Overview of GameFi and Detailed Explanation of Yield Guild Games

The concept of GameFi was first proposed at the end of 2019, combining decentralized finance elements with gaming. Its core feature is "play to earn"(. It utilizes blockchain technology to convert traditional game assets into NFTs or FT on-chain, granting financial attributes to games. This gives game item assets uniqueness and collectible value, and players truly own the related data rights.

Bringing game data assets on-chain is a win-win choice. Game companies can collect taxes in the secondary market, and users can profit from the game, reducing the circulation of funds and items among many studios, thus maintaining the game ecology. As user participation increases, the game will incentivize the creation of more diverse gameplay content, promoting a positive cycle of content production.

However, there are still some issues with the playability of GameFi and the sustainability of capital circulation. After the popularity of several leading games has continued to decline, users' enthusiasm for GameFi has become relatively rational. Nevertheless, GameFi remains the preferred choice for breaking through barriers, and the decline in popularity helps to refine the user base and encourages project parties to consolidate and address the issues of insufficient game playability and capital circulation. At the same time, the GameFi ecosystem is relatively healthy, with some DAOs integrating resources to gather users and form a community of healthy competition. The full-chain game narrative led by Dark Forest is also slowly unfolding.

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Introduction to Yield Guild Games

Yield Guild Games)YGG( is a blockchain-based gaming yield-earning community. It supports NFT assets and connects a global blockchain player investor community, dedicated to providing players with opportunities to earn profits through gaming across multiple blockchain games. YGG has initiated several yield earning programs, such as Axie Infinity, The Sandbox, League of Kingdoms, etc., and operates through a DAO structure. Organization members can participate in the organization’s decision-making and development by contributing funds, gameplay, community building, etc., while also sharing various profit opportunities organized by the organization.

Background of YGG

The Founding and Development History of YGG

Yield Guild Games was founded in 2020 by Gabby Dizon and Archie Oclos, aiming to create a community for earning game profits based on blockchain technology. After its establishment, YGG quickly grew, first partnering with Axie Infinity to launch an NFT-based game profit-earning program. The program operates by having members contribute funds to YGG, which purchases game assets from Axie Infinity and then rents these assets to players. After earning profits in the game, players return a portion of the profits to YGG and other participants.

Subsequently, YGG continued to expand its influence, collaborating with more well-known games and developing new earning plans. In July 2021, YGG completed a $24 million financing round, gaining support from investors such as Pantera Capital and a16z. In February 2023, YGG raised another $13.8 million for the development of soul-bound reputation tokens. YGG Japan also completed a private fundraising round of approximately $2.95 million in January 2023. This shows that capital is optimistic about the GameFi market and blockchain gaming communities like YGG.

YGG Native Token Economic Model

The native token of YGG is named YGG and is an ERC-20 standard token on Ethereum. Members holding the YGG token can participate in community governance decisions, including voting to determine community rules, investment strategies, and game asset management. The YGG token is also used for profit distribution, with the community distributing the profits obtained from investing in and operating blockchain game assets to token holders in a certain proportion. Additionally, the YGG token serves as an incentive mechanism to encourage members to participate in games and community activities.

As of August 8, 2023, the assets managed by the YGG treasury are valued at $185.74 million ), including the native token (. Recently, benefiting from certain positive factors, the price of YGG token has surged significantly, leading to a notable increase in the value of treasury assets.

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Core Mechanisms and Features of Yield Guild Games

Guild Organizational Structure

The guild structure of YGG includes a core committee and player guilds. The core committee is composed of 5 members elected by the community, responsible for formulating and implementing YGG's strategic and operational decisions. Player guilds are voluntarily formed by community members, who purchase and manage virtual assets in different games to generate revenue for the guild. Each player guild has a manager and members; the manager is responsible for managing the guild's assets, while members receive profit distribution based on their contributions.

YGG has also launched regional guilds, including Southeast Asia, India, Hispanic communities, Brazil, Japan, South Korea, Eastern Europe, and Turkey. In addition, YGG has introduced the concept of sub-DAOs, such as YGG-LOK and YGGSPL, which are used for the games League of Kingdoms and Splinterlands, respectively.

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Profit Distribution and Sharing

The profit distribution of YGG is based on the Contribution Proofs ) mechanism. Members can obtain Contribution Proofs by purchasing virtual assets, managing guilds, participating in community governance, etc., and profits are distributed accordingly. Profit sharing is distributed proportionally, depending on the proportion of Contribution Proofs held by members.

YGG takes multiple measures to ensure fair and transparent profit distribution, such as allowing members to view the guild's accounts and implementing decentralized community governance. YGG also encourages cooperation and mutual assistance among members, sharing gaming experiences and profit opportunities.

Cross-Game Ecosystem Collaboration

YGG achieves cross-game ecosystem collaboration mainly through: 1( cross-game asset management platform; 2) cross-game community; 3) cross-game revenue sharing; 4) cross-game investment. Taking Axie Infinity as an example, YGG members can earn revenue by breeding and training Axies, trading Axies on the YGG platform, renting Axies for rental income, and teaming up to participate in game activities.

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Community-Driven Development

YGG focuses on community-driven development, attracting members to participate through an open and transparent governance mechanism. Taking Axie Infinity as an example, YGG's approach to community-driven development includes: 1( community governance; 2) community education; 3) community cooperation; 4) creating an open and mutually supportive community culture.

YGG Development Sustainability

The sustainable development of YGG depends on multiple factors:

1. Business Model: Relies on "play-to-earn" games, needs to maintain player interest and establish a stable and sustainable economic model. Currently, GameFi game economic models are facing challenges and need innovation.

2. Blockchain Gaming Market: Market development is crucial for YGG. The overall market sentiment is currently pessimistic, but YGG is still actively seeking partnerships during the bear market.

3. Regulatory Environment: Blockchain and cryptocurrency regulations are still changing, which may affect YGG's operations.

4. Community Engagement: As a DAO, YGG's success largely depends on maintaining and enhancing community participation and activity.

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