Starting from the deconstruction of YGG, exploring five different types of blockchain game guilds
The similarities and differences of the game guild system ecosystem.Original Author: CyborgDoggie
Compiled by: Katie/Planet Daily
Recently, many so-called "guilds" have emerged, believed to be able to compete with the leading blockchain game guild YGG, but in reality, the management and operation of each guild vary significantly.
This article provides a detailed analysis of YGG, clarifying the differences between various guilds and predicting the future market positioning of guilds, hoping to bring some insights to Web3 developers and investors.
1. Internal Organizational Structure of YGG (YGG Treasury + YGG SubDAO)
Community Management
YGG DAO is composed of scholarship players, ambassadors, and community operation members.
Scholarship players are generally ordinary members of the community, but as guild activities and the gaming scene develop, some skilled players may form professional esports teams, which will be detailed later. Ordinary players will learn games and mining under the guidance of coaches. Ambassadors mainly refer to staff who recruit and train athletes in different regions. The work of community managers mainly involves managing the community through rules and regulations, organizing community activities, voting, etc.
DAO organization differs from centralized management systems; DAOs require active contributions from members. Therefore, it has clear incentive mechanisms, referred to as the "upgrade system" in YGG, with rewards coming from four responsibilities: leadership, guild activities, competitions, and participation in voting. Guild activities include regular competitions in games and daily community activities; tournaments refer to large-scale competitions that deviate from the norm, with rewards aimed at esports players, event organizers, hosts, etc.
DAO members holding YGG tokens enjoy governance rights and income from business activities related to game assets' rights and leasing. If members participate in SubDAOs, they also need to engage in the construction of the DAO and gain privileged benefits from SubDAO tokens.
SubDAO
Although cryptocurrencies facilitate global user accessibility, guild management has not fully transcended geographical boundaries due to language limitations, which is why SubDAOs exist.
SubDAOs are subordinate "departments" derived from YGG DAO, focusing on certain regions or branches of comprehensive gaming projects. YGG SEA is a SubDAO focused on the Southeast Asian gaming community. In addition to organizing community activities (like the main DAO), SEA also assists in localizing industry associations, bridging regional and language barriers, and adding value to the main DAO.
The main tasks of SubDAOs are: recruiting players, training players, localizing games, and integrating talent into the DAO organization:
Organizing activities in specific fields;
Operating and regulating small teams;
Adapting to different management styles in different regions and adjusting strategies in a timely manner;
Recruiting and retaining local talent (mainly "ambitious and energetic young people");
Managing according to rules and regulations;
Striving to maintain stable member income;
Encouraging members to contribute to "ownership";
Issuing region-specific SubDAO tokens.
Localization can also maximize return on investment by binding players and focusing on their needs, habits, and earnings, which can better transcend regional and cultural limitations.
To ensure player experience and gather useful user feedback, SubDAOs will also:
Exchange popular game resources and information from different regions;
Quickly and quantitatively collect player information and feedback, bridging the gap between players and developers;
Allow players to earn additional income, such as hosting local esports competitions, providing insurance, loans, etc.
YGG Treasury
The department responsible for asset management in YGG DAO is called the YGG Treasury, which is responsible for purchasing game assets, asset allocation plans, and promoting asset usage. The assets of YGG DAO not only include those raised in the early stages but also profits obtained through interactions such as staking and leasing game assets.
They not only study each game and teach ordinary players from arbitrage markets how to profit but also evaluate the value of game projects in the early stages of seed investment.
YGG Token
The YGG token is an index of all SubDAO tokens, integrating the token income generated from each SubDAO's assets, the value and earnings of all NFT assets, and the growing user base. With the growth of the NFT gaming economy, through leasing, selling, other forms of benefits (incubation or acquisition airdrops), and esports income, this will have a multiplier effect on the value of YGG.
