Dialogue Kyros Ventures Co-founder and CEO: Axie is still the most respected Web3 builder in Vietnam

Interviewer: bayemon.eth, ChainCatcher

Guest: Zane, Co-founder and CEO of Kyros Ventures

Kyros Ventures was established in 2020 and is a venture capital firm based in Ho Chi Minh City, Vietnam. It is also the investment branch of the well-known Vietnamese crypto media Coin68, dedicated to incubating and investing in emerging technology, gaming, and crypto projects, while enhancing project visibility in Vietnam through its extensive partner and community network. Their goal is to become one of the leading investors in Vietnam and the entire South Asia region, driving the development of the entire industry through investments and ecosystem building.

Compared to investing purely for profit, Kyros Ventures seems to emphasize "education," aiming to internalize news from the entire Web3 world into content that better fits the Vietnamese style, thereby expanding the group of crypto participants in Vietnam and forming a unique Web3 ecosystem in Vietnam.

According to RootData, as a pioneer rooted in Vietnam that continuously incubates and discovers early-stage projects, Kyros Ventures has provided over $160 million in funding to projects at the seed and private placement stages, including well-known projects like Axie and Ancient8.

Investment landscape of Kyros Ventures, data: RootData

As a gateway for international crypto projects entering the Vietnamese market, what unique advantages does Kyros Ventures, born from crypto media and thriving in venture capital, possess? What considerations lie behind their investment strategies focused on gaming projects while also paying attention to DeFi and infrastructure? How does the Vietnamese crypto market, primarily centered around gaming guilds and the GameFi ecosystem, respond to the current bear market? To discuss these issues, ChainCatcher invited Zane (Thuat Nguyen), Co-founder and CEO of Kyros Ventures.

Zane (Thuat Nguyen)

As one of the investors in Axie, Zane mentioned that local chain games and gaming guilds in Vietnam are trying to transform to cope with the bear market. Although Axie is not as popular as in previous years, it remains the most respected Web3 builder in Vietnam and is striving to evolve from a game into a complete ecosystem.

1. ChainCatcher: Could you briefly review the original intention behind the establishment of Kyros Ventures? The core team of the company mostly comes from Coin68; what unique advantages does Kyros have in creating such an influential media outlet?

Zane: Before the ICO boom in 2017, we were a media company. The purpose of establishing the media was to educate and promote concepts related to this emerging industry in Vietnam, a country where blockchain knowledge was not widespread. Research data shows that about 30% to 40% of people in Vietnam hold digital currencies. Although the holding rate is still low, it has progressed rapidly. Our initial mission was "education," which was the starting point for everything. The founding team consists of three friends, and by 2020, we established Coin68.

Perhaps due to the immaturity of the industry itself and the major bear market in the cryptocurrency market in 2018, our team has been fluctuating in the market. But fortunately, before the DeFi Summer began in 2020, we established the investment department of Coin68, which is now Kyros Ventures.

The main goal of Kyros Ventures is to leverage Coin68 to focus on early-stage investment projects and introduce them to the Vietnamese market, developing their communities and users in Vietnam. Some projects have also formed their own Vietnamese teams with our support. We are now partners for many projects in the Vietnamese and South Asian markets, and so far, Kyros Ventures has invested in over 100 projects.

Our current investments are primarily focused on gaming, DeFi, and infrastructure. 80% are international projects, and when these projects enter the Vietnamese market, they choose us as their most trusted local partner. We build bridges between many local enterprises and them, promoting their participation in business development activities hosted by local enterprises, and Kyros also organizes themed events for them.

We will hold a grand event in Vietnam called "Blossom Week." The event will gather some well-known projects from the United States, with an expected 3,000 participants.

2. ChainCatcher: Vietnam is currently one of the fastest-growing crypto markets, and Kyros Ventures is also a gateway for many international projects entering the Vietnamese market. What impact and transformation does Kyros hope to achieve through project investments?

Zane: Kyros is a venture capital company, so first and foremost, we aim to diversify our investment portfolio as much as possible. We hope to seize market opportunities and become a star in South Asian venture capital based on free network space.

At the same time, I believe the main goal of venture capital today is not just to invest in projects and profit from them; we hope to build a robust ecosystem in Vietnam. Especially in terms of team development, we have grown from three people to over 90 now, and more and more people want to join Kyros. Members of the Kyros team have also started their own projects and become founders. Many of the project teams we collaborate with in the future have founders who previously worked at Kyros and were inspired by the culture and style of the Kyros team to start their own ventures. This is what I am most proud of so far, and I will continue to work hard because this is a long-term goal I set when building Kyros and Coin68.

3. ChainCatcher: Kyros Ventures is dedicated to incubating early-stage projects. What factors and key indicators do you pay more attention to when evaluating potential investment opportunities?

Zane: I cannot confidently say that our team has the best investment philosophy; everyone has their own preferences.

