Yield Guild Games

About Yield Guild Games

Yield Guild Games (YGG) is a decentralized autonomous organization focused on investing in non-fungible tokens (NFTs) used in virtual worlds and blockchain-based games. Often referred to as a play-to-earn guild, YGG aims to allow players in developing regions to earn income through playing games.

History and Founding

YGG was founded in January 2021 by Gabby Dizon and Beryl Li. The two recognized the potential for players in developing countries like the Philippines and Venezuela to earn meaningful income from play-to-earn games. However, the upfront costs of acquiring NFT assets posed a barrier to entry.

To solve this, Dizon and Li developed the guild model, where the organization pooled funds to purchase yield-generating NFT assets. These assets were then rented to scholars, who can play games and earn tokens without upfront investment. The scholars split their earnings with the guild.

Business Model and Operations

The core business model of YGG is to invest in NFT assets that generate yield for scholars. It funds these purchases by selling governance tokens and receiving a portion of scholar earnings.

YGG currently focuses on Axie Infinity, an NFT-based game where players breed, battle and trade Axies. YGG scholars earn Smooth Love Potion (SLP) tokens, which they exchange for cash.

YGG has also expanded into other blockchain-based games like Pegaxy, Splinterlands and The Sandbox. The guild oversees asset management, tracking yields and monitoring returns across its portfolio.

Investment and Funding

As of November 2022, YGG has raised over $80 million in funding. Backers include Andreessen Horowitz, Delphi Digital, and Coinbase Ventures.

This funding has allowed YGG to scale its operations. It now has over 28,000 members, making it one of the largest play-to-earn guilds globally. YGG has invested this capital into assets across nearly 30 blockchain-based games.

Growth and Expansion

YGG experienced rapid growth in 2021, fueled by interest in play-to-earn gaming. Within 9 months of launch, the guild grew to over 17,000 scholars.

The guild has continued expanding, onboarding new scholars through its scholarship program. Applicants are vetted based on gaming experience, motivation and alignment with YGG values.

In 2022, YGG launched regional chapters in Brazil, Indonesia, and South Korea. It aims to further decentralize operations and empower local leadership. YGG also plans to expand into more game titles and yield opportunities.

Governance Token and Tokenomics

YGG issues an ERC-20 governance token called YGG. Token holders can shape the guild’s direction through voting on proposals.

10% of revenues generated by scholars are used to buy back and distribute YGG tokens. This gives scholars and token holders aligned incentives.

There is a total supply of 1 billion YGG tokens. About 15% of the supply was sold during a seed and private funding round. 10% is allocated to the founders and team. The remainder will enter circulation through developer incentives and protocol emissions.

Impact on Play-to-Earn Gaming

YGG has had a significant impact on the adoption of play-to-earn gaming globally. By reducing barriers to entry, the guild has onboarded scholars that otherwise could not participate.

This has created earning opportunities for thousands through activities they enjoy. YGG scholars have used their earnings for education, inventions, and supporting family.

Critics argue that scholars are underpaid relative to the value they create. However, proponents note that YGG expands economic mobility regardless.

Governance Structure

YGG utilizes a decentralized autonomous organization (DAO) structure. This allows YGG scholars and token holders to have a say in governance matters.

The guild has a core team leading day-to-day operations and strategy. Major proposals like new game partnerships are open to a vote by token holders.

A Community Council serves as an advisory board to provide suggestions and feedback. YGG aims to transition more decision making authority to the DAO over time.

Controversies and Criticisms

• Centralization concerns: Some argue YGG is overly centralized and goes against decentralized ethos of blockchain and Web3. Important decisions are made by core team, not community.
• Scholar underpayment: Many believe the revenue split between scholars and YGG is unfair. Scholars do most of the work yet only receive a small portion of earnings.
• Scholarship barriers: The scholarship application process has been criticized as needlessly complex. Language requirements and extensive docs create high entry barriers.
• Tokenomics criticism: Tokenomics and YGG buybacks have been said to prioritize profits over community. Large portion of revenues used to boost token price.
• Misaligned incentives: Interests of scholars and YGG don’t always align. YGG incentivized to maximize profits over scholar earnings.
• Regulation risks: YGG operates in legal gray area in many jurisdictions. Lack of regulatory clarity around NFTs and scholars.
• Market concentration: YGG has outsized influence over certain games’ economies. Critics argue this distorts incentive structures.
• Long-term viability: Some question whether play-to-earn model is sustainable long-term or just a short-term fad.

While YGG has created earnings opportunities, it still faces criticisms over fairness, incentives, transparency and long-term direction. The decentralized governance structure may help address some of these concerns.

Future Outlook and Plans

YGG is focused on diversifying into more play-to-earn games and revenue streams. It aims to reduce reliance on any one game like Axie Infinity.

The guild plans to develop more infrastructure and tools for scholars. This includes analytics dashboards,payment systems, and educational programs.

Regional expansion also remains a priority, as YGG builds up local operations and leadership. Tapping into new gaming markets allows for further growth of the guild.

If executed successfully, YGG has the opportunity to bring play-to-earn gaming and Web3 benefits to millions globally. Realizing this vision will require continuous innovation and community alignment.