NFTs will bring crypto to billions of users, explains VC investor

September 18, 2022 Coin Telegraph

The CEO and co-founder of Electric Capital, Avichal Garg, shares his views on the projects that will explode in the next bull cycle.

Avichal Garg, the CEO and co-founder of Electric Capital, defines himself as “an NFT maximalist” – who believes that nonfungible tokens (NFTs) will play an essential role in bringing crypto to the masses. Unlike other crypto niches, NFTs are relatable to aspects of everyday life such as art, music and games.

“I could imagine that NFTs are actually many billions of people because it's ultimately culture. And that's something that everybody can participate in and everybody can understand,” said Garg in an exclusive interview with Cointelegraph.

In particular, Garg is bullish about NFTs being used in the gaming industry, which he sees growing at an exponential pace.

“In 18-24 months from now, I think we're just going to see this onslaught of (NFT-based) games”, he said.

Garg believes the bear market could last as long as the macro picture is dominated by high inflation, which means it could take another year or two before we’ll see the next bull cycle. Still, when he looks beyond the current macroeconomic picture, at a 10-year time horizon, he feels extremely bullish on the crypto industry.

"Interest rates and inflation dominate in the short term when you're talking about a 2-3 year time horizon. But innovation is the one that dominates in the long term.", he pointed out.

Watch the full interview on our YouTube channel and don’t forget to subscribe!

Animoca Brands continues shopping spree with MotoGP mobile dev acquisition

September 16, 2022 Coin Telegraph

Coin Telegraph

The company announced its acquisition of WePlay Media after it recently closed multiple multi-million dollar fund rounds with investors such as Temasek.

One of Web3’s leading digital property rights developers, Animoca Brands, announced yet another major acquisition to its increasing portfolio of gaming subsidiaries.

The company announced the purchase of WePlay Media, which developed the popular blockchain-game MotoGP Championship Quest, on Sept. 16. According to the agreement, the acquisition is in an effort to bolster user engagement in motorsport mobile gaming.

Graeme Warring, the co-founder and COO of WePlay Media and co-creator of MotoGP, called the acquisition an exciting development for both parties as they expand their reach to motorcycle fans across the globe.

“Animoca Brands has the ability to reach hundreds of millions of users in core growth demographics to expand the sport’s fan base and create engagement opportunities for the riders, teams and sponsors."

Similarly, Yat Siu, the co-founder and executive chairman of Animoca Brands, highlighted the potential engagement boost of the acquisition of MotoGP and other motorsport-related games under Animoca.

According to MotoGP’s latest Global Fan Survey, their community has high levels of engagement and interest in regular participation in competitive mobile gaming. It reported that 79% of all respondents from 16-24 years of age engaged in competitive gaming on a weekly basis, with 54% of fans based in the Asia-Pacific region.

Animoca has shown to be highly invested in developing the motorsport gaming sector as it introduced a motorsport-based REVV token rewards ecosystem and NFT programs within the MotoGP game.

Earlier in April of this year, Animoca also acquired Eden Games, which developed the Gear.Club, the Test Drive series and other popular racing games.

In August, Animoca subsidiary Grease Monkey Games received funding to develop the blockchain-based motorsports game Torque Drift 2.

This latest acquisition development comes after Animoca’s successful $110 million funding round led by Temasek on Sept. 8, from which it said it planned to make subsequent strategic acquisitions. Animoca has investments across the Web3 space in operations such as The Sandbox, Axie Infinity, SkyMavis and DapperLabs, among others.

Square Enix Exploring Blockchain Game Development as Part of Oasys Project Partnership

September 16, 2022 Bitcoin.com

China’s Metaverse Gaming Market Might Explode to Over $100 Billion According to JPMorgan

September 14, 2022 Bitcoin.com

Web3 Gaming Still Growing Despite Economic Woes, According to Dappradar Report

September 14, 2022 Bitcoin.com

Web3 Games and Metaverse Projects Have Attracted Nearly $750,000,000 in Investments Since August: DappRadar

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Blockchain Gaming Publisher and Web3 Firm Animoca Brands Secures $110 Million

September 10, 2022 Bitcoin.com

How GameFi contributes to the growth of crypto and NFTs

September 10, 2022 Coin Telegraph

Blockchain Game

The GameFi sector has achieved unprecedented growth over the past couple of years and is attracting investors.

