Did you know that you could earn money while playing video games? Yield Guild Games gives people a way to access the crypto economy so that they can play to earn. Join Jeff Kelley, Eathan Janney, Josh Kriger as they talk to Miko Matsumura and Gabby Dizon of Yield Guild Games. Discover how the guild system works and how they recruit gamers from around the world. Find out how the gaming industry just keeps getting bigger and bigger. And, learn how NFTs aren’t ruining the game experience but enhancing it by giving benefits. Plus Azukis NFT, NFT VAT Fraud, Fayre’s $3.8M Raise, and more in today’s episode!

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Miko Matsumura & Gabby Dizon Of Yield Guild Games – The Play To Earn Gaming Guild, Plus Azukis NFT, NFT VAT Fraud, Fayre’s $3.8M Raise, And More…

This episode features guests Miko Matsumura and Gabby Dizon of Yield Guild Games. Let’s talk about Gabby first though. He’s a startup entrepreneur and a veteran of the gaming industry in Southeast Asia. Gabby is the Cofounder of YGG, a play-to-earn gaming guild. YGG invests in yield-producing NFTs, games and virtual worlds and organizes its player community from around the world to earn an income from playing these games. He has been making games since 2003 and has shipped twenty-plus games on mobile and PC platforms.

He is also the Cofounder and CEO of Altitude Games, a mobile and crypto game developer and Chairman of Alto.io, a platform that connects games to the blockchain. These days, he is most excited about the various applications of blockchain for the game industry. Gabby is also a Founding Member and former President of the Game Developers Association of the Philippines and former Coordinator of the IGDA Manila Chapter. Yield Guild is a play-to-earn gaming guild, bringing players together to earn blockchain-based economies. They are settlers of a new world in the metaverse.

Let’s get a little bit about Miko, who is here too. He’s a General Partner with gCC, gumi Cryptos Capital, a Silicon Valley investment fund with over $500 million in assets, including early-stage investments in unicorns like OpenSea, Yield Guild Games, Celsius Network, Vega Protocol, Qredo, Agoric, Astar and 1inch Network. Miko fell in love with open source software years ago as Chief Developer Evangelist for the Java Programming Language and Platform at Sun Microsystems.

Since then, he has been building open source software startups in Silicon Valley, including raising over $50 million in venture capital for developer platform companies such as Gradle and financial infrastructure companies like Hazelcast. He has participated in multiple exits, including Infravio, webMethods, and db4o. He is an advisor in successful startups like Celsius, Idle Finance, Pundi X and Keyless. He holds a Master’s degree in Neuroscience from Yale University, where he worked on abstract computational neural networks. Welcome to the program. It’s great to have you.

Thanks for having me.

It’s nice being here.

The first question is super important. This is for Miko. Sally’s or Pepe’s?

It’s Pepe’s for sure.

I’m just making sure. We’re in good company here. We’re in good shape. That’s pizza insider stuff for New Haven, Connecticut. Welcome. We’re so excited to have you here. We want to start our readers at the beginning of Yield Guild Games. Tell us about the origin story. Gabby, how did this idea come about? How did you bring it all together?

My background is as a game developer but I got into crypto in 2017. I’ve heard about Bitcoin a few years prior but the main use case in the Philippines was around remittances. I wasn’t so interested in that because I was a game developer. It wasn’t around 2017 when we heard about Ethereum and smart contracts. That’s what got us interested in looking into crypto. We were playing around Solidity to see how the concept of programmable money could eventually make its way to games.

While we were doing that, CryptoKitties came out. I don’t know if you remember this. In late 2017, it crashed the Ethereum network and popularized the NFT. That was the holy shit moment for me like, “NFTs are going to change everything. Let’s dive deep into it.” Since then, in early 2018, I got deep into NFTs. It turns out that NFTs wouldn’t change the world for a few more years but those were a few educational years trying to figure out everything I could about NFTs.

I started playing Axie Infinity in late 2018. Fast-forward to 2020, I was still playing Axie. This was during the early part of the COVID lockdown. People in my country started discovering the game as a way to earn some income during the lockdown. A lot of people lost their jobs, were at home and didn’t have any money. They were using Axie Infinity as a way to earn money during the lockdown. These are people who didn’t have any prior crypto experience. They were gamers who wanted to use their gaming scale as a way to earn.

People were playing Axie Infinity as a way to earn an income during the COVID lockdown. Click To Tweet

We saw that it was something that we could scale to players around the world with games like Axie to have a play-to-earn component. You need to have the NFTs to play. You have to buy the NFTs but a lot of people can’t afford them. We started Yield Guild as a way to provide access to people around the world to the crypto economy by aggregating the NFTs and then lending them out to people who can play them and earn an income.

