96 - Web3 Gaming 101 | Amy Wu

What is Crypto Gaming? Why is it important? What about Gaming NFTs? This is what we explore in this episode with Amy Wu, partner at Lightspeed Venture Partners. This is Crypto Gaming 101. The Web3 Gaming space is emerging from all sorts of angles, from normies to hardcore gamers to crypto natives—and each has a role to play as the ecosystem matures. Here are the 5 questions to answer in this episode: 1. What is Crypto Gaming and why is it important? What about casual & mobile gaming? 2. How do you identify the next Axie Infinity? 3. Why are Guilds important? Are they a good investment? 4. How do you earn in Crypto Gaming? 5. Where does meaning, value, and identity come into play? What about fun? With the Crypto Gaming Revolution well under way, Amy walks us through the fundamentals of the space and how to approach the future. ----- 📣 METAMASK | YOUR HARDWARE WALLET'S BEST FRIEND https://bankless.cc/metamask-shows ------ 🚀 SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/ 🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/ ------ BANKLESS SPONSOR TOOLS: 💰 GEMINI | FIAT & CRYPTO EXCHANGE https://bankless.cc/go-gemini​ https://bankless.cc/go-gemini%E2%80%8B 💧LIDO | DECENTRALIZED STAKING https://bankless.cc/Lido 👻 AAVE | LEND & BORROW ASSETS https://bankless.cc/aave 🦄 UNISWAP | DECENTRALIZED FUNDING https://bankless.cc/UniGrants ------ Topics Covered: 0:00 Intro 3:15 The Conference Experience 6:44 TradArt and NFTs 10:11 Metaverso 13:14 Crypto IRL 16:20 The Panel 19:40 FreeRoss DAO 21:38 The Panelists 24:28 The Potential of NFTs 29:00 More than Fractionalizing 33:45 Liquidity 39:33 Pricing Assets 46:50 Community 54:34 Regulatory Issues 1:00:22 Use Cases ----- Resources: Amy on Twitter https://twitter.com/amytongwu?s=20 Lightspeed Venture Partners https://twitter.com/lightspeedvp?s=20 The Crypto Gaming Revolution https://shows.banklesshq.com/p/the-crypto-gaming-revolution The Rise of Axie https://shows.banklesshq.com/p/the-rise-of-axie-infinity-jeff-jiho ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://newsletter.banklesshq.com/p/bankless-disclosures

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  There's a possibility of actually earning a lot, a very valuable assets, just like that mechanic exists today, except that you can actually go out and sell, for example, a rare skin for like a million dollars or something. And that's sort of almost like a gambling mentality will potentially also be a drive for a bunch of gamers too, to play some of these web three games.

• 0:22Ryan Sean Adams?

  Welcome to Bankless, where we explore the frontier of internet money and internet finance. This is how to get started, how to get better, and how to front run the opportunity. I'm Ryan Sean Adams. I'm here with David Hoffman, and we're here to help you become more bankless. Guys, super exciting episode of Amy Wu. This is Crypto Gaming 101. This is like your intro to crypto gaming, how to invest in crypto gaming, how to find the next axie, web three gaming, NFTs, all of these things. We go over a few things. There's five things I want you to look out for. The first is what crypto gaming is and why it's a big deal. Then why a casual crypto game? Something on mobile might be the next thing. We also get into how to identify the next axie infinity,

• 1:06Ryan Sean Adams?

  why guilds are a good investment, how to earn from games and not just invest in them. Finally, we talk about the importance of meaning, value, and identity in crypto gaming. Amy calls this fun, fulfillment. That's what sustains crypto games. David, fantastic conversation, man. What were some of your takeaways?

• 1:24David Hoffman?

  Yeah, I really liked the meaning and purpose conversation because Amy had a lot of thoughts about that. And really, at the end of the day, all humans just want that. They just want meaning and purpose in what they do. And while the first part of this show is all about going from zero to 100 about crypto gaming, trying to answer some of the skeptics takes, what happens if we accidentally just suck the fun out of games, what really makes a crypto game playable in the long term, all of those basics. And then it leads into the conversation as, well, when we finally figure all this stuff out, what is the end result? And hopefully, the idea is that the end result is we have these fantastically engaging, high just like livelihood crypto communities that are also gaming communities, and they're all just playing games together.

• 2:10David Hoffman?

  Some version of the utopia, the future utopia that we're all trying to build just involves a bunch of people having a fun time in the metaverse. And so hopefully, that's where crypto gaming takes us. And that's definitely where this conversation took us.

• 2:23Ryan Sean Adams?

  This is another story of humanity digitizing itself and the things that humans value in the analog worlds become the things that humans value in the digital world. And I think gaming is such a big part of that as we talk about it. But you know what? What I loved about this conversation too, David, is we dove right into the skeptics criticisms. Okay. And crypto gaming had a breakout year in 2021, absolutely massive year. And with that comes skepticism. With that comes some haters. And much of this pushback, this blowback even, is from the traditional gaming industry. Right? And so we have examples, which we're going to talk about in the episode of like crypto gamers, traditional gamers, basically pushing back on Ubisoft and saying like, we don't

• 3:08Ryan Sean Adams?

  actually want NFTs in our game. Stop foisting that on us. And so what are their criticisms? We got into those and why they made those criticisms. And one thing I love about the crypto space and doing this podcast with you, David, is like, I think crypto people just want to have a conversation, right? It's like, I would love to bring on gaming skeptics on the podcast a bit more and have a conversation with them about why they're skeptical, because I think there's so much more common ground than there is things to divide us. Like, one of those things is probably the populism. We all want bottom-up movements. We all want community-led movements. And I think that can be a real possibility in gaming, in crypto gaming specifically. Maybe some traditional gamers aren't seeing it yet, but I believe they will. I think we want to win them over too.

• 3:54David Hoffman?

  I think we can definitely pull a leaf out of Bitcoin's book, which is Bitcoin had the most haters from like its inception, 2008, till basically until 2020, right? And now people really get like, okay, yeah, then the money printer went burr. I'm like, oh, I get it now. And I think crypto gaming is kind of in that same early stages where there's a lot of conversations and potential about crypto gaming, but it's really not here yet. We had one big W as an industry with Axie Infinity. And even Axie Infinity is so unlike almost every game that you would see on Steam or Epic Games or Activision Blizzard. So it's really easy to critique it because there's nothing there. And so as soon As I think this industry actually gets built out and we actually start doing real stuff in the long term.

• 4:38David Hoffman?

  Perhaps hopefully the skeptics kind of melt away because there's actually something here. There's something real. But it will take time. Like you always say, Ryan, crypto is a battle for hearts and minds and gamers are like really a picky set of people. And I think if we can win the gamers over, we can win everyone over. And we definitely have the tools to do it. We just need to make sure that we do it right and do it and get it done in the right ways.

• 5:03Ryan Sean Adams?

  If we win the gamers, it's game over. That's the quest today. And guys, for you guys, if you're looking to invest in this space, you don't want to miss the next big thing. This is a fantastic episode for that. A lot of alpha that drops about investing in crypto gaming. If you like this episode, make sure you like, subscribe, review, tell a friend. Also, we're going to get right to the episode, but before we do, we want to tell you about these awesome tools from the bankless sponsors that made this possible.

• 5:27David Hoffman?

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• 6:10David Hoffman?

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• 6:54David Hoffman?

  including many of the hot DeFi tokens. And it's one of the few exchanges that has liquid die markets. Gemini just launched their Earn program, where you can earn up to 7.4% interest on 26 various crypto assets. If you're tired of paying fees in DeFi, or you don't want to worry about DeFi exploits, but you still want to earn interest on your crypto assets, Gemini Earn is the product for you. Another product I'm stoked to get my hands on is the Gemini Crypto Back Credit Card, which gives you 3% cash back on all of your purchases, but paid to you in your preferred crypto asset. When I get my Gemini credit card, I'm going to make sure that I get my cash back in ETH. So whenever I buy something, I get a little bit of ETH bonus back to me at the same time.

• 7:36David Hoffman?

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• 7:51Ryan Sean Adams?

  Bankless Nation, we are super excited about our next guest and our next topic. This is an exciting one. Amy Wu is a partner at Lightspeed Venture Capital, where she leads investments on consumer crypto and gaming. The triad there. These three things, I feel like, are becoming one. Maybe united, they become crypto gaming. That's what we're going to figure out. We're going to talk about how she invests in crypto gaming today on Bankless. Amy, it's great to have you. Welcome to Bankless.

• 8:17Speaker 00

  Thanks so much for having me on, guys.

• 8:19Ryan Sean Adams?

  Okay, so here's what we're going to do today. I want to really orient ourselves and orient the audience, right? Because, look, if you're in crypto, you're listening to Bankless. Crypto is really fun, but it's also hard. And the reason it's hard is because this industry moves so quickly. So just when you feel like you wrap your head around Bitcoin and Ethereum, there's DeFi. And just when you feel like you figured out DeFi, you got NFTs, and then you got DeFi 2.0, and they got Layer 2s, now you have crypto gaming. This happens at light speed. I guess that's why you guys are called Lightspeed Capital. But here's the thing. On Bankless, we don't like missing the next big thing. And I feel like crypto is about, crypto gaming specifically is about to become the next big thing. So we're looking for your help today, Amy.

• 9:03Ryan Sean Adams?

  Help us make sense of crypto gaming. Are you ready to help us do that?

• 9:09Speaker 00

  Absolutely.

• 9:10Ryan Sean Adams?

  All right. Why don't we start with explaining crypto gaming? So I've had some of these conversations, you know, around the holidays. I expect to have more of them with all sorts of different people, you know? So let's explain it from three different vantage points, if you will, Amy. So first, the normal person, okay? The normie, you know, your grandma, your, maybe not grandma, your mom, your cousin, somebody you meet at the holidays. Then we'll do from a gamer, somebody who's like played World of Warcraft, Eve Online, these, you know, classic types of games. And then finally, we'll do it for maybe a typical Bankless listener who is a crypto native. So first, a normal person, then a gamer, then a crypto native. So let's explain it.

