Cryptopolitan had the unique opportunity to sit down with THE Yat Siu in Dubai during TOKEN2049, a legend often dubbed the Godfather of Web3, and the insights he shared were nothing short of revolutionary.
Yat opened up about the seemingly legendary status attributed to him, expressing both surprise and humility, stating, “I don’t know that I really hear that much about that.” His down-to-earth nature contrasts sharply with the huge influence he has in the blockchain industry.
In this article, we are going to share everything we had the honor of learning from the co-founder of Animoca Brands.
Yat started off by telling us about the “steadfast ethos” of Animoca Brands, stressing that while profitability is necessary for sustainability, their real goal goes far beyond just financial returns. He emphasized the importance of reinvesting into the ecosystem, creating a positive feedback loop that enhances the entire blockchain industry. In Yat’s mind, the true purpose of Web3 is to bring more financial literacy and equity to the world.
Since starting their journey into Web3 between 2017 and 2018, Animoca Brands has grown into one of the world’s largest investors in Web3, boasting a portfolio of over 400 companies.
But it wasn’t always this way, explained Yat as he reminisced about the early days when they were much smaller and less known. In 2019, Animoca Brands wasn’t in the media every other day. But the company kept investing and expanding all the while staying true to their belief of using Web3 to transform the world’s financial system for the better.
Yat critiqued the conventional corporate focus on maximizing profit at all costs, highlighting how large corporations hoard cash, much of which is unproductively stashed away, accumulating minimal interest.
And so he proposed a model where instead of sitting on idle capital, companies could reinvest a portion of their profits back into the Web3 ecosystem, bringing forth growth and innovation.
This approach, Yat explained, would not only boost the startups but also enhance the investing companies’ valuations through equity or tokens, creating a win-win scenario for all involved.
One of the key themes Yat emphasized was the importance of believing in others. He passionately talked about how investment isn’t just about the financial aspect but also about endorsing someone’s vision and capabilities.
This philosophy has been critical to how Animoca Brands operates, preferring broad and inclusive investments over selective, exclusive deals. Yat highlighted their strategy of expanding network effects by collaborating with multiple investors, which contrasts sharply with the more traditional, competitive approaches seen in the investment world.
Yat also shared insights on how they manage their investments, noting that unlike traditional venture capital that operates within strict time-bound frameworks, Animoca Brands invests from a balance sheet that allows them to make long-term bets without the pressure of immediate returns. This flexibility has enabled them to support innovations in Web3 and blockchain technology, even when the market was not favorable. In his words:-
“We don’t invest selectively. We invest very broadly. We also do a lot of partnership investing. We invest together with many other partners. We have a very, very, collaborative mindset. You know, some investors, when they see a good deal, they want to take the whole deal and they exclude everyone else. We’re not like that.”
And it is his belief that if more people in the investment industry were to use that approach, the world would truly be a better place for everyone. Intrigued, we asked Yat about his take on picking and choosing companies for Animoca Brands to back, referencing a time where he told us about missing out on some deals.
To that, Yat explained that Animoca Brands is not a traditional investor, therefore, it doesn’t operate that way. The company invests most of its money out of the balance sheet. Unlike a venture capitalist, they don’t have a timing issue, or a deadline. An investment could take three, four, or even ten years to generate returns. Makes no difference to Animoca Brands.
Yat humorously recalled a time where venture capitalists wouldn’t even touch anything blockchain or crypto-related, and only jumped in when Web3 became sort of a trend. For Animoca Brands, they only invest in a movement they truly believe in. Like Web3 gaming, for instance. To Yat, such a movement that has reshaped gaming forever and has created more opportunities for a lot of people is an example of what Animoca Brands stands for.
Basically, they’re not just in it for the money. They’re mainly in it to change the world.
The discussion also touched upon the concept of digital property rights, which Yat argued are as fundamental to Web3 as physical property rights are to the traditional economy. We asked him, why is that? Why is this so important for Animoca Brands? And Yat’s response was as simple as it was profound:
“Because it’s important for the world.”
He drew parallels between digital and physical assets, explaining how the lack of property rights in the digital space has squashed the economic potential of digital assets.
By establishing and recognizing digital property rights, Yat believes that Web3 can unlock a new era of economic activity where users truly own and control their digital assets, much like property owners in the physical world.
Animoca Brands sees Web3 as a capitalist system. And in order for capitalism to really thrive the way it is supposed to, we must have property rights, said Yat Siu. This will allow people to turn things into capital assets just as they do in the physical world.
“Imagine if the world we live in today, the physical world, did not have property rights. You could not own your house, you can’t own your car, you can only rent it, right? You can’t invest in it because you could lose it. Now if the whole world was renting, the real estate market would not be a market at all. It became a market because we could own a house.”
Yat emphasized that in order to invest in any kind of economy, one has to think of the long-term value of that economy. He made a comparison with countries like North Korea that have very little property rights and yet, a ton of population, and it is one of the poorest countries in the world. All countries with low property rights have poor GDPs. And the countries with high property rights have strong GDPs, strong capitalism, and an overall better economy.