What a game-changer for so many people out there, it’s the ability to make a living out of playing these games on the blockchain. People have been in competitive gaming for a while and earning a living but you got to work your way into that. It’s a whole other level of competition. To be able to do it and access it at your fingertips if you’re willing to take that step is a change that we have experienced.

That’s also interesting the parallels of your journey and the journey of Axie Infinity and the play-to-earn market. It would also be great to learn a little bit more about Miko, how your story intersected with YGG and why did it intersect after all. There are a lot of different things that you’ve been involved in. Clearly, something about what Gabby was doing caught your attention.

We’re founder-first investors. I had been circling the globe looking for genius founder entrepreneurs. I met Gabby at various points around the world prior. That’s a super qualifying thing, so I was immediately attracted to his entrepreneurship. It was exciting because I had also met with Beryl, who is his Cofounder under a different context with different friends. I had already connected with them in different ways. I was already intrigued. When Gabby explained what he was doing, I couldn’t be more excited because, for me, it hearkens back to being a World of Warcraft player and thinking about guilds.

If you go back to guilds, the only thing that can ruin a guild is what I call loot drama, which is the unfairness of getting rewards. One of the things that I knew deep in my heart is that Gabby is in a way destined to be the fair leader. We need someone who has this sense of justice and is coming from a great place. To me, the goal is to make a guild that can change the world. The amount of fairness that you need to scale to that size is pretty impressive because it’s so easy to become corrupted by all of the power. The core thesis for us is like, “This is the right team.”

The funny thing about what Miko was saying was that if you had experience playing games like World of Warcraft and being part of a guild, it directly contributed to the genesis of the startup. When we pitched the idea to Miko, he got the concept immediately. It was because he was in World of Warcraft and an MMO player. That was cool.

Let’s get into the details a little bit here about how Yield Games is onboarding the next $1 billion through play-to-earn and scholarships. How does that happen?

We’re set up as a community. We have what we call Scholarship Managers or Community Managers that are all over the world. They have access to our assets, be they Axies, Fancy Birds or other NFTs. They go out and recruit players in their local communities. These community members are not employees of the Yield Guild. They’re part of the community that has access to our assets. They go out, recruit and train people from the local communities that then start playing the game to earn an income. In this way, we can grow and scale throughout the world.

Now, we have player communities in the Philippines where we started. We have Indonesia, Thailand, Malaysia, India, Venezuela, Columbia and Brazil. It’s pretty much growing in many places around the world, especially in developing countries where earning a couple of hundred dollars a month extra is life-changing. You can use that extra income first to pay for food but later on to become more of an investor to own crypto assets. Our goal is to turn all of these gamers into investors and be in control of their financial destinies.

It’s so cool that we get a chance to speak about it on the show. The topic comes up quite a bit and we have various touchpoints about it. Clearly, you are one of the most on the ground on this movement. It’s cool to see how you’re making it happen. Also, it’s cool that this is going on.

I was impressed by the CoinMarketCap. It’s $3 billion. Is that correct?

It’s at $3 billion FDV.

That’s $3 billion of value created in a relatively short amount of time.

It has been a crazy ride.

Yield Guild Games: Yield Guild was started as a way to give people around the world access to the crypto economy. They would group the NFTs and then lend them out to people who can play them and earn an income.

One of the things that I talk about a lot and I get excited about to that point is when we think about what was happening in 2017 and 2018, there was a lot of paper value being created. That can dry up pretty quickly and it did based on a number of things that came together. What we’re talking about is a different type of value being created now. There’s real revenue and real impact being created in definitively measurable ways. That to me is what’s cool about this iteration of crypto, blockchain and all the fun things that are happening.

It goes to a question I have around the year-end retrospective and the stats that you released coming through to the end of 2021. I’m curious about that. Are those metrics that you track throughout the year and talk about within the community, how do you feel about transparency around performance and various key statistics that you track internally? What are your thoughts on that overall? What was the inspiration for sharing this information?

We’re a community-based project, first and foremost. We feel that transparency is important for the community to know exactly how the guild is doing. We don’t see ourselves as something like a hedge fund or a financial company. How we perform is what we do. We do it in the service of the players that we have all over the world. We owe the transparency to our players so that they know exactly what’s happening with the fun stuff we have raised, where it’s going and how we’re serving the community.

To call out a couple of them, I was looking at 10,000-plus Axie Infinity scholars and 100,000 members in the Discord community. That’s insane.