• 9:51Speaker 00

  First of all, I think it's really smart because yeah, the vantage point is pretty different right now.

• 9:57Ryan Sean Adams?

  It totally, it makes the explanation totally different. So let's start with the, the, the normal person, the normie, we'll, we'll call them. How do you explain crypto gaming to that person?

• 10:06Speaker 00

  Yeah, for the normie, I think they're actually wrapping their minds around what is crypto in general right now. And, you know, it's exciting. Some people seem to be making a lot of money. And for them, crypto gaming is you get to play a game and earn tokens and NFTs as well.

• 10:25Ryan Sean Adams?

  So that's as simple as how you explain it. What if they ask, okay, Amy, what are, what are tokens and NFTs? And why do I care? Like, why is that different from a, like a coin I used to collect in Super Mario?

• 10:36Speaker 00

  That usually starts going down the rabbit hole and it's a much longer conversation. I think a lot of interesting Thanksgiving dinner conversations for, for people in the U.S. this year. And but, you know, you know, and you can take as academic of approach as you want there. But I think at the end of the day, I, I think that, you know, what it is for a lot of people is that it's fun. It seems to be a big trend happening. You know, there's a lot of ideology around it. The world seems to be going that direction. Certainly, a lot of consumer companies, you know, Facebook and Epic and otherwise are talking about it. And I don't want to miss this trend and the potential to make some money.

• 11:22Speaker 00

  Like honestly, it comes down to, to that for like a lot of, you know, people just learning about crypto for the first time.

• 11:29David Hoffman?

  Amy, I remember trying to explain DeFi to people, thinking that DeFi is the way that crypto is going to go mainstream in 2019. And explaining DeFi took hours. And then if NFTs came around, and sometimes you'd have to explain NFTs to people that really didn't get it. But a large amount of people just accepted NFTs at face value and didn't really need to take any convincing. And so like the trend has been like, it's easier and easier to explain these things. And do you see that maybe some people are like, oh yeah, crypto gaming, but when you pick up gold on the ground, you can actually sell it on, in this DeFi world, you can actually just like turn it into real money. Is it easier to explain gaming than you've seen with other crypto things in the past?

• 12:07Speaker 00

  I have found it easier. I mean, first, like, NFTs has been so much easier to explain than even tokens and certainly DeFi. You're right that people seem to just take NFTs at face value. And, and I think because it's just naturally fun, it's, you know, people are like, oh, this is kind of like gambling a little bit, you know? But also they get emotional connection with owning one and they, aesthetically pleasing, it's fun or cute. And also, yeah, they, they get, it's almost like membership to a, to a, to a club with, with NFTs. And then on the gaming side, it's truly an actual extension of that. Sometimes it's as much as just saying, oh, imagine if you can actually use those NFTs.

• 12:50Speaker 00

  Well, that's basically what, you know, buying NFTs and playing with that in the game is. And I mean, this kind of maybe shifts over to like, what does it mean for a gamer, right? But on the NFT side, I would say that far, I have far more kind of like quote unquote normie or like friends just like learning crypto, like that asked me about NFTs than anything, any currency. And I've actually had very few people ask me about DeFi. So, I mean, it's just like a, the power of, of NFTs, I think, is an entry point for a lot of people into, as a first step into crypto.

• 13:23David Hoffman?

  Do you know what's hilarious? I totally feel like this is flipped, right? So in the, in the older days, right, I, I 100% agree with, with David. The way I would go about explaining it is like, okay, first, let's start with Bitcoin. And let me tell you about digital scarcity and then we talk about that. And then it moves to Ethereum and then it moves to DeFi and they're like, that's the trajectory. Now I feel like it can start to work from the other end, right? And it's like, people are, oh, your first crypto experience was with a crypto game or with an NFT that you saw. And then you could work backwards and start to explain like,

• 13:56Ryan Sean Adams?

  Bitcoin at the at the other end of the spectrum because their first experience with digital scarcity might be these new things. It's it's totally different than the way it used to be. And I guess that is the the benefit of having use cases. Use cases are the best education for the world, for sure. But let's talk about the the gamer then. And I'm talking about the the typical gamer who's, you know, kind of grown up playing all sorts of games, you know, first person shooters like the Fortnights of the world, the Eve Online, the World of Warcraft, all of these things. How do you explain the value of crypto gaming, NFTs and digital property to the traditional gamer?

• 14:33Speaker 00

  Yeah, this is a really interesting question right now, obviously with Discord, Ubisoft news, because that answer is nuanced. There's a few different buckets, right? I would say for your there's your casual gamer and then which honestly, I think, has more overlap with how I would explain it to, you know, a friend who actually is getting to crypto more recently. And then there's your hardcore gamer, you know, the community that we in sort of gaming investing, triple A gaming investing know very well. And the answer usually there is, I mean, you know, we've actually had this concept in gaming for the last 20 years is somewhat of an answer

• 15:13Speaker 00

  to that. And they're absolutely right to a certain extent. I think that the sort of OG MMO games like Eve Online and others actually really pioneered the the idea of these open economies, digital economies, and and actually have taken the concepts, like the philosophical concept of of of digital assets, like further than even a lot of play to earn games today, without actually using blockchain technology, right? I mean, in, for example, in Eve, you actually have, for example, bankers, like central, you know, central bankers that actually are

• 15:51Speaker 00

  taking deposits and, you know, it's like catching up with Hilmar, the CEO, and he was telling me about how some of these guilds or corporations, as they call it, have their own HR and IT teams Their guilds in Eve Online. And so that's why, like, when you look at these hardcore gaming communities, they've they've been like embraced this concept of digital assets for many, many years. And then if you think about, you know, even play to earn, right? The concept of gold farming in MMOs. Um, and, you know, and also just the the concept of playing to earn, let's say, like, you know, you're helping somebody actually level up a character and escape from Tarkov has been around again for for many, many years.

• 16:36Speaker 00

  And so for them, the skeptic, the skeptics are saying, well, what do I need blockchain technology? And um, and by the way, all I see is like this ruining my Discord experience. And then there's also so many scams. Um, and then you have the more bullish people, um, you know, community within kind of like the Web three believers in the hardcore gaming community who are like, it's pretty cool if I can do all of the above and I actually own my assets now. Um, in a much more open economy way, for them, it's about this, like, wow, now there's like more liquidity. I I like own this asset versus the game studio ultimately owning this assets, right? So they actually really do embrace this concept of ownership.

• 17:18Ryan Sean Adams?

  Yeah, well, that that's what's interesting. And I wonder, I almost wonder if that that's what makes it harder, right? It's like explaining DeFi sometimes to someone who's already in, uh, you know, in finance and kind of invested in the existing, you know, financial banking system can be a little bit harder sometimes because they say, why do we need stable coins when we have, you know, uh, digital currencies inside of bank accounts, right? And I feel like the same sort of thing is happening with traditional gamers is like they they've already basically invented all of these digital economies. You're talking about these guilds and Eve Online. Well, that's isn't that a DAO? Right? That's like, that's what a DAO is, you know, a guild.

• 17:57Speaker 00

  It's more advanced than I think what a lot of DAOs are today.

• 18:00Ryan Sean Adams?

  It totally is. And and they see that. And so they're looking at, uh, the present, you know, um, the the the present state of crypto gaming, they're saying like, oh, that's just a step backward. Like, the graphics aren't as good, the gameplay isn't as good. I have a much more immersive experience in like the games I'm playing today. So is it a matter, do you think of explaining why decentralization matters? And even using the term decentralization, I feel like eyes glaze over and you lose people. Is it more about like

• 18:29Speaker 00

  I think so.

• 18:29Ryan Sean Adams?

  explaining open economies and what that can bring? Talk about that for us.

• 18:35Speaker 00

  Yeah, I have found that it's a really interesting time right now where you have there's a strong segment of gamers, I would say, that is just without sort of being more open to learning, equating crypto or specifically NFTs with scams and, you know, sort of environmental and friendliness, a lot of negative things. And I think that it originated with this, I think there's a few things that peel apart here. Gamers are very, very kind of possessive and defensive and about and serious about their their games and the communities they build.

• 19:15Speaker 00

  Really similarly to Web3 communities, you know, and just like Web3 communities are, I think, very sensitive to whether it's institutional investors or others, sort of not disrespecting this concept of decentralization that we have all kind of in in this space come to really.

• 19:32David Hoffman?

  We're both very hard headed and picky.

• 19:35Speaker 00

  Yeah, gamers have a similar protection instinct against people that are just trying to play a game to make money. And also, and also just, you know, scams and and otherwise, and also the the kind of like the how, you know, polished and sort of like well thought out, the integrity of the actual game, right? The game experience community is absolutely sort of like religious to them. So I think like they've kind of seen what are the earlier phases of like play to earn games. And one, they've seen kind of just what they feel like are non-serious game developers that are creating these games.

• 20:19Speaker 00

  And then with the intent of like making money from them, like from raising tokens and selling NFTs. And, you know, there's hundreds of blockchain gaming teams right now. And there's definitely a large number that have probably like thought out game mechanics a lot less than their tokenomic model, for example. And and and I think gamers see that and they're like, well, they're losing sight of what's actually important. And also, again, I'm going to come back to like the scams and environmental concerns they have and have decided to write off that sector, you know, web three kind of entirely. Um, and I would say that this mentality is very similar, and this has been brought up to the um, the skepticism faced by mobile free to play.

• 21:05Speaker 00

  You know, studios when they first launched as well. And to this day, there are like many AAA developers and gamers that aren't casual mobile free to play players, even though like, you know, we have the huge successes of Supercell and, you know, King and um, Playrick, so many others. Um, Genjin and, you know, Genjin and Pax, Mihoyo, um, they're still like, you know, you know, we believe in like hardcore, kind of like AAA shooters and um, and they're, and they're probably never going to change their minds. So I think that there's going to be a large segments of gamers that will not change their mind about web three.

• 21:42Speaker 00

  Um, that web three gaming will also kind of give birth to its own sort of like um, believers and people who really love and embrace the concepts of decentralization, ownership, whatever you want to call it, um, true open economy. And uh, and I'm really optimistic that that audience will eventually grow. And just like today, actually, mobile free to play players is the majority of the gaming audience today and is the fastest growing audience today. Like I, I think in the future that will happen with web three games as well.