The blockchain allows for true ownership of digital properties, whether it is a land, a house, a designer bag, or even educational curricula that can actually generate yield returns. And that is Animoca Brands’ mission. To empower digital property rights all over the world. But as Yat said, one of the world’s biggest problems at the moment is that we believe in capitalism a little too much. “We say everyone should be a capitalist.”
But that is not possible. This is simply because, even though it is important to have property rights, not everyone in the world can actually own a property. Especially with the current state of our global economy. It is becoming increasingly expensive to buy anything of true value.
However, that is not the same for digital properties. Because with them, Yat believes we can create a framework where everyone can own some kind of stake in the network they construct, via tokens. And that is the future, in Animoca Brands’ eyes. Yat sees a world where each and every one of us is a property owner of some form in the digital world, because they get to own the stakes in which they build.
“That’s why we are so steadfastly saying our mission is to deliver true digital property rights.”
The way this starts is through Web3 gaming. Animoca Brands thinks most of the world’s gamers already believe they should own their gaming items. Like truly own it. So, they are easier to start off with, making them the very first step in bringing true property rights into the blockchain and Web3 ecosystem.
Sure, gaming tokens and real life money aren’t the same. Yat knows that. But he also knows that they feel the same to the gamers. They can buy items and property with these in-game tokens. And this triggered him to bring up Mocaverse, an ownership initiative by Animoca Brands to drive network effects within the Web3 industry.
In Yat’s own words, Mocaverse is essentially Animoca Brands’ distribution strategy for the Web3 community. Right now, Mocaverse has over 1.3 million Moca ID holders and the floor price of the Moca NFTs is doing extremely well.
Yat detailed how Mocaverse aims to create a community where users are rewarded for their contributions, contrasting this with traditional models where platform owners reap most of the benefits. This approach enhances the value of the network and also democratizes access to the gains from Web3 developments.
Unlike traditional models where interaction might be passive or purely consumptive, Yat explained that Mocaverse invites users to actively participate in the ecosystems of games, projects, and platforms Animoca Brands invests in, such as Pixels.
This Ronin-supported game is just one example where users can work within the game environment. Here, gameplay and participation allow users to generate and receive value in the form of tokens. Yat drew a compelling parallel between the Mocaverse’s mechanism and traditional advertising:
“In the conventional Web 2.0 framework, platforms like Google and Facebook monetize user attention without directly compensating the users themselves.”
The Mocaverse overthrows this model by enabling users to earn points through their engagement, effectively sharing the economic benefits generated by their participation. As players interact within the game, they build a network that enhances the project’s value, creating a virtuous cycle of growth and reward. This aligns with Web3’s ethos of decentralization and user empowerment, which we all know is the opposite of the profit-centric models of Web 2.0.
The Mocaverse also serves as a gateway for transitioning users from Web2 to Web3 environments, using a points mechanism that facilitates user adoption and integration. Additionally, governance plays an important role in the Mocaverse, as users with Moca IDs or Moca NFTs can participate in governance decisions. Yat is enthusiastic about the potential of this model to create one of the largest and most influential Web2 to Web3 communities globally.
We then asked him what his vision is for an open metaverse and whether he thinks it’s possible for us to achieve that, as an industry. In the vision of Yat Siu, an “ideal open metaverse” is fundamentally anchored in ownership rights. He told us that the entire premise of building a metaverse would be pointless without genuine ownership by the community that builds and interacts within it.
For the legendary co-founder of Animoca Brands, the way to a true open metaverse is through the blockchain, because of its unique capabilities to ensure decentralization, security, and scalability for managing the assets in this virtual world.
Discussing the fusion of AI with Web3, Yat highlights the natural compatibility between these technologies. He envisions AI as a perfect fit for the Web3 framework, pointing out that AI’s digital-native nature allows it to integrate smoothly with blockchain systems. Yat expects this synergy to accelerate as AI becomes capable of operating independently on blockchain platforms, thus granting AI applications potential immortality in the digital world. He added:
“So for instance, when you look at OpenAI, it generates content and it generates value, but it takes information from the internet without actually seeking permission from it. But on blockchain, I can know who I took the permission from, and more importantly, that I can then ultimately pay out a dividend or a reward basically for people who received value from this content.”
Yat Siu then brought up decentralized AI and called it a transformative force in the digital industry. He expressed that AI, inherently a digital native, thrives on blockchain due to its capability to operate independently and perpetually. This independence is very important if AIs are to function continuously on the blockchain and operate without any human intervention.
The interplay between AI and blockchain, according to Yat, not only increases the utility of digital assets but also ensures ethical governance through transparent provenance, where every digital interaction and transaction is verifiable.
On the topic of the launch of MOCA coin, Yat confirmed that Animoca Brands is collaborating with MOCA Foundation and CoinList. By holding MOCA coins, users gain access to governance and decision-making within the network, creating a democratic approach to digital asset management.