That’s over 16,000 now. We have grown quite a bit since the end of December 2021.

There are so many cool statistics across the board there and measurable value creation. This is a different age of blockchain, gaming and all the fun things that are happening there. As we look ahead, you can’t do this alone. It’s about the community to a large degree and community within the folks that are participating in the guild directly and partnerships to help you grow. Could you tell me a little bit about how you form those partnerships? What’s forthcoming on that front? Is there anything exciting that you can share with our readers?

First of all, on the game side, we have bought assets of over 30 games already. These are games that have different types of mechanics that will allow our player community to enjoy the games and have a chance to earn some income. They’re games like Fancy Birds, CyBall and Big Time. There’s an incredible amount of games that are coming in the next couple of years. The landscape has been dominated by Axie in 2021. Axie is even releasing a new version of the gameplay. There’s going to be a huge amount of content for people to go through and different kinds of virtual economies. That’s super exciting.

On the DAO front, we are creating our regional DAOs that will serve as user acquisition deep into the local communities. For example, we started YGG Southeast Asia late in 2021, which is going deep into Indonesia, Thailand, Vietnam and Malaysia. We have IndiGG in partnership with the Polygon folks, which is bringing play-to-earn deep into India and Ola, which is in Latam.

We invested in BAYZ, which is a guild out of Brazil. The idea is that we wanted to partner with folks who knew the ground deeply because with what we’re doing, we want to go deep into each village, town or city and get people access to assets that play-to-earn. We wanted to partner with the best people on the ground.

That’s such an impact. Miko, I do want to ask from your perspective as you’re seeing this rocket ship continue to grow and take off. We talked about metrics before. What is it that you’re seeing that you get excited about that is measurable and that you can take from this experience and what you’re seeing with YGG? I know it’s hard to judge other folks that want to do similar things. Can you apply what you’re seeing and learning here?

The only thing that can ruin a Guild is loot drama. Click To Tweet

There’s no question. We think about the entrepreneurs first. The team is everything. Once we get through that, then the thing we focus hard on is the problem and the solution. The question is, “What problem are you solving?” If you look at the way Gabby described the problem, he described problems like, “COVID hit and there’s not that much employment. People need to survive and feed their families.” Is that a real problem? That is a real problem.

Asking silly questions like, “Can the player learn how to use MetaMask?” They’re going to do everything because that’s what they need to do. They have a serious problem. To me, it’s hard for GameFi people to talk about problems that they solve because a lot of times, they’re solving problems like, “I’m bored,” which is okay. It’s beautiful to help people feel better in the world and entertain people. For me, the beating heart is like, “Is this a serious problem with a serious solution?” That’s my perspective.

There are over three billion gamers in the world. There’s the fact that you can use games as a way for people to get into crypto and earn money. The interesting thing about our community is that most of the time, when our players get recruited, they don’t know anything about MetaMask, Ronin Wallet or anything about crypto, but they know how to play a game and they want to make money while playing a game. They get onboarded to the community and start learning how to play Axie. Two weeks later, when it’s cashout time, you can bet that they will learn how to use their wallets quickly.

We came out of this world where, as kids, you can play video games. If you got good, maybe you could make money out of it. Even that was mind-blowing to our parents saying, “You can’t make money playing video games.” You do have to be pretty good to do it and all that stuff. This is completely flipping it on its head. It’s a whole other level. Anybody can come in and do that. You dedicate your time and effort to it but you don’t have to necessarily be the rockstar or ninja when it comes to gaming. It’s such a cool iteration of gaming and blockchain.

Remember when eSports was early and people were winning huge cash prizes. There was a lot of pushback like, “Games aren’t sports. That’s not real.” There was so much resistance to it. We’re seeing it now with play-to-earn as well, “Is that even a real game? Is it doing anything good for society?” If you look at how many people it’s reaching with the ability to earn via these virtual economies, the answer is yes.

I got to ask Gabby with regard to that transition to play-to-earn and you have been in the gaming industry for so long, how do you respond to the naysayers that talk about this tension with traditional gamers? How do you think all that’s going to play out?

A lot of this is tension. Miko and I talked about this. We had a wonderful conversation about this. A lot of people who play games use it as a form of escapism. A lot of the time, they want to separate playing the game from the commercial part, especially from these people who have felt like the publishers have been squeezing them for money to play the games that they enjoy. They see NFTs inside games as a way to overt financialization of the games. If you look at the people who are enjoying these games and benefiting, there’s a massive benefit.