The crypto industry has grown tremendously over the past couple of years, and one of its biggest drivers is the GameFi industry.

GameFi — a portmanteau of gaming and finance — enables gamers to earn rewards while playing.

The market has been growing steadily and presently has a token market cap of approximately $9.2 billion. Notably, GameFi networks have continued to thrive despite the crypto winter. Indeed, the industry is forecasted to reach a $74.2 billion valuation by 2031.

How GameFi networks work

GameFi ecosystems are based on blockchain technology and use different in-game economic setups to reward players. The rewards are usually in the form of nonfungible tokens (NFTs) that are tradable on major marketplaces. The items are typically in the form of virtual lands, costumes and weapons and are instrumental in diversifying user experiences.

The difference in gaming strategies and economic setups is what makes each game unique.

One of the most popular GameFi economic setups is the play-to-earn (P2E) model. The model is designed to keep users engaged while enabling them to earn rewards.

It allows players to indulge in the games without spending any money. However, progress can be curtailed due to the lack of assets needed to compete successfully. As such, gamers are sometimes compelled to purchase in-game items in order to advance to top levels where they can obtain bigger rewards.

Popular blockchain gaming networks utilizing the P2E GameFi model include Decentraland, The Sandbox, Axie Infinity and Gala.

Why GameFi is popular

The GameFi world has attracted millions of users over the past couple of years. This is impressive considering that the industry was practically non-existent before 2015.

Today, the industry attracts over 800,000 daily players. Many of them are drawn to GameFi due to the medley of benefits it provides.

One of them is the ease of trading digital assets. A recent market report published by CoinMarketCap found that about 75% of gamers are willing to trade in their in-game assets for some form of currency. This advantage is one of the main reasons why GameFi is so attractive to players.

Some virtual assets, such as land, can also be rented out to other gamers. Users who wish to generate passive income without playing games can also indulge in liquidity mining by staking assets. This is a huge incentive for retail investors and people who wish to monetize their gaming time.

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Another merit that many GameFi players appreciate is the low transaction costs. GameFi environments usually utilize cryptocurrencies, and this makes fund transfers relatively easy to execute and cheap.

This is a major bonus when compared to conventional money transfer modes, which are expensive, especially when it comes to making cross-border payments. This aspect was highlighted in the 2021 Blockchain Game Alliance (BGA) survey report, in which 17% of participants named lower transaction costs as a major GameFi benefit.

Another innovative element that captivates GameFi players is the support for user-generated content. This capability not only allows GameFi platforms to engage users with different tastes but also encourages creativity among players while propagating an autonomous environment in which assets can be created, listed and traded publicly. In the 2021 BGA survey, 47% of respondents ranked creativity and gameplay among the top reasons why they liked GameFi.

These distinctive advantages, as well as other auxiliary factors, contribute to the consistent growth of GameFi.

How GameFi boosts growth

GameFi projects rely on cryptocurrencies to settle transactions, and this has contributed greatly to the increased adoption of digital currencies in recent years.

According to a recent report published by DappRadar — a platform that tracks activities on decentralized applications (DApps) — the number of unique active wallets (UAW) wallets tied to the blockchain gaming sector rose sharply in the third quarter of 2021, accounting for approximately 49% of the 1.54 million daily UAWs registered during that period. The data confirms the disruptive potential of GameFi and the increased use of cryptocurrencies in the sector, subsequently promoting their use and adoption.

Another related survey report released by Chainplay — an NFT game aggregation platform — recently revealed that 75% of GameFi investors got into the crypto market through their involvement in GameFi, showcasing GameFi’s growing impact on crypto adoption.

