Fun

‘FOMO’ once drove GameFi funding, but VCs say it’s different this time

News Feed - 2024-04-17 08:04:03

Brayden Lindrea41 minutes ago‘FOMO’ once drove GameFi funding, but VCs say it’s different this timeDuring the last bull run, VC firms were more concerned about missing out on the hype, but they’re taking a much more measured approach this time.155 Total viewsListen to article 0:00InterviewOwn this piece of crypto historyCollect this article as NFTJoin us on social networksVenture capital firms haphazardly piled into blockchain gaming projects during the last bull run but are taking a much more mature and sustainable approach this time, according to industry executives.


“[It was] insane,” Shi Khai Wei, founder of cryptocurrency-focused VC firm LongHash Ventures, told Cointelegraph, adding that some GameFi projects were receiving up to $100 million with only a few team members and some lofty promises.


Keiran Warwick, founder of GameFi studio Illuvium, who recently raised $12 million in VC funding, said he saw the same thing, with much of the investor fervor then driven by a fear of missing out (FOMO).Illuvium confirmed it secured a $12 million Series A funding round on March 26. Source: Illuvium.io


“If someone’s speaking to you and they pitch a game that four or five other firms have invested in, you think, well, they’ve done their due diligence, and they know what they’re doing, so we’re just going to follow suit,” said Warwick, adding:“You get this FOMO and traction purely because people don"t want to miss out and they think, well, others are in, so we"re in.”


But VCs have since expanded their checklists and want to see gameplay, artists, developers, security audits and much more, Warwick noted.“The amount of scrutiny that VCs are putting projects under now versus then is huge.”


Wei attests to this and says a longer checklist actually helps his firm weed out the not-so-legitimate projects.


LongHash has been more invested in GameFi this time as the top-tier projects have launched or are close to launching and are priced at much more reasonable valuations, Wei explained. His firm has invested in Yield Guild Games, Guildfi, Snack Club, Moonveil and Ignite Tournaments.


Wei said GameFi has become a focus area for LongHash Ventures in recent months and hopes the firm will be 6-12 months ahead of the curve when the next wave of FOMO kicks in.Why #web3?

Network effects are the true underlying force of web3 and it also leads to cross-game collaborations.

“#Gaming, art, and decentralized finance all connect together [in web3],” Robby Yung (@viewfromhk), our CEO of investments, said to @lloydWahed from @manasearchuk. pic.twitter.com/JzUVndu60I— Animoca Brands (@animocabrands) April 15, 2024


Gabby Dizon, CEO of Yield Guild Games told Cointelegraph that VCs are now also more aware of the “cyclicality” of cryptocurrency markets, as many of them hamstrung themselves by investing at the peak of the last bull market.


Related:Crypto VC funding breaks 2-year downturn in Q1 2024


It comes as Warwick’s Illuvium.io secured $12 million in a Series A funding round in late March, led by King River Capital, Arrington Capital, and Animoca Ventures.


Among the other GameFi projects to have received funding in recent months are Helika Games, Parallel Studios and Elixer Games in $50 million, $35 million and $14 amounts, respectively.


More than $2 billion was invested into GameFi projects in Q4 2021, but funding amounts fell for six consecutive quarters after the first quarter of 2022, according to RootData.


However, the trend was finally bucked in the third quarter of that year, and the GameFi sector has seen three consecutive quarterly increases since then, including the last quarter, which tallied $268 million.Source: RootData


Magazine:Web3 Gamer: Games need bots? Illivium CEO admits ‘it’s tough,’ 42X upside# Funding# Investments# Adoption# DeFi# Web3# NFT# Cryptocurrency Investment# GamingAdd reaction

News Feed

ZoidPay to Revolutionize the Web3 Landscape With $75M Investment Commitment From GEM Digital
ZoidPay to Revolutionize the Web3 Landscape With $75M Investment Commitment From GEM Digital press release A $75M financial commitment is set to establish ZoidPay as the go-to open
Ethereum Co-Founder Vitalik Buterin Downplays Ethereum PoW Fork, Hopes It ‘Doesn’t Lead to People Losing Money’
Ethereum Co-Founder Vitalik Buterin Downplays Ethereum PoW Fork, Hopes It "Doesn"t Lead to People Losing Money" Ethereum co-founder Vitalik Buterin recently discussed what he think
VanEck says Bitcoin could hit $2.9 million per coin by 2050
Alex O’Donnell6 hours agoVanEck says Bitcoin could hit $2.9 million per coin by 2050Bitcoin layer 2s could be collectively worth around $7.6 trillion, the report added.2072 Total views4 Total sharesListen to article 0:
Central Bank of Peru Will Develop a Digital Currency
Central Bank of Peru Will Develop a Digital Currency The Central Reserve Bank of Peru, the Peruvian central bank, is planning to develop a central bank digital currency (CBDC) like
Marcel Pechman2 hours agoChainlink (LINK) pumps 26% in 6 days — Is there room for more?The LINK token continues to strengthen as professional traders and enterprise solution clients enter Chainlink’s ecosystem.2608 T
Brayden Lindrea6 hours agoMicro $3 Bitcoin miners won’t make bank, but that’s not the point: InventorsPocket-sized Bitcoin miners are a stand against the “secrecy and exclusivity” of the Bitcoin mining industry,
Turner Wright11 hours agoTornado Cash lawsuit judge sides with US Treasury in motions for summary judgmentCompeting motions for summary judgment saw a federal judge rule the U.S. Treasury was within its authority to decl
Apple is future-proofing iMessage with post-quantum cryptography
Tristan Greene6 hours agoApple is future-proofing iMessage with post-quantum cryptographyQuantum computers pose an outsized threat to status quo cryptographic solutions.1096 Total views4 Total sharesListen to article 0:0
Zhiyuan Sun8 hours agoChina launches blockchain-powered data exchangeThe platform will facilitate the buying and selling of Web3 data among enterprises, with Alibaba Cloud and Huawei among the companies to participate.11
LUNA Investor Arrested for Knocking on Do Kwon’s Door After Losing $2.4 Million in Terra Crash
LUNA Investor Arrested for Knocking on Do Kwon"s Door After Losing $2.4 Million in Terra Crash A crypto investor has been arrested after knocking on Do Kwon’s door following
Sushiswap Founder Reportedly Exit Scams as Sushi Token Price Tanks
Sushiswap Founder Reportedly Exit Scams as Sushi Token Price TanksThe anonymous founder of Sushiswap has reportedly exit scammed after converting all of his sushi tokens to ETH on S
Digital collectibles market sees 45% decline in Q2
Ezra Reguerra56 minutes agoDigital collectibles market sees 45% decline in Q2CryptoSlam data shows a significant volume drop for NFTs from Q1 to Q2, with digital collectibles set to hit the lowest monthly transactions si