While some of the tech giants argue over how different or not, a lot of companies are emerging with ties to each other, including backing from the same investors.
In the summer of last year, an outfit called Yield Guild Games invested in a company that invests in NFTs from games and then loans them out to people who use them. Creatures can be bred to battle and ultimately, if they battle well, they can be sold for a decent price.
By October, a16z was leading a massive investment into the parent company of Sky Mavis. BreederDAO is a specialist manufacturer of digital assets for use in games and virtual worlds.
A team of young entrepreneurs, one of whom was an early advisor to YGG, just closed $10 million in Series A funding via a token sale that was co-led by a16z and Delphi Digital.
Why invest in an outfit that only produces digital assets, as if they were on a factory line? Arianna Simpson, the general partner at a16z who is leading many of these related efforts, says that demand for NFTs is beginning to outstrip supply.
Third-party outfits like YGG and other so-called play-to-earn guilds that buy NFT gaming assets and lease them to players under revenue-sharing arrangements have proven to be open to working with game makers to ensure that their games offer enough liquidity to keep users engaged.
BreederDAO has sprung into existence because the guilds suddenly need more assets to lend, and YGG and similar outfits are signing up as customers of the young outfit. YGG has a stake in BreederDAO.
Simpson and her partners think there will be more customers soon. Last year, outfits like YGG and Earn Guild attracted $532 million in funding. The players who lease assets represent less than 2% of the 3 million daily active users. BreederDAO says it wants to work with 5,000 play-to-earn groups by the year 2025.
There are no technical limitations that prevent the games from generating more NFTs. Simpson says that outfits like Sky Mavis don't necessarily want to focus on that aspect of their business more than is necessary. As long as the economics benefit them, they aren't territorial. The more people who play the game, the more valuable the game becomes.
She says to think of the whole process like a supply chain, where you don't necessarily have one company producing everything end to end but rather you have different companies that produce a fully finished product.
BreederDAO's part of the supply chain centers on making NFTs for games such as Axie Infinity, and other play-to-earn games.
The outfit is selling these NFTs at pre-set prices, though this could evolve into a revenue-sharing agreement over time.
Bring on the low-cost NFTs
The co-founders of BreederDAO are from the Philippines. BreederDAO is an in-house smart contract expert, with experience building cryptocurrencies and apps across several chains.
Simpson and the startup's other investors have all invested before the public launch of BreederDAO's token; the idea is to help bolster the team ahead of that offering so they are ready for prime time when that token gets released. The syndicate's participants will get a number of token proportional to their investment.
An undisclosed amount of seed funding was raised by BreederDAO. YGG, which participated in that round, was one of the backers.
All Rights Reserved © 2024
