[Ep #8] THE HOTTEST IN CRYPTO?

Unveiling our latest episode with @ammar_zaeem, CEO & Founder of @Revolving_Games! 

We explore the vision and journey of Revolving Games since 2020, their community growth, the impact of their powerful cap table, partnering with Web2 IP for Web3 gaming, and Ammar's top advice for aspiring founders... 👀

Timestamps : 

00:00 Introduction and Background

01:23 Amar's Journey into Crypto &

08:43 Origin Story of Revolving Games

12:32 The Importance of NFTs and Building Utility

15:04 Building a Transparent and Responsive Culture

18:15 Ammar's Management Skills & Internal Structure

23:00 Building Multiple Games and Communities

26:55 Defining Success in the Gaming Industry

29:03 The Value of VCs and Token Unlocks

31:50 Building the Arcade Network and Infrastructure

36:00 On-Boarding Users W/ Competition

38:36 Challenges of Onboarding Web2 Users to Web3

42:51 Token Unlocks and Valuations Controversy

57:44 Building Demand & Revenue Sources for Growth

1:02:45 Outro

Don't miss this insightful conversation! 🎧

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Youtube : https://youtube.com/@DealFlowPodcast

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[Disclaimer: It's important to note that the information provided here does not constitute financial advice. The views and opinions expressed herein are purely personal and do not in any way represent or reflect the official stance or viewpoints of the individuals company]

#RevolvingGames #Web3 #Gaming #podcast

Transcript

Speaker 1: 0:00

Welcome to another episode of the DealFlow podcast. I'm your host, mixed Race Magic, chief Editor at BSCN, and with me today is a very, very special guest in the form of Amar, who is CEO and founder of Revolving Games, one of the leading blockchain gaming companies in the entire space, with an incredible roster of backers that we'll get into a little bit later, One of those backers being, of course, the Animoca Brands, which brings me on to our regular guests Mehdi, who is head of investment and partnerships at Animoca Brands, and Cam, who is not only the founder of BSCN but also manages a top tier crypto VC in MH Ventures. How are we all doing today, gents?

Speaker 2: 0:37

Very well, thank you thanks for the kind introduction I'm glad to hear it.

Speaker 1: 0:42

I'm glad to hear it. But before we get into the fun jazzy stuff, just a word to say this is a podcast. Nothing here is intended to constitute financial, legal or advice of any kind whatsoever. It's purely discursive. We're going to throw in opinions. We're going to discuss tokens, potentially asset prices. I know that we're already planning to talk about some of those major token unlocks coming this month. So please don't take anything we say too much to heart or too seriously. Nothing is financial advice. Just to clarify. But with that out of the way, I think we probably can dive into the exciting stuff, beginning with Revolving Games. Ammar, maybe you can just give a brief introduction of both yourself and your journey into crypto, and also maybe the origin story behind Revolving Games and where that whole sort of idea sprang up from.

Speaker 3: 1:39

Yeah, I'd love to. I mean, I often talk about this on different AMAs on Twitter, but just to give your audience a quick background, I've been in gaming for 14 years. Prior to that, I actually am 38. So I often say not too young, not too old, because I meet a lot of young entrepreneurs who are like just getting in their 20s and really, really enthusiastic about what they're doing in Web 3. But I started in 1997. Really enthusiastic about what they're doing in web 3, but I started in 1997.

Speaker 3: 2:10

So when I was 12 years old, uh, web 1.0, I I built my first website, started uh, with my brother and we started going door to door trying to convince people to make websites. It's the next new business card, as we would say. We finally found an entrepreneur that wanted to like bring his supermarket on online, and this is 97. He was very forward thinking and all the way in Lahore, well, islamabad, pakistan at the time, which is pretty insane. We did that. We made 600 bucks and I mean nobody was really used to doing anything online at the time over there in the country, so it didn't work out. We made money, was forced back to college, school and then fast forward. I got into college and I dropped out and started my first fund, and that was more again geared towards investing in the capital market in Pakistan, which is previously called KSC, now PSX. Ended up managing about $5 million in assets, and then dad got crippled when 2008 happened, so I call that my first financial winter.

Speaker 3: 3:22

Anyway, at that point took some time off, started thinking what we're going to be doing next, and my brother at the same time in peril was looking to work with a company that was a startup out of Lahore doing a few things in app development, and we thought that mobile was a no-brainer as a platform, but we believed in specializing. So we went laser-focused on building mobile games and, luckily enough, we bootstrapped the company and the first game we worked on was Fruit Ninja. So we did not develop Fruit Ninja. What we did is we built all the technology to take them cross-platform. Something that we see a lot in Web3 today is when all these chains are battling to bring products on board. At the time, blackberry, nokia, even Android and a lot of different Android platforms I'd say different mobile companies were trying to convince developers that had made scale or hit scale to bring their apps and games to their platforms. So we did that and that was what put us on the map.

Speaker 3: 4:34

We worked with some of the top tier gaming companies of the time. We worked with EA. We worked with Kabam Scopely, which is now arguably one of the fastest growing mobile games company in the world. We also, funnily enough, worked with Animoca in 2013. And that was the first game I actually produced. So what I did was I actually worked on that game, where I was essentially doing the production work the sort of semi-design and also worked on product and as a producer, where you manage the entire team. The game didn't do too well, but it was an incredible experience for me, and it was with an IP called Astro Boy. I don't know if you guys are familiar with it. I was quite familiar with it, so it was very exciting for me to work with that IP.

Speaker 3: 5:28

Anyway, fast forward. We ended up selling that company in 2017. We were always quite profitable, given Pakistan also has, you know, tax benefits where corporate is fully tax free in tech. Anyway, I'm going to stop shilling Pakistan, move towards the next step. So, anyway, I moved to the Silicon Valley at the time, moved to San Francisco, started Revolving Games in 2019. One thing in this period that happened was the company that acquired us went under, which was a positive and a negative. Negative in the sense we didn't get a full earn out, but the positive in that was we were able to recruit all the team back in our Pakistani studio and for five months I didn't know what I was doing. We were just spending our life savings on them, eventually, raised capital, got a great leadership together in the US, which was product focused, had, I'd say, built some of the largest gaming companies or work with some of the largest gaming companies at leadership positions. Accumulated I think I always talk about this they've generated over five point three billion dollars in the games they've worked on and it's a handful of games, it's not like 500 games that did that kind of revenue. We built that team. We initially got 12 million injected with us and eventually to like fast tracking to blockchain. We pivoted to blockchain in 21.