People in the provinces of the Philippines aren’t asking, “Is play-to-earn ruining my game experience?” They’re playing it and enjoying it. It’s making their lives better at the same time. Honestly, I don’t think that games that you will play for pure enjoyment will ever go away. It’s a different type of game with an added purpose, which is a pretty noble one and one that can spread gaming to more people around the world because people can feel productive earning money while learning skills and doing it. This will continue to grow over time.

Everything will coexist. Speaking of purpose, you did some pretty major relief efforts around Typhoon Odette. Is that correct?

That’s right. In December 2021, a huge typhoon rolled around the Philippines, where a huge part of our player community is at. This is the week before Christmas 2021. A lot of people pretty much lost their homes. We helped coordinate the efforts of the community and raised $1.5 million from the crypto NFT play-to-earn communities to help with the relief efforts. We were able to channel that towards various aid organizations on the ground to help people get back on their feet.

You are used to organizing in a decentralized way for a clear purpose. It’s a great way to pivot that energy of the community.

Honestly, I never thought that it would be part of our job description to organize aid and relief efforts but it turned out raising money from the crypto community that wanted to help other players was something that we could do.

I hear there’s a subDAO strategy for international rollout and rapid expansion here. It sounds like another implementation of your fantastic abilities here. Can you tell us a little bit more about that?

Yield Guild Games: Yield Guild community managers recruit, and train gamers around the world. Then these gamers start playing the games to earn an income. So, the Yield Guild is continuing to grow throughout the world.

The subDAOs are regionalized versions of YGG that are implementing specific strategies for spreading play-to-earn across different parts of the world. There’s no one-size-fits-all strategy to expansion, especially with different countries, cultures and languages. The way that you’re spreading play-to-earn, for example, in Indonesia is going to be different than India, which is going to be different from Brazil.

The subDAO is a way of us creating the guild structure in different parts of the world and finding the best partners. For example, the BAYZ guys in Brazil know the ground pretty well and what games would work well with the Brazilian market. They have a heavy focus on mobile eSports because most of the people there own Android phones and love to play these competitive games. That’s an example of us personalizing so that we can relate better to the players in those countries.

We see that in the corporate world, going into different markets has to have a completely different marketing strategy message in those different places. This is interesting too. I wonder if this will have an impact on politics, watching the way this type of thing evolves and being able to access unique markets and let people build localized campaigns around a specific movement.

Politics is something we think about. There’s a huge philosophical discussion here. When you give people income that is sovereign from the country that they live in, then they get loyalty around the guild because the guild made them live a better life. What does this mean for politics and these countries involved? It’s crazy to think about. Some of our local scholarship managers are able to accrue some loyalty from the people that follow them in these regions around the world. That usually means political power if you look at the arc of history.

Miko, how does the intricacies of DAOs in the decision-making and how can that influence an organization and even subDAOs? How does that influence your thinking from an investment perspective when you’re thinking about whether you’ve put dollars into capital, time and companies where you’re not necessarily just talking to a CEO or a board that’s guiding the direction of a company?

One of the things that still remains is a desire for leadership. We are all still mammals. We were born to parents who care for us. We look up to people. Even with DAOs and subDAOs like YGG, there’s still a strong need for humans, human examples and leadership. This is an essential thing that we will never separate from. I see that even with this maximal decentralization, we still have the stories and the realities. That’s the way I reason about this. Trust still remains. You can trust code, open source, blockchain ledgers and this trustless infrastructure but you can also trust humans. It’s still possible. Institutions are losing trust but humans are still able to retain trust, some of them.

The centerpiece of most healthy cultures is a good environment of trust. It goes to the transparency we were talking about.

There’s transparency, trust and communication. We are not set up like a typical profit-maximizing corporation. We don’t think exactly tell the subDAOs what to do but we are incentive-aligned. We have the common culture of wanting to help make the players’ lives better first. From there, because we’re incentive-aligned, we have the same values and they’re transparent about it too, it helps people move in the right direction without a traditional command-and-control type of company.

Having that strong why is such a great North Star. As we think about the inspirations for you outside of your day-to-day, what other projects or things happening in the world of NFTs are inspirational for you?

There are so many things that are inspirational. At the end of 2021, I took a break from thinking about work and went back to my first love, which is going degen into NFTs. I haven’t been able to do that for much of 2021 because work was so crazy. That enabled me to check out different chains, set up new wallets and buy into new NFT projects. This got me into discovering CloneX back in January 2022, which is one of my absolute favorite NFT projects and they have done a good job.

If you look at a lot of the projects that have a long-term horizon, you can release a 10,000 PFP project but it’s not just the PFP. I think of these 10,000 PFP projects as layer one for IP. If you have good IP, you can start something that looks like a simple PFP project. If you look at what CloneX has done, they have layered airdrop on airdrop and built experiences on top of it. It’s a great way to build IP in this world where you may start with a character but it’s the base layer for a whole metaverse world.

