be the way to go. If you think the game is creating and distributing a lot of value, then you can go with the subDAO tokens or YGG where you capture the activity that’s being driven. Of course, both of these are not mutually exclusive, and in fact, YGG also invests in some of these assets into the treasury.
So how do you actually balance the different activities of YGG? I feel there are a few arms like an “investment arm” that looks into assets, land, and new games, and then there is a “research arm” for strategy and management, and then there is an “operational/scholarship arm."
Gabby (40:06): Yeah, that is super accurate. So the “investment arm” almost works like an early-stage VC firm. Except that we take a look at tokens and NFTs. There are some games that we bought into during private sales or pre-sales. Illuvium is one of them, Ember Sword as well. Even though the games are not released yet, we bought in early because we believe in the future of these games, we believe in the teams behind them, and we think that they have great potential. This also allows us to get in on the assets’ prices that are cheaper, which means we can buy more assets when the game is out, which means more of our players can play the game. This is the investment part, and we have actually invested in 10 games already, so it’s not just Axie, as I said. It's Illuvium, Zed Run, Guild of Guardians, and a couple more.
Shi (41:01): Can I just cut in here? Does the “investment arm” engage in some sort of active trading and do you actually sell Axies or sell tokens when you think it’s time to take profits, or is it for more productive assets?
Gabby (41:12): We’ve never sold anything so far, we’re actually not built as a trading firm or an NFT hedge fund. We only buy assets if we think that we can make them productive. That being said, it’s not that we would never sell them, but we would first try to make them productive within our community, and we might only sell if we feel like there’s really a need to take profit or if we feel like the player support is waning. But we haven’t really sold any of the assets so far that we have purchased.
Shi (41:51): Understood. Were you going to say more about the other arms?
Gabby (41:56): Yes, you were talking about the “operations arm,” which is primarily in Axie Infinity, which we are investing in very heavily to provide Axies to scholars from around the world. A lot of our concentration is around Southeast Asia and Latin America, and we are looking for some partners within Africa as well. I think those are the three areas that we can really build a huge scholarship operation that can impact a lot of lives around the world, because, in a lot of countries, there are limited earning opportunities, and some of them might really benefit from the economic opportunities that the Metaverse provides, or in our case, Axie Infinity. We have a product team that will be creating our “community mining app” that will be a lending marketplace in the future. Basically, they will be providing more services on top of the huge user base that we are acquiring.
Shi (43:00): I think one of the features or products that I am really excited about is the quest to earn more of YGG itself, and from there, you can scale with more community engagement.
Gabby (43:13): That’s right. YGG is unique compared to most of today’s protocols, in that we don’t have a “liquidity mining program,” so instead we have what we call a “community mining program” with 45% of the token supply reserved for the community.
But you have to do things inside the community that accrue value to the community itself. For example, it might be playing one of our partnered games. We might create a quest system on top of Axie Infinity, so they are not only earning SLP (Smooth Love Potion), but they are also earning the YGG token. And then we can also do this with the other games that we’ve partnered with, and this is a way for our community members to achieve and earn the token.
A lot of our community members won’t be able to buy much of the YGG token, maybe because they don’t have a lot of money to invest, but what we’re telling them is that when the system is live, people can invest with their time, skill, and contribution to the community instead of money. Because we are serving a lot of community members who frankly don’t have a lot of money to invest.
Shi (44:23): I think that really balances out the economics and ownership of the guild itself because I almost feel that this is quite a different distribution compared to DeFi DAOs where you might have liquidity mining, and in essence, the whales can still acquire more of it because they have more capital. But in this case, because everybody has the same amount of time, you can only perform the quest however long it takes for you to do so unless you are somehow 100 times more efficient in accomplishing these quests with bots or something. Inherently, the distribution of the guild ownership, I expect, will be more equitable, right?
Gabby (45:04): I think so. We have raised a bunch of money from a lot of different VC funds, but this is because we wanted to invest in the assets that we then can provide to our player base, and overall, we’ve actually set aside a larger percentage of tokens—45% to our community—than what we have set aside to sell to our VCs. So we do want to be a player-owned guild in the long term, and it is going to take a lot of work to get there, but I hope that we can really make it happen.
The analogy I use is that what if Uber made their drivers equity owners, shareholders, from the very start. I think a lot of early Uber investors, shareholders, have been a lot better off from the rise of Uber and other gig economy products, but you cannot really say the same about the gig economy workers themselves. And I think that is the great promise that Web 3 brings because tokens are software. They're easy to distribute. There is this great opportunity for the people who are working on the protocols and also the owners, and this is something that really excites me the most.
You can check out the full podcast on YouTube.