Speaker 3: 7:04

I often talk about the fact that animoka reached out to me in 19 talking about nfts and they called them non-fungible tokens at that time and I I literally said what the f are you talking about? So, uh, although I was a believer in blockchain, I I didn't understand NFTs at that time. I'm very transparent about it and now my thesis about NFTs is the kind of the new generation, the way they're immersed in digital ownership is just a no-brainer, and this seamless experience to ownership has to be there and it's getting better and better. But the emotional understanding and the emotional connection these young, uh people have is just unbelievable. Like if I, if I, had a billion dollars to spend on collectibles, I likely not be buying you know uh, 50 million dollar nfts. But we've seen that with the younger generation they would. They wouldn't buy a picasso, they would buy something digital. It's a very different mindset and a different world, uh, that we live in and that kind of inspires me to be one of the early guys believing in it, because it's a 10-year vision that we're after.

Speaker 3: 8:23

We're not trying to. We don't think that this is just. This market is just going to flip overnight. Uh, it doesn't happen like that. A few good games will change some elements to it, but it'll take time. But you have to have a long-term vision. So I'm going to pause there a lot of information I've thrown there and then you can ask me questions around it yeah, I mean, what an incredible introduction.

Speaker 1: 8:46

I have to say that, so I didn't know that you were one of the I suppose one of one of the infrastructure components or one of the early developers of Fruit Ninja. I think if that game didn't exist, then there are definitely some exams that I would have done better in when I was younger.

Speaker 1: 8:58

But I won't hold that against you at all, and also you know the experience working with you know, really, really high profile IP and stuff like astro boy and stuff like that. That must work absolutely wonders. Now that you're working in web 3, where you know pulling in some of the ip is just so, so important for adoption and stuff like that, I guess and I also wasn't aware that there was a pivot that took place in 2019 and the animoka had got in touch like, definitely that you've been, you've been scalped and eyed out early days for sure. I guess you know, now that we've got the context in terms of where it came from, what exactly is the end vision.

Speaker 1: 9:30

You know what were you pitching investors? What were you pitching internal team members? In terms of you talk about how you know, completely agree with you and it's not a sort of you know sudden overnight phenomenon for Web3 adoption to just occur. It is a long-term time horizon, but what do you look like at the end of that time horizon? What role has revolving games played in that, so to speak?

Speaker 3: 9:50

so the first thing that we did and I think, uh, we, we shied away from just going all in on building hype, uh, in 22 and 21 22 and we kind of were focused on building a great team, first of all, that can actually execute. Today we're about 155 full-time employees. We worked on building a great culture. We worked on really building something that can actually produce something of quality. So that's the first step we took towards actually legitimately trying to do something. The second thing is we raised enough capital to build these products without going to the market, because I believe for us, I never believed in raising money from the market because of many reasons. I also want to be prudent on some of the legal aspects of things and also the fact that the expectations that VCs have, versus when you're on Twitter trying to get people to put in money, is very, very different.

Speaker 3: 10:56

The VCs definitely help you build something of quality. They have their own reputations online. We have had Animoca backing us, but we also have one of the biggest Web3 VCs, which is Pantera, backing us, and they've been extremely helpful, especially during the bear market, for us. So that's the first thing. The other aspect of that is the fact that we believe that community is king. They are the most important thing and we want to give more and more to the community.

Speaker 3: 11:31

So we were able to essentially build before and launch our nfts for free and build value in our nfts for them, and the kind of value, value and the stability we've had in our NFT prices has been absolutely incredible and it's just been getting better and better over time. Hopefully, when I go off this I don't see a crash, but it's been quite incredible, even during the worst of times that we've seen, that our NFTs didn't crash when the market had all the top collections dropping. And the reason why I'm highlighting this is the fact that we built so much before we did all of the marketing that we're doing today, where I've become the face of the company Not something I love doing now because it's a lot of pressure, but it is what it is. I'm getting used to it.

Speaker 1: 12:32

Got it, can you like? It does seem like the NFTs and we even spoke about it a little bit in the introduction are such a key component to what you guys are building. Can you talk a little bit about those NFTs and why you feel that they didn't suffer from some of the maybe bear market diseases that other collections definitely did?

Speaker 3: 12:48

I'd say a few things, right. A, the utility of those NFTs aren't restricted to one game. We made sure we did that. I actually wore a consumer hat because I was not buying a lot of NFfts, right? I? By the way, just one quick thing I bought my first bitcoin in 2013. So I actually sold everything in 17 when my mom was texting me. So about bitcoin, so, yeah, I realized that we've hit the top.

Speaker 3: 13:18

Um, anyway, as a consumer, I barely bought nfts unless I'm doing it as a favor or as, like, getting into community for some reasons. But I realized, like, people build the airdrop narrative and it's cool, but as a consumer, I thought, why would I keep it after the airdrop? Right, if I was trying to make money and flip it, my thought process was let it run up before the airdrop and dump it right before the news. So you know, it just made sense. So, if I'm thinking of that as a consumer, I never, ever felt the need to keep it forever and I wanted to de-risk our nfts in that sense. Right, and?

Speaker 3: 14:07

And the way we we, we thought of doing that is building a few things. One, de-risking people from owning some an asset. First, we gave it for free number two we built utility around all our games, our ecosystem, which is arcade, the network. You're basically a node with the NFT and you get the perks of different communities they're dropping, including arcade. So all of that utility is not restrictive to one thing, basically is what I would say Got it, got it, got it.

Speaker 1: 14:46

so that's maybe the primary driver yeah, the primary.

Speaker 3: 14:49

Just to like sum it up like it should not be, like people don't plan to drop it or sell it for one news aspect like airdrop. So so I had to create a whole like roadmap of what, what the utility is apart from the utility, uh, one one aspect of web3 is also culture.

Speaker 4: 15:10

Uh, so can you comment on how were you able to cultivate that culture as well? Because I think with the, with the nft, the valuation you're getting is not just the utility of financial speculation, but it's also just being part of that community and being part of that culture. So comment about revolving games culture, the NFT community culture and how you have been cultivating that.

