Yat seo He’s seen a lot during his decade investing in cryptocurrencies as a venture capitalist.
The Hong Kong-based venture studio and game developer Siu co-founded, Animoca Brands, has grown to become one of the most powerful names in Web3 culture, with data provider CoinGecko pegging the market cap of tokens issued by Animoca portfolio companies to More than $45 billion.
But the cryptocurrency winter of 2022 and 2023 proved to be a tough test for Animoca, with several cryptocurrencies from its companies falling by nearly 90%. In the depths of these dark times in February 2023, the Financial Times wondered whether Animoca can survive.
Times have changed, of course. Bitcoin price rises more than 120% in 2024, in the United States The pro-crypto president will take office soon And Animoca almost recently Its office space has quadrupled in Hong Kongeven with the decline of the local traditional financing market there.
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Seo now sees the cryptocurrency industry at an inflection point similar to the one he observed regarding the Internet in the 1990s when it first transformed business.
At the time, Hong Kong’s clothing industry, now a relic of the city’s past, relied on physically shipping its samples to customers for inspection during the production process. There was no Slack at the time, nor Dropbox or FTP, and the resolution offered by fax machines was not sharp enough to be useful for this task.
“People are used to designing their own patterns [and send them] To America via DHL,” Siu said in a recent interview with CoinDesk at Animoca’s Hong Kong headquarters. The process took days to complete, and cost some companies as much as $80,000 a month, according to Siu.
But Seo offered a solution. He ran one of the first broadband Internet providers that allowed clothing factories to take high-resolution scans — something that had previously been difficult because of limited bandwidth — and send them to customers in the West.
The use of broadband Internet has made the client review process “infinitely cheaper” and more efficient, eliminating the need for what Siu described as the “crazy” practice of relying on physical delivery for design approvals.
Seo likens this innovation to the emergence of stablecoins and what he expects is their eventual widespread adoption by traditional financial institutions.
“If you want to do trade with America, you will need to have cryptocurrency paths,” he predicts.
“As that evolves over time, this becomes a business friction… If one person says, ‘I want to send you some Tether or USDC,’ and the other side says, ‘I can only do a wire transfer,’ that doesn’t happen,” Seo said. : “the job”.
In Asia, the use of stablecoins is already common in areas such as supply chain finance. The fashion industry, among other things, is seeing declining margins, and it doesn’t make sense to use bank transfer to pay supply chain partners when stablecoins are sufficient, Seo explained.
“Stablecoins have become indispensable to make these transactions cheaper and faster,” he noted.
This, Siu sees, is the first part of mass adoption of cryptocurrencies in 2025.
Memecoins making community
The next part, in Seo’s mind, is expanding memcoins to include an entire blockchain ecosystem.
“I expect memecoins to release their own L1s or L2s. They are no longer just coins, they build communities and ecosystems,” Seo said. “Memecoins are essentially cultural tokens. They attract attention and build narratives that resonate with people beyond financial speculation.
According to Seo, NFTs are following a similar path, moving from standalone assets to integrated parts of broader ecosystems.
“NFT projects are no longer just about launching tokens; “It’s about creating ecosystems with cultural and symbolic value,” Seo said, pointing to examples like Solana’s growing collection of meme currencies, some of which are now launching NFTs, to boost engagement and deepen their connection to their communities.
For memcoins and non-fungible tokens to achieve sustainable success, they must evolve into platforms where communities “build games, apps and other experiences, not just speculate,” Siu noted.
Cryptocurrency gaming is gaining momentum
Web3 gaming isn’t an entirely new phenomenon, but the efforts so far haven’t resonated with consumers. During the 2021 bull market, big studios are moving to integrate NFTs into games like Ubisoft AAA Ghost Recon franchise It was met with a cold reaction by the market. Likewise, original Web3 games like Decentraland I couldn’t capture the player base Which reflects Billion dollar valuation From their symbols.
And other games like Off the Grid, which promised to bridge the gap between Web2 and Web3 games with great visuals and a focus on games first and cryptocurrencies second, It seems to fade away After a few weeks.
However, Siu remains optimistic about cryptocurrency gaming.
He sees gaming as a powerful entry point for Web3, where culture, community and ownership converge to create something much bigger. In this ecosystem, in-game asset trading becomes an integral part of the gameplay itself, naturally evolving from concepts such as Skin trade Which many already know from games like Counter-Strike.
“To bring in a Web2 player, the focus should be on building the network effect, creating a fun and engaging game, with the added benefits of ownership and trading,” Seo said. “In 2025, we’ll see games where Web2 players won’t even be able to tell whether it’s a Web3 game or not. They’ll enjoy it for what it is, and the benefits of blockchain will be a bonus.”
“They just want to play,” he added.
Reputation as currency
No economy can function without trust between parties and counterparties. While blockchain transparency helps create an environment of high trust, there must be a system to measure reputation as well, according to Siu.
“Reputation is currency. It’s not just about rewards, it’s about how the network values you and your contributions,” Siu said.
A reputation network, like Animoca’s Moca ID, will do just that, he explained. Moca ID allows for a standardized, but decentralized, method of identification across all companies in the Animoca portfolio.
In theory, this would be similar to Equifax’s traditional financing system, allowing services such as uncollateralized cryptocurrency loans — a big change from the current system of over-collateralized loans.
“If you don’t have a good reputation, I can’t build trust with you,” Seo said. “Imagine building your reputation over the years. Would you risk losing it over one bad act?”
It’s not all about profits
As a venture capitalist, Siu seeks a comeback, of course. He is also a strong advocate of capitalism and the benefits it brings, and, In previous interviewsHe said many people’s feelings of hopelessness and inequality came from a lack of financial literacy, which leads to inequality.
Those who do not have the opportunity to own things and generate returns will not be able to understand capitalism, which, although imperfect, is still the best option for society, according to Siu.
“Web3 can save the capitalist narrative by turning users into stakeholders and co-owners,” he has previously said, warning that “the roots of communism came from feelings of inequality.”
For Seo, Web3 represents an opportunity to build a better form of capitalism, one that is more inclusive and participatory. He urges the industry to focus on blockchain’s transformative potential rather than short-term profits, warning against a “FOMO mentality.”
“Let’s remind ourselves of that [crypto] “It actually helps us build something bigger,” Seo said. “It’s great that we’re all making money and the industry is great, but let’s remind ourselves why we’re really here.”
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