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Yield Guild Games (YGG): A Threefold Surge in One Week - A Deeper Dive
Beginner
2023-11-07 | 5m
TL;DR
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Yield Guild Games (YGG) is a decentralized gaming guild that pools investors' funds to acquire in-game NFTs and profit from games.
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YGG comprises multiple SubDAOs, consisting of players from specific NFT-supported games or geographic locations.
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Most Play2Earn games are not sustainable in the long run. As players usually prioritize earning over playing, once the incentive offered by the game no longer meets their expectations, they quit the game, which is a potential risk for YGG.
Last week,
Yield Guild Games (YGG) became an A-lister in the crypto industry. With a single-day trading volume surpassing $3.9 billion, YGG gained significant attention in major crypto communities. However, this surge, which exceeded three times its previous value, was followed by a sudden 70% drop within days. Such substantial volatility raises questions for crypto investors: How did YGG perform against the m arket trend during a bearish period? What sets it apart? What innovations and new investment opportunities will YGG bring to the crypto industry? This article aims to provide an in-depth look into YGG, the world's largest
blockchain gaming guild.
What is Yield Guild Games (YGG)?
Yield Guild Games (YGG) is a decentralized gaming guild and a game-based decentralized autonomous organization (DAO). It pools investors' funds to acquire in-game NFTs and generate profits from games. Its core concept revolves around enabling players to earn real financial rewards from virtual games, powered by
blockchain technology and smart contracts. YGG connects players to the economic value of a game by allowing them to obtain in-game virtual items such as tokens, currencies, and props, which can be traded or exchanged for real value on internal or externa l trading platforms.
The Birth of YGG
The inspiration for YGG dates back to 2018 when Gabby Dizon, one of YGG's co-founders, noticed the popularity of blockchain games in Southeast Asia. Many players were engaging with Axie Infinity, a well-known NFT game at the time, but a significant number of them couldn't afford the game's NFT characters called Axies. He started lending his Axies (an in-game NFT asset) to other players who couldn't afford the character. To help more players enter the world of NFT and blockchain gaming, Gabby Dizon and Beryl Li co-founded Yield Guild Games in 2020.
(Source: YGG official website)
YGG's Operational Model
YGG consists of multiple SubDAOs that are made up of groups of players from specific NFT-supported games or geographic locations. For instance, players of Axie Infinity, The Sandbox, and those from Southeast Asia initiated their respective SubDAOs. Players join different SubDAOs to discuss game strategies and support each other in achieving optimal performance. Each SubDAO manages its own gaming activities and assets according to its rules and conditions while contributing revenue to the YGG DAO. Every SubDAO has a community leader, a wallet, and a SubDAO token. Token holders receive a share of the revenue generated from the game based on their contributions and can make proposals and vote on governance decisions related to the SubDAO, such as purchasing more in-game NFTs or managing assets.
This model enables players of the same NFT game to collaborate to maximize in-game profits. Guild members can also lease community-owned NFT assets for in-game rewards. In return, those who lend NFTs to the DAO receive a portion of the gamers' earnings. All NFTs and digital assets are stored in the community-controlled YGG vault, providing NFTs for each SubDAO, including Play2Earn assets in multiple blockchain games.
In a nutshell, YGG's core business is like a combination of Warren Buffett's Berkshire Hathaway and Uber, where YGG obtains various NFT assets from several Play2Earn games and leases them to players who lack the initial capital (i.e., the in-game NFT assets) to generate profits.
YGG's Tokenomics
The YGG token provides holders with governance rights in the YGG DAO. The total supply is 1,000,000,000 YGG, with 25,000,000 YGG successfully distributed through its initial DEX offering (IDO). To support the community, 45% of YGG's total supply is reserved for gradual distribution to users over the period of four years. The remaining tokens will be distributed to stakeholders, including the treasury, the founding team, and project advisors.
As the platform's governance token, YGG has a wide range of application scenarios. It can be used to pay for services on the network, staked to earn rewards in the YGG staking pool, and used to unlock exclusive content on the YGG Discord channel. YGG holders can also submit proposals and vote on decisions related to the guild's technology, products, programs, token allocation, and overall governance structure, among other matters.
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Challenges Faced by YGG
GameFi is still in the early stages. The blockchain gaming sector itself faces uncertainties and risks in the crypto industry due to the periodic shifts between bullish and bearish
markets.
Another challenge for YGG is the sustainability of most Play2Earn games in the long run. Players often prioritize earning over gameplay, and if the game's incentives no longer align with their goals, they may quit playing.
Closing Thoughts
GameFi, as the next blue ocean market in the crypto industry, holds significant potential for development. YGG stands as one of the most notable GameFi projects with its unique business model. Despite the challenges it faces, it's evident that as YGG continues to grow, it will offer users more ways to participate in GameFi and innovative profit models. As the GameFi market matures and improves, YGG is expected to continue to realize its original vision and value.
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