The conversation then shifted to Hong Kong and its role as a hub for Web3 innovation. Yat highlighted his involvement in an advisory group dedicated to Hong Kong’s Web3 strategy. This group’s work, as Yat outlined, is crucial in shaping governmental policies that support the growth of blockchain technologies.
Under his guidance, the advisory group plans to position Hong Kong at the forefront of the digital economy by using its already existing financial infrastructure and regulatory environment to attract a ton of Web3 enterprises.
So we asked him, “In your perspective, which one’s better for young founders and developers? Hong Kong or Dubai?”
The selection is heavily dependent on the target market, as Yat said. Because of its central location in Asia and its proximity to other big Asian economies, Hong Kong is an essential hub for anybody targeting the Asian market. With its advantageous location at the intersection of numerous cultural and economic zones, Dubai, on the other hand, provides strategic benefits for accessing consumers in the MENA and, to a lesser degree, Europe.
Web3, according to Yat, is fundamentally decentralized and has a worldwide reach, which makes it irrelevant in terms of geography. To demonstrate his point, he brought up how easily people from Singapore and Hong Kong can attend major events in Dubai, and how easily people from Dubai can attend major events in Hong Kong, displaying the worldwide connectivity that Web3 facilitates.
Yat also called Saudi Arabia an important market, similar to the influence China has in Asia, due to its massive economic power and young, tech-savvy population. To him, it is highly-important to establish a strong Web3 presence in Saudi Arabia, both for its market potential and its ability to act as a catalyst for a huge regional growth.
Yat is of the opinion that there is potential for exponential growth in the MENA region as Saudi Arabia advances its digital infrastructure, which would serve as a model for others in the vicinity.
He then addressed the challenges and misconceptions surrounding cryptocurrency and blockchain technologies. By actively participating in these high-profile events and dialogues, Animoca Brands seeks to influence perceptions and regulatory frameworks, thereby paving the way for a stronger and more secure adoption of Web3 globally. Yat explained that this is why the company has partnered with NEOM. The mission is to drive regional Web3 initiatives in line with the Saudi Vision 2030 plan.
“So it makes complete sense for us to, you know, focus and build that area. And also, when Saudi becomes bigger as a blockchain market, what will happen to the MENA region for Web3? It will actually expand. It won’t just concentrate in Saudi. Everything will increase as a result of that, right?”
Continuing the interview, the conversation shifted towards the convergence of virtual constructs with tangible infrastructures, like those seen in ambitious projects such as NEOM in Saudi Arabia or the conceptual Bitcoin cities in El Salvador. Yat Siu emphasized the transformative potential of blockchain technology in these developments.
He noted that blockchain’s capability to enable permissionless trust while securing privacy through mechanisms like zero-knowledge proofs could revolutionize how personal data is handled, contrasting sharply with current centralized systems where a handful of companies control the global population’s extensive personal data.
Yat stressed that the true power of blockchain lies in its ability to integrate seamlessly with government activities and societal functions. He argued that while digital interactions are becoming rampant, the necessity for physical spaces and traditional societal functions remains, making the cooperation between digital advancements and governmental structures incredibly important for the world.
To round up the interview, we asked Yat Siu if he had any message for our readers, and he said yes. He started by expressing his gratitude towards everyone actively participating in Web3, acknowledging the recent recovery from a bear market and the positive momentum currently propelling the industry.
He praised the communal aspect of Web3, stating that unlike the competitive nature of Web2, in Web3, each success story contributes to the collective prosperity. This, he believes, is due to the shared network structure of Web3 platforms like Ethereum, Solana, and Ronin, where advancements on one part of the network enhance the whole, supported by the fluid interchange of assets across the ecosystem. The ethos of Web3 is about the shared network effect; we don’t play to beat each other, we play to become better for ourselves and to help one another in the collaborative spirit of Web3.
Yat passionately argued that every participant in Web3 is contributing to a redefined model of capitalism, one that is more inclusive and accessible. Moreover, he discussed the broader implications of Web3 on improving financial literacy and the redistribution of capital. By democratizing access to financial tools and knowledge, Web3 could potentially address the systemic barriers that have kept the majority of the global population in economic insecurity.
He shared his vision of a future where everyone can be a capitalist, not just in terms of wealth but also in having a stake and say in the digital economies they help create. His words were:-
“Most of the world doesn’t understand money. Most of the world doesn’t invest. Which is why we have such a small class of people that can make money, because they understand capitalism, and essentially, capital assets. And the vast majority of the world is a labor class. And so they don’t know how to make money.”
He proceeded to say that yes, people use money every day, for everything. But because they trust it as a store of value, they keep getting betrayed by capitalism, which is also something they haven’t truly understood. His last words? “I think your readers who are building this space should know that they’re not only doing something for themselves, they’re also helping grow an ecosystem.”
Written and edited for publication by Jai Hamid
Interview by Yaroslav Belkin