First, we generally prefer early-stage projects, and since we also localize, we will look at whether their budget can cover the entire plan to enter the Vietnamese market and what we can do for them in Vietnam. Besides the project's model itself, we also care about the team and the Vietnamese market, as well as what we can do for these projects in Vietnam. This is one of the distinctions between us and other companies.

Second, the market changes so rapidly that each narrative or project may quickly disappear in a short time. Therefore, we pay attention to the founders of the team and the project team, assessing whether they have enough adaptability to cope with market fluctuations. This market is continuously innovating, and new things always emerge in the field. Therefore, to succeed, the team needs to make quick decisions and should be able to adapt to the market, which is why we always focus on the team's capabilities. We support founders with a "glue background" because they always strive for the project and possess broad knowledge and skills across multiple fields, enabling them to adapt to market changes.

4. ChainCatcher: About 44% of Kyros Ventures' investment portfolio is allocated to gaming projects. Why is there a particular preference for gaming? Is this strategy closely related to the local Web3 ecosystem in Vietnam?

Zane: Yes, the gaming industry is an important part of our investment portfolio, but this was not intentional. We have never tried to overly concentrate on one industry; I think this is just an investment preference that has formed inadvertently during our investment process.

First, most of our investments in the gaming sector have been successful, which motivates us to delve deeper into the gaming field. Our team is skilled in gaming and familiar with the gaming industry, so it has gradually become a favored industry for us, and we have enough experience to collaborate with gaming founders.

Second, from the user's perspective, we believe that gaming is an easier way to enter the crypto space. If users want to learn about crypto through other means, it may take many years, while through gaming, they can gain a brand-new experience in just a few months. Although the underlying technology of blockchain games is blockchain, users do not need specific knowledge to engage with games. Once they earn from games, they will proactively learn how to use wallets. This is a very natural entry process for users, which is why I say gaming is an easier way for users to enter the crypto world.

We have indeed seen many new users in Vietnam who learned about decentralized finance (DeFi) through some Play-to-Earn games before understanding cryptocurrencies. This is how they began to engage with Web3 and how they got involved in the gaming industry. Therefore, in 2021 and 2022, we made significant investments in the gaming sector.

5. ChainCatcher: Kyros Ventures has also invested in Axie. How do you view Axie's performance in recent years and the changes it has brought to the youth in Vietnam and South Asia?

Zane: I believe every developer in the Web3 gaming field should respect Axie because they are the pioneers of this entire wave. Even if people's views on games or Web3 games differ in the next two years, Axie should still be respected.

We still have a very positive outlook on Axie's model because Axie excels in user onboarding. I am not saying that the Play-to-Earn model is sustainable; it is merely a user onboarding strategy, a marketing strategy, and the project itself has its own lifecycle. On a higher level, Axie has done an excellent job in spreading Web3 knowledge; its influence in the Philippines is greater than in Vietnam, and many users learned about Axie and had a certain understanding of it even before they had bank accounts.

In Vietnam, we have also incubated some gaming communities and gaming infrastructure, and Axie has played an important role in this community. There are many touching stories within this community. I know a girl who loves playing Axie; she plays games with her mother and participates in many Axie events. Some of my relatives, who haven't even graduated from high school, learned how to use wallets and how to send and receive tokens through Axie. They started to understand concepts like blockchain and decentralization through games, and their interactions with MetaMask and Web3 wallets exceed their interactions with their bank accounts.

Therefore, I believe Axie has sparked a "movement." It has created a sensation in the entire field and became the focus in 2021. Now, the Axie team continues to expand; they are not just a game development team but a complete gaming ecosystem, even participating in some infrastructure projects, constantly expanding their influence and ecosystem, which makes me happy. In Vietnam, Axie remains the most respected Web3 builder.

6. ChainCatcher: Gaming guilds in Vietnam are also very developed, but as the entire market gradually declines, GameFi projects are also affected, and their popularity has decreased. What strategies might gaming guilds like Ancient8, which you are familiar with, adopt to cope with the crisis during the bear market?

Zane: Everyone knows that every game starts with a scholarship model, but the scholarship model is difficult to maintain, especially during market downturns when users will continuously drop off, and scholarships will eventually fade away. I think scholarships may still exist now, but only at a competitive level, no longer as a broad Play-to-Earn income.

It is worth noting that most projects are now striving to adapt to the changes in the entire Web3 world; they have to change their models and must begin to build independently. For example, Axie has already shifted its direction from a platform to an entire gaming system, aiming to provide infrastructure and services for game studios and independent developers, trying to bridge the gap between Web2 gamers and Web3 games, teaching Web2 players the new concept of ownership, which is also Axie's mission. This mission was previously achieved through the scholarship model. Now, it is being realized through software development and participation in platforms. It is not just Axie that is changing; every project is striving to adapt to the surrounding changes. I believe at least all projects have not given up, and they should perform well in the next bull market.

