Although Web3, blockchain and crypto have been trending on social media for a while, their user base is still very limited compared to the traditional internet. After all, blockchain and its related applications are still very new to average people who need extra motivation to learn all of these complicated concepts and take their first steps into Web3.
One strategy that has been widely implemented is to introduce concepts through something fun – for example, gaming. Axie Infinity is an innovator here – it introduced the concept of play-to-earn (P2E) – you can earn assets while playing games. This mechanism has successfully accelerated the process of embracing blockchain, and even making one’s living through blockchain. Axie-like games usually require gamers to purchase in-game NFTs to start earning or accelerate their earning rates. In order to lower the entry barrier and open the door for Web3 games to invite more people to the crypto world, game guilds were born. However, game guilds also receive frequent criticism that their existence might threaten the stability of the tokenomics of Web3 games, as guild players always swap their tokens right after being minted, instead of leaving them inside the game ecosystem.
Ancient8 is one of those guilds with a mission to reach, educate, and empower the first native generation of metaverse citizens on the blockchain. It is by far the largest guild in Vietnam. On June 8, 2022, during the bear market, Ancient8 announced it had successfully raised $6 million in a private round of funding led by Makers Find and C2 Ventures. With these funds, Ancient8 will accelerate the development of the infrastructure for GameFi and the metaverse by building the next generation of software products, communities, and guilds.
After its funding round, Pandaily interviewed Howard Xu, Co-Founder of Ancient8. We discussed why he believes Ancient8 will stand out in the highly competitive game-guild field, what the next trend for Web3 games is, what the role of game guilds should play in a broader GameFi realm, and how game guilds should survive when the overall P2E model is cooling down during the bear market.
Pandaily: How did you enter the crypto field and what makes you feel excited?
I started my journey in crypto in 2017 when I was a VC investor at ZhenFund, which has invested in many successful blockchain startups including Huobi, Amber Group, IOST, among others. I’ve been following the development of blockchain since then while working in VC and building FinTech startups.
I think blockchain is the most exciting sector in technology today, with fundamental breakthroughs that can lead to a platform shift, similar to the internet in the early 2000s. Layer 1 chains, crypto exchanges, DeFi, NFTs have all created new technologies and experiences that are highly valuable for the world, and we are seeing ever more innovations in DAOs and GameFi that can bring the next hundreds of millions of people onto the blockchain. That makes me and the team at Ancient8 really excited.
Pandaily: Why did you pick up GameFi?
GameFi is one of the most exciting area in blockchain as games are naturally fun and intuitive, and playing blockchain games is arguably the best way to guide a layperson through learning about blockchain technology. We believe GameFi can introduce next hundreds of millions of people to blockchain, and we want to build the infrastructure for that.
Gaming guild is only one of the solutions we provide to our gaming partners. Ancient8 develops the infrastructure for GameFi by building various products including GameFi Identity, NFTs and token launchpads, guild management software, research portals, and other community/software products, with the goal of helping GameFi projects to succeed and contributing to the sustainable robustness of the GameFi industry.
Pandaily: A gaming guild is a very big playground with a lot of competitors, what is the key differentiator to decide who can stand out based on your understanding?
We think that the most important competitive advantage for a gaming guild comes from its community and product focus. The foundation for gaming guilds is the business model of managing scholarships and players for playing blockchain games. Every top guild typically has a differentiated geographical focus. For example, Ancient8 is by far the largest guild in Vietnam.
Each guild also has its own focus beyond the foundation – for example, some are focused on investing in and incubating gaming projects, while some are focused on building guild-as-a-service software. Ancient8 is focused on building the community layer and the infrastructure (GameFi Identity and launchpads) for the GameFi ecosystem.
Pandaily: Following up on the last question, what makes Ancient8 different from the others?
We believe beyond managing the guild, the high-quality software products and community that we build will be the biggest differentiator.
- Ancient8 develops the infrastructure for GameFi by building various products including GameFi Identity, NFTs and token launchpads, guild management software, research portals, and other community/software products.
- We are laser-focused on growing and helping our community, and are by far the largest community in Vietnam. Geography is important here as each country has different language, culture, and communities.
- Vietnam ranked 1st on the 2021 Global Crypto Adoption Index and 2nd on the 2021 DeFi Adoption Index, according to Chainalysis.
- Vietnam has the 3rd-highest MAU on MetaMask out of all countries as of August 2021, according to MetaMask.
Pandaily: Gaming guilds are very controversial in the crypto field. Some GameFi founders criticized the existence of gaming guilds, alleging they might destroy the long-term stability of tokenomics. What is your reaction to such statements?
From my experience, most GameFi founders actually really welcome guilds. They recognize that we are the best partner to help them reach more users and introduce them to GameFi communities. I don’t believe it’s fair to blame the failure of a game on guilds, when the real causes are poorly-designed tokenomics and gameplay.
