Thread by @accel_capital

1/ Our second issue is out.

In this issue, we discuss global labor arbitrage and the #Metaverse by looking at the history of MMORPG gold farming and the future of #playtoearn gaming.

This is done through the lens of @YieldGuild, a Metaverse recruitment agency.

Link/thread 👇

2/ acceleratedcapital.substack.com/p/yield-guild-…

3/ @Its_Falcon_Time refers here to the #Metaverse as a set of digital nations.

We agree with this metaphor.

The #Metaverse with its shared on-chain history, vibrant meme culture, & the developing spatial Webaverse is best understood in this way.

https://twitter.com/Its_Falcon_Time/status/1358919496099110915

4/ It's a particularly apt metaphor when considering the macroeconomic and geopolitical forces that will ultimately shape the rise of the #Metaverse.

Let’s consider global labor arbitrage.

5/ Global labor arbitrage occurs when frictions to international capital flows are removed. Labor tends to migrate to nations with higher-paying jobs.

So what happens when a virtual, 24/7 #Metaverse accessible via mobile phone and Internet creates better opportunities?

6/ To make sense of this, we consider gold farming, the practice of playing MMORPGs to acquire in-game currency, which is later sold for real-world money.

Gold farming in video games is a microcosm of economic development from subsistence farming to globalization/offshoring.

7/ A recent example of gold farming and global labor arbitrage occurred in Venezuela after a massive spike in inflation resulted in monthly wages of less than $5.50.

Venezuelans began gold farming in Runescape and Tibia to make ends meet.

bloomberg.com/news/articles/…

8/ However, #Blockchain tech enables a deeper level of ownership over digital assets that turns them from ephemeral products within a game into actual assets that are directly owned.

#PlaytoEarn is an improvement on the traditional gold farming model that embraces this tech.

9/ "By participating in the in-game economy, players are creating value for other players and the developers. In turn they are rewarded with in-game assets. These digital assets can be anything ranging from #crypto to in-game resources that are tokenized..."

- @PlayToEarn

10/ As @mikojava states, "in traditional gaming, these relationships were exploitative, whereas in #DeFi and #NFT there is a great potential for the rise of #playtoearn guilds that benefit the players and their families."

This is where @YieldGuild comes in.

11/ @YieldGuild was founded after seeing the devastation in the Philippines from the reaction to COVID-19.

👾 1 in 4 household heads lost employment
👾 47% experienced reduced income
👾 3 out of 4 households reported they were worried about having enough food

12/ @leah_cb reports in this @CoinDesk article on the Inton family:

"While the government has provided some assistance, it’s hardly enough to get by. Since March, the Inton family have received two relief payments totaling 13,000 PHP ($267)."

coindesk.com/nft-game-filip…

13/ As households attempted to find ways to supplement their income during this trying time, word spread in the community about a game you could play to earn real money.

That game? @AxieInfinity.

14/ An average player can earn around $300-500 a month playing @AxieInfinity, depending on how $SLPs are trading.

@gabusch: "To a crypto investor, gaining $300 or $400 a month might not mean that much, but for these people it means the world."

https://twitter.com/kookoo_crypto/status/1364119835270025217

15/ While this income level is a lifesaver for many people around the world, there are larger upfront costs associated with getting started.

The founders of @YieldGuild (@gabusch, @OwlOfMoistness, and @berylchavezli) looked at this situation and decided to solve it.

16/ In its simplest form, @YieldGuild matches up high-quality gaming #NFTs with players that are willing to grind.

Using @AxieInfinity as an example, YGG leases out Axies to players looking to get started with the game that might not be able to afford the initial upfront cost.

17/ Players keep 70% of the $SLP they produce while 20% goes to the community manager. The remaining 10% accrues to the @YieldGuild's treasury.

This model is not limited to @AxieInfinity. YGG currently operates in @GodsUnchained, @LeagueKingdoms, @TheSandboxGame, and more.

18/ Essentially, @YieldGuild is a #Metaverse REIT.

@Delphi_Digital says:
"YGG will become an efficient bridge between the supply side [...] & the demand side from players who are eager to perform yield-generating activities but might be unable to afford the highest-end assets.

19/ But there is also a deeper level to the @YieldGuild thesis best expressed by @ysiu of @animocabrands:

"I see YGG as a recruitment agency for the #metaverse."

20/ As we see further migration of labor capital into the #Metaverse, from employing real humans in @decentralgames' virtual casinos to vibrant creator economies operated by community-led #DAOs, one thing is certain:

Digital nations are forming, and the migration has just begun.

21/ Be sure to check out the full post above and subscribe for regular commentary.

Each week we analyze how #cryptoassets, #DeFi, #VR, and other exponential technologies are transforming our economy, society, and culture.