It's already the end of 2025, and with the GameFi sector being this competitive, why is funding from top VCs like Sequoia and a16z still continuously flowing into YGG? Many people find this unbelievable, thinking that YGG is merely a large 'gold farming guild' with an outdated model and limited imagination. If you still think that way, you are very much mistaken.
To understand this game of YGG, we must strip away the label of 'gaming guild' and dissect it from the perspective of the balance sheet. You will discover a whole new species. One of the three non-standard criteria I personally use to evaluate such projects is to see if the proportion of investments in 'non-gaming assets' has quietly increased in its financial statements. YGG's financial report precisely reveals that its ambitions go far beyond simply organizing players to play games.
First of all, the true identity of YGG is actually an early Web3 fund disguised as a guild, or in other words, a 'venture capital DAO'. Its core business does not rely on scholars earning meager shares through gold farming, but rather deeply intervenes before games go live through the powerful YGG Ventures. They acquire project tokens and core NFT assets at very low prices, which form the core value of their treasury. Then, once the game goes live, YGG's vast guild system and tens of thousands of scholars become the most precise and efficient cold start traffic pool for these new games. The influx of players quickly activates the game economy, driving up asset prices, and YGG Ventures' early investments thus yield substantial returns.
Next, let's look at how this model forms a closed loop and continues to expand. After profiting from investments, YGG does not simply distribute the earnings, but reinvests the profits in two directions: one is to continue investing in more potential early-stage games, and the other is to build and support its subDAO network. Regional sub-guilds like YGG SEA and YGG Japan are essentially cellular divisions and regional replicas of the YGG model. They leverage the endorsement and resources of the YGG main brand to make more refined investments and operations locally, further expanding YGG's asset map and influence. This is a textbook-level flywheel effect: investment profits feed back into the ecosystem, the ecosystem expands, leading to stronger investment capacity and bargaining power, repeating over and over, growing ever larger.
Of course, this model of 'guild as fund' is not without its risks. The biggest challenge lies in its over-reliance on the entire GameFi sector. If the market continues to be sluggish, or if the projects invested in continuously fail, then the entire flywheel may not only stop but could even reverse. Moreover, the large subDAO network also places extremely high demands on management capabilities; ensuring that each sub-guild aligns with the main DAO's objectives while also stimulating their autonomy is a complex governance art.
In summary, what VCs favor is no longer the labor-intensive gold farming YGG 1.0. What they invest in is a GameFi ecosystem incubator that integrates capital, traffic, and community. YGG is building the infrastructure for the Web3 gaming world; it acts like a massive aircraft carrier battle group, providing comprehensive support from funding to users for new games. This is the true reason it can still attract top-tier capital even in a bear market.
Having seen this, do you think the biggest risk of YGG's 'guild as fund' model comes from the market, or from the complexity of its internal governance? Feel free to share your thoughts in the comments section.
Disclaimer: This article only represents personal views and does not constitute any investment advice. Investment carries risks; proceed with caution when entering the market.