Speaker 3: 15:30

Yeah, so I started being very, very close to the community the last four months. I'm actually very responsive on X. I have a hidden troll personality, so people, I connect with them quite well. But the culture is being transparent, being open. We share more than most communities do.

Speaker 3: 15:54

We're very responsive to people's feelings and the fact that we actually have never paid any KOLs. We've never paid anybody to do anything for us. In fact, I have a joke I'm not going to name them, but they'd know when they're listening. It was one really important marketing firm that reached out to us and they pitched us the whole thing. You know, pay us X amount of 50 grand a month or something like that, and then give us this percent of your supply and we've done this, this, this, for so many projects. In the end, they ended up investing in us, and so my joke to them is you paid us and they bought our nfts as well. So so, uh, the reality is I think that really makes people feel safe that we haven't been built upon this crazy marketing scheme. It's rather they're me talking to the community directly and being very transparent about what we're building. We try to do our best.

Speaker 1: 16:52

Sounds like there's a big emphasis on sustainability and sort of avoiding sort of very, very short-term hype when it comes to community traction, stuff like that oh, yeah, yeah, absolutely yeah.

Speaker 3: 17:02

just just one last thing on that is the fact that we were actually, I think, undervalued in certain ways because we haven't created that hype. But I'm okay with that because organically we'll get there and we're almost like we are generally expected to perform really well versus a lot of other hype projects, at least from some of the biggest backers in the world. So I'm pretty bullish on what we're building.

Speaker 1: 17:30

One thing that I did just want to pick up and flag, and I might have just heard this completely wrong, but you said how you've been responsive on X, on Twitter, with community and all the rest of it, but that you have a troll personality. So are you trolling community members Like as a? Did I hear this wrong? It's possible. I heard this wrong.

Speaker 3: 17:46

Yeah, well, I'm not saying I'm trolling them with misinformation, but I'm trolling them just like it's funny, like often, like for instance, one guy was asking me really tough questions and I just put him on our quest board. So now he loves me, right. So it's like it's fun.

Speaker 2: 18:05

It's more of a sarcastic response, would you say.

Speaker 1: 18:09

Yeah, yeah, more sarcasm than trolling, yeah it's like, I like it, I like it.

Speaker 2: 18:15

I have two questions, if you don't mind, one being you know you're saying that you're the face now on, you know, front-facing, the marketing person that is. You know, and I get that, and I think that's very valuable and definitely required from most projects or not even, I should say, all projects in crypto, because you know it's built on community. How do you manage being, you know, the founder ceo as well as being front facing, so managing this big team that's behind you and also, you know, managing the community? Um, is it just you on the marketing side or is there a big team helping you navigate?

Speaker 3: 18:51

that's a great question. So you know, I'm the co-ceo and the co-founder. We're three brothers. Uh, we're three co-founders, and so a lot of the operational management, although I have seven people directly reporting to me, but, on the other hand, there's a lot of ops that are managed by by my co-founders. At the same time, we do have a marketing team.

Speaker 4: 19:16

I am.

Speaker 3: 19:17

I interact, but I I'm not making a lot of the marketing decisions. It's my director of marketing and he has a team underneath him I don't remember the head count, but it's about four or five people and then there's a separate community team that also manages discord and a bunch of those comms right, and and we we do feel we're we're getting understaffed given the growth we've faced. We're also scaling the team as we speak. So yeah, but I do have to work 18 hours a day versus. It wasn't that bad before fair enough did you say the?

Speaker 1: 19:53

team was 150 people 155. Yeah, that's incredible. And what's the distribution? Like you mentioned, there are four or five in marketing, maybe a few more than managing, you know, social channels like this so these are the developers, I'm guessing yeah, these are full-time employees.

Speaker 3: 20:09

We have actually a bigger team. So, from 155, this distribution is about 50% engineering, which is primarily focused towards our two studios that are building four games. We've announced only one game so far, uh, and, and on the other hand, we have product design engineering. Uh, art, art is obviously a massive piece of games in general and entertainment, and then we also have 20 people that we've outsourced art to in brazil. That's additional to this. Um, we're, two of our games are very large-scale games. We spent $10 million plus on both games and their development.

Speaker 1: 20:52

Are you able to share anything about those?

Speaker 3: 20:53

two games. So one is public, it's called Skyborne Legacy. We built the IP in public and it's like Animal Crossing meets Zelda exploration. It's a really cute game. I think the goal for us was to reach a bigger demographic females, middle-aged females versus males, versus younger people and adults and we're trying to do that. It's a really cool mid-core RPG title. I think it's going to really onboard a broad audience.

Speaker 3: 21:25

But at the same time, I believe as gaming is risky in the sense that if we bet our entire company on one game, it's too risky what we did is the way we've de-risked our business is. Skyborne is an IP I always call it an IP and we're going to build multiple games under the franchise and the goal for that is, if we miss on one game, that doesn't mean Skyborne dies, that doesn't mean the company dies, and that's why we also de-risked ourselves with the second game that we're going to announce soon. We're calling it Project Noah and it's a 4X strategy game and we've been working on it for a while now and that's a completely different economy, completely different team. Again, the way our teams work, they're very separate. They obviously share information, but the studios have independent leadership, from game directors to product managers to game designers, to Even artists, and even the engineering is very separate. There is no cross sharing of resources, okay.

Speaker 1: 22:36

so even though it's a very, very big team, it is very, very clearly structured, so to speak. It's not just sort of you know, oh yeah, yeah, yeah, it's fairly just sort of you know, oh yeah, yeah, yeah yeah, it's fairly structured there's.

Speaker 3: 22:46

You can't build games without that. You know, just building a game is so hard, forget being successful fair enough.

Speaker 1: 22:55

Fair enough, um, and to move away just a little bit from. Oh yeah, cam sorry, did you have a question?

Speaker 2: 23:00

yeah, I just had a question, because I know that, um am I? You stated that you're building numerous games and that's the um, the thing behind what you guys are doing, because you don't want to, like, let's say, fail on one of them and you're distributing numerous ones so you can build a community and hopefully tailor to different people. How then do you successfully, you know, build different communities alongside these different games? Does that not just saturate the market of? You know, like you know, it's the I don't know what the saying is, but you know you should focus on one thing uh, build that out to become successful and then, if that doesn't work, then pivot. If you're building numerous games, are they going to be distributed over, you know, different times, being like a year or two year later, or is it purely launch one game, six months later, launch another game, but then don't you lose resources on the first game to build out gameplay and players and everything else?