It’s exciting that you mentioned that project because I got a MNLTH. Hopefully, I won’t regret that decision. Is that one of the elements of the ecosystem that you’re a fan of?

I got airdropped eleven MNLTHs and I have a bunch of their CloneX Pods. What they’re doing where you’re getting airdrop upon airdrop if you hold base layer NFTs is pure genius. We have this concept in YGG, the Founders’ Coin that we gave for free to members of the community when we were starting out. There are only 300 of them. We’re also giving them airdrops, not only NFTs but also physical airdrops like merch.

There are over 3 billion gamers in the world. You can use games as a way for people to get into crypto and earn money. Click To Tweet

For people who hold that, the value of that NFT has risen. At one point, it hit around 30 ETH. It’s somewhere under 10 ETH now. It would have changed people’s lives if they sold it but they identify with being an early member of the Yield Guild as a holder of this Founders’ Coin so much that some of them are never going to sell it and they’re going to receive cool airdrops for life.

There’s so much of that happening in so many cool ways. Miko, I wanted to ask you. What’s inspiring you other than the stuff we have talked about already? Where are you getting jazzed?

I’m very excited about the entire phenomenon and the development of culture. Gabby talked about IP. IP is this idea of an evergreen transmedia franchise that is decentralized. Bored Ape is headed that way by getting a bunch of celebrities but also commissioning their own games. Bored Apes game is coming. To me, the thing that’s exciting is the first wave of NFT. The internet invented object permanence, so now, the internet is like a baby that suddenly is able to see things. “That object is permanent now.”

Instead of filling it with Beanie Babies, let’s take an animal on a blockchain and crisscross them. There are actual projects with ambitions to make immortal-worthy IP. It’s IP that belongs forever in this blockchain because we invented a form of digital immortality. Why shouldn’t we use it and put things in there that are worthy? They’re things like the Founders’ Coin of YGG. That’s a hold forever. Warren Buffett said, “My favorite holding period is forever.” What a better thing to say about NFTs. I know he doesn’t like NFTs but he should.

It’s so key and central to everything that’s happening. It’s that immutability. For all our readers, check YGG out. There are so many cool things happening in there. What a community that you’ve built. It’s growing. We wanted to shift gears a smidge and get your personal perspective on some fun questions that we have, which we call Edge Quick Hitters. There are ten questions. We’re looking for short, single-word or few-word responses but we may dive in a little deeper here and there to have some fun. Gabby, we will start with you. Question one, what is the first thing you remember ever purchasing in your life?

It was a stamp. I was a collector even at an early age.

That’s our first stamp collector.

Miko, how about you?

It was a Bazooka Joe bubblegum with a comic inside. That was so awesome.

Do you have some of those comics sitting around?

No, I don’t. I wish.

Question two, Gabby, what is the first thing you remember ever selling in your life?

It’s NBA Cards. I was doing it for lunch money.

How about you, Miko?

I sold a GI Joe to my brother.

There’s a lot of family arbitrage on this show.

Question three, Gabby. What is the most recent thing you purchased?

I got AirPods Pro for my wife.

Miko, how about you?

I acquired some equity with some token warrants from an entrepreneur.

Question four, Gabby. What’s the most recent thing you sold?

I sold some NFTs. I sold some Meebits at a profit.

Miko, how about you?

I’m a long-term guy. I don’t sell. I tie my hands.

There’s no couch on Craigslist. There’s nothing.

I’m holding that couch forever.

My favorite investors only have the buy button. They don’t have the sell button. That’s an investor that you want.

Question five, Gabby. What is your most prized possession?

Yield Guild Games: It’s hard for GameFi people to talk about the kind of problems they solve. A lot of times they’re solving problems like boredom, which is okay. But sometimes you have to find a more serious problem.

It’s my crypto wallet.

A lot of us can say that. That’s for sure. Miko, how about you?

I would have said the same thing. At the moment, it’s ETH. I’m holding my ETH.

Hold on tight. Question six, Gabby. If you could buy anything in the world, digital, physical, service and experience that’s currently for sale, what would it be?

My mind goes towards one-of-one NFTs. It’s the first artwork that Josie Bellini ever put out. That’s what I would buy.

Miko, what do you have your eye on?

It would be fun to have a big castle and have guild events. Make a physical guildhall. We can all hang out and get swords and whatnot.

