By Kathy Chu, TruthDAO
It took web3 pioneer Yat Siu less than a decade to grow Animoca Brands from a struggling mobile game company into a nearly $6 billion powerhouse, and now it is shaping the digital asset space.
Animoca, co-founded by Siu, also is an investor, and today claims stakes in more than 200 companies across the decentralized project world. High profile investments in the company’s portfolio include games-and-apps developer Dapper Labs, digital-asset exchange leader OpenSea and data firm CryptoSlam.
Amimoca develops games, allowing players to buy and sell unique digital assets called non-fungible tokens (NFTs) on the blockchain. NFTs, which may include collectibles and avatars in the gaming world, are a high priority for Siu. “We are trying to invest in anything that continues to aid in the construction of network effects of NFTs,” he says.
Skeptics question the need for building video games on the blockchain. Critics also point out that NFTs, which are freely used by scammers to enable fake trading and other forms of fraud, are increasingly eroding investor confidence.
During an interview on May 19 on TruthDAO's "Crypto DeFined" show, available on Fireside, Siu opined on these and other topics, including his still-bullish outlook on NFTs, which have lately been taking a beating in the market.
Top Five Insights From Siu:
Stablecoins will benefit from regulation.
The way Siu sees it, regulation is the only credible way to instill broad-based confidence in the stablecoin market: “Once people know that this is regulated and blessed by governmental authorities, it’ll drive mass adoption,” he predicts.
The crypto dip is a buying opportunity for Animoca.
“If you believe like we do . . . that this is the next iteration of the Internet… investing now or even later is not a big deal,” he said. “I’m not thinking about what happens next year. I’m thinking about what happens in the next 10 to 20 years.”
Children are a window into the future.
“Ask children what they want for Christmas or for their birthdays and it’s likely something digital,” Siu points out. “They don’t necessarily want that shoe or that fashion item -- they want something from Roblox or Fortnite.”
Why that matters: “From my point of view, looking at behaviors and desires of our children is really a lens to the future. . . That’s why, in technology, everyone focuses on youth… because they do show where the future is going in terms of behavior and desire.”
Web3, in combination with quality research, will push out bad actors.
“We’re at the point where the space is growing,and more and more responsible players are entering,” Siu asserts. “Instead of a central authority that is trying to keep people accountable, actually the decentralized nature (of crypto) is keeping people accountable in a different way.”
According to Siu, the Darwin effect is already at work: “If you’ve been involved in many projects that turned out to be bad, then your ability to launch other NFT projects turns out to be harder… This is a maturation process” that is now playing out across the crypto world.
Why that matters: Projects that are backed by respected investors “is a way to confirm they’re real, that the due diligence has happened, that they’re authentic. (Investors) know there’s not going to be a rug pull.”
Blockchain is an ideal environment for gaming.
In the 2.0 world, mass appeal is where it’s at. Game developers literally need millions of players to achieve megahit status. In web3, that is not necessarily the case.
Explains Siu: “Blockchain games only have hundreds of thousands of active daily users, for the most part. Yet they drive economies worth billions. That’s because there’s more capital efficiencies.”
“What that means is that we now have a framework (web3) where we can have diverse content that is not dependent on creating a game that has only mass appeal.” According to Siu, that opens up a lot of doors – and financial opportunities – for developers of all sizes across the crypto universe.
You can watch the replay of the full interview here.