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Web3 Gaming Giant YGG’s India Unit IndiGG Bags $6 Mn From Sequoia, Lightspeed

Web3 Gaming Giant YGG’s India Unit IndiGG Bags $6 Mn From Sequoia, Lightspeed

IndiGG is a sub-DAO of YGG that aims to create a blockchain-powered play-to-earn gaming guild on the Polygon network

Gamers earn digital assets like NFTs by participating that can then be sold and exchanged on different marketplaces

According to Reddit cofounder Alexis Ohanian, who invested in IndiGG, 90% of the games in the market will be play-to-earn games in the next five years

Web3 gaming startup IndiGG has raised $6 Mn in seed funding from Sequoia Capital India, Lightspeed Venture Partners, Variant Fund, Play Ventures Dune Ventures and Jump Capital among others.

Angel investors including Alexis Ohanian (Reddit), Alan Howard (Brevan Howard Asset Management) and executives from MPL, Hungama, Nazara, WinZo and Hindustan Talkies also participated in the round. 

Decentralised Autonomous Organisation (DAO)

Founded in 2021, IndiGG is a sub-DAO of YGG that aims to create a blockchain-powered play-to-earn gaming guild on the Polygon network. A DAO is an ‘organisation’ that is controlled by (usually transparent) rules encoded in software.

Usually, all financial transactions, their records and program rules are maintained on a blockchain. DAOs are created with the belief that they can eliminate human error and manipulation of funds by giving decision-making power to an automated system and a crowdsource process. 

These DAOs exist in a legal grey area in most countries, but this doesn’t usually affect them because they generally remain unaffiliated to any nation-state to remain truly decentralised.

The first organisation formed with these principles in mind was the eponymous “The DAO” that launched in April 2016. Its crowd sale of DAO tokens raised more than $150 Mn, making it the most successful crowdfunding project at the time.

Immediately after launch, some research papers revealed that the Ethereum-based DAO has some serious security vulnerabilities that can be exploited to steal the money that has been put into the project by contributors. 

The predictions in the paper turned out to be true in June 2016 when hackers attacked the DAO based exploiting the same vulnerabilities and gained access to ETH 3.6 Mn, worth around $50 Mn at the time. 

This attack is one of the major reasons behind the Ethereum fork that saw the network split into two: Ethereum and Ethereum Classic. Early security vulnerabilities aside, DAOs have the potential to upend the modern corporate structures that have proliferated the gaming industry. 

Along with the shift of software companies to a subscription model, gaming companies have also turned to increasingly avaricious methods to make more money from customers. The biggest companies in the industry have turned to loot boxes and other ‘pay-to-win’ mechanics.

This shift in focus from giving gamers the best experience to earning as much as possible from them has earned their ire, and for all the good reasons. In theory, this is where DAOs like IndiGG come in, with their more community-centric approach that includes ‘play-to-earn’ mechanics. 

What Is Play-to-Earn (P2E)?

In its most basic essence, P2E games refer to games that reward their users by paying them. Gamers earn digital assets like NFTs by participating that can then be sold and exchanged on different marketplaces.

But at the same time, gamers need to buy NFTs in order to participate in the game in the first place. According to IndiGG, gamer guilds strive to make sure that the barrier to entry is low by making these NFTs relatively affordable. 

This new approach to gaming could potentially disrupt the entire industry and turn it on its head. According to Reddit cofounder Alexis Ohanian, 90% of the games in the market will be P2E games in the next five years

“In five years, you will actually value your time properly, and instead of being harvested for advertisements, or being fleeced for dollars to buy stupid hammers you don’t actually own, you will be playing some on-chain equivalent game that will be just as fun, but you’ll actually earn value and you will be the harvester,” said Ohanian while speaking on the Where it happens podcast. 

In Kraken Intelligence’s annual crypto report, it has underlined the massive implications of P2E gaming, “The implications resulting from this model are revolutionary for gaming, particularly in an age where users spend real money on in-game assets such as in Fortnite which has generated billions in revenue. Not bad for a so-called ‘free-to-play’ game,”

“Looking ahead, it is possible many will make a career out of being in the metaverse, architecting digital buildings, hosting events, and playing via P2E game mechanics as the industry grows and commercial involvement increases,” the report concluded. 

There are going to be a myriad of ways for users to earn money in P2E games. You could buy and sell in-game merchandise or even offer in-game services to others. These ‘services’ could be anything from helping someone win a first-person-shooter game by joining their team, or even driving their car in a virtual universe.

But this is not even the distant future that we are talking about, many gamers playing the game Axie Infinity are already earning upwards of $500 a month.