We have had some castle stuff on this show before, but nothing quite as extravagant as that. Question number seven, Gabby. If you could pass on one of your personality traits to the next generation, what would it be?

It’s curiosity.

Miko, how about you?

I have a son, so I think about this question all the time. If there’s only one possible thing, I would say hard work.

It’s great that Miko said hard work. He had such a gigantic smile on his face the whole time. I’m like, “This guy is having too much fun.”

Question eight, if you could eliminate one of your personality traits from the next generation, Gabby, what would it be?

It’s my short attention span.

Keeping focused is a good thing. It seems like you’ve been able to overcome that for sure in your pursuit. Miko, how about you?

I’m an anxious person. I prefer to be less anxious. That would be nice for the next generation.

This is a little bit easier. Question nine, Gabby. What did you do before joining us on the show?

I just woke up.

How about you, Miko?

I made a toast. There are no images that appeared in the toast though. It was just toast.

You could have gone a few different directions too, like you made a toast at a cocktail party. This is the last one. Question ten, Gabby. What are you going to do next after the show?

Coffee.

Miko, how about you?

I’m going to go to an investment committee meeting.

You could combine those two and have a good result. Those are the ten questions. That’s Edge Quick Hitters. We appreciate you indulging us there a little bit. That was lots of fun. We have some hot topics to get to.

Here’s the first hot topic on the block, “How Azukis Suddenly Became The World’s Best-Selling NFT Collection.” Talk about suddenly. I was looking it up and I was like, “What are Azukis?” I have an NFT show. I should know this, “Anime-style characters known as Azukis were priced at $3,400 apiece. They sold in three minutes, raking in over $29 million. Another $2 million worth was sold in private offering a few days later. Things heated up.”

“The four weeks ended February 11th, 2022, Azukis did nearly $300 million in transaction volume across several major NFT marketplaces like OpenSea.” I was talking about this with a friend about the various little trends that are coming into NFT projects and how when one pops on the radar, there’s something else that has its own spin on things. It makes you think whole new thoughts about what could be successful. Josh, what are your thoughts?

I’m on OpenSea. I saw these and I was like, “What is going on here?” They’re selling for $50,000 to $100,000 each. They have been holding their value. They give you membership access to The Garden, which is a corner of the internet where artists, builders and Web 3.0 enthusiasts meet to create a decentralized future. That’s a pretty ambitious roadmap there that seems to have attracted quite a bit of attention. Have you caught wind of these Azukis?

I have 5 of the top 100 rarities of these.

Gabby is on top of it. We got a thousand different things we can focus on. What garnered your attention around these? How did you get privy to it?

You can trust code, open-source, or blockchain ledgers. You can trust this trustless infrastructure, but you can also trust humans. Click To Tweet

I found them in secondary. I am too old/too busy to get into mints. I consider myself a Series A degen. I wait for the best ones to bubble up and then I can go buy and see. Azuki caught my eye, going back to the thesis that PFPs are layer one of IP. First of all, the art is incredibly strong. Their Art Director was the former Art Director of Overwatch for Blizzard Entertainment. If you see the execution, it’s good. You can see that there’s a lot of thought that the team has put into executing what is going to happen after the PFP drop. There’s going to be merch and IP.

CloneX and Azuki in particular are doing well to follow the footsteps of Bored Apes in terms of layering culture on top of the PFP itself. There has also been a lack of good Asian-style anime PFPs. They’re the ones that nailed it. Anime is a global cultural phenomenon at this point. It’s not just Asian but it includes a lot of people in Asia who would want to buy these high-quality PFPs as well. I was so bullish on the project. I ended up spending a lot more money than I normally would.

Matt Kalish came on the show and had a similar approach to, at this point, buying after the mint because he wants to see what’s going to happen. Plus, we’re also busy. It’s an interesting strategy. I got to call some attention before we wrap this topic to their vision and values. The first value is a community first. The number three is to trust the process. The number two value is dope shit only, “Azuki is creative, brave and relentless. It’s easy to follow trends and improve incrementally. It’s harder to be original and do dope shit. We pave our own path.” I like that.

Time flies. Kalish was on 50 episodes ago. It wasn’t that long ago because we did a lot of episodes. It’s just to give you a sense.

It’s all blurring together. Miko and Gabby, this is episode 110, to put that into perspective.

I never even knew there was an NFT podcast with 110 episodes.

We’re glad we have you on it. Miko, have you had any exposure to this project?

No. It’s my first time hearing about it. Thinking about anime, it’s astonishingly deep. The approach is beautiful and the art is amazing.

