Key takeaways
- Gamesta is a guild that raises capital to purchase gaming assets and distributes yields to investors while providing players access to those assets.
- The company is building AI and machine learning datasets to make more informed decisions about which GameFi assets to acquire rather than relying on emotion.
- Gamesta has raised under 13 million dollars and is deliberately taking time to deploy capital, viewing the current market as early with many projects unlikely to survive.
- Spencer Tarring believes metaverse games with ownable land and NFTs have stronger long-term potential than play-to-earn games that may have unsustainable token economics.
- The blockchain gaming industry is only six months established, making it comparable to the early internet era when adoption and viability were uncertain.
From pay-to-play to shared ownership
Ashton Addison: What is Gamesta building, and what problem does it solve?▶ 00:23
Spencer Tarring: I'm a big crypto and Bitcoin believer, and blockchain is a profound technology that is changing many industries. Gaming is an incredible one for it to touch. Previously, people just paid to play and enjoyed the experience, but there was no real way to be rewarded for the time they spent in a game. Now developers can share the success of their game with their gamers. The value of any game comes from its network of players. Blockchain lets you share that success, and NFTs give people the right to own digital assets within different games and metaverses. Gamesta is a guild. We buy assets, give our network of players access to them, and those assets generate a yield that we pass back to the investors. We're basically connecting investors with players.
Ashton: Gamesta isn't just a game with NFTs. How do you choose which games, assets and players to back?▶ 02:17
Spencer: GameFi has only been prominent for about six months, and people have been buying assets on human emotion, on what they think will be good. At Gamesta we're building data sets so we can apply AI and machine learning and make more informed decisions about which assets to acquire. It's very early days. Normally you apply machine learning to massive data sets, and we don't have that yet, so right now we're focused on building them. It will take a while, but once we've done it we'll have a very valuable set of data. It will be useful not just for us but for other guilds and gamers who want access to this information.
Getting 10x, 20x on day one is not sustainable or good for any project.
Going slow while the market runs hot
Ashton: The GameFi ecosystem is still young. Where is Gamesta now, and how are you building a strong foundation?▶ 04:09
Spencer: We already have an operating guild with a thousand Axies and a few hundred players, and we're using it as a test bed to work out the best strategy. We've raised just under $13 million, and I'm not in a rush to deploy it. I think we're at a precipice. There are a lot of not-good projects and games out there that I don't think will be around in the next 12 months. A lot of folks have been on token devices, getting 10x and 20x returns and forgetting about actually delivering a product. My background is entrepreneurship. I've built and sold many businesses over 20 years. With Gamesta and my other project, Dope Wars, I'm not focused on pumping token prices. I want to get my head down and build a product, and spend money where it should be spent. Building something long-term and sustainable takes time.
Ashton: What criteria do you use to decide which games to add to the portfolio?▶ 06:12
Spencer: It's hard to know, and you can't get every decision right. You need to get more right than wrong, and that's the basis of any fund. If you got 100% right, we wouldn't be talking here, we'd be on a private island. We use the AI and machine learning to improve our decision-making and give us an edge. It's difficult because so many games are coming out, and a lot of them are said to be Ponzi schemes. Even Axie has to keep adding players, otherwise there are too many Axies and too much SLP. I'm very bullish on metaverse games. Owning assets like land and NFTs within a game, which other people want to use and which you can build up and make more valuable, is the ultimate game for me. I'm bullish on space metaverse games like Star Atlas when it launches.
Ashton: Metaverse projects with virtual land have been around longer than most GameFi games. Does that make them safer bets?▶ 08:26
Spencer: Anything that passes the 20-year mark is when people expect it to be around forever. Bitcoin is approaching that, and the internet is well past it. When I was running my internet business in school, people asked why they would ever need a website. Now you can't imagine a world without the internet. In the same way, you probably won't be able to imagine a game without crypto. There's a lot of work to be done and a lot of kinks to iron out. Because of the way crypto works, projects like Axie and Star Atlas can raise a lot of money up front and figure things out later, so you have to be careful to pick the right ones. That's why people should invest through guilds rather than directly. A guild gets access to NFTs at a better price, and we have operational experience in running and yielding those assets. Hopefully we also build up the experience to know which assets are right, rather than just buying what looks cool.
Who the guild is for, and how the token works
Ashton: Why should a player join a guild rather than play to earn on their own?▶ 10:10
Spencer: A lot of our players are underprivileged players from Vietnam, Indonesia and the Philippines who don't have the capital to buy these assets. Even in Axie you now need about a thousand dollars to have something decent in the game, which is out of reach for many players. What's beautiful about gaming is that every gamer's time inside the game has equal value. It doesn't matter whether that person is worth a million dollars or minus 50. That makes it a great opportunity to level the playing field within metaverses. I'm very bullish on metaverses. I think the whole world is going to be in one, and we might already be in one right now.
Ashton: How does the Gamesta token work inside the ecosystem?▶ 12:02
Spencer: Its main utility is transferring value between the three parties in our ecosystem: the investors, the players and the management, which is us. The investor buys the token, which gives us asset value. We use that to buy NFT assets and loan them out to players. The players earn, say, SLP, and the SLP is converted back into our token. That token is then distributed to investors, to management and to the player. So it moves value between everyone in the ecosystem.
You probably won't be able to imagine a game without crypto.
Backlash, Zinc and what comes next
Ashton: You faced criticism over your fundraise. What are the big things coming for the platform in 2022?▶ 13:36
Spencer: We took a lot of stick for using Copper Launch to raise money for our platform. We did a very successful raise of close to $13 million, but many people in the IDO and private rounds were unhappy because they didn't see big price pumps on day one. Getting 10x, 20x on day one is not sustainable or good for any project. Our project isn't about rewarding private and IDO investors with a big pump on day one. We want to spend a year or two building this platform and delivering value. In about three weeks we're launching a fair launch auction platform called Zinc, which is like Copper Launch on steroids, with lots of extra features, and backed by us. Staking is also coming. There are connected projects too, like Rendezverse, a metaverse for exhibitions and trade shows. In two weeks we'll announce VRcade, a metaverse for arcade machines. They have the licenses for big games like Mortal Kombat and Street Fighter, and you'll be able to play them and challenge other players in the metaverse.
This interview has been edited for length and clarity. Recorded December 2021.
