In the summer of 2021, in an internet cafe in Cebu, Philippines, 23-year-old Carlos made a decision that his family couldn't understand: he used all the money he had saved for six months to buy a motorcycle to purchase a token from a gaming guild called YGG. His mother nearly cried on the phone: 'Child, that's money for playing games, not for investing!'
On this day two years later, Carlos used part of the returns from that investment to pay for his sister's college tuition, renovated the roof of his house, but he still hadn't bought the motorcycle—because he discovered something that fascinated him even more: a new world that is reshaping the boundaries between gaming and finance.
And it all started with a simple question: What does the YGG token and its underlying assets mean for an ordinary investor?
Not game coins, but 'game economy ETF'
Let’s break a misunderstanding: YGG tokens are not in-game gold or credits. They are more like a share in a game economic index fund.
In traditional understanding:
· You invest in Tencent stocks = investing in the parent company of (Honor of Kings)
· You invest in Nintendo stocks = investing in the creators of (The Legend of Zelda)
· You invest in YGG tokens = investing in 'player productivity' itself
What's the difference? Imagine:
If you invested in Amazon in 2020, you were betting on 'the future of e-commerce and cloud computing'. If you also invested in YGG, you were betting on 'the ability of rural youth in the Philippines to earn income through gaming', 'the potential for children in Brazilian slums to monetize their gaming strategy talents', and 'the trend of democratizing global game asset ownership'.
'People often ask, what does the YGG token really represent?' said a co-founder of YGG during a community Q&A, 'It represents our belief that gaming skills should be verifiable, tradable, and capitalizable human assets, just like programming skills and design skills.'
Triple value layer: Anatomy of YGG assets
For ordinary investors, understanding the value of YGG requires looking at three levels:
Layer 1: Value of underlying assets (NFTs on the balance sheet)
As of the end of 2023, YGG holds:
· Over 150,000 game NFT assets (from Axie to virtual land)
· Distributed across more than 20 blockchain games
· Conservatively estimated market value exceeds $50 million
But these numbers can be misleading. The key is not 'how much', but 'how to manage'.
Taking Axie Infinity as an example:
· Ordinary players holding Axie: a single asset, concentrated risk
· YGG holds Axie: forms a 'battle combination' to hedge the risk of a single game
· YGG's management strategy: dynamically adjusting asset allocation based on game economic data
'Our asset pool is not static,' explained the head of YGG's asset management department, 'it's more like an actively managed fund. When we detect signs of overheating in a certain game economy, we gradually reduce our position; when we find undervalued new games, we intervene early.'
Layer 2: Operating cash flow (the guild's 'recurring revenue')
This is the most underestimated part. YGG's revenue sources are diverse:
1. Scholarship sharing
· Managing over 20,000 'scholar players'
· Sharing from their gaming revenue (usually 20-30%)
· Providing tools, training, and asset support
2. Asset leasing
· Renting game NFTs to players
· Similar to 'game asset sharing economy'
· Monthly rental income is stable
3. Governance participation
· Participating in game governance voting as a large holder
· Providing professional proposals for rewards
· Influencing the direction of game development to ensure asset value
4. Data services
· Selling anonymous game behavior data to developers
· Providing economic model optimization suggestions
· Emerging but rapidly growing revenue streams
'Q3 2023,' YGG's financial report shows, 'operating cash flow covers all costs for the first time and achieves profitability. This means that even if all NFT asset values go to zero, YGG as a business can still break even—something that most NFT projects cannot achieve.'
Layer 3: Network effect value (the hardest to value but the most important)
This is YGG's true moat:
Human network
· Over 30,000 active members
· Covering over 100 countries
· Forming cross-cultural, cross-time-zone collaboration capabilities
Knowledge network
· Accumulated game strategy database
· Experience in economic model analysis
· Insights into player behavior psychology
Governance network
· Voting rights in multiple gaming DAOs
· Established industry standard agreements
· Developer partnerships
'You can replicate our NFT assets,' said the community development director, 'but you cannot replicate the trust network, training system, and cultural identity that we have built over three years. This is YGG's 'social capital'; it is not reflected on the balance sheet but determines our long-term survival.'
The valuation model that confuses Wall Street analysts
Last year, a traditional investment bank attempted to establish a valuation model for YGG, but encountered unprecedented challenges:
Challenge 1: How to price 'player productivity'?
· Traditional model: Revenue × Price-to-earnings ratio
· But YGG's 'core asset' is the time and skills of players
· These 'assets' can leave at any time or become more efficient
Challenge 2: How to assess the 'value of governance rights'?
· YGG has voting rights in over 10 gaming DAOs
· These rights can influence game economic rules
· Similar to 'holding board seats in multiple game companies'
· Traditional finance has no corresponding valuation methods
Challenge 3: Correlation of cross-game assets
· YGG's NFTs are spread across multiple games
· When the Axie economy declines, Splinterlands may rise
· This creates a natural hedging effect
· But how to quantify this 'game economy beta value'?
