A16z Crypto backs YGG’s $13.8m round to advance soulbound tokens

Yield Guild Games (YGG), a platform that rents NFTs for use in blockchain games, announced on Friday that it had sold US$13.8 million in tokens to a group of investors led by DWF Labs and a16z Crypto – a Web3-focused fund managed by VC firm Andreessen Horowitz.

YGG will use the funds to further develop its soulbound reputation token, co-founder Gabby Dizon told Tech in Asia.

YGG co-founder Gabby Dizon / Photo credit: YGG

The new reputation tokens were test launched last year but were only rewarded for in-guild activities such as content creation. YGG said it will work with developers to place the tokens directly into games, which will be rewarded for completing selected quests or tasks.

Dizon added that the reputation tokens will also play a bigger role in the platform’s ecosystem when it launches its revamped web app, which is scheduled to be revealed during the Game Developers Conference in San Francisco in late March.

“When YGG comes into a game, people know that these are high-quality players,” he said.

The co-founder explained that the updated web app uses newer technology that would better support the reputation token rewards for achievements.

The token purchase by a16z is the second time the company has invested in the gaming platform. The  firm joined YGG’s US$4.6 million round in 2021.

“We have committed to support YGG as part of our vision toward a blockchain-based economy through Web3,” Andrei Grachev, managing partner at DWF Labs, said in a statement.

Dizon shared that the token sale was concluded “late last year,” but the announcement was delayed because of a stream of negative news about the crypto industry at the time. YGG’s token languished as low as US$0.16 in 2022 but rose almost 200% in the start of the year.

While the firm did not disclose the number of tokens sold in the round, the sale represented over 35% of the estimated US$25 million in assets in the platform’s treasury as of November 2022. When asked how YGG determined the size of the token sale, Dizon said the firm balanced the cost of software development with the desire to maintain a hard runway of two years.

The co-founder added that YGG still controls a 45% reserve of the firm’s token maximum supply.

The YGG treasury wallet has US$21.7 million in tokens as of February 15, according to data from Nansen.ai, including US$5.1 million in Tether (USDT) and US$4 million in USDC.