The rise of the Metaverse
We’ve been studying the emergence of DAOs especially with our investment in Yield Guild Gaming (YGG). With the rise of the Metaverse, we see more opportunities for DAO organizations as concentrators of labor power. YGG itself models both a Labor Union and a Hedge Fund. With 10,000 Axie Infinity “scholars”, YGG shouldn’t be looked at as a World of Warcraft gold mining company with 10,000 employees. It should be looked at as a hedge fund with 10,000 analysts. Neither of these analogies adequately explain what YGG actually is, since someone looking at this as a “labor union” would consider it to be Socialistic whereas someone looking at it like a fund would see it more as Capitalistic. So to be fair YGG is something quite new and innovative, especially when you consider how well integrated all of its efforts are.
Further, one can look at YGG as a talent accelerator for “time investors”. As soon as scholars become great at playing Axie, they can graduate to becoming managers, breeders or scouts for new game or even the leader of a subDAO.
Axie Infinity has been experiencing some criticism of late around sustainability. One of the bigger concerns is the idea that players don’t create enough economic value while playing. Because of the lack of economic input, the game eventually bleeds out. The structure of Axie depends on a steady stream of new players who buy axies so they can battle. So really the net revenues are more related to new player sales of NFTs than they are to gameplay from existing players. So we have been doing a lot of thinking about how “Play to Earn (P2E)” can be made more sustainable.
Learn to Earn
When we learned about ProofofLearn.io (POL), we became excited by the novel mechanism. Obviously one of the big gaps in the metaverse are the lack of talent. We feel that building a community centered around learning creates lots of economic value–and addresses a key shortage of skilled talent. We think that the economics of POL has sustainability and can be generated from online education, which is already a very large industry. If learners can double and triple their salaries by learning valuable metaverse skills, there is plenty of room for projects built in Web3 to become more than sustainable.
Of course no gCC investment would be complete without an A+ team. This new company and its exciting upcoming projects are led by Sheila Marcelo who is a 15 year founder, CEO and chairwoman of Care.com. Sheila was introduced to us by Gabby Dizon, Founder of YGG and we were impressed by the top notch team Sheila is building around herself. In the current macroeconomic climate, we feel that a new tier of entrepreneurs has entered the field, and these veterans are able to scale on access to capital and organizational skills that can put money to work effectively. We feel Sheila represents this new breed of top notch serial entrepreneur coming into the blockchain space. Her work as an EIR at Matrix Partners and a Venture Partner with NEA (who is leading this current round) is indicative of the kind of company that she keeps. We see Sheila creating a unicorn of Web3 education here.
A “labor union” is a structure that wants to be big. This is a function of collective action including collective bargaining. We see substantial network effects associated with collective action. Since the market wants there to be a big winner in this area, we feel that what is necessary is bold, visionary leadership, prolific capital formation, excellent organizational skills and the ability to scale rapidly. We see the builders of the metaverse as the biggest beneficiaries and value creators and the guild that is able to “mint” metaverse builders will control the most essential human resource of our generation. We are very excited to back this excellent team on this very disruptive and innovative mission.