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🌊 Wave: Play-to-earn (P2E).
🦾 Leverage: Calendar audit.
🇪🇸 Deals: 26 new investments.
There’s been a lot of noise around play-to-earn (P2E) projects lately. If you suffer from information overload and lack of clarity on the subject, you are not alone.
This week my friend Carlos Otermin, one of the brains behind Disco Datu, who also happens to live in the Philippines - a country where play-to-earn is having a truly big impact - takes us down the 🐇🕳️.
⚠️ None of this is investment advice. Do your own research, never invest more than you can afford to lose.
Making money playing games is hardly accessible.
Play-to-earn (P2E) - blockchain adoption enables the creation of real economies within games that can reward makers, players and other participants.
⏳ How we got here
The metaverse refers to digital environments and communities that exist natively on the internet. It can be thought of as one overarching metaverse with various independent digital environments within this one expansive metaverse, or it can be thought of as many independent, unique, but potentially interconnected metaverses.
The concept of the metaverse originates before blockchain technology and cryptocurrencies. For instance, game environments like the Sims, SimCity, Pokemon, and Grand Theft Auto all have aspects of the metaverse concept without any blockchain technology - an open digital environment or landscape “map” with significant freedom of movement and action for players within this digital world.
However, blockchain technology and cryptocurrencies enable a much more expansive, powerful, and potentially economically valuable type of metaverse where players and actors within a blockchain-powered metaverse can transact together for digital goods, services, and assets. Enter: Play-To-Earn.
Imagine a Grand Theft Auto’s digital clothing store - where characters change outfits - where digital clothing designers can now participate and sell products as NFTs. Not only can players transact and ensure a level of scarcity, but these assets are now also potentially portable to other environments (i.e. a different game).
Or imagine a Pokemon version where each battle dojo is designed and operated by a real person or business that provides a community meeting place and training (or other services) in exchange for a fee from players.
Fortnite has hosted metaverse concerts with artists like Travis Scott that have attracted +10 million viewers, the same number of viewers as the 2021 NBA Finals.
Its still very early days, but we’re likely going to start seeing more and more blockchain-powered economies popping up across gaming.
🚀 Market Map
P2E games have attracted new types of players who might not otherwise have picked up a controller or downloaded a mobile game. The use of NFTs also introduces the concept of digital property rights that exist outside the control of the game’s developers. Enabling individual ownership of in-game assets brings us another step closer to a true metaverse.
Axie Infinity - The Pioneer Crypto Game
Axie Infinity has been the pioneering success and proof-of-concept for the crypto gaming space. Founded in 2018 by Vietnamese game studio Sky Maven, Axie Infinity is a character-based “battle game” with a simple but entertaining user interface and plans to expand the game experience into a broader game landscape with a vibrant digital economy inside the game. Axie Infinity’s monthly active users grew from 100,000 in June 2021 to over 1 million by mid-August 2021. Notably recent estimates are that 40+% of Axie gamers are in the Philippines.
Axie has also become the 2nd largest revenue generating crypto project on the entire Ethereum blockchain behind Ethereum itself.
Historically, to play a game, the player needed to buy access to the game by buying the latest xbox game CD, or paying to download a game file onto a computer or phone. In free-to-play games like Fortnite, players pay for extra in-game benefits.
Axie Infinity revealed an important insight that has driven the massive growth in the game’s popularity - letting the owners of the in-game assets rent out their game characters to other players who want to earn from the game.
[Axie] has been putting food on the table for families in the rural Philippine who had been affected by the Covid-19 pandemic
- Leah Callon-Butler
The relationship between game “investors” and game “players” has fuelled the rapid growth of Axie’s user base and economic value.
Although there are still questions about the sustainability of the game’s economic model (i.e. investor “capex” providing the cash-in against a perpetual “opex” demand for cash from the players), the game’s features and model continue to expand and evolve. The community believes a more sustainable demand balance between cash going in and cash going out is likely to develop over time.
Want to dig deeper on Axie? Read this article.
YGG - The Pioneer Crypto Gaming Investment Guild
YGG functions as an investment platform, crypto-gaming guild, and operating system for “sub-guilds” that are focused on particular games. YGG has over 5,000 Axie Infinity gamers active in their guilds and owns a growing collection of NFTs in a variety of high-potential games.
In August, Andreessen Horowitz led a $5m investment into YGG. Led by their new crypto-focused partner Arianna Simpson, it was one of the first investments a16z has made in Southeast Asia.
You can read an interview with Arianna about crypto games and their investment in YGG here.
