Animoca Brands is one of the leading players in blockchain gaming, with hundreds of investments and holdings, including The Sandbox, Life Beyond and Battle Palooza as well as licenses such as MotoGP, Power Rangers, and WWE.
Company co-founder Yat Siu delivered a keynote conversation at the recent Proof of Talk conference in Paris, in which he shared his big picture vision of Web3, and how he believes the market will play out internationally.
Speaking to interviewer Zohair Dehnadi, co-founder & CEO of X Ventures, he said that the United States is in danger of falling behind, as regulators scrutinize the blockchain and crypto markets.
“The SEC has absolutely shown its hand, which means that the world now understands their position very clearly,” he said, referring to various ongoing Securities and Exchange Commission investigations into high profile crypto failures. “I feel like nobody in the world is building a business around the U.S. market. Nobody’s thinking about launching a token in the U.S. Nobody’s even thinking about launching certain types of crypto-related projects there. It is, unfortunately, dead. But it also means we factored it all in [to our plans]. It’s all baked in.”
Advantage Asia
He said that other countries can move faster, capturing Web3 expertise and market share, citing China – Animoca is based in Hong Kong.
“Hong Kong has been super crypto forward, if you compare it to other places around the world,” he said. “China itself has come out with a Web3 strategy paper, and spoke about Bitcoin and Hong Kong, to all the citizens in China, on national TV. That tells me something interesting about what China is trying to tell the world about what they want to do in the world of digital assets and Web3.”
Siu pointed out that other countries in Asia and in Europe are also moving fast to position themselves advantageously in Web3. They are “much more progressive than the U.S”.
“One of the big reasons why we see so many countries pushing Web3 – particularly in Asia – is because they think of it as a way to reclaim part of their own digital sovereignty. All of the technology we use today, including in Europe, is U.S. dependent. It’s dependent on Apple, Facebook, Amazon and Google. Web3 can be a way to build new technology platforms and new systems that, at a minimum, are decentralized, but that serve [individual] national interests, instead of being dependent on a third party that doesn’t have your national interest at heart.”
But he warned that it’s always unwise to discount the U.S. “I don’t think the U.S. is going to willingly give up its monopolies in technology,” he said. “The U.S. will come back to Web3 in a big way. It’s just not going to happen in the next 18 to 24 months. That means, for the next two years, there is a benefit for companies outside the U.S. to build enough of an advantage in those local markets.”
Capitalism solved
Siu, a noted booster for blockchain and Web3 gaming and enterprise, shared his overall vision for the market, claiming that it can fix some of capitalism’s problems.
“We believe in the future of Web3, that it creates more equity, that we have more stakeholders for all. We think we can also solve the problems of capitalism, because everyone can own a stake in the network that they have. We share in the network effect that we co-create.
“Now, that’s a really big vision, and it’s still playing itself out. But the people who believe in that vision are joining a purpose that is bigger than themselves. Even if we fail, we can say we have tried our best to make a change in the world to make an impact that has a purpose.”
He said that Animoca is in the market for the long term, and is prepared for mistakes and failures. “We have over 450 investments today. We don’t think of each investment necessarily as having the best returns. We think of the investment creating economic activity in the entire ecosystem that Web3 is building.
“That means we don’t invest in one marketplace – we invest in a dozen marketplaces. Even if all those investments don’t give us the best returns individually, the network effect that they generate for the entire ecosystem will benefit us as a whole. That’s basically been our approach.
Lui added that the company’s decision to hold onto its currency assets during the crypto boom demonstrates its long term commitment to the market. “At the peak of our industry in 2021, our token positions were worth $16 billion, so a lot of money. We didn’t sell any and maybe that was stupid. But why didn’t we sell? Because we believed in the future of the governance of these tokens. If we want to have a say about how the industry can work better, then we need to hold on to these votes. But if you’re thinking just about making [fast] money, then obviously the logical thing is to sell.”
You can watch the entire conversation here, starting at the 30-minute mark.
