Hong Kong-based Animoca began as an indie game studio in 2014, growing into a blockchain gaming powerhouse. As crypto markets have cooled, not only has it held faith in the blockchain play-and-earn model, it’s also continued to transform into a venture capital-style firm, now invested in over 380 Web3-related businesses. In September, Animoca closed a $110 million funding round, led by Singapore state fund Temasek, Boyu Capital, and GGV Capital.

Where is the crypto industry headed, and Animoca within it? What made you decide to branch out from blockchain gaming?

Crypto, in the sense of decentralization and true digital ownership, will continue to grow in adoption, scale, and application across almost all industries. We firmly believe that this technology, which enables property rights for virtual goods, presents us with an opportunity to shape a more equitable form of capitalism.

Gaming is just the tip of the spear [for blockchain]: It’s an easily understandable use case for gamers, who are already comfortable with virtual goods, except that now, they’re able to genuinely own those goods instead of renting them. For example, one of the most exciting applications is education, a field that is characterized by underpaid teachers and a general lack of resources.

What differentiates Animoca from other VCs in the industry?

We’re not a VC in the typical sense — we have no limited partnerships and we invest mostly out of our balance sheet. We think Web3 requires a different approach from traditional competitive VC thinking. Our goal is ecosystem growth for a shared network effect, rather than trying to pick “winners” in a single category.

We love all things related to GameFi, and we have a lot of activity in this area. In addition to The Sandbox, we are excited about Life Beyond, which is our newest 3D metaverse MMORPG [Massively Multiplayer Online Role-playing Game] and has an entirely different visual experience. Phantom Galaxies, our AAA blockchain mech action role-playing game, will soon launch a play-and-earn event. Also … the ecosystem we are building together with Yuga Labs (Bored Ape Yacht Club) and our … partnerships, including with the iconic NFT collection Cool Cats.

Apart from GameFi, earlier this year, we acquired TinyTap, a user-generated-content educational technology company that provides a no-code platform, enabling educators to easily create and distribute interactive educational content while earning revenue based on the usage of that content. We are now evolving TinyTap to take advantage of Web3 technologies that will provide teachers with better earning opportunities.

What other Web3 developments are worth watching, and point to future, real-world applications?

Web3 allows for the construction of projects and companies that can be viewed as economies, rather than businesses in the traditional sense — almost like independent mini-nations. I would pay particular attention to the evolution of decentralized autonomous organizations [DAOs], as they point to a future of community-governed entities that are the next logical step after the establishment of digital property rights. We believe DAOs have the potential to surpass traditional corporate structures in significance, and are an important step in the realization of these mini-nations.