Speaker 3: 23:52

so let me let me take a step back and I'll answer your question a slightly lengthier way. First of all, the vision for revolving games, games and Arcade is Arcade is our chain and Arcade Network is the biggest play for us. It's the infrastructure, web3 play. Our biggest asset is we understand distribution and a chain needs to understand distribution if you're focused on gaming, because they go hand in hand. So Revolving Games is going to be the publishing platform and publishing is always. You're talking about launching multiple games, right. You have the playbook of marketing, how to build community. And Cam to your question.

Speaker 3: 24:43

I think if you look at Web2, there are over 50 publishers that are multi-billion dollar companies that have launched multiple games, which is why I stressed earlier to my point, our studios are completely independently run. I've been in the industry for 14 years, so I understand how important it is when I was stressing on the fact that even the resources are not shared. So it's not like my front-end engineer is working on Skyborne today and tomorrow he'll get pulled into NOAA because we need an engineer. The NOAA team needs to hire a new engineer. Right, the vision, the art style, everything is very different. The only interaction is we have one leadership call every Monday and we share knowledge, data or if there's any data shared, eventually, when the games are live, there's going to be that knowledge. The central team is the executive team, the marketing team and that's it, and tomorrow it's going to be the publishing, user acquisition and all of that and all the games eventually get plugged into that.

Speaker 3: 25:46

Our biggest strength right now from an arcade standpoint is we have four games that come live. Two are mini versions of the games that we're launching. It's essentially to test our network and then eventually launch these large-scale games. That's our vision and we are going to launch more games on the network by funding from our ecosystem and I already am talking to six game developers that are facing trouble in launching games in Web 2, but they have amazing teams and to what the narrative in Web 3 has been and I still see it as we're going to launch 300 games or 500 games. You talk to different chains and they've sprayed and prayed. Our focus is as a publisher, as a central team. We can focus on 10 games over the next 24 years, 24 months, and even one game will beat the numbers of any chain out there and that is really what we're building towards. So that's your like? Short answer to like.

Speaker 1: 26:52

We're giving you more data points on what you're at what do you Amar would count as successful in terms of like game usership, number of monthly active players, this kind of stuff, even community size. What wouldn't you know when you say it just takes one of those 10 to sort of be successful?

Speaker 3: 27:09

It really depends on the genre, right? For instance, in the Forex genre, if you have 250,000 monthly active users, typically those would be whales, right, high spenders. Your average spender in Web 2 is very high. It could be anywhere between $250 to $500 spent by one user, versus a more casual title would have a million monthly active users but a lower spend. We have to be careful of that. The way I'd put it is from a chain perspective. If I'm looking at arcade, I'd be looking at, okay, how many wallets are created in a forex genre. You'd have the high net worth individual. So it's like boutique banking versus, uh, you know, large-scale commercial bank. Right, that's, that's how I'd I'd see the wallets. They're high spend, high value transaction, and then there's low value transactions but multiple transactions.

Speaker 1: 28:12

Depends on what you're looking at, there's really no black and white. This is successful. This is not Ultimately. It's going to be case by case, going to depend on the genre it's going to be case by case, going to depend on the genre?

Speaker 3: 28:24

Sure, yeah, depending on the genre, but at the end of the day, you know it's all around the gas fees and what we're going to do with all of that for our validator nodes.

Speaker 3: 28:34

We're still looking at a lot of other comps and learning from them and seeing what can be done right and better right, and that's why I said it's going to take us 10 years to be truly successful. But we definitely have the gaming dna and I've spent the last 24 months really building the and the web 3 side of things to really execute on the larger, larger game plan that we have got it.

Speaker 1: 29:01

Got it makes a lot of sense, yeah, amar Amar. So I suppose it's best to articulate the question around investors, stuff like that. Obviously, you guys did raise a really, really serious round at the tail end of 2022 with, as you mentioned, some of the best investors in the space Obviously, a handful that we know personally. Obviously, vcs and the value of VCs is a very, very hot topic of debate at the moment in the space. Do you feel that that value add has been tangible wanting? Are there any sort of specific points that you feel have been especially beneficial?

Speaker 3: 29:39

I think from Social Optics' point of view, they've been extremely beneficial On a personal level during the bear market. They were pretty helpful for sure, especially our lead investor. They always have praises for them. In many ways, They've been exceptionally great Pantera In terms of when it comes to execution. I think Wesee's tried to do a lot.

Speaker 3: 30:02

At the end of the day, it comes down to the founders and the team what they can do. Um sure, the we see's hands are tied and and often they try to do things which are counterproductive. Luckily for us, we haven't faced any of that. They've been super, super helpful, um, and yeah, they've let us do everything of. I have 14 years of experience in gaming. I have a finance background, so I was able to get the right terms where there is not anything that's negative coming towards the company If the VCs were. You know, some people have faced their own issues with VCs, so we did not face any of that for sure. So we did not face any of that for sure. But I do see, when I'm looking at this debate, I do see people having bad experiences as well. I can also say some investors did promise the world. They didn't execute on any of that, not even 1%. But you know, as a founder you expect that right.

Speaker 1: 31:01

If you have debt in the cap table, hopefully that's not the biggest deal.

Speaker 3: 31:05

Yeah, but for any founder listening who's young and wants to do something, I'd say don't depend on the VCs to do anything. It's not how you build your business right and, honestly speaking, the hype of having the best VC lasts a few days. You can use them in different conversations, but your product has to speak for yourself or, as an entrepreneur, your team or your roadmap needs to speak for itself and your execution on that road, your ability to execute on that roadmap, speaks higher, louder than anything else.

Speaker 1: 31:43

Yeah, enough said for sure.

Speaker 4: 31:44

I guess, like ultimately it is going to come down to the founder and reliance on vcs, not a sustainable strategy for sure so so, amar, uh, so since you guys are building a, like the devolving games, a game publisher type platform, you guys will also have your infrastructure, um, so tell us a little bit more about the infrastructure, uh, the blockchain you're building to kind of facilitate uh those, those games um kind of feels like in. In that case, your competitors will become along the lines of ronin imx, how you, how you kind of thinking about the landscape and and how does the infrastructure come into play?

