Yield Guild Games (YGG) Explained
Since Axie Infinity's success, the P2E blockchain gaming world has seen a massive surge of growth. Millions of people worldwide have gotten on board with the P2E trend. However, gaming NFTs are too expensive for many players, especially those in developing countries. Yield Guild Games is aiming to tackle this issue by creating a P2E community and providing a solution that allows these players to start playing with NFTs.
What Is Yield Guild Games?
YGG is a Decentralized Autonomous Organization that focuses on investing in NFTs used in blockchain-based gaming experiences, which are part of the emerging metaverse. This metaverse refers to the various digital realms based on blockchain technology, such as digital land, assets, and more.
In 2018, YGG co-founder and CEO Gabby Dizon noticed that blockchain gaming was gaining traction in Southeast Asia and that a global play-to-earn gaming community was born. Many regional gamers wanted to join the popular NFT game Axie Infinity but lacked the funds to purchase their Axies – the in-game NFT characters.
Realizing how blockchain games could be an asset to citizens of developing countries, Dizon began loaning out his Axies to other players who needed the means to purchase them. This selfless act ultimately drove Dizon and Beryl Li to create Yield Guild Games in 2020, assisting gaming enthusiasts in benefiting from NFTs and blockchain gaming.
How Do the Yield Guild Games Work?
YGG DAO is an open-source protocol based on the Ethereum blockchain that merges Decentralized Finance (DeFi) and NFTs to create an economy within a virtual world. Its smart contracts ensure that all rules and regulations set by the community are upheld, as well as providing awards and organizing rentals of NFTs.
Composed of numerous SubDAOs, YGG enables its members to self-govern according to the specific NFT game they play or their geographic area. Every SubDAO carries its own rules, establishing the foundation by which players are allowed to manage their assets and carry out their gameplay masterfully.
This model encourages players of the same NFT game to collaborate to maximize their in-game profits. It also allows guild members to rent out and utilize the DAO's NFT portfolio, getting a portion of the gaming revenue.
Within YGG, the YGG Treasury stores all NFTs and digital assets, controlled democratically by the community. The Treasury distributes the NFTs to each SubDAO and holds P2E assets from various blockchain-based games.
Through its NFT rental program, known as scholarships, the YGG DAO seeks to maximize the value and utility of gaming NFTs. The Axie Infinity community first introduced this idea to benefit both owners of these NFTs and "play-to-earn" gamers.
In Axie Infinity, users who have acquired gaming assets can loan them to less experienced players for a share of that player's in-game rewards. Smart contracts running on the blockchain facilitate this process, ensuring that the scholars can only use the NFTs in the game. Additionally, only the original owner (manager) of the NFTs can trade or transfer them.
YGG offers scholarships to new players through a revenue-sharing model, enabling them to kickstart their journey with NFT assets and generate in-game rewards. No initial investment is required from the scholars, but they have to share a percentage of their earnings with their managers. Independently, community managers present the scholars with the necessary training and guidance.
The YGG Treasury provides scholarships for more than just the NFTs found in Axie Infinity. Other play-to-earn games, such as The Sandbox and League of Kingdoms, also offer virtual lands owned by YGG, while F1 Delta Time features virtual cars as part of their scholarship program.
The YGG DAO comprises various smaller SubDAOs, each representing a localized gaming community. These SubDAOs are formed based on P2E games the players participate in or geographical locations. For instance, the Axie Infinity SubDAO includes those dedicated to Axie Infinity. The Sandbox SubDAO is for gamers of The Sandbox, and the Southeast Asian SubDAO is for players residing in the Southeast Asian region. By being part of a SubDAO, gamers can collaborate and manipulate information related to gaming strategies to gain better performance.
In a SubDAO, a community lead, wallet, and SubDAO token holders oversee the activities and assets of each respective game. Through the SubDAO token, contributors gain access to revenue generated through gameplay while being eligible to provide input and vote on decisions impacting the SubDAO, such as buying additional in-game NFTs or asset management. Despite this autonomy, the SubDAO will still contribute earnings to the YGG DAO.
YGG is an ERC-20 token granting its holders permission to participate in the YGG DAO governance. It has a total amount of 1 billion tokens, with 25 million put on sale during an Initial DEX Offering (IDO) on SushiSwap in 2021. To back the community, YGG has set aside 45% of its overall supply to be gradually dispersed to users over four years.
YGG is the native token of the platform, allowing users to pay for services on their network. They can also stake it in YGG vaults for rewards or use it to unlock exclusive content on the YGG Discord channel. Furthermore, token holders are empowered to submit proposals and vote on decisions involving the DAO's technology, products, projects, token distribution, and overall governance. YGG tokens will be rewarded when suggestions are made and implemented through the DAO.
What Is YGG Vault?
Rather than staking tokens to receive a fixed interest rate, the YGG DAO is taking a different path. On this platform, vaults are created for various initiatives and rewards tied to the platform. For instance, a vault may offer rewards dependent on a scholarship program, whereas another one may offer returns based on the outcomes of the Axie breeding program.
YGG plans to create an ultimate, comprehensive vault index considering all yield-producing activities within its system. This vault would reward stakers whose contributions yield income from subscription plans, merchandise sales, rentals, treasury expansions, and SubDAO index achievement.
Token holders can "stake" their YGG tokens to demonstrate their support for a specific activity. Proportional rewards, including YGG tokens, Ether (ETH), or even stablecoins, are distributed using automated smart contracts. This is determined by the code used in the vault.
YGG is creating a decentralized network in the real world that shares revenues between members. This model allows everyone to succeed in virtual environments with a brand-new gaming economy. As more and more metaverse projects are gaining traction, Yield Guild Games and other NFT guilds can gain an influx of interest from newcomers and crypto fans looking to gain alternative revenue streams with play-to-earn NFT games.