Besides advancing the use of cryptocurrencies, GameFi has also contributed immensely to the rise of the NFT industry. GameFi relies heavily on NFTs for in-game assets, and this increases their use on the blockchain. Not surprisingly, the rise of the GameFi market in 2021 coincided strongly with the NFT boom.

GameFi NFT sales rose to $5.17 billion in 2021, up from the $82 million recorded in 2020. The sales numbers helped to solidify the growth of the NFT market.

GameFi attracts more investors and gaming companies

Droves of investors are injecting money into promising GameFi projects. The development is bound to help the blockchain industry gain greater credence in mainstream markets as a viable investment space.

According to data derived from Footprint Analytics — a blockchain data analytics firm — over $13 billion has been raised so far by blockchain gaming companies. Over $3.5 billion of this was raised during the first half of 2022.

Speaking to Cointelegraph, Ilman Shazhaev, the founder and CEO of GameFi project Farcana, said that the industry is rapidly evolving, hence the rising interest among investors:

“Investors are particularly interested in GameFi because it represents a sector of the broader blockchain ecosystem that has earned a genuine interest worldwide. They are betting on the future, as only a few industries have a chance of attracting more users in the long run than GameFi.”

He added that the sector was still at a very nascent stage with significant room for improvement, especially when it comes to innovation.

As things stand, major enterprises, including mainstream gaming companies, are jumping on the GameFi bandwagon as the industry continues to advance.

Eminent gaming powerhouses such as Ubisoft are already making moves to conquer the GameFi frontier. Earlier this year, the gaming firm announced a partnership with Hedera and the HBAR Foundation to come up with Web3 GameFi games for the brand. The gaming behemoth is behind the popular Far Cry and Rainbow Six franchises.

Zynga, another renowned game developer, also announced plans at the beginning of the year to unveil its own NFT-based games. The mobile gaming giant said that it was working toward building a blockchain team and making alliances with accomplished blockchain partners in order to bring to life its own collection of NFT games.

Mainstream tech conglomerates such as Tencent, the Chinese multinational technology company, have also started investing in the GameFi sector. The company was recently named among the top contributors in Immutable’s $200 million fundraising event. Immutable is the developer behind NFT games such as the Gods Unchained and Guild of Guardians.

The entry of such players indicates increased competitiveness for a share of the space. This is likely to increase GameFi investments and drive innovation over the long term.

Cointelegraph had the chance to catch up with Anton Link, the co-founder and CEO of NFT rental protocol UNITBOX, to discuss this phenomenon.

Link said that the industry’s highly positive growth indicators were among the main reasons why investors are flocking to the sector.

“Unlike other application areas, it [GameFi] allows for implementing of tech here and now, and the sector’s growth forecasts and indicators speak for themselves.”

He also noted that some game developers were looking to dabble in GameFi in order to obtain a more engaged demographic.

Some challenges that the GameFi industry is experiencing

While the GameFi sector attracts hordes of players, investors and gaming companies, there are still some significant issues to overcome before it captures a sizable pie of the overall gaming industry.

Security issues

The GameFi market has faced some serious hacks in the recent past that are likely to negatively impact user sentiment in the sector.

One of them is the Ronin bridge hack attack that happened earlier this year. It caused Axie Infinity players to lose over $600 million in crypto. Most recently, a newly launched Web3 game dubbed Dragoma suffered a rug pull that caused users to lose $3.5 million.

These are just a few of the reported losses from GameFi intrusions and scams. Such incidences continue to erode trust in the industry.

Poor gaming experience

Furthermore, blockchain-based games suffer from playability issues. While they allow players to control and transfer their in-game assets, graphics, immersion and gameplay often lag far behind their mainstream competitors.

Many blockchain games lack game mechanics beyond “grinding,” i.e., completing repetitive tasks to be rewarded with assets.

Complaints from gamers show that the appeal of blockchain-based tokens isn’t everything and that players still value the vivid experiences offered by popular mainstream games over the benefits provided by GameFi.