7. ChainCatcher: What is Ancient8's current profit model?

Zane: Ancient8 is currently developing software and providing infrastructure software. They are offering different onboarding tools for games to avoid user attrition. Recently, they launched a platform called Space3 to provide Web3 gaming loyalty rewards and interactions, which will allow users to discover different gaming projects and engage and learn during their Web3 gaming journey. This is Ancient8's first project, and they are trying to leverage their advantages in Vietnam to establish more interactions between games.

Ancient8 has the best distribution channels and content creators in all of Vietnam and even South Asia. Vietnam, as an emerging market, has unique advantages; they have the most suitable user base for GameFi projects and the best driving force compared to other similar projects. The gaming industry is indeed somewhat sluggish during the bear market; although many games are still in development, after one or two years of accumulation, only a very few will successfully launch. Ancient8's model has also changed as a result; the team needs to continuously adjust itself to adapt to the development trends of the entire industry, to build the right products, provide the right tools for game developers, and enable players to benefit in the Web3 space.

8. ChainCatcher: What kind of soil has Vietnam provided for the birth and growth of phenomenon-level games like Axie?

Zane: This question is difficult to answer. I believe Vietnam is not the largest market for GameFi; it can only be considered an emerging market. For such markets, Web3 gaming projects have the best effects. Because for emerging markets, gaming guilds have communities, content, and ways to make it easier for gamers to access Web3.

I believe guilds have found the "most developed roots" here, as they play the role of providing liquidity, which will become a liquidity provider for education and the entire gaming space.

9. ChainCatcher: Besides investing in GameFi projects, Kyros Ventures also focuses on DeFi and infrastructure. Is there a deeper consideration behind this layout?

Zane: The DeFi sector is developing very rapidly. We do not have specific internal metrics to evaluate DeFi projects. In my view, the most important thing is whether their solutions have scarcity in the entire field and whether they can fill existing gaps. In other words, whether there are functionalities that are still unachievable in certain areas.

What role the project plays in the entire ecosystem is an important consideration for our investments, and we also need to consider the timing of the market. Some projects may have innovative models, but it may still be too early for investment.

Currently, we are very much looking forward to seeing some DeFi or infrastructure projects with better onboarding processes and simpler user interfaces, enabling new users to easily understand and use them. However, in reality, learning to use DeFi is not easy, and the mass adoption of DeFi takes longer compared to the gaming sector. Therefore, we hope to see some DeFi or infrastructure products aimed at the general public or projects aimed at attracting non-crypto users.

10. ChainCatcher: The Vietnamese government is actively working to establish a new legal framework to regulate business activities related to digital currencies. What steps will Kyros Ventures take to address regulatory risks?

Zane: Currently, in Vietnam, cryptocurrency and blockchain technology are still in their infancy in terms of legal aspects, but the government encourages startups to utilize blockchain technology to build products and apply them in more transparent, efficient, and valuable models to improve productivity and effectiveness.

Although Vietnam's legal framework may still need improvement compared to other countries, it remains open to innovation and actively building things with community and social value.

We are always committed to bringing benefits to the entire Vietnamese community. Therefore, we hope to receive government support in the future. But regardless of whether we receive government support, we will continue to do the right thing for the community.

11. ChainCatcher: Regarding future expectations, will Kyros Ventures change its overall investment direction in the next cycle, and are there any promising new fields or projects already identified?

Zane: This year, Kyros Ventures will establish its own media department and provide marketing solutions to support some projects entering the Vietnamese market.

In addition, we have a venture capital department dedicated to discovering early-stage potential project teams. This year, we also plan to launch a research lab under Kyros, aimed at exploring and developing innovative products to try different topics in the Web3 field. This project is currently under development and has not yet been officially launched.

We have been building our network and ecosystem. We believe the most valuable asset is our team; as long as we have a sufficiently excellent team, Kyros can continuously shape and develop and always adapt to market changes.

12. ChainCatcher: Under the influence of different local regulations, policies, and cultures, each country will form its unique Web3 ecosystem. Please briefly outline the general situation of the crypto market and users in Vietnam.

Zane: I believe that Vietnamese users are indeed somewhat opportunistic; they focus more on trading and investing rather than long-term holding. Vietnamese users tend to try new projects and opportunities; they not only lead in holding cryptocurrencies but also have high participation in the DeFi sector.

The opportunistic nature of Vietnamese crypto users and their enthusiasm for quick actions can create better network effects. Once the proportion of people in Vietnam who understand cryptocurrencies increases, the dissemination of related knowledge will become easier. If a person's social circle has one or two friends who understand digital currencies and are willing to answer questions, their world can change dramatically because of the presence of those one or two people. Similarly, if an entire country becomes interested in a certain concept or technology and gradually understands it, it will undoubtedly lead the development of the entire industry.