Pandaily: In your eyes, what is the role of gaming guilds in the overall Web3 gaming industry?
Guilds help both the players and the GameFi projects.
On one end, users and gamers are learning about Web3 and Web3 gaming, and the guilds provide the best education and access to the community.
On the other end, Web3 game studios need high-quality distribution, and guilds exhibit the following characteristics:
- They need a partner who has real insights to help educate the community and unfold their visions.
- They need a partner who is with the community day in and day out and trusted by the users, to help the community navigate the thousands of GameFi projects in the market and filter out the noise. Ancient8 Research provides just that: https://ancient8.gg/research
- They need a GameFi-focused, dedicated channel to introduce their NFTs and tokens to the community that care the most deeply about GameFi. This is a community that will become long-term investors and supporters of their game in multiple ways.
- They need to identify and attract gamers that are the most active, NFT collectors that are the most enthusiastic, and investors that are the most diamond-hand. They need clean, actionable data and marketing tools to help them effectively target the high impact users.
- They need a partner who can help them build great Web3 games. They need experienced Web3 gamers to test and provide feedback in order to improve the game. This will also help incorporate crypto into the games’ economies – a challenge and opportunity that no previous game studio has faced.
Pandaily: Web3 games were rising because of financial incentives, i.e. P2E. In the long run, how can Web3 games keep their attraction when financial incentives decrease, especially while there are so many maturely-designed Web2 games?
Web3 games are fundamentally better than Web2 games in a few aspects, but developing high-quality games takes time.
To start, Web3 gaming allows a lot more players to cash out their in-game work, while in Web2 games only the very top pro players can do so. Imagine if there are two versions of League of Legends that are completely the same, with the only difference being that one is a blockchain Web3 game where gamers can play and earn, while the other is a normal game. It would be a no-brainer for people to switch to the Web3 version.
Additionally, Web3 has unlocked access to ownership for players and the community, and it has unlocked access to capital for game studios. Lots of talented game studios are moving to Web3 because of that. They can build with ever more creativity and freedom, and without restrictions from game publishers’ “portfolio construction.”
Pandaily: P2E has become a widely-accepted concept now, but most of these projects have already gone down or are now entering a death spiral. Is this unavoidable? What lessons should we take from these P2E projects?
Games need to be fun, first and foremost. Web3 games today don’t have as good gameplay as the most popular Web2 games, because they’ve only been around for under a year, and it takes many years to build a high quality game. With more and more talented game developers moving to Web3, I believe that over the next five years, Web3 games will flip Web2 games – both in terms of quality and popularity.
We are entering a new phase, as GameFi is evolving beyond the P2E business model by focusing on delivering high-quality gaming experiences – advanced gameplay, graphics, and social experience. These are the best initiatives for long-term development. Tokenization will play a role, as real-value accrual means will be allocated to the stakeholders that contribute the actual value to the game ecosystem. The promise of rewards should be used as a go-to-market tool for game studios to attract early users who try out the game and refer more players by word of mouth.
Pandaily: Ancient8 focuses on the Vietnamese market – why? What makes Vietnam special?
Vietnam is a large developing country that’s also surprisingly crypto-native.
I grew up in China during a time of explosive growth. Since 1990, China’s proportion of global GDP grew from 1.6% to a whopping 17.4% in 2020. Hundreds of millions of people rose out of poverty. The country leapfrogged many developed countries to become a superpower, in part by embracing technology. My grandparents used to be farmers, and I witnessed firsthand how many families that once were in poverty were able to move into skyscrapers and own luxury cars – all within a decade. Technological innovation played a huge role in sparking this economic growth.
There are clear parallels to Vietnam today. As the third-largest country in Southeast Asia, with a population of 100 million, Vietnam has some of the highest metrics regarding crypto adoption in the world: #3 in Metamask MAU and #2 in Defi adoption. Finder’s Cryptocurrency Ownership Report published on August 13, 2021 suggests that Vietnam ranked #1 in Crypto ownership, with 41% of Vietnamese surveyed owning crypto. So it’s no surprise that Vietnam is emerging as a leader in GameFi. GameFi made learning about crypto a lot easier and a lot more fun. Games like Axie Infinity and GameFi infrastructure players like Ancient8 are onboarding millions to crypto & Web3.
My co-founder Zane has been one of the pioneers of Vietnam’s crypto ecosystem since 2017. He laid the groundwork by educating millions of users about blockchain with Coin68 and Kyros Ventures, the leading Vietnamese blockchain publication and VC fund. At Ancient8, we aim to continue this mission to reach, educate, and empower the next 100 million metaverse citizens with blockchain.
Pandaily: People always say the bear market is the time to BUIDL. How does the bear market impact the development plan of Ancient8? From the overall industry perspective, are there any exciting trends people should keep eyes on?
We are focusing on building the best products to realize our vision of democratizing social and financial access in the metaverse.