Join the Guild, Earn Yield
Happy Sunday! Today’s profile is Yield Guild Games, and they are doing tremendous work to onboard a diverse group of people across the Metaverse and Web3 spaces. Let’s dig into it now.
The Profile Basics
Startup Name:
Yield Guild Games
Industry:
Web3 - Consumer (Play-to-Earn)
Funding Stage:
Seed
Break It Down for Me
The Problem:
A majority of the world lacks enough financial resources to fully participate in many Web3 platforms (and consequently the financial upside that many of them offer).
The Solution:
YGG fronts the capital for the NFT assets needed to participate in the Metaverse, lending them out to their low-income scholars. Scholars then utilize the assets in games to earn revenue, from which YGG takes a portion (30%).
Core Users:
Low-income scholars who could be blue-collar workers in the virtual world: single parents working paycheck to paycheck, students struggling to pay for tuition, or gig workers anywhere around the world. The majority of users so far have been in Southeast Asia.
Walk Me Through It:
Think of how YGG makes money as Berkshire Hathaway (broad investment exposure on revenue generating assets, in this case play-to-earn assets) plus Uber (gig workers that generate revenue, in this case “scholars”).
YGG identifies early “play-to-earn” Web3 games and provides upfront capital to buy NFT assets in a variety of games. YGG then lends these assets to low-income “scholars” throughout the world so that scholars can play the NFT games to generate additional revenue with the assets.
Show Me the Money
Currently:
YGG makes money in two ways: appreciation of their loaned NFT assets held across the play-to-earn ecosystem and a cut of revenue (30%) generated by scholars around the world.
Be Wary
Where to be wary for YGG:
From an investment perspective, YGG’s token can be seen as gaining broad exposure to play-to-earn games and the Metaverse. However, so far much of its success has been due to the success of one game, Axie Infinity. Axie has without a doubt been the leader in the play-to-earn space, and there is reason for skepticism regarding whether other up and coming play-to-earn games can replicate such success.
Now Get Excited
Now time for my favorite section -- I get to tell you why I’m excited and you should be too.
First, I love the alignment between YGG’s values and business model. During the pandemic, they enabled low-income scholars to generate a source of income when many were laid off. Many of these scholars were able to buy a car or a house for the first time thanks to YGG. The scholar program addresses the exclusion of low-income individuals due to the soaring NFT asset prices needed to start playing. This makes YGG necessary for the inclusion of a diverse set of people in the fast growing ecosystem of play-to-earn.
Second, YGG has attractive, long-term potential as they continue to grow. YGG hopes to apply their significant war chest ($800M+ in their treasury) to continue to buy assets and grow their scholar program to compete with larger gig economy companies. In comparison to Uber or Lyft, YGG does not cost additional upfront money for a gig worker (like a car and gas). From that standpoint, they could potentially serve a larger potential demographic than competitors.
Finally, I’m excited about YGG’s potential for expansion by:
The product - Introducing onboarding programs to Web3 for a simpler transition, NFT-game diversification, and scholar quests for boosted rewards during NFT-asset usage
The target user market - Geography-based expansion to other developing countries (e.g. Latin America). Additionally, YGG can explore bond-like structure to the NFT lending in order to attract low risk individuals looking for a guaranteed return. YGG could also add an eSports media branch to target top Web3 gamers and add additional rewards for these high performers.
Revenue generation - Revenue sharing with streamers and creators of private YGG events, as well as transaction fees or royalties from sub-lending/borrowing
ofNFT assets
And that’s a wrap. As always, I welcome all replies - I love to hear what you enjoyed and didn’t.
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