• 22:15David Hoffman?

  Amy, I feel like we've heard this story before. It's, it seems to be like, there's just something new comes about in the world of crypto that is similar to something that already exists, uh, pre crypto. And there's just a lot of resistance to change. Humans just don't like change. A lot of people are just very comfy where they are and they see something shiny and new and they're like, well, I'm, I'm comfy here. I don't, I don't want to change. Is, is it like, when we, is that too reductive or is that kind of just what you're seeing here?

• 22:45Speaker 00

  I think that's part of it, but I also think in this case, uh, they're also thinking about like, well, how is this better? Um, you know, how is this like a more authentic community? Um, and, uh, and I think part of that is like not really seeing, for example, like the Axie Infinity community and realizing that yes, there's actually people just farming and making a lot of money from that. But there's a, a real like, you know, community there. Otherwise they wouldn't have the retention rates they do, right? Like, I think something like over forty percent like D90, which is just crazy in the gaming world. And, and yes, it's like a different use case, right? It's earning.

• 23:24Speaker 00

  But, um, so I think that like a skepticism is a big part of it, but also, um, I think we're in early stages, very early stages of, of blockchain gaming. And, um, some of these bigger like, or experienced studios will, will come out with a more like AAA gaming experience and, um, embedding blockchain pretty natively and reinventing ways to use the technology. And I think that will also convert a lot of people as well.

• 23:52David Hoffman?

  Do you see this gaming world maybe perhaps like being split behind the, the traditional hardliners that just, just want to play? And then this new like asset powered gaming world, or you think like this, the, the concept of gaming is going to go like diverge into two different worlds?

• 24:09Speaker 00

  I think that it may be, it may follow a similar path to mobile free to play, which is that there's going to be a whole segment that you're totally right, like are not going to be ever believers. And, um, and, and actually like there's the, um, converting the developer community and then there's converting the gamer community, right? And these are actually two separate, like a segments of stakeholders here that at least in the mobile free to play scenario, both needed to be convinced. Um, and a lot of actually people in gaming industry have thought about this and have looked back to the mobile revolution to, to track how this evolves. And, um, and so there's a number of, for example, the king, one of the most successful.

• 24:54Speaker 00

  Studios in the world actually had its roots, for example, in browser gaming. And so they really understood this casual audience. And they actually never were in AAA gaming or were a force in that. And they basically went evolved from mobile to essentially like trailblazing and creating new genres within like mobile free to play. Um, from browser to free to play. And so I think that the um, I think that there might be some AAA sort of develop um, like game developers that make the switch as well. But not necessarily, we may actually be looking at a whole different category of people that are going to transform what this looks like. Um, and I personally am probably most bullish around um, the casual audience embracing this first.

• 25:39Speaker 00

  And also sort of mobile developers also looking at um, you know, applications first, although there's some complexity there because the uh, mobile platforms, the app stores like Apple and Google haven't um, and Android, you know, hasn't actually allowed direct uh, crypto transactions, right? And so that definitely adds a lot of friction in a gaming category that thrives on no friction in terms of or like very little like in terms of gaming, so that will need to be solved, but I think you'll see that. Um, and uh, and so, yeah, I think you'll see a splintering.

• 26:10Ryan Sean Adams?

  I I want to highlight that for folks because possibly that's some some alpha. What we game here for Amy is like, so yeah, you you know, your thought is that maybe um, a casual gamer start and it's going to be sort of mobile first rather than these big massive games and crypto. And that's definitely something that we can watch in in the future years. Um, but but for folks that aren't familiar, then the reason why we're camping on trying to explain uh, crypto gaming to gamers is I think if you're in it, look, we're all in a bubble at some degree or another, okay? I consume a lot of crypto culture, a lot of crypto content. And so uh, I'm somewhat in that bubble, right? I try to break outside of my bubble whenever possible. And uh, sometimes reality kind of catches up with me.

• 26:53Ryan Sean Adams?

  And there's some recent news items that maybe we could talk about that were that exactly that happened. So there is one where the the Discord CEO, the CEO of Discord, which is, you know, A chat app that everybody uses, but is also very popular in traditional gaming circles. Rolled out some features. He was talking about rolling out some features to integrate like Ethereum wallets and MetaMask and Web3 logins, that sort of thing. It's such a backlash from just the screenshots of these features that he, two days later, not less than two days later, he went back and said, "Oh, nope, just kidding. Like, we're not really doing that. This is just a, you know, a test and, you know, we're not going to actually implement these Web3 features."

• 27:36Ryan Sean Adams?

  Something similar happened just this week as we're recording this, Amy, with Ubisoft, which is a big traditional game publisher. And they announced that they were going to, first big game studio, I believe, to announce that they were going to incorporate NFTs in their games. They were going to use the Tezos blockchain to do this. And they released a teaser video, okay? Apparently what happened with this teaser video is that it got downloaded to hell, right? I'm talking like 5% upvotes on YouTube and 95% down. And the comments on this thing were absolutely crazy. And I thought to myself, wow, like, I didn't realize so many people not didn't know about NFTs,

• 28:19Ryan Sean Adams?

  not like had sort of a neutral opinion on them, but like downright hated them, hated them in crypto gaming. So much so that Ubisoft actually pulled the YouTube video about this. So this for me was like, oh my God, I gotta figure out why, right? It's like, why do, why do some of these traditional gamers seem to hate NFTs? And I think you talked about some of the surface reasons, right? Scams, you see as many scams. I've also seen other things like environmental concerns, which of course crypto has an answer for. We stole their GPUs, apparently. Like, that's been something raised. But there also seems to be these substance reasons too, Amy. And you were getting at some of them, I think.

• 28:58Ryan Sean Adams?

  And the one, I guess, as I was researching some of this in the gaming community, which I'm not like an intricate part of these days. But the one thing that popped up that feels like something that is commonly shared, and I'm wondering if you can reflect on, is this feeling of populism, okay? So what they didn't like is the Ubisofts of the world and the big corporate gaming interests of the world.

• 29:24Ryan Sean Adams?

  Trying to force this upon the community. It was like top down. And the sentiment in the community was like, hey, they already manipulated us with like microtransactions and all of these downloadable content costs. And now this is just another way for them to milk the community. Okay. And very much because it was like top down rather than bottom up. And I resonate with that. Okay. Because like, what is crypto? Crypto is a bottom up populist movement. I'm like, I'm on board. I hear you guys when you say that. And I'm wondering what you think about that sentiment? And if you think, does that make you bullish on more new game studios? And more like bottom up sort of crypto native type experiences rising to the top?

• 30:08Ryan Sean Adams?

  Or do you even sort of reject that? Do you think this like populist narrative is not a real reason that that crypto gamers are so anti or that traditional gamers are so anti NFTs? What are your thoughts on this?

• 30:20Speaker 00

  Ryan, you brought up a lot of nuanced topics and obviously we're still thinking through that, but I think a couple of things.

• 30:29Speaker 00

  The, it was pretty brave for, you know, Discord and Ubisoft, certainly Ubisoft to take the first step. I mean, Ubisoft was the first AAA studio to do that. And, you know, I think everyone, the world had been waiting to see what would happen. And like, I mean, to be honest, like I thought that they had long, I mean, they had announced the rollout of the NFTs very thoughtfully. It was a play to mint type of, you know, type of launch. You know, the NFTs are free to, to earn, right? Instead of like costing a lot of money, which is one of the concerns, by the way, for a lot of people, but certainly that didn't, that didn't kind of quell a lot of the, the negative, you know, sort of lash back from, from a lot of the players. And we had a first taste of that with the Discord announcement.

• 31:13Speaker 00

  And, you know, I don't, I'm not an investor, so I don't know exactly what happened, but it seems like a combination of employees and, and, you know, customers were taken by surprise and very, and had a very negative reaction. And I think that is probably one thing that the two announcements had in common, which Was not necessarily, or at least not, not that I saw, right? Like, um, having this kind of grassroots bottom up. Let's actually discuss with the community on what this means. And, um, and then get their feedback, explain it in a way that's not scary. And, um, and in a way that's very player friendly, um, and, um, and take it from there.

• 31:55Speaker 00

  And I think even if they had done that, to be honest, there'd probably still be a lot of negative feedback. But perhaps it would have been a little bit, um, you know, more like easier to understand. Instead, I think I, and I also looked at so many of the comments and a lot of the comments around like, you know, players being taken surprise by surprise by Ubisoft's announcement. And then also, um, and also just they, they obviously had, uh, had put out some disclaimers around, you know, well FYI, we're using Tezos. And by the way, like, you know, these are the transactions that may, uh, these are the things that may happen and we don't have responsibility for them. And, um, and I think, you know, gamers not understanding anything, they didn't know, they don't know what Tezos is. They don't understand blockchain, seeing that for the first time is honestly pretty scary.

• 32:40Speaker 00

  And, uh, and so I think all of that was, um, probably kind of not, yeah, not the most positive reaction led, led to that. But there's also a lot of just, a lot of gamers basically immediately equating NFT being bad. And without even going any further from there, right? And so I think that there's like probably two sets of people that need to be, um, spoken to. And, um, I, I think that not every gaming community has sort of had that reaction. So for example, our first blockchain game investment was, um, Mini Royale. Uh, and, uh, they, uh, it's founded by Alex Paley, Dennis Zidanoff. They're longtime game makers, you know, probably like over a decade of experience in mobile free to play.

• 33:24Speaker 00

  Uh, most recently as, um, co-GM's at, at Scopely. And their game Mini Royale, um, Faraway Games, they had actually a, you know, ten, uh, Discord community in the tens of thousands, very passionate about their game Mini Royale. And, um, they took a very different bottoms up approach, you know, they did. Discord sort of community chats, they really explained this concept of open economy and ownership to their community without using kind of scary crypto terms, I would say. And and they have actually, the majority of their NFTs will actually be sort of play to mint rather than pay for for drops. And and I think like so far, the community has been really positive about it.

