TLDR: “Reputation Cookies” by Decentralised.co
Throughout the Crypto Winter, Yield Guild Games (YGG) stood firm in building toward a future where its community could organize onchain, and carry their reputation anywhere, to give them better access to life-changing opportunities. The Guild Advancement Program (GAP) and Superquests have granted community members achievement badges that prove their contributions to the web3 gaming ecosystem. Now, YGG is taking the next step by transitioning into a protocol that enables guilds worldwide to scale.
In an essay titled “Reputation Cookies,” Joel John of Decentralised.co studies the evolution of YGG while exploring the emergence of digital collaboration on the web and how guilds fit within it. Decentralised.co commands a viewership of 23,000 subscribers and was one of the earliest to cover Ronin’s ecosystem. The newsletter is known for being ahead of the curve when it comes to covering web3 social, data infrastructure and gaming. Joel’s piece takes a broad look at how communities and digital collaboration have evolved on the web and ties it to why guilds are a modern phenomenon that is here to stay.
The following summarizes Joel’s thoughts on the state of web3 gaming after a brutal two-year bear market. He also shares his observations and learnings drawn from his many conversations with YGG’s core team, partners, and communities, having spent more than three months studying the Guild Protocol as well as the games and guilds building on it.
Here are some of the key takeaways from his essay.
Web3 Gaming Is Early and VCs Value Infrastructure
Web3 gaming currently mirrors internet streaming in the 1990s, which was stifled by technology limitations. Web3 gaming has not had its Netflix moment yet. Investors understand that and have put the bulk of their money into the infrastructure layer, in projects such as Immutable, Polygon and Ronin. Even in applications, the money is going into marketplaces or NFT tooling. The risk in investing in a single game is far too high.
Additionally, the Philippines — where YGG has its roots — has historically been ground zero for testing social apps. Joel explores how the region was a crucial testing ground for social network-based games of the late 2000s to propagate and how the trend died out. He then lays out the cultural and socio-economic reasons behind the Philippines being a dominant player in web3 gaming.
Web3 Needs Gamers, and Guilds Can Bring Them
In every platform or application, users often need to spend considerable time on them before money starts flowing. This relationship is inverse in web3, where users are given capital incentives upfront. The challenge is that when the market does well, there is an influx of users, suggesting growth. But when the market declines, users incur financial losses and abandon the platforms.
YGG tackles this with a product foray to build a reputation network for gamers, realized in the form of soulbound tokens (SBTs), which are nontransferable NFTs. A player can get an SBT for completing quests such as being the first to play a game. YGG ties SBTs to a game’s quest engine, which serves as an integrated analytics suite monitoring a user’s behavior. With SBTs, games can have curated users that have verifiably spent time on a product. For YGG, they gain a network of gamers that have built their reputation.
In such a system, YGG takes on the role of the issuer for reputation. In YGG-supported web3 games, users own these reputation markers, which are the SBTs. A variation of this system can be seen in web3-native social networks like Farcaster.
Web3 gaming is largely imitating multi-creator networks of web2 social networks today. During the emergence of the creator economy, agencies emerged to bundle channels on YouTube to assist with better monetization. The aggregation of creators led to better economics for everyone involved. Joel draws parallels between multichannel networks (MCNs) of the mid-2010s and guilds of the early 2020s to lay a case for why guilds are here to stay.
Reputation Cookies
The web runs on cookies. Cookies help websites like Amazon and YouTube make recommendations based on user patterns. YGG co-founder Gabby Dizon calls YGG’s SBTs “cookies for onchain reputation.”
A developer may want to offer a new game with added perks to a gamer with 10,000 hours accumulated. The developer needs to verify the user’s reputation and allocate assets accordingly. The emphasis here is the portability of reputation, not assets. Even interoperable assets are still dependent on game publishers to be useful.
Naturally, this has a much bigger implication. When expertise is accessible across products, individuals would stand to benefit better. The creation of open identity networks can lead to alternative advertisement models. An internet where power users can be identified onchain and be offered the ability to opt into custom products built specifically for them.
YGG as a Guild Enabler
“YGG’s core innovations are its ability to bootstrap a community of users that can be early to web3-native games and its suite of tools that track the gamer’s progress over some time.” — Joel John
Introducing a layer of reputation to guilds creates transparent and verifiable contributions holding considerable value as a network. In such a model, YGG does not run guilds but becomes an enabler of guilds. Guilds enabled by YGG are simply aggregations of skilled users coordinating for mutual gain. Decentralization takes on a new meaning with YGG enabling multiple communities, each running independently.
Community Is the Moat
Joel observes that many YGG members stick around for the community and only see the SBTs as a bonus. He has heard stories from many users who stayed with YGG even after the market downturn because of the friendships they had formed. They have a reason to stay committed to YGG even without financial incentives. Joel dubbed the phenomenon “come for the speculation, stay for the community,” noting that in this context, the community becomes a moat.
The LinkedIn of the Future
YGG’s focus is exclusively on gaming, but it may expand to more niche tasks. Joel writes that it is not hard to imagine guilds focused on data labelers for AI and LLMs, copywriters, executive assistants, or accountants, with a unifying mechanism of credentialing skill and reputation.
Traditional attestation networks like universities would credential individuals for their abilities. As work becomes increasingly digital and remote, new forms of attestation become necessary. The LinkedIn of the future will have onchain queries for wallets that have SBTs to credential them.
YGG’s long-term vision is to scale this model for the entire gig economy. In doing so, they are opening access to better opportunities on the web for a generation of users that historically relied on traditional jobs.
Read the essay in full at Decentralised.co.
YGG is collaborating with Pixels to build its in-game guild system. Find out how to join a Pixels guild by completing the Pixels Superquest with Player_w3.
Join YGG on Discord and follow us on X to stay updated on YGG’s activities.