Speaker 3: 32:21

I so the first thing I'd like to say is that no one's a competitor. Everybody is actually complimentary because they're investing in growing the ecosystem right. I always. I said this earlier. There are 50 publishers roughly, or more, I don't have the right number on top of my head, but which are billion dollar companies. So I feel every everyone.

Speaker 3: 32:47

When ronan brings uh games on chain, when imx does, they're doing everybody a favor, um, the way we. So when I looked at infra two years ago, it was tough to focus on just building publishing and then go infra. It was like, yeah, we're not touching that. Um, things have become easier. Like you've seen, zai gaming bunch of these guys roll up uh and launch their own chains and now are bringing on games. Our secret sauce is we already have the games right, so so we're gonna eat our like I say we're gonna eat our dog food.

Speaker 3: 33:25

First, figure out things, because when we were working with chains, I even had term sheets from, I think, across the board, every chain. That I a fun fact. We even got a uh tara luna basically gave us a massive term sheet two days they went to zero. So I was in touch with everybody and we were talking to Dopon directly. Nothing cool now, but the reality is that at the end of the day, we saw problems in every chain and we realized if there are problems and the infra play is so amazing, it de-risks our investors. We should actually go for that. We spent time I had to work two months and one week the work hours were insane to get everyone together, team together to get the right kind of people, travel around the world, hire people to do a lot of the things that we're doing now, but it's definitely been worth it and I'd rather have that in for internally to improve it over time and launch our games on it and future games on it. I think it's the first thing that helps our community grow as well, because if I had just launched a Skyborne token and not understanding if the game is going to be successful, it was going to be a big risk for everybody. Our investor is us and our community. So that's really why we went towards that and it's turning out to be really really good for us and Mehdi, to your point.

Speaker 3: 35:02

So when I look at IMX, the business for IMX and to Ronin Ronin essentially was they didn't have the gaming DNA and now they're. I think they're one of the best companies out there doing amazing things in terms of how deep they go with their companies. The companies that they bring on projects. They go with their companies. The companies that they bring our projects they bring on their chain. Uh, imx is more of a mass publisher and they're actually working with publishers now. So we're kind of more towards what ronan is doing, uh, but with a massive slate of games that we can build internally as well. So that gives us that kind of, I'd say, firepower that is not easy to build. So you won't see 20 companies doing what we're doing. For sure, in the short run it's going to take them time, maybe like three, four years.

Speaker 2: 36:01

And just a follow-on question. You know now launching your own l1 um, that adds a bit of a bit of a level of you know onboarding, how you know and now, like the, the, the whole space is saturated between l1, l2s and all these different chains. So how do you envision actually onboarding users? Do you think that's going to be a huge challenge? One is from launching an existing l1 you're hopefully already bringing on those users because it's easy to have you know wallet set up. There's already funds in those wallets, you know. You know the, the native token of that chain, and now there is new thing that you guys are bringing out. You know there's got to be a lot of infrastructure being built. You know bridges being able to allow people to come over. I'm not saying it's going to be a hard thing for you guys to do. You're well connected, good cap table, but do you think that you're going to lose some of the community that you've already built because of the constraints of onboarding them?

Speaker 3: 36:57

If you're going to depend only on our community for growth I depend only on our community for growth. I don't think that's going to happen. That's one. But to go to your point about L1, we're actually going to be in L2 first. L1 is a bigger, longer term play, so we won't face a lot of these, but our community will benefit from the infra play. But the real growth is purely and everybody says that and I'm going to say nothing new is bringing web 2 users to web 3, and that's what games are supposed to do, right. So for them, if they're coming in an eath or like even if you were building on bitcoin, let's say whatever, like it doesn't matter. Um, for them it's like they want to come in for the quality of games, and then then we have to have the user experience, where it's seamless for them to essentially have their funds lying in our wallet. So our goal is just to build really fun games eventually.

Speaker 3: 37:53

If we're not able to do that, then none of this really pans out. I don't want to keep cycling the funds that are already in Web3. I want to bring new funds, new users, new wallets. That is the goal. Otherwise we're just like this liquidity crunch that we're all seeing, or we don't want to be a business that's just caught up in these cycles. To be honest, we want to break through that through having real users and which also means your revenue has to come through, has to be a mix. It has to have fiat currency as well. If you're just thinking that you're gonna have these you know farming cycles, then you know. Then I should just launch a token right now and pump dot fund.

Speaker 2: 38:39

So you know, I love the take of onboarding, you know, web to users to web 3 in the gaming industry, and that being the biggest way of doing it or the easiest way, because people understand gaming. Then what are your thoughts on? You know, obviously, a lot of games now. You know really, uh, let's say, triple a games that are being, uh, hybrid. So they're going on playstation, they're going on xbox, they're going on epic games, maybe steam, um, that Xbox, they're going on Epic Games, maybe Steam.

Speaker 2: 39:05

I would see that as a barrier of onboarding Web 2 to Web 3, because you're allowing them to play this high quality game and they can do that without being on chain. And then Web 3 users existing Web 3 users can play the game if they want to do it on chain and earn NFTs and these rewards of whatever currency it may be. Uh, I'm assuming you guys are taking a different approach and being just web3 native. Do you see that, then, a barrier? I know that you want to onboard web2 users, but a barrier of you know how do you convert these web2 to understand web3? What's the education behind that? Because I'm seeing there's not many web3 gamers really and the big numbers are coming from the web2 side.