There’s a lot to talk about on this one. Unfortunately, we got to get to the next one, “British authorities just seized NFTs for the first time, in a £1.4 million fraud probe. Britain’s tax watchdog has seized three NFTs in what is thought to be the first seizure by a UK law enforcement agency. Officials at Her Majesty’s Revenue and Customs say they seized the NFTs during an investigation into a suspected value-added tax fraud case worth £1.4 million.” That’s $1.9 million, “Three suspects have been arrested on suspicion of attempting to defraud the taxman.”

What I find interesting about this is for outsiders in the crypto space, maybe the word crypto has a weird feeling to it. It seems like this underbelly, fraudulent and overhyped type of thing. As far as people we see, there’s so much good energy and good nature going on. We’re looking at some of the things that you are doing, like helping out in disaster relief and stuff like that. It’s nice to see the fraud that is happening. There’s something there to watch it and clean it up.

It’s good to see people taking action on it. It’s nice to see that. We have to remember that any of these things are moving so fast. Technology is moving so quickly. There are bad actors in there. We have seen it with certain projects like legit rug pulls and things like that directly within the community. In this case, these guys were legitimately using the project to try to claim back more of the VAT taxes than they were entitled to. We’re talking about fake phones, invoices and fake accounts left and right. It’s a relatively intricate scheme.

We’re going to see stuff like this happen. It’s good to keep an eye on it. Also, be aware that there are bad actors out there. Be smart with what you’re doing and what you’re investing in. Research it, understand what’s happening and protect your information, so you don’t end up caught up in stuff like this. It’s always a good reminder, as things are moving so fast, to still be smart about what you’re doing with your information, your money and the projects you’re getting involved with.

Are there any other thoughts on this one?

The space does draw some of the worst and the best. It is good to see things getting cleaned up.

We’re going to be able to have a meeting with a guy named Joi Ito, who has the number one tech podcast. Do you know Joi by any chance, Miko?

I do. He’s a real OG from even the first internet all the way back.

I heard him talking because he oversaw the New Media Lab at MIT for a number of years. Hearing him talk about how he had to fight the myths around being a cryptocurrency-interested guy who wanted to promote that stuff. It’s beautiful to see the process of folks getting through that and dealing with these actual issues in a fairway.

Yield Guild Games: Some gamers see NFTs in games as an over-financialization of games. But if you look at the people who are enjoying these games, NFTs are not ruining the game experience.

Let’s hit the next hot topic here and then we will wrap up, “Fayre raised $3.8 million to help brands create and manage NFT communities. The London-based NFT marketplace that raised $3.8 million in private funding ahead of its public token sale and platform launch is the brainchild of Luis Carranza, a marketing and innovation strategist with vast experience.”

“Immediately after Boson, Carranza decided to launch a platform where brands and celebrities can create and manage NFT fan drops as clubs or decentralized loyalty programs. The Brand Dashboard is different from all others in the space. It allows brands and IP owners to manage NFT communities.” That’s a very interesting add-on to how they manage other social platforms. The community is so central and a place like OpenSea can’t do anything like that.

There’s this need. We don’t know who the winner or winners will be. They’re going to create an easy button for people to connect with their communities on the back of NFTs. We talked to Julian Rodriguez from Momento on the show. It’s a cool project doing similar things and solving a similar problem. They’re helping people to reward and connect with their fans in a way that is an easy button, which is what’s required for a lot of creators.

They’re busy in creation mode and not necessarily in the world of thinking about how to build a contract for a particular drop, manage all the ins and outs of particular NFT drops and the backend of it, build a utility and all those things. The quicker we can get to a spot where somebody can flip a switch and do that to build a community within their already existing base of followers, the quicker that we will see the uptake across a lot of mainstream influencers that are out there and brands.

Gabby, I had a follow-up from something you said both in the hot topics and the show. On this topic of communities, you mentioned the PFP projects being layer one of IP. How much do you think the fact that their actual profile pictures, a head and a face, have this personality? Does that need to be assigned to these NFT collections for them to have that larger IP value? Is there a potential to have a project with a large number of NFTs collection be something more abstractly artistic or something like that? Do you have any thoughts on that?

Having PFPs as faces that people can put on their profiles helps with promoting a certain NFT collection. With that said, you do have Art Blocks‘ generative art that got wildly popular even though the art is a lot more abstract. It’s not necessary. I’ve said before that if Walt Disney were building its destiny. You would start with the PFP project and layer on everything, including the theme parks on top of that. You have things like Decentraland, which has done well and Sandbox that are land-based projects. You have generative art. It’s possible to do other things but PFPs are, as a base layer, the best way to go.

You would think if Decentraland was reimagined now, they might have started with a PFP project, to begin with.