With Disco Datu, we see a similar opportunity to invest across the metaverse and have a unique opportunity located in the Philippines to follow the latest developments as the crypto economy transforms or supersedes the “real” economy, particularly in the Philippines and emerging markets around the world.
The Disco Datu DAO is a community that participates in cryptocurrencies and NFTs in the blockchain-powered metaverse. We seek to own different types of projects that offer high earnings yields and/or attractive capital appreciation potential.
We started almost a year ago with the pandemic growth of play to earn in south east asia and focus on projects with a large user base in developing countries, in which we believe cryptocurrencies and blockchain technology offers a particularly strong value proposition.
We ❤️ the space, mostly play to earn games, metaverse NFT assets, creators of NFT metaverse assets, and applications that enable or empower metaverse users or metaverses themselves.
In addition to play-to-earn game characters and lending out these characters to players, we participate in NFT land assets within games or metaverse landscapes, in-game NFT features like costume ‘skins’ used within these metaverses, and tokens of applications that provide tools for metaverse users (like easier on-ramp/off-ramp access between fiat currency and metaverse crypto tokens) or financial products for metaverse users that are inadequately served by traditional finance providers in their home markets.
Within this broader framework, we have a balanced mix of Play to Earn Gaming in games with live operations, stakes in gaming studios that are currently developing new projects, NFT assets in blockchain metaverses (‘land’, in-game assets, etc) and Tokens of promising Metaverse-related projects that may be pre-launch.
Proceed with caution: like any market experiencing a bull run, there are a lot of false signals being put out there. From projects that aren’t legitimate to outright scams. Beware of the quality of information you absorb and always check the source. Remember to cover the basics and study who the team is behind a project, how the project and its participants capture value, wether the platform been exploited or hacked before etc.
Gain exposure to developing markets: That being said, the market is also very exciting and there are several ways to be exposed to it. There is a big opportunity to invest in “play to earn” crypto games and blockchain metaverse opportunities more broadly with a focus on projects with a large user base in developing countries, in which cryptocurrencies and blockchain technology offers a particularly strong value proposition.
Think beyond today’s main NFT use-cases - It is possible to invest in play to earn games, metaverse NFT assets, creators of NFT metaverse assets, and applications that enable or empower metaverse users or metaverses themselves. In addition to investing in play to earn game characters and lending out these characters to players, Disco Datu for instance will look to invest in NFT land assets within games or metaverse landscapes, tools (i.e. enable easier on-ramp/off-ramp access between fiat currency and metaverse crypto tokens) and financial products for metaverse users that are inadequately served by traditional finance providers in their home markets.
🐇 Follow the White Rabbit 🕳️
🦾 Calendar Audit
If your calendar looks like 👇 you need this exercise:
Print a version of your weekly calendar
Grab 3 highlighters or colour pens: Red, Yellow, Green
Now start colouring your calendar with these simple (hard) rules:
Red: I shouldn’t really be there (even if its hard to let go)
Yellow: I shouldn’t really be there but I like being there because I enjoy it.
Green: The meeting cannot happen without me.
Scrap all Reds from your calendar.
Do this once per quarter, you’ll thank me.
💵 Recent Deals In Spain
You love startups and want to enjoy a Spanish lifestyle? Come join the Spanish startup ecosystem. Here’s a list of recently funded startups:
Freshly Cosmetics raised 20M
Amenitiz (traveltech) raised 6.5M
egogames (gaming) raised 5M
480 (cybersecurity) raised 4M
Zazume (proptech) raised 2.5M
Champion games (gaming) raised 2M
Luda Partners (pharma) raised 2M
Picker (marketplace) raised 2M
Solarmente (energy) raised 1.5M
IF Last Mile raised (logistics) 1.5M
Fleksy (keyboard sdk) raised 1.3M
🤩 Amphora Logistics 🤩 (ecom. logistics) raised 1M by yours truly JME.vc
Kintsugi Therapeautics raised 1M
Grupo Sego Finance (fintech) raised 1M.
Deep Detection (foodtech) raised 1M
Blainebox (flowers) raised 1M
Cubicup (proptech) raised 800K
Biointaxis (biotech) raised 800K
Twin & Chic (retail) raised 600K
Unibo (proptech) raised 500K
Singerfy (music) raised 500K
Delitbee (logistics) raised 400K
Webel (services) raised 200K
Prospera Biotech raised 200K
KBox (sales enablement) raised 200K
JoinHome (proptech) raised 120K
Gamesquare (gaming) raised 100k