Speaker 3: 39:47

Hence why a lot of triple a games in web3 are taking the hybrid model if you remember, free to play right, everybody thought that free to play is not gonna win. It's like who the hell would download a free game and then there's a paywall and you pay. Eventually you see people spending. I don't know if you guys know the numbers, but there are people who spend over a million dollars a year and playing these games, even like being someone who believed in free to play, did not believe that we would see such explosive growth. And the way free-to-play was done is nobody was initially forced to pay and then data suggested at what points you can do that, and that is the data we want to collect and execute into Web3. When should you actually onboard people within your game to the Web3 elements? But at the end of the day, like in free-to-play, you can play the game without paying. You should be able to play the Web3 games without feeling it's Web3. I think our biggest, biggest problem is actually, in fact, platforms right, because you know platforms have their own fees and they're not very helpful to Web3 right now, and how payments work and how all of that. Once that becomes more helpful and seamless or there's more technology and overlays that allow you to do that, I think it will become much easier. I see this challenge going and being reduced in the next two to three years. Nothing that will happen miraculously in the next 12 months, but once that happens, you know it will be much easier. To give you an example Apple Pay. Just Apple Pay has made payments so easy on different apps that it, just like you know, the spending goes up.

Speaker 3: 41:42

Free to play in india had zero revenue. I'll give you a fun fact. Actually, before we finish off in, we launched a game in india in 2013. It made 50 dollars or 100, something in that range, and it was in the top 50 grossing games. Right now in india, if you're in the top 50 grossing games, you're making a couple of 100k a month. At least the top 10 make, you know, hundreds of millions of dollars, right? What? What did india do? Right? They've solved a lot of payment issues through carrier building to like paytm, to bunch of things, even like for games like fortnite. They have last mile, not fortnight, sorry pubg makes I don't know, a couple of hundred million there. The last uh, uh, like they, they literally have solved it. To like taking cash at someone's house to pay for in-game items, right? So those solutions eventually, as seamless as they get. You see the revenue going up. Uh, so it's, it's. It's very interesting. You could definitely have a different chat around this.

Speaker 3: 42:51

But if, johnny, like the question you were asking is around token unlocks, right, um, I, I personally. I personally believe that the market is so hype driven that, as a founder, if your token crashes the understanding of the general community and investors at least investors that are just in it for a quick rise it's basically you've failed. So people came up with this whole angle of having a lower supply at the start and slowly unlocking, which is now being negatively seen, and I totally see that. But you know, at the end of the day, everything is dependent on liquidity, right, and the market doesn't have the liquidity for such big unlocks. And then the other problem is launching a token is so easy as long as you have like at least the narrative, even in this cycle, became you have a little bit of hype, you get some listings and boom, you're like, you know, you have this crazy FTV. So I'm not on either side.

Speaker 3: 44:12

But if I have to be logical and if you're building a real, real company, I'd say, then you need to create a demand and be open to bigger unlocks for sure. So the goal, the right answer for me is always when I'm debating it in my head is create the demand and then allow bigger unlocks, which is better for everybody, but then create your own liquidity right. Do not depend on market's liquidity. And what I was telling Cam earlier the goal for a gaming company should be bring the liquidity from outside. That is the real success.

Speaker 3: 44:46

That is really truly the success of everything, and people would you could even do like if we have real users and we have real 1 million gamers, they would even use non-centralized exchanges to buy your token right. They won't even know the big exchanges. To be honest, that's a different learning curve for them. Very true, very true. Yeah, cool guys. Uh, I guess I am late for my other call, but uh, let's, let's circle back at some time. If you guys are ever in dubai, would love to meet you guys in person as well, okay perfect.

Speaker 2: 45:22

Let us know when you're here.

Speaker 1: 45:23

Yeah, thank you so much for joining us, amar. It's been really really good and appreciate you taking the time.

Speaker 3: 45:27

Yeah, absolutely Take care guys, Take care man, take care mate.

Speaker 1: 45:30

Bye, bye-bye, okay, no, it was great to have Amar on good of him to give sort of his take as a founder on all the controversies that are happening around mass token unlocks right, especially right for the month of may. Um, you know, to give context there, there's already been a few that have happened evo and pith that I think have really led the charge and there's definitely some more that we can get into um. But you know very, very kind of amar to sort of give his two cents from the founder perspective that maybe the rest of us lack as well. But to dive back into that, obviously a lot of controversy across a number of avenues.

Speaker 1: 46:06

For me, the token unlock story, right, the idea that you know two to three billion dollars worth of tokens are set to be unlocked in May really goes hand in hand with the research that came out last week showing that 80% of tokens listed on Binance in the last six months have now collapsed in price and are effectively showing in the red, with maybe, like I think it's, four or five that are actually up since time of listing in terms of valuation, and I think three of them are meme coins and one of the other ones has like no VCs or something crazy like that. You know, the principle being that effectively exchange listings and having TG on exchanges is effectively just a way for VCs and team members to dump on retail demand once the exchange listing comes. Obviously, you know that high FDV is sort of supplemented and propped up by the fact there's very, very few tokens in supply and so everybody's focusing on the FDV and not the market cap itself.

Speaker 4: 46:57

So the fact that all of these One token that was actually up. Johnny was GTO. It has VC.

Speaker 1: 47:03

Yeah and JITO. It has VC. Yeah and JUP as well.

Speaker 4: 47:05

Yeah, jito and Jupiter again has loads of demand. Both of them have VCs. It's just that they're catering to very, very high demands because of the nature of the vertical restaking yeah, 100%.

Speaker 1: 47:19

Even within the Solana ecosystem as well, like a lot of tailwinds coming from that. That maybe sort of set them apart. Um, but what do we think about the principle that goes on behind these mechanisms? Right, like I think it was evo and pith. Both had massive ones. Uh, evo is down 46 percent over the last month. Pith is down 30 percent over the last month. Are people dumping these tokens because they're expecting massive unlocks, or is it actually the unlocks of themselves that are creating the sell pressure?

Speaker 4: 47:46

yeah, uh, for me it's. I think fundamentally, all of it boils down to demand, um and revenue. Right, so let's say so. I think one thing one market structure that I felt like was broken in in crypto was basically project and even retail have high expectation in terms of what the valuation should be. So let's say, if we launch a lower flow token, it's not team's fault. It's like the people who are buying the token and speculating on them. I think it's to a smaller degree, their fault, in a way that, firstly, they're not being cognizant of what the valuation would be in the near term.

Speaker 4: 48:24

I know a lot of folks in crypto just don't care about fdv or valuation because they just feel like it's a meme, but that's and and and the data is clearly showing us that's. That's not the case. So for me, I think market will price themselves appropriately. Now this was healthy for the industry. People realize the fact that we cannot have launches at 30 million, 10 million, 20 million, like like it's a joke. So I think what will eventually happen is market will become smarter. Exchanges will make sure that token fdv on launch are reasonable. Market maker will also ensure that that's the case. Team will also ensure that and I think there will be some sort of repricing of expectation among all of these stakeholders. I think that's number one and I think the number two part is it's also becoming obvious, like one example is of jito and jupiter.

