The guild ecosystem in the cryptocurrency space has grown rapidly over the past year, growing from a simple idea to a diverse collection of groups seeking to participate in the economy of ownership. In this post, our purpose is to categorize and analyze the strengths and weaknesses of the standard guild design, and present some ideas for improving the existing model. While people have been organized into groups with a common purpose or expertise for thousands of years, in PlayFi the concept of a guild takes a slightly different form, and that’s what we’ll mostly explore in this article.
Generally speaking, the purpose of a guild is to facilitate a flywheel of asset acquisition and community organization. More influential guilds can be thought of as Kingmakers, as they are able to fund new games, buy in-game assets, and then drive players into the game, ensuring a certain level of success and creating value for the assets. Guilds leverage Treasury assets to enable individuals or groups to play, compete and earn money in the new crypto-economic gaming world, where value is distributed to users.
Currently, we see an ever-expanding ecosystem of guilds competing for membership, assets, and transaction flow. With the rise of PlayFi and the X-to-earn economy, the role of guilds in organizing people around new incentive structures for games, products and services is likely to increase further.
A typical PlayFi guild strives to build a feedback loop of scholar onboarding and asset accumulation. The three main components are Academics (Sponsored Players), Scholarship Managers, and Guild Treasury.
To kickstart the flywheel, guilds buy assets to play PlayFi games, covering players’ often substantial up-front costs. The guild then elects scholarship managers, who are tasked with recruiting, training, and overseeing scholars on the guild subcommittee.
Once the resources are in place, scholars will borrow in-game assets from the guild to play various games. In exchange for these services, managers and treasuries receive a share of the value generated (usually in the form of in-game tokens). As the scholar base expands, the flywheel accelerates.
- A larger scholar base brings more income to the guild.
- As the Treasury grows, guilds are able to purchase more game assets and fund the development of new games.
- Guilds can continue to grow the number of scholars by investing in more game assets and private transactions.
Guilds effectively serve as venture funds, holding companies, educational institutions, and personnel services, all in one.
Guild Economic Flywheel
As guilds grow in size, they have the added benefit of leveraging their vast academic base to influence their investments in new PlayFi games towards success. By providing their academics with economic incentives (in the form of revenue shares) and assets needed to play new games, guilds can directly influence user adoption of their portfolio companies, and doing so often leads to appreciation in game token and asset prices , all related assets will also rise with the tide.
In 2019 and 2020, Gabi-Dison lent Axies to local Filipinos to train them in Axie Infinity and explore this novel tokenized game mode when he realized there was a possibility of more big development. He then founded Yield Guild Games, which laid the foundation for the thriving guild ecosystem we see today.
Yield Guild Games was the first to apply the guild model to the PlayFi space, monetizing games to revenue at scale. What sets YGG apart is that it aims to exist as a mega-guild. Instead of trying to compete on continents as a single entity, YGG invests in key regional DAOs (Decentralized Autonomous Organizations) to franchise the brand globally. They also provide platforms for game-specific sub-DAOs, enabling groups of members to coalesce around a specific set of Treasury assets, in a process that is game, platform, and location agnostic, with neutrality maximizing the potential for success .
YGG’s Game Ecosystem
This enables YGG to more effectively expand its business to different languages, jurisdictions and cultures. Through the positive-sum approach, the Yield Guild was able to go further and faster. To date, YGG remains the largest guild by academic base, portfolio, and market capitalization.
Common shortcomings of existing guilds
While the existing guild structure is sound as a whole, when evaluating guild designs, we see several common problems.
While there are definitely benefits to this model, like it doesn’t make sense to leave every decision to the community to vote on, having your community involved in managing decisions can be very beneficial for member loyalty and retention. Delegating to teams, soft voting and bottom-up recruiting are all part of that. If scholars and other community members have a say in the future of the guild, they are more likely to stick with it.
Guild tokens generally have little functionality beyond staking rewards. In an ideal world, Guild Tokens should be coveted by academics who are committed to the long-term success of Guilds.