• 34:08Speaker 00

  In fact, I think when they published their white paper in the next week, some of their Discord members immediately translated it to other languages. Which was amazing to see. So I I see that and I'm I'm still very optimistic that there are ways to have like, you know, a web three approach to this, involve your community, explain what it is that you're trying to do, which is to actually allow a player to own their game assets, right? And and actually help them, you know, play a fun game, but also have fun with like tokens and FTS. Explain the fun, explain the ownership part, and I'm so optimistic that you'll be able to convert at least like the the core segment to gamers and there will be a lot of, there will be a lot of gamers that are never going to like this concept.

• 34:54Speaker 00

  And by the way, gamers revolt and react against changes to the game all the time. For and this is like something that we've all known. For example, just back to Eve, you know, they they actually tweaked their monetization. I think they were rebalancing like something in the game and there's currently minor strikes going on like in the game, right? And and so I I this is like, you know, gamers are, and this is just testament to how passionate they are about preserving the sanctity of their game. I like love that. It's one of the reasons why people just love gaming so much is just to see how much passion there is. But of course, that also means that people will react negatively if they're if they feel like they're being harmed or misled, miscommunicated to and surprised.

• 35:38David Hoffman?

  I'm reminded of every single time back in like middle school and high school that like Facebook would change its layout. Just the entire Facebook like community would just like say, "Oh, God, we all hate it." And then later, we're just like, "Oh, wait, no, this is actually way better." It's always the reaction to change. Like, people just don't like change. Amy, after talking with Gieho and also Ariana Simpson from A16Z, we kind of had this aha moment where the incentives of game studios changes when it goes from trad gaming in its current form to web three gaming in hopefully its future form, where the business model previously was, "How much revenue can we extract from our users?" And now, we kind

• 36:19David Hoffman?

  of think that the new business models is, "How much value and wealth can we create inside of our game that our users can therefore access?" Right? It's not, "How much can we extract?" It's, "How much wealth that we can create?" And that's why all the crypto natives are so bullish on the concept of crypto gaming in general. It's just, there's more alignment behind the developers and the users. And so, maybe if there's any developers that are listening to this, maybe the takeaway, and I want to get your thoughts on this, maybe the takeaway is not like what the users are fearful of, which is, "Hey, come buy our NFTs. It's your new skin." It's exactly what you said, which is, "Hey, come earn these NFTs. They have monetary value. You get them by playing the game." And so, it's much more bottom up, rather than like, "Hey, let's, here's a new product that we can sell to

• 37:03David Hoffman?

  our, to our fanbase." It's more of a, "Hey, here's new value that our fanbase can earn by playing our game." Is that, is that kind of the takeaway that we should run with?

• 37:12Speaker 00

  I think it is one of them, but there's, I have a slightly different take on that, which is, I think people with, who maybe have spent less time in the gaming industry, immediately, like in web three, go to this decentralization and earning. However, gamers have poured, you know, it's like thousands of dollars and, you know, tens of thousands of dollars in their lifetime and hours into the game with the expectation of zero earnings, right? That's the baseline. And, and at the core of this, there is a Whole segments, probably, you know, hundreds and hundreds of millions of gamers at least that are, that love this industry for the game and the community.

• 37:57Speaker 00

  Um, and the earning actually comes way after that. And so I think just actually explaining, oh, you can earn money. A gamer would be like, that's not why I'm playing. You know, I don't know, like a thousand hours of like, you know, Fortnite. Um, and yes, it's cool and, um, and you know, like if I have the opportunity to earn some tokens and maybe make a bunch of money from it. Or, um, it's essentially like a gambling kind of, um, mechanic, right? Like maybe I'll, I could, if I play this game, maybe I'll make a million bucks or something.

• 38:27Ryan Sean Adams?

  But Amy, is this, is this maybe where we're also talking about different gamer demographics here too? Because this is what's interesting. So when I asked the, the, the community, hey, like, how come gamers hate NFTs? And a lot of different responses, but one of the responses was actually, hey, I'm from the Philippines, someone else said, I'm from Indonesia. We love NFTs. I don't, I don't know what you guys are talking about in, you know, in, you know, in, in the US. Maybe, maybe US gamers, European gamers, maybe they're sort of behind. It seems like it's taking off in other areas of the world. Or maybe your, your other segmentation was not among the hardcore gamers yet, but the casual gamers. Can you talk about that at all?

• 39:10Ryan Sean Adams?

  Is this like just a demographic dis- uh, difference, do you think?

• 39:14Speaker 00

  I do think so. This goes back to, I think that some of the casual gamers are just more embracing of, um, of new concepts. Uh, and you know, having fun, your core kind of consumer audience, actually, um, which is all, which, which is basically the casual gamer one. Um, and yeah, I think the hardcore triple A gamers are a pretty distinct segment, very large segments. And traditionally actually more revenue driving than, um, from Western markets, right? Than the rest of world. But actually it turns out if the rest of world combined is like, course there are orders of magnitude, actually more people. You don't need to actually monetize them as deeply with, um, and, and have like an amazing business model. But also, you know, and also, you know, this concept of like earning as well, right?

• 39:59Speaker 00

  So absolutely, I, I do agree with you. Um, I, I think that you'll find different. Populations and segments of people embracing play to earn web three games. And this, though, is like a separate concept of are some of these game economies sustainable, by the way? And so I want to separate the two. But certainly, I think, you know, Asia, for example, even in traditional gaming, have always like led a lot of the trends in terms of free to play dynamics. And you see like studios in Korea and China and Japan actually being some of the most inventive

• 40:40Speaker 00

  around monetization, game mechanics, et cetera, because their audiences are much more open to experimentation. And then actually, a lot of Western studios then look at that and copy some of the mechanics. And like we're like followers in some cases, right? And and it's like, you know, for example, Miho Yo, right? One of the leading, I think, experimental gaming companies in the world, Genshin Impact. And I think this is where you will see some of the biggest innovations in web three as well from both developer mentality and gamer adoption. I am hugely bullish on Korea, for example, as a market where you have the intersection of that. Game development talent and an open, you know, attitude towards web three and crypto

• 41:23Speaker 00

  combined is going to probably bring a ton. And then, of course, like Southeast Asia is one of the biggest, the fastest growing markets in gaming. Obviously, Green is there, Free Fire, one of the biggest games in the world. You know, they also recently led the Forte rounds, also, you know, investing in other crypto companies. You see this more openness to this, to web three from that region. So 100% agree with you.

• 41:49David Hoffman?

  There's one incentive that I think web three crypto gaming can bring to the table that we haven't touched on yet. And I want to get your take on how powerful it is when it actually lands on like the traditional gamer. And that is the concept of owning the things that you buy in the game. The example I always use is, once upon a time, there and still to this day, that Magic the Gathering is a huge trading card game and you own your own cards. You buy the cards. And you get to keep them, you get to trade them with other people. If you want to sell them on eBay, you can. But the drawback is that Magic the Gathering, those are physical cards. You gotta, you gotta be right next to the person, right? You don't, you lose some of the digital coolness. That's something like Hearthstone has. Hearthstone, a great Blizzard game, kind of the same model.

• 42:33David Hoffman?

  There's a lot of cool game mechanics that exist because it's in the digital world. But when you buy Hearthstone cards from Blizzard, they just, you don't own them. You just have access to them bestowed by you inside of the Blizzard app. And Blizzard players, Hearthstone players funnel hundreds and hundreds to thousands of dollars into Hearthstone to purchase these cards. And then Blizzard just like mince more expansion packs. They lose their, they lose their power inside the game and they never were even able to like actually sell them like they were with Magic the Gathering.

• 43:04Speaker 00

  Yeah.

• 43:05David Hoffman?

  Uh, future card game.

• 43:06Speaker 00

  Really an example of that. I was actually playing Magic just last night. Because there's a couple of things that I'll say. Magic the Gathering is actually like a bigger business than than Hearthstone. I think Hearthstone is the most successful TCG game, uh, trading card game, you know, digitally. But actually Magic the Gathering had, is probably bigger, um, yesterday than, uh, sorry, last year than it has been previously. It's actually growing, um, and not like shrinking as an audience from like a DAU, daily active user perspective is bigger than Hearthstone today.

• 43:46Speaker 00

  Um, they probably have something like, let me call it like 15 million or so like active players, um, even today. And from a revenue perspective is uh, significantly larger today. Um, and like, and so, um, I think people don't realize how big Magic is. The, um, and actually I think it's a great, um, example of why I actually think the gamers, um, will embrace the concept of ownership. Because in Magic, you own the cards, right? And, um, Magic is like the OG collectible sort of, um, uh, and almost like a progenitor of like, um, what NFTs are because right, you know, these days, um, some of the Magic. Cards are worth literally hundreds of thousands of dollars, if not more like each like.

• 44:30Speaker 00

  And um, and the ownership of it actually means a lot to people and is why, one of the reasons why it's so. So um, it it's like both like amazing monetization and also has this massive audience because. People are still buying the cars and they're very proud of like showing off like the cars that they have from like, you know, older sets. Um, and uh, and so, yeah, I actually think that this concept is one of the reasons why I'm so bullish. That over time gamers um, in the digital worlds will embrace um, owning the items that they have. Care so much for, play so many hours with um, and uh. And as you know, as soon as they kind of wrap their mind around some of um, you know, what, what, what this all is.

• 45:12Ryan Sean Adams?

  You know, we're still, we're still uh, trying to explain crypto gaming to uh, to traditional gamers. Uh, but, but this one last area that I, I think I wanted to cover here, and this is uh, an area of interest, maybe back a little bit to that theme of populism, but. Something else like above, when you dig down and you get, you get above the surface issues, what are the substance issues that? The traditional gamers have and, and one is this question of like, how many people use games as escapism? From real life, right? It's like, they wouldn't use the term escapism, it's just where I go to have fun. I work my day job, it's a dead end, I'm in a cubicle all day, you know, I'm whatever. Doing something I don't love doing during the day, but at night I'm transformed into this alternate world.

• 45:55Ryan Sean Adams?

  Where I have my people, my tribe, my guild, I'm a badass there, I've, you know. Warrior armor, I'm like level sixty, right? People think I'm a big deal, I'm good at this game, all right? Different world. Now, when you inject real world economies into this type of environment, all right? You inject all the cruft from the real world, all of the wealth inequality that we have previously. And now suddenly, I'm fighting against, you know, three arrows capital for my dragon armor, right? Like, I have to bid against them and they can buy their way in. And so I get all the outside gaming economics that have just invaded this world.

• 46:35Ryan Sean Adams?

  And I don't like that. Not only I don't like change, it's just like you're ruining the thing that I had. The one place I could go where I wasn't affected by all of these real world troubles. What do you think about that? Maybe that's like a bigger kind of picture thing, but does this sort of wreck some of the value proposition for for traditional gamers?

• 46:56Speaker 00

  Yeah, absolutely. It does. And and it basically you're touching on the concept of pay to win. And actually, the a huge amount, I mean, I'd say the majority of the gaming population

• 47:09Speaker 00

  really don't like this idea of paying to win. In fact, some of the most passionate communities, whether it's, you know, Guild Wars or or some of the biggest MMOs are are not paid to win for a reason, which is very different from pay for power, I would say, like, you know, if if somebody wants to spend like $10,000 and, you know, decking their characters out with skins and also maybe speeding up some of the progression in order to get certain items. Then they should, you know, they should be able to, right? It's it's it's an open economy and and many of the top games have

• 47:48Speaker 00

  have actually embedded this kind of dynamic into their game. But at a certain point, even if you spend, I don't know, a million dollars or something into a game, you will still not be able to beat out somebody who is more skilled. And the best, like, I would say PvP competitive games in the world balances this out very, very well. And and I think in in the future, I think a great Web three game is going to need this similar balance. Otherwise, they will not reach the scale or longevity of of another game that actually has figured this out. Because if you're competing against three arrows or a fund, maybe you're competing for certain skins and rarity of skins.

• 48:27Speaker 00

  And by the way, that happens today, too, is like, you know, really rare gaming skins will also cost tens of thousands or maybe even hundreds of thousands of dollars. But if I feel like with that item, a fund can beat me in the game, well, then the game basically loses all fun. And and so like, I think that what Web three game developers really need to do is think about balance. And, you know, how do you make it so that at some point, it doesn't matter how much money you spend? Like, you're still playing the game on an equal basis, whether I'm playing free to play, like, and have never spent a dime in the game, but I'm just really great at it. Or if I spend, you know, like, I don't know, a thousand dollars in the game.

• 49:05Ryan Sean Adams?

  We need gaming economists is what it sounds like to go figure out these these wealth inequality issues for us in game. Maybe we could export some of that to the real world too. Maybe we'll learn a few things.

• 49:15Speaker 00

  Yep.

• 49:16Ryan Sean Adams?

  These digital worlds.

• 49:16Speaker 00

  Economists are some of the are actually very, very essential to the most complex games, whether it's like an RPG or an MMORPG and and other like complex games. And it's not like you set up the economy once. It's a it's totally a live operated skill set, right? Like, for example, a, you know, a game economist or a game designer is introducing a new economy into the game, a new market into the game, which is a new item or something like that. It impacts the behavior of, you know, how people react and they'll change their behavior. They'll have an they'll have a assumption or hypothesis around how it impacted. But then they will start like tweaking the levers of the of of like the game in

• 49:59Speaker 00

  order to balance that, right? Maybe one item is way too powerful and therefore it is really ruining the competitive dynamics of the game. Well, then they'll they'll balance it. And usually, you know, if somebody had really grind a lot of hours or I paid money for a certain item, yeah, they'll be pretty upset for a short period of time. But ultimately, if the players trust that the game developers is trying to just optimize for the best experience for the player, and that trust is something oftentimes built over a long period of time, then then they will, you know, accept these changes. One of the challenges of Web 3 and introducing NFTs is that this cycle is vastly accelerated because any imbalance in the game is immediately essentially taken advantage of, just like arbitrages are immediately

• 50:44Speaker 00

  taking advantage of in DeFi. And and so therefore, and some sorts of these changes might actually be irreversible, right? There are some, I think, providers out there of blockchains that offer reversibility and sort of private blockchains. And I mean, to that, I truly question, well, what is the difference between that and an internal ledger? That is actually not like Web 3. And and I think some game developers may not understand that nuance. But I think over time, hopefully they will. And because I think over time gamers will realize that if you do that, then you actually won't actually own the item. And so then what was the point of adopting that quote unquote blockchain slash internal ledger in the first place?

• 51:30Speaker 00

  But it does create like game design challenges that I think game developers will need to figure out.

• 51:37Ryan Sean Adams?

  Yeah, I'm all about on bring on the the game economists, right? Bring on the game central bankers, so long as we preserve the right to fork to fork them. If they mess things up, that is important for decentralization. Okay, so we promised three explanations here, and that was the the gamer explanation. The last and final one is for the crypto native. Okay, so crypto native knows all about NFTs, you know, knows sees the value proposition of digital scarcity, knows all about decentralization. I think generally the crypto native is pretty excited when you when you tell that person about crypto gaming. Because they're like, oh, my God, bring on the metaverse. This is what I've been waiting for. I understand digital scarcity like so.

• 52:17Speaker 00

  These will be the earliest. These have already been the early adopters. I don't know a single person, I think, who have embraced Web three that haven't been excited about gaming in Web three. Because I think they've already embraced the concept of decentralization, more ownership, more governance and control. Like for for the creator and the end user versus the centralized, you know, sort of stakeholders. And and so it's almost like, yeah, I don't even need to do any explaining.

• 52:46Ryan Sean Adams?

  Yeah, you don't.

• 52:46Speaker 00

  I mean, people in this space, we've long felt that gaming and, you know, maybe it's like social tokens and things have been are the best use case. And it actually will give utility for NFTs and actually will just drive the next adoption wave of them. And because, I mean, there's still like very few, I mean, color like maybe hundreds of thousands of people that have bought NFTs right now. There's like the next hundred million billion people to onboard. And so and of course, like we went three, we're like the minority, right? And so we were really excited to find like people to red pill and and bring on board. And but I would say I would really. Really say that for for us in the community, it's important to have patience. There's a lot of jargon.

• 53:30Speaker 00

  There's a lot of, I think, I don't know, like, you know, elitism and and I think for people who kind of experience that and some of the toxicity, I would say, they kind of react against that as well. And, you know, we are in the minority here. You know, it's on us to actually provide a very friendly, open, inclusive environment to bring on people on to sort of this platform.

• 53:55David Hoffman?

  So Amy, say somebody is listening to this and is like, I'm sold. I want to go play some crypto games. I think they might be a little bit disappointed if they were a gamer, if they if they know all about gaming. They might be a little bit disappointed about what the current world of crypto gaming has to currently offer them. So what would you say is like, you know, Axie Infinity has a bajillion players, but like, as far as like what people are used to, it's very, very off the beaten path. It's a new kind of game. The graphics just are very rudimentary. It doesn't it doesn't feel like Fortnite. It doesn't feel like Hearthstone. What would you say is really holding back the current state of crypto games that we really need to work on as an industry?

• 54:33Speaker 00

  Yeah, I mean, you know, first, calling out, I mean, Axie Infinity basically was the first to go mainstream. And so I think everyone is learning from what they've done, right? The the things they've done right, the things they've made mistakes on, and the team is super open about the things that they're working on, the challenges with with the game. But the reality is is that games take years to develop. And, you know, I think Valorant took seven years and even some of the best, like, free to play mobile games that are more casual in nature to take a couple of years to develop. And therefore, some of these games that are going to be super exciting to play, or I would say most of them, are still in development and will probably not come out for a couple of years.

• 55:17Speaker 00

  I think that there are certain genres, for example, browser games as a genre, I think, are making a comeback right now. They were big. Call it 15 years ago and and then mobile took over in the last year, um, in the last 10 years. And because of the red ocean competitiveness of user acquisition in the space, browser is slowly coming back. That's why we invested in fairway games. And so I think, you know, people are really excited to see what that might feel like. They can play mini Royale, um, and it's live today, right? Um, not with all of the blockchain components, of course, um, but over time it will, it will launch. And so I would say, I always tell gamers to be patient, you know, like, um, and, you know, if they're really excited about the concept,

• 55:57Speaker 00

  they should tell their developers, um, the, the game that they would love to see and hear more about what they're thinking about in, um, in blockchain. Be involved in the conversation. That is the spirit of Web three and, uh, and it starts there.

• 56:12David Hoffman?

  We often like to say on bankless that crypto is speedrunning the history of money and finance. And then we've also added on that DAOs are speedrunning the history of human governance systems. And there's just a lot of previous stuff that we humans have already done that crypto is redoing once again. And when you tell me that like browser based games are making a comeback, I remember spending hours on like arcadegames.com or miniclip.com when I was a kid. Do you, do you feel like we could, do we, are we kind of following the same pattern? Like crypto gaming is speedrunning the history of gaming once again?

• 56:47Speaker 00

  Yeah, well, I mean, I do think that the concept of like these, um, distributed ledgers and decentralization is, is quite new and exciting. I mean, I guess it's not new, I mean, it's been around for probably like eight years now, um, and finally it's taking mainstream adoption. So really it's more around, you know, like, just like browser games, finally, some of the, um, leading developers, um, are re, uh, kind of rediscovering it and moving over and creating like these great consumer experiences as that happens in crypto, right? I've always thought like, what will bring on the next like billion users will be an amazing consumer experience in application form, whether it is a financial services app or, you know, a game or a social network, et cetera.

• 57:29Speaker 00

  Um, and this audience is much larger than financial services, um, as like, you know, in DeFi as a use case, even though, even if that's like a deeper sort of use case from an asset, total asset perspective.

• 57:41David Hoffman?