Speaker 4: 49:11

Let's say, even if you launch at the lower float, the idea is, as the token unlock, your demand has to match or your revenue has to match those unlock or else the token will dump. It's simple as that demand and supply. So I think one issue was there was a lot of big narratives, a lot of big hype, low flow token launches, but the demand didn't match up all the hype that was created. So one thing could be either lower the hype or lower the expectation, or the other part of the equation is just create massive demand, massive revenue sources that matches those unlocks. So I think my take is simple. I don't think if you launch a high flow token, low flow token, it just doesn't matter. I think what really matters is can you deliver the demand out there and not just simply deliver a narrative?

Speaker 1: 50:01

So my understanding was that a lot of these you know, you like the, you know the lessons that really really need to be learned around launching at certain valuations. I think a lot of the issues, or at least a lot of the frustration from the community, is that, yes, absolutely, this is a lesson that needs to be learned. But the reason that those valuations are so high is because the projects want to raise a crazy valuation so they don't dilute themselves. It means the airdrop recipients you know that five percent is is, you know sounds like an awful lot on paper but actually, you know is is very, very small when it comes to the entire token supply. But also even the investors right, they want to see that their positions have been marked up, at least on paper, if not in the liquid markets. Like is this a problem that really needs to be addressed by the team? Is it a question question of like greed or trying to play clever games?

Speaker 4: 50:44

I think retail has to address that. So, for example, let me just give you a hypothetical case. Let's say a token A launches with 5% of token at 50 billion valuation and private market raised at a valuation of 2 billion. Now it's up to retail if they feel like 50 billion valuation is crazy and there's only 2% token unlock, I should stay away from this Rather than blaming it on the team, blaming it on the exchanges. So let's say if you stay away from this, the valuation will itself correct. To what should the fair value be? So I feel let's say if somebody researches about a token and feels like it's overvalued, just stay away, just don't invest and the prices will correct itself. And I think once, once the price is correct itself, it signals exchanges not to do stupid shit in terms of launching high fdv tokens. It also signals to investors that, look, markets are not giving you such a premium and and once that happens, that translates to private market where investors will invest at a lower valuation. So I feel like market can self-correct itself.

Speaker 4: 51:48

I think there is a little bit of blame to be done to retail that there has been this tendency to not look at valuation and be like insensitive and just invest. We saw this in spac as well. We saw this in, let's say, kathy would talk like kathy would stocks as well. So I think there is a little bit of that part that I think that needs to be corrected. And I think we are kind of seeing that. And I think what has happened is retail realizes that the valuation is high. Instead of buying some of the tokens, they just invest in meme coins. So I think there has been some indication that retail is kind of staying away from tokens which are high fdv and low float rather rather prefer a little bit of meme coin.

Speaker 1: 52:31

So I think that's already playing no, I was gonna say that is a reason that's sort of one. You know, one of maybe two or three reasons that's being attributed at the moment to the performance of some of these assets is that, you know, because of the, the unlocks and the potentially unhealthy like team vesting schedules, that retail investors, you know they're just not attracted to these assets anymore in the way that maybe they were in 2021 and obviously 2017 and 2018. Um, you know, just potentially one of the reasons.

Speaker 2: 52:54

But cam, yeah, please, please, carry on so just given my point of view on everything that's going on um, I think that on social media we've seen, you know, different people give their point of views and trying to blame each other.

Speaker 2: 53:08

Being retail vcs, this and that blah blah, big blame game going on at the moment yeah, I I honestly have to say that I believe of course, these high valuations are stupid and we can get that into a moment. I think the biggest thing the problem is is the airdrops. Like there's no unlocks for vcs. Vcs have invested. Yes, we can argue about the bigger percentage for vcs and teams cool, that's a different argument. But purely, we're seeing these downtrends of, you know, price and that's purely because of airdrops. Like you, I think we we saw the, the um, the lp farming back in 2020. Um, that just destroyed every, you know most projects. Only a few survived and we're just seeing this other narrative being this point system and airdrops, and I think that's the, the downfall, really, that there's a lot of airdrops going for free um and no one knows how to really solve it or do it properly. But then it all, like you know, mehdi was saying and we floated about in this conversation it's all about demand. And then you look at some of the projects and it's just, you know, it's really hard to, you know, create demand unless it's an L1 or an L2, because there's actual users and there has to be that native token for using, to use that chain when you're using most projects in crypto there, just doesn't need to have that token to use the product. So creating that demand is something that's going to be 10x harder or even 100 times harder.

Speaker 2: 54:33

I think that's where the issue lies. So I think what needs to be addressed is airdrops and how that system's done, because you're allowing these guys to retail to dump out stupid high valuations. That's airdrops and how that system's done, because you know you're allowing these guys to, you know, retail to dump out, you know, stupid high valuations. It's the whole point. Yeah, and then. Okay, cool. Now you talk about uh valuations and how can you create demand if your valuation is already too high? You look at a valuation of someone being in the billions and it's you know, I don't know what maybe the project is, but why is anyone going to buy that when they're not going to make a 2x? You're going to see that project go from $5 billion to $10 billion. It's harder than going from $100 million to $1 billion.

Speaker 4: 55:14

So, cam, my argument is that's the case when a project launches at that valuation, some of the folks buy it. Some of the folks buy it at that valuation because of that reason the valuations are high. And then let's say when they buy it, some of the folks buy it at that valuation because of that reason the valuations are high. And then let's say when they buy it and there's no, blue chip right here yeah and and so so.

Speaker 4: 55:30

So the price falls, um, yeah, so I think the issue is not buying these like if you think the tokens are over value, just not buying these at that valuation and and which kind of has a trickle down effect on investors, exchanges, market makers and investor, like the market regulates itself.