Uncertain regulations

Additionally, many GameFi platforms are operating in a regulatory gray area and are likely to face major headwinds in the next couple of years. Right now, the United States Securities and Exchange Commission (SEC) is considering whether to classify blockchain gaming tokens as securities due to the “expectation of profit.”

Classifying them as such would bring them under the purview of the regulatory authority. This would oblige many GameFi platforms to make extensive disclosures about their clients and revenue models. Networks that fail to meet SEC requirements are usually forced to bar U.S. investors and players from joining their platforms to avoid fines and sanctions. This is likely to undercut the growth of the sector.

Technical complexities

Novel blockchain concepts usually experience myriad teething problems. The decentralized finance sector, for example, experienced many of these problems because many users found the platforms hard to understand and use.

GameFi is experiencing some of these issues as well. Buying and selling of NFTs, for example, is a complex affair and remains a major hurdle for newcomers.

The sector is still bound to the wider crypto market

GameFi is a subset of the crypto industry and is therefore affected by the booms and busts of the digital currency market. Consequently, the GameFi sector experiences a rise in activity during uptrends, but the opposite happens when there is a downtrend.

To maintain interest in GameFi platforms, developers face the uphill task of developing enthralling games to help ecosystems weather market slides.

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Currently, GameFi investors are focused on improving gaming experiences to build on sustainability, but the task is easier said than done.

Developers face myriad challenges, but if they are successful in attracting players with top-tier gameplay, the future of blockchain-based gaming looks bright.

Music NFTs will take gaming to new levels

September 9, 2022 Coin Telegraph

Coin Telegraph

Instead of relying on unwieldy contracts to generate music for their products, NFTs are offering GameFi developers ways to come up with faster (and more equitable) agreements with artists.

The GameFi industry has surged since 2020, with some estimating a market capitalization of $55.4 billion as of February 2022. While others have much lower estimates closer to $3 billion, one thing is for sure: The industry grew rapidly from zero and is poised for continued growth. What matters, however, is not the day-to-day or even month-to-month market cap, but rather the continued rise of users who feel like they’re extracting value.

Games are created so that people have fun. But the rise of “gamification” refers to the application of gaming principles into otherwise boring, but usually value-enhancing, activities. For example, many educational activities can be boring until they are gamified. Technology can be applied to more complicated classes in mathematics and science, but it can also be used to help students learn how to navigate a large university campus. One Arizona State University scavenger hunt, for instance, “guides users to landmarks around ASU’s Tempe campus for a fully virtual experience or to visit in the real world,” gamifying the way students learn about the campus.

But one aspect that is often forgotten when constructing virtual or augmented leisure activities, or other gamified experiences, is the role of music.

In-game music

One of the most underappreciated aspects of games is the music. Everyone always thinks of the imagery, storylines and technical performance, but we sometimes forget about the music. To be sure, all the aforementioned factors are crucially important, but music is also what enhances the in-game experience and makes it more realistic and memorable.

“Music is probably one of the most underappreciated yet high-impact parts of any game. When it's done right, you don't even notice that you are being influenced by the music, but when it's done incorrectly, it is very obvious. What we focus on in the games is the emotions we want the user to experience, it sounds simple, but in reality, finding the right array and options is exceptionally time-consuming,” said Corey Wilton, co-founder of Mirai Labs.

*Example of in-game skin selection from Mirai Labs*

Studios often access sample packs or purchase an audio file from a website and modify it as they see fit. For example, audio packs of a specific genre often provide five-to-10 options and suit the tone for the game. Most developers will have hundreds of these stacked over time if they are a casual- or medium-sized studio that ships many titles. But the limitation of this approach is that the artist behind each song receives a small fraction of the contract size.

The reason for that is economic: studios buy audio in bulk at a much lower price than they would if they were buying individual songs. While the upside for them is a lower cost, the downside is that their search is often less directed. Similarly, the upside for the artists who produce songs is that they find some demand for their audio, but the downside is that they are not remunerated for their individual contribution – rather, they’re compensated at a discount based on where in the audio pack it lands.