In the end, they adopted a hybrid model:
1. Net asset value method: NFT market value × discount rate (reflecting lack of liquidity)
2. Discounted cash flow: Forecast of operating cash flow for the next five years
3. Option pricing model: Treat governance rights as 'options to influence game development'
4. Network value multiplier: Premium based on community size and activity
'The conclusion is interesting,' the analyst shared privately, 'traditional valuation methods can only explain 60-70% of YGG's current value. The remaining 30-40% is the 'future possibility premium'—the market is betting that YGG can create new business models we have yet to imagine.
Risks: When gaming meets reality
Investing in YGG is not guaranteed profit. Ordinary investors need to be sober about the risks:
Regulatory risks
· Different countries have different definitions of 'play-to-earn'
· May be classified as gambling, securities, or new types of labor relations
· YGG is actively communicating with regulators, but uncertainty exists
Technical risks
· Relying on blockchain infrastructure
· Smart contract vulnerabilities may lead to asset loss
· Security threats to game servers
Economic model risks
· In-game economy may collapse (e.g., SLP crash)
· New games may not attract enough players
· 'Gold farming' may be replaced by AI automation
Concentration risk
· Although decentralized, still relies on a few major games
· If Axie, Splinterlands, etc. all encounter problems at the same time...
YGG's hedging strategy is noteworthy:
· Geographic diversification: Members are spread around the world, reducing regional risks
· Game diversification: Portfolio covers various game types
· Revenue diversity: Not only relying on asset appreciation but also on operating cash flow
· Compliance first: Obtained formal business licenses in the Philippines, exploring legal frameworks
Carlos's investment diary
Let's return to Carlos's story. He wrote in his investment notes:
'July 2021: Bought YGG. Logic: Saw friends in internet cafés really making money from gaming, but individual risks are too high. YGG is like 'the union + cooperative of game workers', which should reduce individual risks.'
'March 2022: Panic. SLP crashed, and all game assets were falling. But I noticed that YGG was doing three things: 1) Expanding the scholar program (reverse operation); 2) Launching training courses (improving efficiency); 3) Starting data services (diversification). Decided to hold.'
'January 2023: A turning point. YGG launched the 'sub-DAO independent operation' plan. I suddenly understood: they are not building a 'big guild', but incubating many 'small start-ups'. Each sub-DAO could potentially create value independently. This is the power of the ecosystem.'
'Today: I started learning about game economic analysis. My investment is no longer passive; I am understanding what I invest in through learning. I find that the best way to invest in YGG is to be a part of it—not to buy tokens and wait for the price to rise, but to understand the value logic it creates.'
Five questions for ordinary investors
Before considering YGG-related investments, ask yourself:
1. Do you believe that 'gaming jobs' are real jobs?
· If you believe, YGG is providing infrastructure for such work
· If you don't believe, this may not be right for you
2. Can you accept a volatility logic that is completely different from traditional assets?
· Game assets are affected by version updates, player emotions, and community events
· Very low correlation with traditional stock and real estate markets
3. Do you have the patience to wait for the ecosystem to mature?
· This is not an investment driven by quarterly earnings reports
· Requires a vision of 3-5 years or even longer
4. Are you willing to spend time understanding the game economy?
· The best investors are often deep participants
· Surface understanding may lead to wrong decisions
5. What is your risk tolerance?
· Such investments should be viewed as 'venture capital' allocations
· It is recommended not to exceed 5-10% of the investment portfolio
The future: When YGG goes beyond gaming
The most interesting possibility is that YGG's model may spill over into non-gaming fields.
Experimental directions:
· Skill certification: Can in-game strategic abilities prove decision-making abilities in real life?
· Remote collaboration: Can game team management experience across countries and cultures be applied to real enterprises?
· Governance experiments: Can DAO governance models tested in games solve real organizational problems?
'We have an internal saying,' revealed a product manager at YGG, 'We are not a gaming guild; we are a research institute for new types of organizations in the digital age. Gaming is just our first and best experimental ground.'
This may explain why some traditional companies are starting to pay attention to YGG—not to invest in games, but to learn how to manage distributed teams, how to design incentive systems, and how to build community trust.
So, what does YGG mean?
For early participants like Carlos, YGG means 'the shift from game consumer to game economy participant'.
For ordinary investors, YGG tokens may mean:
A bet: betting that gaming will become an important part of the future economy
A ticket: Entering a learning journey to understand how digital-native economies operate
A participation: At this historic moment where blockchain meets gaming, not just an observer
An experiment: testing whether you can understand the most cutting-edge forms of economic organization of this era
Back to the internet café in Cebu. Carlos doesn't come here often now because he can use better equipment at home. But he occasionally returns to help new young people register their first wallet, explain what private key security is, and share how to earn their first income through gaming.
'Sometimes I feel,' he said to a new friend, 'that I am not just investing in a token. I am investing in an idea: that anyone, anywhere, with skills and effort, should have the opportunity to improve their real life through the digital world.'
'YGG is proving that this idea is possible. My investment is my vote for this possibility.'
The screen flickers, the game loads. In front of countless such screens, a new economic system is being collaboratively built by thousands of people. YGG is both a participant in this system and its infrastructure provider, as well as its value bearer.
Are you ready to vote?
@Yield Guild Games #YGGPlay $YGG