  The era of proof-of-stake is upon us. Proof-of-stake systems like Ethereum, Terra, and Solana allow the industry to move away from the hot, loud, and wasteful proof-of-work systems and return back to a cottage industry of individual stakers and individual validators. And that is what we need to make this industry stay decentralized. Individuals must play their part in crypto network validation. And that is what Lido is here to do. Lido makes staking accessible to everyone at the click of a button. By delegating your stake to Lido's network of nodes, you can access the yield offered by proof-of-stake systems and claim your share of the network transaction rewards. Do you have 32 ETH and want to stake it to Ethereum, but running a node sounds intimidating? Or maybe you have less than 32 ETH and you need to pool your ETH with others so you

• 58:25David Hoffman?

  can access staking yields? Lido offers a solution for both. Simply go to lido.fi, choose which assets you want to stake, and deposit them to the Lido validating network. Lido is working to make sure proof-of-stake stays as decentralized as possible and is committed to decentralizing its own validating network to eventually become a completely permissionless protocol. So if you want to stake your ETH, Terra, or Sol and get liquidity on your stake, go to lido.fi to get started. Bankless is proud to be supported by Uniswap. Uniswap is a new paradigm in asset exchange infrastructure. Instead of a cumbersome order book system where trades are matched with other humans, Uniswap is an autonomous piece of software on Ethereum, which is what Ryan and I call

• 59:10David Hoffman?

  a money robot. No human counterparties or centralized intermediaries, just autonomous code on Ethereum. Input the token you want to sell and receive the token you want to buy. Something brand new in the Uniswap ecosystem is the Uniswap Grants program is now accepting applications for grants. We have been saying this for a while and we'll say it again. DAOs have money and they are in need of labor. If you think that you have something to contribute to the Uniswap DAO, apply for a grant to Uniswap. Just look at the size of the Uniswap treasury. It's almost $3 billion. This mountain of capital is looking for labor. Do you have something of value to contribute to the Uniswap DAO? No matter how big or small your ID.

• 59:51David Hoffman?

  Idea is you can apply for a uni grant at uni grants.org and help steer Uniswap in the direction that you think it should go. That's exactly what we did to get Uniswap to be a sponsor for Bankless and you can do the same for your project. Thank you, Uniswap for sponsoring Bankless.

• 1:00:06Ryan Sean Adams?

  Okay, so here's what the crypto native is gonna want to know. So that, you know, the traditional gamers may be gonna want to know, what games can I play? The crypto native is gonna want to know, okay, what do I buy? How do I get exposure to the space? Right? Tell me what to ape into, this sort of thing. And on Bankless, we don't get into the details of these things, but I will remind audience listeners, okay, we're talking about Axie Infinity last year at this time when no one else was, a lot of people weren't ignoring it, market cap $32 million for the AXS token. All right. This was one year ago, as we're recording this, looking on CoinMarketCap, it's at 6.8 billion at the time of recording today. This is how fast these markets can move

• 1:00:49Ryan Sean Adams?

  and the opportunity cost of missing something, right? Which is why, partially, Amy, we're having this podcast. We want to try to identify what's next. But give us a sense of if somebody wants to, if a crypto native wants to get exposure into crypto gaming, what do they do? Because it's different than like, just, do I buy a token? Do I buy an item? Do I buy digital property? Do I get equity exposure? There's a game I was looking at, it's kind of a loot fork, it's called Dope Wars. Anyway, I was looking at Dope Wars and I didn't know whether to buy their in-game currency, it's called paper, or like the Royals Royce loot item, right? It's like, what's gonna appreciate more? Should I buy the collectible, the item, or should I buy the

• 1:01:34Ryan Sean Adams?

  currency itself? Do you have any guidance on how to get exposure, how you evaluate things as a venture capitalist on, do I buy token? Do I buy item? Do I buy some property? Do I get equity exposure? Are they all equal? Does it depend? Give us a sense.

• 1:01:51Speaker 00

  Yeah, I think there's a few different ways to think about it. First of all, I think AAA Web3 Gaming will be one segment in the gaming, but Play to Earn is just actually another segment in Web3 Gaming. I don't think it's going to go away anytime soon, first and foremost, because these guilds that have come up, which you know, YGG is leading right now, but there's at this point thousands of guilds in the world, which are, I think, essentially like a yield farm fund. So have actually raised vast amounts of money at this point, accumulated a capital that now needs to be deployed into these games, which will sustain sort of like the next generation of Play to Earn games.

• 1:02:34Speaker 00

  And in that world, I actually don't think the gaming is fun. The and I think what needs to happen is a really keen sense of tokenomics, because I think of them as essentially like DeFi meets gaming. And and I think that there's a few different places to invest, as you mentioned, you can invest in a Play to Earn games, governance token, in-game currency, assets, there's land assets, items, etc. And then there's also, there's also, there's a game studio themselves, and then there's also the guilds, right? And so the thing with these games is that the majority of them will go through, I think, a fairly short cycle, like kind of like, you

• 1:03:17Speaker 00

  know, you have kind of hyper casual gaming dynamics there, where you're usually, you're actually using incentivization to bring people in, bring them into the assets. And so getting in early is very, very important. And when they stop incentivizing the asset value appreciation, whether it's a token or the NFT, the thing is that there will be essentially like hundreds and hundreds of these. And so therefore, the rational thing is that guilds and then also players will move to the place where they're going to get the most return, which is probably going to be another new Play to Earn game that is heavily incentivizing new users. It's not unlike a lot of DeFi apps, right? Have the same mechanism where you see this huge drop off as soon as they stop.

• 1:04:00Speaker 00

  Doing, um, you know, air drops and, and, uh, and yield incentives. And so, um, I think there are this couple of nuances. How the token is structured in the game economy is really important. And therefore, for an investor, you should probably read the white paper and understand exactly how the economy is structured. Because, for example, if the governance token is actually utilized as part of a soft currency. So it's a soft currency in a, um, in a, a play to earn game, right? Has unlimited, um, circulate, uh, supply. And so they will continue to print it and therefore it's never going to experience like long-term sort of huge increase in, in value.

• 1:04:40Speaker 00

  Because the, the point is that that is used as almost like a stablecoin-esque, or that's the hope. Um, way to like, um, to, to pay out earners, right? However, for example, if there are breeding mechanisms or, um, or, uh, that, that in, involve the, uh, in-game governance token as part of the fees to do so. And that is a fixed supply, then it basically is a naturally built in like value accumulation, um, you know, mechanism into the governance token. And so kind of like, at least in the short to medium term, it's, it's going to increase until the, um, until the game studio decides to, uh, start airdropping and releasing the token

• 1:05:23Speaker 00

  from, from their own treasury. And so there's, I, I, so I think if you're like a savvy trader in that, I would really look at how the token is structured. Because you can use that to predict like token appreciation, at least in the short term, um, depending on what the game studio does. And then on the asset value side of it, um, because like there's so much money in these guilds to be buying these assets, you will also likely see um, a lot of accumulation of these assets. And so there it's like, look to see where does a play to earn game have accumulated a lot of community. Um, and please, that's where the guilds will be looking to see where they actually make their next investments as well. And, um, you know, if you are, are able to get on these asset sales early, um, then, you know, that's like, uh,

• 1:06:07Speaker 00

  I mean, there's, there's a lot of ways to, to find returns there. Um, and And I think you've seen that play out with these like very, you know, very public land sales and also appreciation of these like NFT assets. I actually think in-game NFTs, like some of these games are starting to realize that fit quickly appreciating in-game asset NFTs are detrimental, directly detrimental to the retention of players. Because they quickly become unaffordable, right? And so therefore, like there's new mechanics around Play to Mint, you know, releasing potentially millions of these items. And trying to keep these asset prices down, which is beneficial for gameplay.

• 1:06:48Speaker 00

  But maybe like not as beneficial if you're an investor looking for appreciation of of asset value.

• 1:06:54Ryan Sean Adams?

  Yeah, it's really interesting. I guess there's no clean answer to the question of do I do tokens? Do I do items? Do I do property or do I invest in a guild here? And it really depends. But if you're evaluating a game, right? You definitely need to look at the token, uh, token economics.

• 1:07:08Speaker 00

  Yeah.

• 1:07:09Ryan Sean Adams?

  Behind the token itself, but like, what do you guys do when, when, when you go? Do you ever buy items or is it primarily like tokens and, um, you know, investing in the, the equity of the game studio? That sort of thing. And then, and then maybe is the, the idea behind investing in a guild? Is that like, oh, you get exposure to a wide set of games? So that's sort of an indexed fund type of investment. Any thoughts on that?

• 1:07:33Speaker 00

  For sure. Um, so we're not traders. And so, um, when we invest in a game studio, uh, which we have, we are really investing in equity. And then the governance token, um, with the expectation that we will be investing a studio in the long term. Um, I think that there's like a trading strategy around play to earn games. But then there's like a long-term investment one and we're very squarely in the latter. And that's why we do equity and governance token deals with these games, um, studios. And then I absolutely do think that the guilds are an interesting part of the value chain. Because like I mentioned, um, these game, these titles will rise and fall. And I actually think a play to earn for a lot of them, like in a pretty short timeframe. Um, and, um, however, if you're a guild, you send and, and you command over time, a distribution

• 1:08:18Speaker 00

  of tens of thousands, hundreds of thousands, eventually millions of. Players, right, in these emerging markets, then you, um, that is the mode, right? First, you need, um, they have accumulated a lot of capital in order to buy assets to then accumulate the distribution. And once they have the distribution, they essentially can move players from one game to another. They're almost like kingmakers. They can actually produce like, you know, probably like at least jumpstart a lot of these games as well. And therefore, um, it's not been lost on a lot of investors that guilds are an interesting part of the ecosystem. I think the challenge right now is that, as you have mentioned, there's just aren't that many like live uh play to earn uh games.

• 1:08:58Speaker 00

  And so therefore, uh, while guilds have been trying to diversify their treasury into a lot of different gaming assets, uh, you know, most of them are still heavily invested in Axie because there's just not that many other live games right now. Right? And so, um, uh, and so I think there's going to be a time when there's like a lot of concentration of these guilds in that one game.

• 1:09:19David Hoffman?