Revolutionizing the sourcing of music

Nonfungible tokens (NFTs) have the potential to transform the way music is curated and even created for games. Rather than having to rely on large contracts that take forever to get approved, GameFi leaders can simply buy up individual music NFTs or commission a group of artists who agree upon an equitable split of the revenues and collectively mint an NFT. Once done, the NFT would immediately plug into the game and the artists could receive remuneration for their created content based on the popularity of the music. This could be implemented through ratings and other feedback mechanisms.

Classical music NFTs have a special role to play. There is simply no audio substitute for the epic nature of classical music, ranging from Wagner’s “Ride of the Valkyries” to Carl Orff’s “Carmina Burana.”

Fortunately, adding music NFTs to games isn’t much of a stretch. Digital assets are already being traded in games. One project — House of Blueberry — has created more than 10,000 assets that people can buy to express who they are and to use in games and online communities.

*Source: House of Blueberry. Provided by Katherine Manuel*

And music NFTs can also create value for games that are not purely blockchain-based. The only difference is that the creators would purchase the NFTs on the blockchain and find a way to remunerate the artists.

“I work hard to remind them that the end user wants ease of access (i.e., download and account creation), games that are quick to start and learn but hard to master, instant purchasing ability if they wish to spend money in-game, and a game that is heavily engaging and keeps them coming back for more. If they are unable to execute these foundational game design elements with blockchain, they are creating themselves a losing formula,” Wilton added.

Christos A. Makridis is an entrepreneur, economist, and professor. He serves as COO/CTO for Living Opera, a web3 multimedia startup, and holds academic appointments at Columbia Business School and Stanford University. Christos also holds doctorates in economics and management science from Stanford University.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph. The author was not compensated by any of the projects cited in this piece.

Animoca confirms $110M round led by Temasek, plans new acquisitions

September 8, 2022 Coin Telegraph

Animoca confirms 0M round led by Temasek, plans new acquisitions

Blockchain Game

Singapore government-backed investor Temasek is known for crypto-related investments but is yet to do its first direct investment in crypto.

Animoca Brands, a major player in the metaverse and blockchain gaming, has officially disclosed details of a funding round led by Singapore's state-owned investor Temasek.

Animoca announced on Thursday that it closed a strategic funding round of $110 million from the issuance of convertible notes to a small number of institutional investors. Completed at a conversion price of AU $4.50, or about $3.0, the new round values Animoca similarly to its previous funding round, the firm said.

The notes round included new investors like Temasek, the private equity firm Boyu Capital and the global venture capital firm GGV Capital. These companies have established a strategic consortium of new investors, aiming to provide advice to the company as it continues to grow and build its organizational structure.

Temasek, Boyu and GGV are now expected to engage and advise Animoca on a wide range of business issues as well as provide input on its business and capital gains, the announcement notes.

Additionally, existing investors in the round included major South Korean investment firm Mirae Asset Management and the venture capital firm True Global Ventures.

Animoca is planning to use the new funds to continue to make strategic acquisitions investments, develop new products and secure licenses for intellectual properties. The company also targets advances in the open metaverse, including efforts to promote digital property rights for online users.

Yat Siu, co-founder and executive chairman of Animoca Brands, pointed out the importance of the round’s participation by major global institutions, stating:

“Our new investors will contribute strategic advice and perspective as we build the world’s leading company furthering digital property rights in the Web3 industry.”

Some initial reports on Animoca’s funding round first surfaced in late August, with anonymous sources claiming that Temasek would lead a $100 million round for Animoca.

Temasek is a high-profile crypto-related investor, participating in multiple investment rounds for big crypto companies, including Binance and Amber Group. Temasek International chief investment officer Rohit Sipahimalani stressed that the government-backed firm did not directly invest in crypto but rather is focused on investing in a crypto-related business.

“We don’t directly invest in crypto, but some of the funds we have invested in may have crypto exposure,” Sipahimalani reportedly said in July 2022. He added that, at that point, the firm felt more comfortable with exposure “more in the picks and shovels of the entire system, the enablers rather than the currencies.”

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