Axie Infinity's behind-the-scenes driver YGG successfully completed its IDO, but this is just a carnival for 32 addresses

Azuma
2021-07-28 17:32:33
Collection
Has IDO surprisingly become a game for a few?

This article is sourced from Odaily Planet Daily, authored by Azuma

On July 27 at 22:00, Yield Guild Games, one of the biggest boosters behind the popular blockchain game Axie Infinity, launched the public sale (IDO) of its token YGG on SushiSwap MISO.

The Carnival of the Few: Only 32 Addresses Successfully Participated in the YGG IDO?

Although the entire IDO was designed to last 24 hours, in the face of nearly frenzied community participation, 25 million YGG tokens were sold out in just 31 seconds, raising a total of 12,496,000 USDC. However, in stark contrast to the enthusiastic community, the highly anticipated IDO ultimately turned into a carnival for large holders and "scientists"—only 32 addresses successfully participated, with a single address starting with 0x71d88 (actually a personal contract address) grabbing a whopping 9 million YGG tokens, accounting for over one-third of the total sales, leaving the vast majority of participants helplessly sidelined.

The Driving Force Behind Axie Infinity's Success

To introduce Yield Guild Games, one must mention the recently popular blockchain game Axie Infinity. As the leading project in this round of the GameFi boom, Axie Infinity has maintained high market popularity for a long time.

According to NFT data site Cryptoslam, Axie Infinity ranks first in various dimensions, whether comparing trading volume, number of buyers, or number of transactions, outperforming many established projects like CryptoPunks and NBA Top Shot.

The Carnival of the Few: Only 32 Addresses Successfully Participated in the YGG IDO?

Data from Token Terminal shows that Axie Infinity's protocol revenue in the past month reached 149 million USD, far surpassing leading projects in different sectors like MetaMask, MakerDAO, and Compound by more than ten times.

The Carnival of the Few: Only 32 Addresses Successfully Participated in the YGG IDO?

From the price trend, Axie Infinity's native token AXS also performed remarkably. According to GoinGecko data, as of July 28 at 10:00 Beijing time, AXS was priced at 47.75 USD, with a 24-hour increase of 28.4%, a weekly increase of 216.6%, and a monthly increase of as much as 1191.8%.

The Carnival of the Few: Only 32 Addresses Successfully Participated in the YGG IDO?

Yield Guild Games' support is a key reason why Axie Infinity has been able to achieve such strong performance. Yield Guild Games is a gaming guild established in the Philippines. The rampant COVID-19 pandemic has caused a surge in local unemployment rates, and under these special circumstances, some local unemployed individuals gradually turned their attention to blockchain game projects represented by Axie Infinity, beginning to try "play-to-earn."

Yield Guild Games saw an opportunity window in this. On one hand, the guild helps Axie Infinity recruit and train players; on the other hand, Yield Guild Games rents in-game characters to players who cannot afford the early startup costs, and then takes a cut from the players' earnings.

A special "three-win industry structure" was born. For games like Axie Infinity, the work done by Yield Guild Games can help them quickly attract users; for players, Yield Guild Games' actions lower their entry costs; and Yield Guild Games itself benefits from this positive model, quickly becoming the largest gaming guild within Axie Infinity, with its "influence" beginning to expand to other games and regions.

With rapid expansion, Yield Guild Games ultimately made an important decision regarding its future development—transforming into a decentralized autonomous organization (DAO). Autonomy requires governance tokens, which is why Yield Guild Games chose to launch YGG.

Public Sale Turned Private Sale

From the results of YGG's IDO, "contradiction" seems to be the most appropriate descriptor. This is because this IDO has both a successful side and a failed side.

The success refers to the extremely high popularity of this IDO. Selling out in 31 seconds and raising tens of millions of dollars, such performance was rare even a few months ago when the market was thriving. Before the official launch of sales, many communities had detailed participation strategies, and discussions within the groups were heated, with countless investors eager to participate.

The failure refers to the mysterious design of this IDO. Initially, Yield Guild Games considered using a conventional auction method, but since the MISO platform does not support setting a price cap, it ultimately switched to a Dutch auction. In the rule introduction article released a few days before the IDO, it was evident that the guild (now it should be called a DAO) had considered various scenarios that might arise during the auction, but perhaps underestimated the enthusiasm of large holders, ultimately not setting limits on individual accounts.

The result of this design flaw has already been mentioned: the public sale ended up being played as a private sale. If YGG's main utility is as a governance token for the DAO, then from the perspective of token distribution, this IDO will be a complete failure.

From on-chain information, the entire IDO lasted only two blocks. To grab the tokens faster, large holders and "scientists" either wrote the two transactions (authorization + minting) required to participate in the auction into a contract to execute them simultaneously, or significantly increased the gas costs to accelerate the on-chain packaging speed.

The Carnival of the Few: Only 32 Addresses Successfully Participated in the YGG IDO?

Taking the large holder who invested 4,528,000 USDC and grabbed over 9 million YGG tokens as an example, this user wrote their two transactions into a contract starting with 0x71d88 and paid a gas fee of 1.166 ETH.

The reason large holders acted so frantically, according to some discussions in the community, is that some funds failed to obtain private placement quotas for YGG and could only compete with retail investors in the IDO. With the dual disadvantages of total funds and technical strength, the retail investors' sidelining was almost a foregone conclusion, and it's no wonder investors would curse, "I want to see how these 32 cut each other."

What Does the Launch of YGG Really Mean?

Although this IDO did not benefit community users broadly, it still holds certain positive significance as a landmark event marking Yield Guild Games' transformation from an ordinary gaming guild to a DAO.

For Yield Guild Games itself, ideally (which clearly still requires effort), transforming into a DAO will bring stronger cohesion to the entire guild, with all members jointly deciding the future development direction of Yield Guild Games based on YGG as a token. From aspects like organizational form and division of labor, gaming guilds and DAOs naturally possess good compatibility. If Yield Guild Games can achieve better development through the DAO model, it will also help promote the further popularization of the DAO concept.

For the blockchain gaming sector, the recognition of Yield Guild Games by funds means that a viable business model independent of game self-operation has been established within the sector. Previously, whether it was card trading or play-to-earn, they were still limited to the operational scope of the game itself, with the executing entity being the game project party and the service target being the players; whereas the executing entity of Yield Guild Games' model is the guild independent of the project, serving both players and game project parties.

From an ecological development perspective, Yield Guild Games enriches the ecological landscape of blockchain games, becoming another layer of application built on games like Axie Infinity. This somewhat resembles the story that once occurred in the DeFi world, where early protocols like Maker and Uniswap evolved into ecological cornerstones over time, leading to the emergence of countless new projects that gradually built the DeFi tower. This time, Yield Guild Games has become the latest stone stacked on the foundation of blockchain games.

Finally, let's talk about the token situation. The final auction price for YGG's IDO yesterday was 0.49984 USD. Since the auction still needs to run for the designed 24 hours, the large holders who won the tokens cannot claim them yet. This means that there are currently no circulating YGG tokens in the secondary market, and trading will not open until at least 22:00 tonight. As one impatient community member put it, "Tonight's opening is the real 'public sale,' but the middlemen have made a profit from the price difference."

Original link: www.odaily.com

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