Animoca Brands Co-creation: The Future of Web3 in the Market Turmoil of 2024

Author: Ryan Yoon, Yoon Lee Source: TigerResearch Translation: Shan Ouba, Golden Finance

Abstract

• Current Status of Blockchain Market:2024 is coming to an end, and the blockchain market is still full of uncertainty. Many projects have difficulty achieving practical results. Although the approval of Bitcoin ETF has promoted institutional investment, dissatisfaction remains due to stagnant market prices.

• Web3 Success Strategy:The success of Web3 depends on public education, closer cooperation with the government, and technological innovation. Developing sustainable business models and real use cases is critical to demonstrating the value of Web3.

• Importance of the Asian Market:Interest and investment in Web3 is surging in Asia, driven by the region’s rapid economic growth and positive attitude toward capitalism. This makes Asia a prime market for Web3, with many projects looking to establish operations there.

This report stems from an exclusive interview with Yat Siu, Co-founder and Executive Chairman of Animoca Brands, at CoinFest Asia 2024. The discussion provided insight into Yat’s views on the global Web3 market, his thoughts on Animoca Brands’ performance in 2024, and broader industry trends. In addition to the interview, this report incorporates independent analysis and findings from Tiger Research to provide deeper context and a comprehensive understanding.

1. Where will we be at the end of 2024?

2024 has entered its last quarter and the blockchain market remains in turmoil. Projects that cling to old narratives have difficulty achieving meaningful results. Although the approval of Bitcoin ETFs has boosted institutional investment, many investors are disappointed with the stagnant market price and are cautiously looking to the period after the Bitcoin halving in mid-October 2024.

Amid this uncertainty, CoinFest Asia 2024, Indonesia's largest blockchain event, provided a platform to gain insights from global leaders. Notably, Yat Siu, co-founder and chairman of Animoca Brands, provided a refreshing insight into the current market. Beyond the current market turmoil, this report aims to give us a deeper understanding of the market and prepare for the future.

2. Where are we currently in 2024?

The blockchain market outlook for 2024 is mixed. Despite a short-term recovery, many projects are still struggling. Against this backdrop, Yat Siu’s emphasis on strong fundamentals stands out.

Looking back to 2024, Yat Siu highlighted that while 2023 was an extremely challenging year, 2024 has seen significant progress. Animoca Brands overcame the challenges of the crypto winter and achieved key financial and strategic milestones. He attributed this success to a strong internal and external team that helped the company through turbulent times.

Notably, several projects backed by Animoca Brands, such as Axie Infinity and Pixels, continue to thrive, highlighting the importance of good fundamentals. The successful launch of Mocaverse during this difficult period further proves that with the right framework, success is possible even in challenging circumstances.

However, the broader market continues to face challenges. This is a reminder that sustainable business models, real-world use cases and a strong community foundation are critical. CoinFest Asia leaders echoed the sentiment, stressing the need to re-evaluate their strategies and prepare for the potential failure of projects that lack strong fundamentals.

3. What Should We Do to Prepare for the Rest of 2024?

For the rest of 2024, the blockchain industry must focus on building a solid foundation for wider adoption. Insights from Yat Siu and other CoinFest Asia leaders pointed to clear priorities.

Yat Siu stressed that long-term investment in education is key to getting the masses involved. The OpenCampus project is an example of this, showing that widespread adoption takes time, but is essential.

He stressed the importance of strengthening collaboration with governments and organizations. By working with Web3-enabled regions like Hong Kong and Saudi Arabia, we can open up new opportunities for wider adoption of Web3 technologies.

He also spoke about the importance of pursuing technological innovation and various strategic initiatives in the Web3 ecosystem, although specific details were not disclosed. At the same time, leaders at CoinFest Asia, especially application developers, are focused on building on chains with strong foundations, emphasizing that long-term value creation is more important than short-term gains.

This multifaceted approach, which covers education, technological advancement, government collaboration, and platform stability, is essential to democratizing Web3 and expanding its adoption. Projects that align with these priorities will likely lead the market in 2024. Developing user-friendly services and enhancing public understanding will be key, especially since only platforms that successfully reach the masses will thrive.

4. Why is there interest in Asia?

The surge in interest and investment in Web3 in Asia is not just because of a younger population and a large user base. Yat Siu believes that Asia's unique economic and cultural background is a key driver of this trend.

Rapid economic growth in Asia over the past few decades, represented by countries such as South Korea and China, has entrenched the importance of capitalism and wealth accumulation. This background makes Asians more receptive to digital asset ownership and a decentralized economic system, which are the core principles of Web3. The region's strong desire for economic success is a good fit with the opportunities provided by Web3's new digital asset ownership.

In contrast, Xiao Yi found that Western countries, especially the United States and Europe, have shown greater skepticism about capitalism, partly due to concerns about inequality and stagnant middle-class incomes. Cultural differences also play a role. Asian parents tend to emphasize frugality, saving, and investing, while Western culture is more inclined towards consumption, which is reflected in higher credit card debt rates.

Yat Siu believes that these cultural and economic factors increase the likelihood of Web3's success in Asia. Web3's inherent capitalist framework (viewing token purchases as investments) resonates with Asia's economic culture. Therefore, it is expected that the Web3 consumer narrative will be stronger in Asia than in the West.

In summary, Asia's economic growth experience, positive views on capitalism, and cultural attitudes towards investment and wealth accumulation are well aligned with Web3 technology, driving its growth in the region. These factors are key to understanding Asia's growing interest and will also be important indicators of Web3's future development.

5. Why should we participate in the Web3 market?

When asked why we should participate in the Web3 market, Yat Siu highlighted three main reasons, which were also shared by many CoinFest attendees.

First, Web3 provides new economic opportunities for the younger generation. