DeFiance Capital - Fund - Contributions

GM Merit Circle DAO,

I am Bailey / @bottomd0g, Senior Investment Analyst leading gaming investments and portfolio support at DeFiance Capital.

A quick intro to us and how we operate:

Founded by Arthur0x, DeFiance Capital is one of the most active Web3 & Crypto-focused venture funds globally that focuses on Decentralized Finance (DeFi) and Web3 Gaming. We believe that Web3 will transform the gaming industry by redefining the value proposition for players and developers - unlocking the virtual economy within games.

Our focus and expertise in applying fundamental analysis to cryptoassets separates us from the rest. We adopt an active approach and partner with teams to bootstrap necessary network effects for them to scale. At the same time, we provide invaluable thought leadership and guidance on critical aspects such as token economics, governance scaling and community building. We believe investing is more than just a standalone transaction and we are in this for the long term with our founders.

For games specifically, we have helped teams with token/NFT launch strategies, navigate centralized exchanges and designing game economics. As gamers ourselves, we understand games from a player’s perspective and have been researching the industry to understand the developer’s perspective. We have experience in DAO governance and are active governance participants and voters in our portfolio projects like Aave, Bancor, dYdX.

Ever since we invested in Merit Circle’s seed round last year, we have been in close contact with the executive team helping where we can. While most of our work was done behind the scenes rather than in public purview, we definitely think that the work we have done has benefitted the wider Merit Circle community equally.

Value added to the Merit Circle DAO so far:

  • Introduced promising projects who were fundraising that eventually led to a successful investment by Merit Circle. Examples include Blast Royale, PathDAO and several other deals that are yet to be disclosed.

  • We have connected the executive team with numerous other entities in the space to explore partnerships and win-win collaborations to improve Merit Circle’s network of partners.

  • We have been arranging regular calls where we share intelligence on the latest trends in both private & public markets and where the industry is heading towards in the short to medium term.

  • I also often chat product and strategy with Mark, COO at Merit Circle, acting as a sounding board for the amazing ideas that the team has.

    • Specifically, we discussed the issue of upcoming investor unlocks and how to manage it to ensure all stakeholders are taken care of. These conversations culminated in the current initiative on Transparency and Accountability.
    • Tokenomics have been another area that we have been talking about. Stay tuned for new proposals on that front.
  • We have written tweet threads and helped amplify announcements where possible

Going forward, we intend to continue working closely as we have always been. Here are areas we will collaborate on as well as some ideas for Merit Circle:

  • We will commit to staking our unlocks for a minimum of 6months in our doxxed wallets as Merit Circle continues to ship exciting products. We will also help steward the DAO by staying abreast of latest developments and being active voters.
    Our ERC20 receiving addresses are at:

    • 0x1E138759baED8a1139376a475Bf7f08053ACA016
    • 0xE97eb050Fa3e677e79E4ebEe7EF9c9c7D026377D
  • As a cryptonative fund with a close pulse on the market, we will always be ready to pick up the phone and assist the core team in making critical decisions when needed.

  • In the Investment pillar, we will continue to share suitable deals, assisting in due diligence and co-invest in projects. An interesting idea here could be to start a small media arm to report updates from games that Merit Circle has invested in to help market and raise awareness to players.

  • In the Marketplace pillar, we will refer gaming projects that we have invested in to integrate MC’s marketplace product where needed. By powering the marketplace for games, we think more games will be open to launching on a future Merit Circle publishing platform as well.

  • In the Gaming pillar, we plan to loan our prized NFT assets to the talented players and streamers in the Merit Circle community in the future as more games start to come to the market.

    We think having the best and coolest NFTs to work with can improve Merit Circle’s brand in the eyes of talented gamers and streamers. Some of our gaming NFTs are stored here and you can read more about our purchase of SIPHER genesis NFTs

    Going forward, acquiring talented players who will be able to compete for higher leaderboard positions will be crucial to improve returns from playing Web3 games. This is because as games shift focus to skill-based gameplay to improve their economies, a bigger percentage of token rewards are allocated to skilled players who place high on leaderboards.

    In this vein, we think that Merit Circle should be building out an esports team as the best Web3 games will have a strong esports scene.

Conclusion

Merit Circle is a trailblazer defining what it means to be a leading Gaming DAO as it continues to execute across its 4 Pillars and we think there is a good chance for Merit Circle to become Steam for Web3 - a decentralized game publishing platform with its own games and marketplace to trade assets.

DeFiance Capital remains optimistic and will continue to offer strong support and stewardship in our shared vision to accelerate the Play-to-Own movement and Web3 games.

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Thrilled to continue to work closely with Merit Circle and advancing the developments of blockchain gaming!