The value of the YGG token comes from its revenue from ownership of all SubDAOs, with the treasury containing a portion of the assets (NFTs and tokens) from each game in the SubDAOs, while the rest is earned by the community and invested in games. The YGG token reflects the ownership ratio of each tokenized SubDAO as follows:
A = % Axie SubDAO (YGGAXS) + % Lok SubDAO (YGGLOK) + ……+ % Zed SubDAO (YGGZED)
2. Traditional Guilds vs. Crypto Guilds
The Relationship Between Players, Guilds, and Developers
Gold farming is a common demand among players in traditional games, but it has been criticized by laws, game developers, and players.
From a legal perspective, the regulation of virtual assets is inadequate. Gold farmers engage in large-scale transactions but are not subject to tax systems. Automated bots excessively produce game assets, disrupting the game economy and infringing on the interests and intellectual property of game developers.
For game developers, while some mobile game manufacturers collaborate with industry associations to promote their projects and increase active user numbers, in the gaming industry, development teams often block some plugin users and ban gold farming (account situations are more common, as gold farming can affect the overall balance of gameplay and even directly damage the ecosystem).
In the game Diablo 3, in-game gold was swept away by a large number of gold farmers, leading to extreme devaluation, making it impossible for ordinary players to obtain certain game assets. Developers and manufacturers can only ban some accounts and limit online gold farming advertisements to reduce black market exposure.
From the players' perspective, gold farmers undermine the fairness of competition and gaming experience, prompting them to unite the entire community to wage a "cyber war" against gold farmers, such as harassment and banning accounts suspected of gold farming.
Returns for Guild Players
Traditional gaming guilds are often referred to as "sweatshops," forming a long profit chain from gold farmers → factory owners → intermediaries → plugin creators → game managers, where the interests of gold farmers are most easily exploited. In the early days of the dark industry, some gold farmers viewed free-to-play games as the best option; they did not require salaries as long as the gold farming factory provided food and accommodation. However, the reality of the working environment was quite harsh. Around 2000, small gold farming factories in China had only about 3-10 machines, and gold farmers had to take shifts day and night. In the previous plugin era, the number of gold farmers often exceeded the number of computers, playing 24 hours a day. Dormitories were small and messy, housing 8 to 10 people, with no furniture other than computers. They stared at electronic screens for up to 12 hours a day in a smoke-filled environment, performing extremely boring repetitive tasks, with a basic monthly salary of only about 800 yuan.
The emergence of YGG hopes to change this situation. Guild members hold governance tokens that allow them to vote, suggest, and participate in the DAO. In addition to playing games, members can also take on other roles in the community, such as community operators, trainers, and volunteers. From professional gamers to newcomers with scholarships, everyone can receive their due rewards.
Active Secondary Market
Crypto-related guilds have a strong collaborative relationship with players and developers. On one hand, guilds invest in the primary market, helping projects grow and increasing their traffic; on the other hand, guilds delve into the gaming field, recruiting and training players, hosting competitions, and promoting games, organically integrating player communities with game projects.
The close ties of interests among the three parties rely on active secondary market trading. Traditional games are priced and monopolized by officials, and players, as consumers, do not own game assets. In contrast, when games are combined with NFTs and cryptocurrencies, anyone can manage their assets as buyers and sellers in the secondary market. Many user-generated content tools in games encourage extensive innovation beyond officially released content. With a secondary market, players can independently and freely evaluate NFTs and provide liquidity, with early players becoming core participants in obtaining game rewards and remaining stable in the project, while new players enter by purchasing avatars or merchandise.
Economic Positioning of Guilds
Three elements in the ecosystem are directly related to YGG: seed investment, secondary market (purchasing game NFT assets), and scholarship programs (training and operating player communities). Do not view YGG as a gaming guild, but rather as an investment institution focused on cryptocurrency/non-crypto games, with very close relationships with both players and developers, providing not only economic support for projects but also guidance and community contributions.
So, what will future guilds look like?
The evaluation criteria for guilds have shifted from the accumulation of individual income to the balance sheets of companies.
Distribution Channels
While Web3 allows everyone to publish their own projects, it also requires recognition to gain fame, and guilds are definitely one of them. YGG follows three criteria when selecting games: there are NFT assets on the plot; the game has issued tokens; and it has "play-to-earn" mechanisms such as player-versus-player (PVP) rewards and token staking. In other words, the games YGG invests in have adaptive ecosystem designs suitable for the P2E model, comparable to core gameplay. When they promote games on social platforms, guilds will become distribution channels and conduct reliable assessments of investment value and playability.