  So a lot of the web three community is definitely interested in just like, oh, how do, how do I get exposure? And like, what, what do I buy? As Ryan said, but as you just in, uh, said, the, the whole play to earn movement, it's not about buying. It's about playing. You're in some, so a lot of these assets, you're supposed to play the game in order to earn them. And I know we, we really just only have Axie Infinity and maybe a few other examples to really know what that really means. But in, in theory, projecting forward, what are the different vehicles in which people that don't want to invest their capital, but rather instead they want to play the game to get upside? What, what's the, the generalized model? How do people actually make money playing the game?

• 1:10:01Speaker 00

  Yeah, people making money playing the game. I mean, um, I, I personally think kind of in the future, um, my hypo, my hypothesis is that there's going to be this classic play to earn gaming model, which will cater to, um, which will cater to sort of like the emerging market, where actually like the replacement for income is just much lower than in a Western audience. Right? Um, and so there's, that's going to be a thing. And, you know, if, and that's more of like a trading mentality. I think of it as like, you know, I think Western traders will look at. That and find our opportunities and and otherwise and um and and but a gamer looking to earn maybe like you know play and earn.

• 1:10:41Speaker 00

  At the same time, let's say like, you know, I can be playing like COD, you know, Call of Duty, but then I can also play something like this, but also earn some tokens and have fun doing that. I don't think it's going to become like a replacement for income ever. In fact, I think if it is, then that actually will. That is not sort of correlated with um longevity of that game. And so in that kind of segment, you're um most likely going to um play and earn. You know, you can probably earn some tokens. Some people spend thousands of hours in these games, so they'll probably earn maybe like a substantial amount of value. And NFTs and and tokens from doing so. Um and because uh and because there's like um.

• 1:11:19Speaker 00

  And I think a lot of these AAA games will actually incorporate a mechanic in which I, you know, there's a possibility of actually earning a lot. A very valuable assets, just like that mechanic exists today, except that you can actually go out and sell, for example, a rare skin for like a million dollars or something. Uh and I think that will be a component to it as well. And that sort of almost like a gambling mentality will potentially also be. Um a a drive for a bunch of gamers to to play some of these web three games.

• 1:11:48David Hoffman?

  One of the favorite things in my mind about both gaming and crypto is that everything is really, really community based. And we're seeing overall the whole entire world move closer and closer towards communities, towards tribes. People are finding their their tribe on in the metaverse, in wherever they they identify with themselves. And the web three world definitely runs on communities. Gaming has run on ran ran on community since day one. And now we are seeing the intersection of the web three communities and the gaming communities. Amy, can you can you just talk about the the role that you see community playing when we talk about the world of of crypto gaming that's coming?

• 1:12:26Speaker 00

  Oh yeah, I mean, I think communities already play a vital role in Web3 gaming and it will absolutely continue to and um and I'm very hopeful that they'll also come together, you know, game um gaming community and Web3 communities finding a common common grounds and we're honestly just not seeing very much of that right now, they're very separate today um and uh in in these like, so when I look at Axie Infinity, like, you know, these communities love that game, right? And they help each other onboard and and teach and teach each other sort of like how, what are the best strategies to earn and win matches, etc. Um and I think um uh say what you will about like sort of like the pros and cons and the mistakes and and the and how they manage their economy.

• 1:13:07Speaker 00

  However, the community was with that game from day one and uh and it's one of the key reasons as to why that player and game was so successful and any player and game developer who don't realize that, I I don't think will have a success um like, you know, a success case anywhere near that of Axie. Um and so the the community is absolutely key, especially because even in traditional gaming, there has been the biggest trend and that has been the convergence of gaming and social. Um and uh you know, browser is one of the subtrends with that because, you know, they're instantly shared, you know? Um and so theoretically, you can go on social network and share a link and potentially get tens of thousands of people playing one instance in a browser game immediately.

• 1:13:48Speaker 00

  But also, if you look at the rise of Roblox and um you know, the core use case of Roblox is kids going to a library, like playing with as friends and playing hours in, I don't know, one of one of their, you know, um what is like actually very basic fidelity games, but just super fun social games, right? Like, again, you don't need high fidelity like Valorant to have essentially hundreds of millions of people playing your game. It turns out that people are going to games um like the bigger population is going because it's fun to play with friends. Um today, mostly friends in real life that they bring in, but in the future, like friends that they meet actually in the game environment. And so um because of that, I think the concept of a community is already growing in significance

• 1:14:31Speaker 00

  in traditional gaming and already important in Web3, and so this trend will just continue.

• 1:14:37David Hoffman?

  I think I'd like to remind listeners that the Web 1 and Web 2 world both came out of social use cases. Like, the Web 1 world was people wanted to chit chat on forums with like-minded, like-interested people, and then the Web 2 world just supercharged that with social media platforms. So, the internet, the growth of the internet always kind of seems to be trending towards just, how do we make things more social? How do we make more communities? And how do we enable them to exist? Amy, when it comes to all of these play-to-earn games, and you talk about how there's a potential for people to earn more than a living wage when it comes to playing these games. What about the concept of like, meaning and purpose and career when it comes

• 1:15:18David Hoffman?

  to working in these Web 3 games? How does just, people always want to discover meaning and think that they are working towards some sort of bigger purpose when they do their labor, when they do their work, and that's why it keeps them going. How does that role fit into the world of crypto gaming?

• 1:15:35Speaker 00

  Yeah, I love that concept. In my opinion, I think that is the most important core of a future metaverse, you know, this idea that people are spending substantial amounts of time in like, a digital world. Well, they won't do that unless they derive significant meaning, value, and identity from that. And I think people talk a lot about the form factor of that digital world, but actually, it's sort of like, if you think about a person's, a human's needs, and this need to belong and find meaning, it actually is the core concept of it. And honestly, like, when I think about some of the greatest like, MMO designers of our era, like, that's honestly what they think about all day long. And so,

• 1:16:19Speaker 00

  I think, you know, I love like, Eve Online, and you know, they're, some of their largest guilds or corporations have literally like, 10,000 people in it. And, you know, I've spoken, and the CEO has often said that players over the last 20 years, just how long this game's been around, have come to him and be like, "I actually derive more meaning and learnings from this game and my role in that than I do in real life," or "I'm porting..." Learnings from the game into real life. Um, and, uh, and you know, I am somebody in this game, very important. Whereas, you know, I don't find as much meaning in my day to day job, you know? And that's why they have spent like, um, so much of their time, energy, love, and also like, you know, money into this game.

• 1:17:03Speaker 00

  Um, and, uh, and this is, and, and so, you know, these are, these are guilds in which there's like leadership, there's a CEO, there's again, like I mentioned, IT departments and, and HR and, and people have jobs. And, um, all within this digital world, I think it's the OG, honestly, like metaverse. Um, and so therefore like this concept of meaning and value. Um, but also this concept of scarcity and, um, and potential loss. The things that are actually really important to a person sort of in real life. Um, is, uh, is actually what will drive how they spend their time. Um, and, uh, and so if there is going to be future metaverses, this is going to be core to that.

• 1:17:45David Hoffman?

  So, once upon a time, I absolutely loved going to the gym and I'd be in the gym every single day. And then I became a personal trainer and it just sucks the fun right out of it. And I just did not want to be in the gym at all. And I'm kind of worried that everyone wants to play games. And then as soon as you put money and assets into games, people think that's a great idea. But then it goes from like fun into work and it kind of just sucks the fun out of it. Do you have this fear that like crypto gaming will just kind of suck the fun out of gaming and just make it more like work?

• 1:18:17Speaker 00

  I think that meaning and value creates fun. This concept of fun is a pretty like, you know, like a nebulous one. And this is one that I've sort of debated a lot with people as well. Um, if you're tasked in an MMO guild with just grinding like in the like dungeon crawler levels to create a certain amount of goals so that the guilds can, um, you know, buy certain resources to, to like win their next battle or whatever. Like, is that, is that work or is that fun? Or is that somewhere in the middle? Or is it fun because that person feels like they're adding a lot of value to their guilds? And, um, and so therefore I think that the lines are blurry.

• 1:18:58Speaker 00

  And more important is that meaning and connectivity and social creates fun. Um, and, uh,

• 1:19:08Speaker 00

  And that's sort of, and like, and that's like a more kind of direct tie than necessarily like, "Okay, this is a beautiful sort of like first-person shooter experience and that creates fun." Actually, I always argue that the the social experience, but then also like the fun of going through the game mechanics and and the level combined create fun.

• 1:19:29Ryan Sean Adams?

  You mentioned earlier, Amy, that, and there's been one criticism that some of these crypto games are unsustainable. What's required to make a crypto game sustainable? Is it that fun element that we talk about? And realizing the term fun, again, is, you said, nebulous, but it's also very broad, right? It's like, what are we kind of optimizing for in life if you boil it all down, right? It's like, there's money, there's stuff you have to do, there's also fun. When I say fun, it's like, it's like leisure, it's like stuff you want to do, it's the life fulfillment stuff. So money and fun, these are the two optimizations. Is fun required to make a crypto game sustainable?

• 1:20:05Speaker 00

  So again, I have a very broad definition of fun, right? And so when I say the game has to be fun, I actually mean like a bunch of different things. And I don't mean necessarily the graphic fidelity of the game, et cetera. I mean, you know, does the game create value and social?

• 1:20:21Ryan Sean Adams?

  It's like, it's like fulfillment, right?

• 1:20:23Speaker 00

  Yeah, and fulfillment, yeah. And and fun, kind of in the classic sense, you know, the gameplay is super fun and addictive, so I'm just gonna play it. And and that translates to retention of the player wanting to actually come in, you know, we always talk about the concept of like the thousand-hour game, right? What does the game need to have in order for somebody to play for a thousand hours? It's difficult. I mean, we have really short attention spans. We don't do a lot of things more than like, I don't know, a couple of hours, maybe, time to fun in a game, right? You have three minutes to basically get somebody into and and engaged and willing to invest time into a game or something like that. And so all of these concepts are really important. And when I mean sustainability, I mean, definitely the fun has to be there in this broad definition. And I think social elements will really help

• 1:21:08Speaker 00

  that, potentially competitive elements, you know, PvP will help that as well. But also, what what takes away from sustainability is also these, is this optimal? For quickly appreciating assets. Basically, what happens then if you have guilds and investors and basically investing in all of the early like assets in the game that then appreciates a thousand X. And then the normal, the normie players come in and they're buying these assets a lot more expensive. After the tokens launch, it's already worth like billions of dollars of FTV. Then essentially you are setting these people up for significant, I would say disappointment. When inevitably, once you stop, um, when, once the game maker stops incentivizing them and asset value comes down.

