Despite blockchain gaming’s play-to-earn angle, I prefer to pay – TechCrunch

I’m pessimistic with coding games

If there is one The thing that venture capitalists have taught me is that matching incentives can surprise me.

It’s a phrase you’ll hear often if you spend time with professional private market investors. But if you recall my college years, the phrase is really just an economic principle that individuals respond to stimuli, rephrased in a slightly more targeted way.

In the land of venture capital, the idea works like this: People respond to incentives, so you want to make sure that everyone in the company, for example, has alignment incentives.

This is why startups often give a flick of equity to employees, giving them a small portion of ownership in the enterprise as a whole. this is alignment Employee incentives towards the overall success of the company, which is something employers want because they are in the game of paying people as little as possible while still achieving human capital quality standards and not having a lot of employee pressure.

There are less blunt capitalist readings of why venture capitalists allow start-ups to sell equity to employees at below-market rates through options. I don’t buy them. Investors love the return, and they are improving it thanks to their incentive structure.

Venture capital has a good gig. They take money from existing pools of capital, invest it in the work others do, and then take a cut of the deal profits while also shredding a few hundred pips a year from their total investment vehicle. Here again, we see consistent incentives, where venture capitalists benefit when they They support profit. work as one team.

I pull you through all of that to explain that the concept of compatible incentives is deep in the worlds of startups and venture capital, something that can, at times, blind people to other ways of doing business.

Games for example. Cryptographic games in particular.

As you can see, the cryptocurrency community and its countless supporters have a huge interest in crypto games. Here, it seems, is a place where incentives can be aligned in a new and exciting way, translating gaming into relevant economic activity. All gaming fun, but with compatible economic incentives! What can go wrong?

Play to win?

Through the lens of aligned incentives, the concept of playing games to make money on the blockchain excites venture capitalists. Users will play the game, which generates fun and economic activity. The user gets some of the value, and the company gets the rest. Everyone is happy, and the game can keep making money forever, right?

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