Due to the lack of meaningful governance and token functions described above, and the imminent saturation of the field, guilds may experience problems with retention of community members. To reduce membership attrition, guilds should focus on rewarding long-term behavior and committed community members, rather than those less committed short-term actors.
Automation and Tracking
Most of the bottlenecks in the guild ecosystem revolve around a lot of trust and human governance. Out of trust, academics pay managers earnings, and managers are trusted to pay earnings to the guild’s treasury department. The protocolization of this process will greatly accelerate the development of the guild.
Since academics’ main source of income is from gaming, they tend to be the extractors in the PlayFi ecosystem. This is common in games with weak token mechanics; relying on distribution to academics as the primary user acquisition channel often results in continued downward pressure on prices.
Opportunities for guild improvement
To address each of the above points, we’ve detailed possible adjustments to various aspects of the guild mode. We recognize that this is by no means a comprehensive list and will not fit the specific needs or architecture of each guide.
Considering the goal of increasing community and academic participation, while understanding the inefficiencies of a fully decentralized DAO structure, we recommend that guilds adopt the elected committee DAO model. In the committee DAO model, governance token holders will vote and “elect” individual and community members to topic-based committees. Once elected, the committee will operate with far-reaching autonomy, requiring only community approval for large-scale decisions, such as changing the guild’s token economics. The committee’s responsibilities may include: Treasury management and game investments, guild infrastructure, guild partnerships, and sub-DAOs. Examples of this type of governance in other areas include Yearn’s restrictive delegation and MakerDAO’s core unit.
Both games and guilds should seek to build more symbiotic economics. While academics can exploit games, the onus is on games to design experiences and incentives that optimize player fun. For games, this could be shifting rewards to high-level agency actions and creating more natural token utility, like a decoration store. For guilds, this could be an evolutionary token economics model that rewards academics for more long-term behavior.
In the world of guilds, scholars are the most important controlling asset. Guilds with the most scholars will generate the most revenue, and unlike game assets held by the Treasury, they can easily be transferred to rival guilds with more favorable incentives. Guild retention and scholar access can be improved by incorporating strong token utility and mechanisms that add additional incentives for long-term token holders.
One way to achieve this is to give scholars and community members a way to share in the financial success of the Guild, thereby directing the greatest incentives to those most committed to the Guild. This can be achieved by introducing a token lock-up mechanism, and token holders who have completed the lock-up can obtain a share of the income generated by the guild and have a say in the management of the protocol. This mechanism is also more likely to lead to token price appreciation by reducing the likelihood of mercenary capital. Additionally, to encourage further participation and retention, guilds can offer to exchange a percentage of a scholar’s income for locked guild tokens.
In addition to the token economics and governance adjustments described above, we believe that both guilds and P2E games would benefit greatly if guilds expanded their target audience beyond academics to include non-academic players as well. Since games are often the primary source of income for academics, game tokens are often earned and sold immediately. While a revolutionary way of sustaining life for many, it’s not a fully sustainable approach without design tweaks.
The result of this dynamic is massive selling pressure on the in-game currency – as we’ve seen with Axie’s SLP price plummeting. By expanding beyond the scholar-centric guild model to a hybrid structure that incorporates aspects of traditional gaming communities, guilds can offset the extractive nature of scholars with the additive nature of traditional gaming communities.
The future of the guild is bright
After the huge success of Yield Guild Games, new guilds flooded the market, and other than a regional focus, there was often little difference between the different guilds. As the guild realm becomes more homogeneous, we envision a future where guilds are rebundled into new entities, or child DAOs of international guilds with infrastructure to support scale.
We’d also like to see Guilds start applying this model beyond the PlayFi realm, taking advantage of the broader economy of ownership. Guilds will use their size for bulk purchases, discounted prices, early access, and generally favorable treatment for members. As a result, guilds are starting to look more like bargaining collectives or unions, flipping the traditional mindset of historically predatory platforms and applications. We firmly believe that the future of the Guild is bright and it represents the beginning of a new and original way of coordination in the cryptocurrency space.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/talking-about-the-advantages-and-disadvantages-of-the-current-guild-design-and-suggestions-for-improvement/
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