It could be possible. Crypto Unicorns, for example, have cute unicorns that have names. They also have land but people aren’t putting the land as their profile pictures. They’re putting the unicorns.

Thanks for adding this wonderful image, which for some reason, I never had before of Walt Disney being alive and having this whole NFT and IP cultural emergence.

He’s trying to do an NFT drop for sure. People will be calling him a scammer. This isn’t exactly what he would be doing now.

That’s a wrap on hot topics. That was a fun time. I know our readers are going to be itching to follow everything that’s happening at YGG, as well as with you being at the forefront of so many cool things in the space. Where can they go to follow you and your projects?

For us, go to our Discord community, Discord.gg/YGG and Twitter.com/YieldGuild.

For me, it’s Twitter @MikoJava.

Follow those guys, see what’s popping and stay at the forefront of everything exciting in the space. We’re going to be doing a little giveaway as well. We got a pack of free Axies. We’re going to get some details out. Follow our socials. We will share that with you in the community. Get excited about it. They’re fun stuff. We’re very grateful for that offering. Thank you so much for that. That’s a wrap overall in the episode. We have reached the outer limit at the show. Thank you for exploring with us. We’ve got space for more adventures on this starship so invite your friends and recruit some cool strangers that will make this journey all so much better.

How? Go to Spotify or iTunes, rate us and say something awesome. Go to EdgeOfNFT.com to dive further down the rabbit hole. Remember, we always invite you to co-create and build with us at the show. We’re unlocking a whole new way to connect and collaborate with us through our own NFT drops, Spirit Seeds, leading to Living Tree NFTs, which lights the way to our event, NFTLA, a one of a kind immersive and unforgettable experience in LA at the Los Angeles Convention Center on March 28th to the 31st, 2022. Check it out at NFTLA.live and move quickly on early bird tickets because they’re moving fast. Lastly, be sure to tune in next time for more great NFT content. Thanks again for sharing this time with us.

Important Links:

• Yield Guild Games
• Altitude Games
• Alto.io
• gCC
• Celsius
• Idle Finance
• Pundi X
• Keyless
• Ethereum
• Solidity
• CryptoKitties
• Axie Infinity
• Fancy Birds
• YGG Southeast Asia
• IndiGG
• Polygon
• BAYZ
• MetaMask
• Ronin Wallet
• CloneX
• MNLTH
• Founders’ Coin
• Bored Ape
• Meebits
• Josie Bellini
• How Azukis Suddenly Became The World’s Best-Selling NFT Collection
• Matt Kalish – Previous episode
• British authorities just seized NFTs for the first time, in a £1.4 million fraud probe
• Joi Ito
• Fayre raised $3.8 million to help brands create and manage NFT communities
• Julian Rodriguez – Previous episode
• Art Blocks
• Decentraland
• Sandbox
• Crypto Unicorns
• Discord.gg/YGG
• Twitter.com/YieldGuild
• @MikoJava – Twitter
• Spotify – Edge of NFT Podcast
• iTunes – Edge of NFT Podcast
• Spirit Seeds
• NFTLA.live

About Miko Matsumura

Miko is a General Partner with gCC Gumi Cryptos Capital, a Silcon Valley investment fund with over $400M in assets including early-stage investments in unicorns like OpenSea, Yield Guild Games, Celsius Network, VEGA Protocol, Qredo, 1Inch Network and Agoric.

Miko fell in love with open source software 25 years ago as chief Developer Evangelist for the Java Programming Language and Platform at Sun Microsystems. Since then he has been building open source software startups in Silicon Valley including raising over $50 million in venture capital for developer platform companies such as Gradle and financial infrastructure companies like Hazelcast and has participated in multiple exits including INFRAVIO, webMethods, and Db4O. He is an advisor in successful startups like Celsius (CeFi Lending), Idle Finance (DeFi Yield Aggregator), Pundi X (Payments), and KEYLESS (ID infrastructure). He holds a Master’s degree in Neuroscience from Yale University where he worked on abstract computational neural networks.

About Gabby Dizon

Gabby is a startup entrepreneur and a 15-year veteran of the game industry in Southeast Asia.

Gabby has been making games since 2003 and have shipped 20+ games on mobile and PC platforms. He is currently the co-founder and CEO of Altitude Games, a mobile and crypto game developer, and Chairman of Alto.io, a platform that connects games to the blockchain. These days, Gabby most excited about the various applications of blockchain for the game industry.

Gabby is a founding member and former president of the Game Developers Association of the Philippines (GDAP) and former coordinator of the IGDA Manila chapter.