Esports Tournament Organizers
In hosting global esports events, guilds will act as sponsors, responsible for planning, organizing, broadcasting, connecting social platforms, players, arenas, etc. Currently, the competition among crypto game projects is still at the regular competition stage, and the commercial potential of esports has not yet been realized, as there are no strong competitive games on stage. Once shooting games (FPS) and multiplayer online battle arena games (MOBA) are in place, SubDAOs will spread globally, and guilds will become the best organizations for esports teams and initiate global esports tournaments.
Mediating Disputes
In the operation of games, modifications to attribute points or mechanics often bring different experiences to players. Since specific SubDAOs of guilds can communicate officially with developers, the situation where players can only express dissatisfaction on social media outside of official surveys will soon improve.
Some official restrictions aimed at protecting the balance of the game ecosystem affect a large number of innocent players, so guilds may vote and negotiate with game offices to resolve conflicts. Guilds can also appropriately restrict players' gaming behaviors. Players must adhere to certain rules when using guild assets, as excessive gold generation and account abuse can harm game balance.
Professional Gaming Teams
As projects refine according to game types, players will form different tribes based on gaming preferences and skills, possibly leading to guilds of different organizations, such as SubDAOs. For example, YGG is a comprehensive venture capital firm focused on integrated game investments, Guild B focuses on professional video games, while Guild C is dedicated to guiding traditional players' transitions.
3. Other Cryptocurrency Game Guilds
Most cryptocurrency game guilds provide guidance and scholarship services for players, with some forms being DAO organizations and publishing platforms. However, very few guilds can fully replicate YGG's internal operations, as most guilds develop in specific directions due to short development times and insufficient resource capabilities.
Well-Structured Guild: Merit Circle
The internal structure of Merit Circle is basically consistent with YGG, divided into a main DAO and SubDAOs, with two mature game SubDAO cases: the blockchain game projects Axie Infinity and Vulcan Forged. The ownership of assets and profit distribution is even more detailed than what YGG has published.
Referring to the treasury in SubDAOs regarding how to allocate scholarships, Merit Circle has customized different treasuries for different game mechanisms and provided proven examples from Axie Infinity. Additionally, Merit Circle participates in different games in various ways, acquiring land in the blockchain game Big Time (future operations have not been disclosed) and investing in the early stages of the blockchain game Cyball, forming strategic partnerships.
Merit Circle gitbook
Incubator: GuildFi
GuildFi has a treasury and DAO management internal organization similar to YGG, and they have invested in some games in the early stages, transforming themselves into game incubators and gaming enterprises.
GuildFi intends to establish closer connections between players and games by recruiting sub-guilds and implementing game verification mechanisms. Instead of top-down monitoring of players, they integrate these informal local guilds by providing membership and more organized support, effectively expanding their influence and player community support.
Moreover, game proof-of-play rewards incentivize some individual players or asset owners who may be too busy to participate and voluntarily join the DAO but collect game items and occasionally engage in gaming. By granting authorization and providing experience points, individual players can level up and earn additional bonuses, even if they do not participate in any scholarship programs. For players who hardly need to earn money through gaming, this lifelong gamer certification involving a sense of achievement will keep them motivated to continue playing.
GuildFi White Paper
Lending Protocol: Metagame Guild (MGG)
The description of MGG token usage in the white paper is very limited, spending a lot of space introducing Axie Infinity and YGG. Although it is strange to present the achievements of other successful projects as their promotional means, the lending protocol of Metagame Guild (MGG) is indeed impressive.
In addition to purchasing a large number of NFT game assets across various projects, MGG DAO also encourages funders to lend their idle assets in the treasury to maintain the sustainability and growth of the treasury, with funders or investors receiving deposit income. This lending protocol makes MGG more like a lending platform, targeting users who already own their game assets but are too busy or inexperienced to maximize their NFT profits.