Speaker 4: 55:49

My take is my take is airdrop is actually. I don't think airdrop is to blame. I I feel like there should be bigger, bigger airdrop. So, for example, let's say, for token launches, if there's a massive airdrop, what it does is, firstly, people who are in the community, they benefit, they sell the token. But let's say, for token launches, if there's a massive airdrop, what it does is, firstly, people who are in the community, they benefit, they sell the token. But let's say, when you're selling the token, it reduces the valuation, so allows you to like, buy in at a cheaper valuation. So I feel like higher percentage of airdrop and higher unlocks of airdrop could actually be better. I think one thing teams have been doing which I'm not a personally big fan of is also locking the airdrop. I feel like that's a disaster because then it's also creating further low floats.

Speaker 1: 56:28

Just for a longer period of time as well.

Speaker 4: 56:34

Yeah, it creates more pressure down the line. I feel like more airdrops, more unlocks, so basically allows a better price discovery initially. So let's say, for example, johnny, you have a conviction that pyth will do really well and I'm a airdrop holder. I just made a lot of money. I sell it. I sell it to a certain degree. That market falls 30, for example. You feel like the valuation of, let's say, 600 million is reasonable and you come in. I think I think that's healthy. What's not healthy is, let's say, I only get a little bit of airdrop and the token is, let's say, 4 billion and you come in. I think I think that's healthy. What's not healthy is, let's say, I only get a little bit of airdrop and the token is, let's say, four billion and you really want bite. But you really want bite so badly that you are willing to invest at four billion. I think that's the dynamic which is unhealthy and and I think people are complaining about yeah, but then you don't see.

Speaker 2: 57:19

but it definitely is. You just don't see retail be like oh, this has fallen 30%, or majority of retail, oh, this has fallen 30% or 50%. I'm going to buy that now, let's get in. It's more like oh, this has gone up 100%, I'm going to buy that now, and that's the difference.

Speaker 1: 57:34

It's going to do it again.

Speaker 2: 57:43

I think that that's cool, but I think the way of doing it if you're going to give a token away for free, it needs to be different. Like you want to build demand and you want to build usership on your product, then instead of doing all these farming before launch, why not do the a afterwards, like you can earn x amount of tokens for actually using the product? If you're going to give that away, for example, let's say you're using wormhole as a bridge. They let everyone farm beforehand and then you gave a token away for free and you know wormhole is down. I mean like down like 70 or 80 percent from when they actually launched. Right, stupid valuation.

Speaker 2: 58:18

Why not say, every time you use our bridge, we're going to give you five tokens for just using the bridge from X chain to X chain and the token's already launched. That incentivizes people to use it and giving them their money back for using the chain. Why is it any different from allowing them using it beforehand? Why not do that afterwards? You're still then making people use your product and there's actual demand over long-term. Like now, there's no reward or incentive to using that, to using that bridge. I'm going to go somewhere else that may allow me to farm and I may get an airdrop I?

Speaker 4: 58:52

I don't disagree. I'll just give you anecdotal evidence of um us trying this, uh, like with some of the projects, we have tried this. So I think what happens is, first, three to four days of your token launch, you have the most liquidity, right? So what projects tend to do is let's give the airdrop in the first day or so. So let's say, there's a lot of cell pressure, there's a lot of demand, all the cell pressure gets absorbed. So I think that's one of the rationale that project uses uh to kind of basically absorb all the cell pressure. I'm not debating whether that's right or wrong, but I think one of the thinking behind doing airdrop at the day of launch is to just absorb the airdrop by, let's say, different buyers coming in.

Speaker 4: 59:32

The second thing is, as you mentioned, like sometimes the community in crypto are short-sighted. Like we experimented this idea of, let's say, launching a token and doing an airdrop. After the community didn't like it, they deferred the token. So, for example, they deferred the token in a way that, oh, we didn't get our airdrop. Airdrop was supposed to be given at launch. Why have you delayed it by one week or two weeks? I'll give an example, even though there were other factors involved was Farhana. They delayed the airdrop maybe a couple of weeks after and the community was pissed off. When the community is pissed off, they basically express their anger on twitter. They express their anger on twitter and basically the demand that was about to come doesn't come, because there's fun, um and I think we saw something similar with imagining ones as well like they delayed the airdrops but that's different, though.

Speaker 2: 1:00:19

I feel like you're promising the, the community and airdrop, where the vision should be in a way like how games used to be in 2021 right, like you play to earn, but a different mechanics of you use this product and you can.

Speaker 4: 1:00:33

You know you're rewarded for certain mechanics I think the few projects actually doing that, like pixels, are doing that in in a certain way like phase, phase two and phase three of airdrops, of blur and iglier. Uh, so I think we're seeing that experiment happening, um, where people, people know that let's say there will be a season two, season three. If they participate they'll get some sort of airdrop, but then what tends to happen is then you also have farming, where people are doing those action, not because they like to use the product or they love the product, it's just that they're setting up a farm factory to farm their airdrops, if that makes sense.

Speaker 2: 1:01:11

Yeah.

Speaker 4: 1:01:13

So it's complicated. There isn't one solution.

Speaker 2: 1:01:16

So the solution to this is project founders raise a lower valuation and then they can launch a lower valuation to actually have retail demand that actually want to use a product. Project founders raise at a lower valuation and then they can launch at a lower valuation to actually have retail demand that actually want to use the product and actually buy the token. I think that's the solution. I think fdvs now are just ridiculous uh, which you know maybe you and I definitely see all the time like raising valuations at the moment are just ridiculous yeah, um, like I agree with hasib hasib's, I think he wrote like an article on Twitter.

Speaker 4: 1:01:46

My take is very similar, I think let the market decide. So this is a problem. Market kind of is taking action and speaking about it. So let's say, if the valuations are higher, basically let market adjust. And since we're speaking about it, that already means that it will be in motion. So I feel like just let market decide. So let's say, if valuations are higher, let it launch at lower valuations. If the valuations are too low, maybe launch it at higher. So I think market will figure this out and I feel like these are like good things that are happening, making us closer to traditional market, where markets are becoming efficient.

Speaker 1: 1:02:22

I think the whole debate is very healthy for our industry that's probably true, the fact that it's being discussed in such aggressive detail now. There's probably some clearer conclusion that will. That will come out of it ultimately kind of necessary in a sense but yeah, uh, to cam's point.

Speaker 4: 1:02:39

At this moment the valuations have to come down so markets become more healthy in terms of launching tokens.