NFTs
Interview with Yat Siu, Executive Chairman of Animoca Brands
The Cryptonomist interviewed Yat SiuCo-founder and Executive President of Animoca Brandsto talk about the future of NFTs and the metaverse thanks to games and education.
Below you will find our interview with him.
What trends do you believe will drive the Web3 space forward in 2024?
Broadly speaking, the trends that we think will drive this cycle are basically culture, very heavily skewed towards games and, of course, distribution narratives. So that means that, on the culture side, whether it’s like GAMI or like Mocoverse, or digital identity, game narratives are going to be big things because they’re going to integrate users.
And in terms of distribution narratives, things like TON for example. Telegram helps solve a big problem when it comes to Web3 user adoption and onboarding. GAMI now has 3 million daily active users because of Telegram and TON blockchain. So for me, those are some of the things that I think become really important motivators in all of this.
I believe that in the next 12 to 18 months, we will see over 100 million users joining Web3 because of the games that are happening on distribution channels like Telegram. So that’s one of the big trends to watch. So it’s very consumer-focused and of course that means that things like games, entertainment and also education are going to become very big narratives in Web3 in the next 12 to 18 months.
What are some of the biggest regulatory challenges facing Web3 companies today, and how can these challenges be turned into opportunities for market expansion?
I think when it comes to regulation, it depends on what markets we’re operating in, right? So our focus has been Asia and a little bit the Middle East. So the regulatory framework depends on where you are, right? And so we would say that because we don’t operate much outside of the US for now, we don’t have as much regulatory concern around what we do compared to maybe some of our peers.
Because in Hong Kong, Japan and Southeast Asia, where we operate a lot, that market in Asia has been quite friendly to Web3. The rules have been quite clear. And the focus has been on the regulatory side, mainly on more types of exchanges, for example on service providers and custodian providers, rather than on people who do web-3 games or make investments like us.
So, it hasn’t affected us that much. But obviously for our portfolio, especially the portfolio, the investment portfolio that has exposure in the US, obviously they’ve had to deal with some of these things and we have to see how we can support them on the legal side, on the board side, kind of thing, and then thoughts on that and also help them enter other markets.
As a pioneer of the open metaverse, how do you envision its evolution in the coming years?
The evolution of the metaverse is very much centered around digital property rights. We think that’s the main focus for us. And this is also the company’s mission. We don’t think the metaverse is around VR, AR and glasses. This is one way to access the metaverse. But that’s not the reason, that’s not the main way to engage with the metaverse. The main way to engage with the metaverse is to own digital property. So in other words, if you are on Web3, you have NFTsyou have tokens.
From our perspective, you’re already basically in what we call an open metaverse, where you have digital property and can start building on top of it. But it starts with your property and you build from there.
And we are already in the early stages of developing this. We think there’s a lot of activity going on there. If you look at, for example, Play to Earn Gaming like Axie Infinity or Pixels, for example, if you look at what’s happening with the NFT space on Mocaverse, these are growing ecosystems and more users are joining them. More people are being integrated because of this. And as far as we’re concerned, they’re already in the metaverse. They’re not just Facebook’s version of the metaverse. They are in the open metaverse, which is basically the Web2 metaverse.
What strategies do you recommend to drive consumer adoption and engagement on Web3?
I would say when it comes to adoption, it’s games and content. And content, we think, is probably the most important thing, because content is what you engage with. If you think about content in terms of distribution outcomes, like Game of Thrones and HBO. HBO may be the distribution outcome, but people won’t use HBO if they don’t have Game of Thrones. Content is king in this case. So we’re very focused on the content layer. We also need to make sure that distribution has users available to you. And that’s one of the reasons why we’ve made such a big investment in the TON ecosystem, because we believe that Telegram will help solve a lot of these distribution problems.
What strategies are you adopting or investments are you making to keep up with this type of trend?
For Animocathe philosophy of how we invest is a little bit different in the sense that we invest based on the kind of future that we think we want to build. So we’re very focused on being driven by investment strategies, by an ecosystem approach, rather than following an investment thesis. We create the investment thesis and then we invest.
And so this investment thesis is focused on gaming, education, and distribution. And so last year, we made a big investment in Telegram and the TON ecosystem. We’ve almost invested in over 150 gaming companies because we believe that gaming is going to be a big driver of that.
So we have over 500 investments in the space today, and we have three, of which over 150, in fact maybe 160 of them are in gaming. That’s probably our deepest portfolio to get through all of this. And of course, education is also a new area. So we’ve been actively investing. This year alone, so far, we’ve probably done over 70 deals. Not all of them have been disclosed. But to give you an idea, we’re basically putting our money where our mouth is effectively.
What do you think of the NFT market now? Will it rise again?
I don’t think we should wait for a bubble. I don’t think that’s the point. NFTs can be used in games, they can be used for intellectual property rights, they can be used for a lot of things, right? But at their core today, most NFTs, whether it’s a virtual land, or a crypto punk, or a Beople, right? What are they? Their status is, at this point, cultural capital, right?
In some ways, it’s not that different from owning a Ferrari, or a Birkin bag, or a Rolex watch. You don’t buy a Rolex watch every time, you don’t buy a Birkin bag, that says something about social status. So basically, what happens in this community building is that when you’ve generated a lot of value in the Web3 native ecosystem, you want to signal your social status like we do in the real world, based on the items that are representative of that generation and that ecosystem.
So in other words, if I make money or if I reach a certain status in Web3, I’m going to want an eight board, or I’m going to want a Cryptopunk.
So NFTs are currently doing about half a billion dollars in volume sales per month. So obviously it’s not as big as it used to be. But it’s also not right. So I think it is and I think it is and it’s also summer. Then, typically after the summer period when market activity picks up, you will see more volumes, trade and activity. I think this is also a seasonal thing. Typically this is true for all markets.
Can you give us feedback on your thoughts on returning to the stock market in the future?
So, first of all, when the journalist interviewed me, they asked me the question and said, “do you want to go public again?” And I said yes, because we are already a public company, right? We are just a list, we are already a public company, we have 2,000 shareholders by email. In a way, Animoca is almost like a DAO because we have to go through voting and everything that’s on our ledger. So, we want to go public, that’s a fact. But I said it will probably be in 2025 or 2026. So we’re not just in 2025, we’re somewhere in between.
And there is a lot of work we need to do. We need to domicile, we need to leave Australia, we need to decide which market we want to list in, we need to hire a consultant. So, there is still a lot of work that needs to be done. But it is true that we intend to go public.
When you open a company’s capital, it doesn’t happen in a month, it takes time.