Gaming Guild CGU
Some guilds do not wish to expand their influence in the gaming industry or collaborate with game projects; they simply hire players from around the world. Perhaps they lack criteria for selecting games or just want to increase their community, focusing on Axie Infinity without acquiring other game assets, Crypto Gaming United (CGU) is one of them.
Although there are over 20 sub-communities distributed across different countries, with Discord users reaching 90,000, only 5,000 people have earned income through CGU's scholarship. They have also designed a main DAO and SubDAO structure in their white paper, but apart from Axie Infinity, they do not indicate involvement in game incubation or asset collection, so the DAO's organization does not affect the treasury of the SubDAO.
CGU Official Website
GameFi Platform
From my personal perspective, GameFi is a platform rather than a player organization; it is a kind of guild version of Steam, emphasizing collaboration and showcasing of game projects rather than deliberately dividing players into different tribes.
GameFi is a comprehensive GameFi hub providing services for game studios, players, projects, and investors, targeting games on the BSC (Binance Smart Chain) and Polygon networks, and is the first market to allow cross-game trading of in-game items and NFTs. The GameFi ecosystem consists of gold unions, game launches (IGO), game aggregation (showcase and display portals), asset trading, and incubators.
GameFi Official Website
5. How to Differentiate Guilds as Investors?
Game Sensitivity
Currently, some guilds are continuously expanding their partnerships, but if we closely observe these projects, we will find that many games have completely different gameplay. From a gameplay perspective, some games lack competitiveness and playability, merely engaging in pure gambling behavior. Although these projects are very common in the GameFi field, after several collapses, some players have realized that without core gameplay to retain core players and attract reinvestment, the liquidity of game tokens will dry up.
Taking the blockchain card game Splinterlands as an example, its daily active users far exceed those of Axie Infinity, but the NFT trading in the past month was less than 1/100 of Axie Infinity. If there are limited transactions and disproportionately large numbers of logged wallet addresses, how can we ensure there are real players in the game rather than bots?
Despite the strange user data, some guilds are still promoting the Splinterlands card game.
Dappradar's Daily Active Users Chart for the Past 30 Days
Dappradar's NFT Trading Data for Axie Infinity Over the Past 30 Days
Dappradar's NFT Trading Data for Splinterlands Over the Past 30 Days
Comparative Advantage Based on User Base
Guild participants exhibit a clear regional clustering effect. For example, YGG SEA captured the Southeast Asian market during the pandemic when people lost their jobs and had free time to learn how to make a living through gaming. The large labor force, low average wages, widespread mobile device usage, and high user acceptance all interacted to contribute to YGG's success. With adaptable gaming resources and user bases, similar achievements will also appear in parts of South America, Africa, and East Asia.
Due to cultural and gaming translation requirements, there are characteristics of localization, with many participants being introduced by local gaming KOLs or friends, and competition for users will quickly become a prominent topic for guilds.
On this basis, YGG has the majority of users in Southeast Asia (mainly the Philippines), while GuildFi will encroach on some users in Thailand, both having geographical advantages and independent user markets.
Merit Circle may not be as open to users as local guilds in developing countries, but it still has first-mover advantages and experience in SubDAO operations; CGU's founders are from Australia, with users distributed worldwide, which may dilute its localization efficiency and require assistance from many localization teams; while platforms like GameFi may expand their online communities by breaking geographical and cultural barriers.
Additionally, guilds should take on the responsibility of enriching their gaming resources, as a single game may limit the development of a diversified player ecosystem. Most guild members play Axie Infinity, and some guilds even require all players to play Axie Infinity, which is an abnormal phenomenon.
6. Conclusion
YGG did not emerge by chance. Its co-founder Gabby is a game developer who founded his mobile game company, Altitude Games, in 2014 and then studied how to avoid the negative impacts of smart contracts and cryptocurrencies on the gaming industry. Such founders have profound insights into both the gaming industry and the cryptocurrency market, but very few of the many gaming guilds that have emerged today have relevant backgrounds.
Cryptocurrency-related gaming projects attract a lot of attention, but game development and community management require a deep understanding of this industry. As a gaming guild, there are limitless opportunities to hire players and witness the emergence of new games, but what truly matters is having the vision and insight to lead the development of the blockchain gaming industry.
