In this episode of Blockcrunch Podcast which took place on June 6, 2024, Jason and Gabby discuss YGG’s origin story, the future of P2E, and scholarships. Read our notes below to learn more.
Background
- Jason Choi (Host) – Angel at Tangent
- Gabby Dizon (Guest) – Co-Founder of YGG
- YGG – a Web3 Guild Protocol
YGG origin
- Gabby says that in the Philippines, many people lost their jobs due to COVID-19, prompting them to seek alternative income sources. In 2020, players needed three axes to start earning $SLP in Axie Infinity, leading to the formation of communities around guilds and the scholarship system.
- He adds that the scholarship system was a community innovation rather than an initiative by the Axie team. It involved sharing usernames and passwords for gameplay without access to crypto wallets for asset security.
- Gabby says that the scholarship system led to guild formation where experienced players were matched with newcomers seeking to earn but lacking assets. Contrary to popular belief, scholarships were not directly pushed by the Axie team but organically developed from community interactions.
Play-to-earn and scholarships
- Gabby says that YGG introduced soulbound tokens as badges for community members at minimal costs.
- He adds that questing and reputation-building became integral parts of YGG’s platform evolution during market fluctuations.
- Gabby says that despite a proliferation of guild formations, YGG maintained dominance through a unique approach as a platform serving guild operations.
Gaming ecosystem analysis
- Gabby says that the community needs to be grassroots for scalability. Success is driven by empowering communities to self-manage.
- He adds that the team doubled down on $AXS tokens based on community feedback despite market perceptions. Pixel’s game was successful due to existing community interest, another prominent game that YGG was able to invest early in.
- Gabby says that they are working closely with game developers during transitions for explosive growth. Early investments in promising games before significant valuation increases.
- He adds that distinguishing between community building and user acquisition. Prioritizing organic growth over superficial social attention for long-term sustainability.
Lessons learned from Web2
- Gabby says that different roles within a gaming community: Healer, Mage, Rogue, and Guild Master. These roles enhance the gameplay experience when players collaborate.
- He adds that early experiences in community building were shaped by Axie Infinity. The game’s community-driven approach, including features like scholarships created by players rather than developers, taught valuable lessons about fostering strong communities.
- Gabby says that Building value on top of permissionless assets was ed as a key aspect learned from being part of the Axie community. Success in games is attributed to both game quality and effective community-building strategies.
- He adds that discovering games with potential for success and supporting them to reach “escape velocity” faster through strategic community-building efforts. Collaboration between YGG and promising games accelerates their growth trajectory.
- Gabby says that people engage in social settings by forming groups and guilds to play various types of games like TCG, farming games, or hardcore MMORPG. Building gaming or guild-related companies require different skill sets compared to layer-1/layer-2 protocols. The focus is on optimizing player connections within a community.
- He adds that many guilds are transitioning to layer-2 due to valuation benefits. Being a category leader in a new domain can lead to significant strategic advantages.
- Gabby says that the project differs from DAO tooling as it focuses on building network effects rather than operating as a SaaS business. Crypto’s strength lies in bringing communities together, compounding network effects across various sectors like DeFi, gaming, and social finance.
- He adds that partnering with different entities magnifies network effects by combining strengths rather than viewing them as competitors. Collaborations aim at compounding network effects where users earn tokens from multiple sources simultaneously for enhanced engagement.
- Gabby says that Pixels exemplifies organic growth by re-engaging users effectively over time compared to typical crypto projects focused on short-term gains. Axi to Pixel transition showcases sustained user engagement uncommon in crypto projects characterized by transient user movements for profit-seeking purposes.
- He adds that Ronin‘s success stems from offering diverse experiences while maintaining solidarity among users despite occasional imperfections.
Quest elements & community integration
- Gabby says that soulbound tokens incentivize players to engage more deeply with games. These non-transferable tokens serve as reputation markers, indicating a player’s participation or achievements. Soulbound tokens establish permanent reputation markers based on various in-game activities.
- He adds that there is a contrast between web2 (data owned by big companies) and web3 (users own their data). Challenges like large-scale farming highlight the need for meaningful reputation systems using soulbound tokens.
Other verticals
- Gabby says that there is a transition from social networks to SocialFi within a crypto context. Expansion beyond gaming into social elements within YGG Protocol, emphasizing group activities and collaboration.
- He adds that unforeseen developments such as scholarship formation driven by community initiatives rather than deliberate planning. Leveraging cryptographic primitives for innovation without centralized approval contrasts with traditional web2 models.
Potential threats to YGG
- Gabby says that creating a community with distinct attributes and on-chain history contributes to building network effects.
- He adds that once established, such a community becomes difficult to replace, enhancing the protocol’s sustainability.
- Gabby says that the primary threat lies in the potential of another entity building network effects around groups faster than YGG can. Neglecting the community or centralizing control over primitives could lead to long-term losses.
- He adds that YGG’s success in engaging its community was exemplified by an event in the Philippines that garnered significant praise. Consistent engagement with the community, focusing on education and empowerment rather than handouts, has been key.
- Gabby says that by tapping into individuals’ innate desire to contribute, learn, and be recognized, YGG has fostered a thriving ecosystem.
YGG’s roadmap
- Gabby says that YGG plans to introduce gamified staking that incentivizes both capital investment and active participation within the network.
- He adds that the release of on-chain guilds will provide a platform for groups to establish themselves on-chain with defined structures and roles.
Check out these important links
Show Information
- Medium: Youtube
- Show: Blockcrunch Podcast
- Show Title: YGG is Building the First Guild Protocol – Gabby Dizon, Ep. 257
- Show Date: June 6, 2023