• 1:21:52Speaker 00

  Um, then you, you have a player that otherwise may have actually wanted to play the game, but is actually sitting on, um, like having lost a lot of money in assets. And they're going to basically, and it's going to, it's going to destroy the trust between that player and the, and the game. And that's like a really, that's a really subpar experience and leads to unsustainability. And so when I say sustainability, it is kind of like both like the, the, like the positive and the negative side of that and really taking care.

• 1:22:20Ryan Sean Adams?

  This is what makes investing in this space kind of tricky and it's easy to say like, hey, uh, you know, Amy, tell us what the next axi is, but it's actually hard like to identify what, what that's going to be. But a few of the things I feel like you mentioned are community, a community is super important. Token economics are actually important. Finding the right balance is important. Making sure the gameplay is fun, the broad definition of the word fun, meaning fulfilling.

• 1:22:48Ryan Sean Adams?

  Lots of other things I'm sure, but what else do you really look for? So when you're looking at, hey, I'm trying to invest in, in, uh, in the next big crypto game thing. What are you looking for beyond the things we've already discussed in this episode?

• 1:23:05Speaker 00

  I think a lot of that, but I also think that, um, we, um, that some of the most brilliant game makers are still thinking through how to reinvent like the, um, the embedding of washing technology into the game to, to solely enhance the, the, um, the player experience, you know? For example, you know, like, um, some of the The best game makers in the world, whether they're at Riot or Supercell or, you know, Epic and otherwise are thinking through this. And I'm actually super excited to see what these game makers will invent in this genre. And some of these, and whether, and it may well

• 1:23:45Speaker 00

  come from indie studios as well, right? And but I am bullish that it will come from new games created with native blockchain, you know, sort of integration. And whether that's happening within a large gaming publisher or an indie studio, rather than necessarily just porting over an existing huge franchise to blockchain, I mean, it could happen if it's done really thoughtfully. But I think that we have yet to see a lot of really creative mechanisms that have yet to be invented.

• 1:24:19Ryan Sean Adams?

  So it comes down to the common denominator we always talk about on Bankless where it's back to the teams. You're kind of investing in individual people because they're the ones that are trying to navigate this uncertainty. Just two more things, Amy, we want to cover, and then I think we're good for this episode. The first is this question of timing, right? So you'd be right about the thesis of crypto gaming, but get the timing wrong. And it feels like now there's a lot of, I guess, excitement about crypto gaming on the back of Axie. Excitement we didn't see frankly at this time last year. And I almost wonder if some of that might be overextended or overhyped. Kyle Simone from MultiCoin said, yeah, there's

• 1:25:00Ryan Sean Adams?

  a lot of crypto funds turning into gaming VCs right now, and it's not going to end well. According to The Block, roughly 42% of the last $3.8 billion worth of VC funds, that was from November, went into crypto gaming. Do you feel like the market's maybe a little bit frothy now? Or does this feel like a right size? And what does this mean for how you think about this as an investor?

• 1:25:26Speaker 00

  Yeah, I think the market is absolutely frothy. I would agree with Kyle on his prediction. But actually, kind of the cycles of gaming investing has been, has happened far before Web 3, where you have these cycles of a lot of enthusiasm from non-gaming investors coming in and not quite realizing, I think, how title-sensitive like success is. There is, I don't, I'm not sure there is like a more power law, you know, sort of distribution of success industry than in gaming, where actually, you know, the vast majority of the success accrues to the top.

• 1:26:09Speaker 00

  It's possible we won't see another play to earn game as successful as Axie. Like, it wouldn't surprise me. I wouldn't be surprised otherwise as well. And so what happens even in traditional gaming is a bunch of people come in and get super excited, drive up like game asset value. And then the reality is when they launch, probably 99.9% will fail. And as a reminder, there's basically 100,000 games launched on, you know, I think like on mobile, on like a monthly basis or something like that. I mean, it is a massively competitive field. And so, and so, I mean, the vast majority of these games will fail in the longer terms.

• 1:26:54Speaker 00

  And that's just the distribution of gaming. I think in Web 3, you might see some of them reach like initial success from like token value, defined by token appreciation as they're incentivizing. But if you don't have retention, like you will not get these like long, you won't get long-term success. And, but, but as an early-stage investor, right, you're, hopefully, the game studios are locking us in for kind of like two, three, four-year time horizon, which will long extend beyond that initial period. And so therefore, I agree with Kyle. I think that the majority of the games we'll see today will fail because that's also just the natural distribution of title success and failure in gaming in general.

• 1:27:37Speaker 00

  And, and so therefore, you know, I believe in the portfolio construction of game title investing. And, and you know, this is only a growing industry. And so I still, I still remain incredibly bullish myself in terms of finding the right teams to back in the space.

• 1:27:54Ryan Sean Adams?

  Our best not financial advice for the casual investor in this space is like, go find something you love to play. Go find the game that's fun, that's giving you fulfillment. And you know, chances are if it does that for you, it's going to do that for thousands, maybe millions of others. That is a And that's the real alpha. That's the alpha right there.

• 1:28:15Speaker 00

  Yeah, that's what you know and love.

• 1:28:16Ryan Sean Adams?

  Exactly, exactly. It's a, you know, it's a Buffett thing, but it's, but it's actually true. And I don't think Buffett plays video games. Maybe, uh, you know, or he'd be here, I guess with us. Let's talk about 2022. So we're getting ready to close out the year. Amy, feels like 2021 has been a breakout year for crypto gaming. What can we expect in 2022? Is this going to be another up only year? Are you bullish on specific categories? I know you mentioned casual mobile crypto games. Is that one? Are there others? Tell us about 2022 and the outlook.

• 1:28:48Speaker 00

  So, um, yeah, I mean, we're very excited about crypto in different categories in the very long term. Absolutely. Nobody can predict the crypto markets. Uh, I think even on like a very short timeframe horizon, the next week, right? I mean, um, Sam Bankman-Fried can't predict it. Nobody can predict it. Um, and, uh, and so, but I think that's why as venture investors, we think in much longer arcs. And you know, we're, we're really bullish about this space, kind of, you know, if there's a bear market next year, if there's a bull market next year, but some of the, I think the trends that I'm super excited about are certainly web three.

• 1:29:26Speaker 00

  I think that will be massive. I, I think we will see multiple launches of social networks in, um, in decentralized social networks next year. And, uh, some of them are in production, you know, are in development now and we'll see more. Um, more creative use cases and deployments of, of token and NFTs and blockchain in games and also in social, uh, consumer companies. And, um, and then also kind of on other sides, I think that we will continue seeing like the next iterations of, of DeFi, right? How do you tap into non-collateralized funding? These are areas that, you know, Teams like AVE are innovating on and I think a big category that will arise is

• 1:30:09Speaker 00

  infrastructure in crypto and I would include security as part of that. You know, there's so much about pulling and hacks in the space, you know, how do you prevent it with interesting, kind of like decentralized reimagination of like security protocols in crypto, but then also insurance and also how do you make building applications significantly easier for developers? So DevOps tooling and built on top of blockchains. These are all super interesting categories that we're excited about.

• 1:30:41Ryan Sean Adams?

  Amy Wu, thanks for taking us down the crypto gaming rabbit hole today. We definitely appreciate it. I think listeners will feel like this gave them a zero to 100 course in the space of about 60 to 90 minutes. So thank you so much for spending time with us.

• 1:30:55Speaker 00

  Thank you so much for having me on, guys. Super fun conversation.

• 1:30:58Ryan Sean Adams?

  Action items for you today. Bankless listeners, we have a sister episode that is also very good. It is called the Crypto Gaming Revolution with Ariana Simpson. You can listen to that. We'll include a link in the show notes. Also, the rise of Axie Infinity, that Axie Infinity story. We got Gio from Axie to tell us about that over the summer. And that is a fantastic story as well. That'll get your mind wrapped around the biggest crypto gaming success story we've seen so far. Third and finally, guess what just happened? Bankless got to the fourth largest investing podcast on the list, on the charts, Apple iTunes in the US, okay? Dave Ramsey is number one, all right? Imagine the real flipping is when Bankless flippin' Dave Ramsey.

• 1:31:43Ryan Sean Adams?

  And I think that's going to happen maybe sometime in 2022. So if you want that to happen.

• 1:31:47David Hoffman?

  Only going to happen. You have to go like and subscribe and review on iTunes because we want to flip absolutely everything crypto is taking over the world. So if you want to help Bankless become the number one podcast in investing, please go like and subscribe and rate and review wherever you listen to podcasts.

• 1:32:04Ryan Sean Adams?

  Let's make David Hoffman the Dave Ramsey of crypto, guys. Come on, we can make it happen. Thanks so much for listening. As always, risks and disclaimers. Crypto gaming is risky. ETH is risky. Bitcoin is risky. So is DeFi. You could definitely lose what you put in, but we are headed west. This is the frontier. It's not for everyone. Paul, we're glad you're with us on the Bankless journey. Thanks a lot.

• 1:32:24David Hoffman?

  Hey, we hope you enjoyed the video. If you did, head over to Bankless HQ right now to develop your crypto investing skills and learn how to free yourself from banks and gain your financial independence. We recommend joining our daily newsletter, podcast, and community as a Bankless Premium subscriber to get the most out of your Bankless experience. You'll get access to our market analysis, our alpha leaks, and exclusive content, and even the Bankless token for airdrops, raffles, and unlocks. If you're interested in crypto, the Bankless community is where you want to be. Click the link in the description to become a Bankless Premium subscriber today. Also, don't forget to subscribe to the channel for in-depth interviews with industry leaders, Ask Me Anythings, and weekly rollups where

• 1:33:07David Hoffman?

  we summarize the week in crypto and other fantastic content. Thanks everyone for watching and being on the journey as we build out the Bankless nation.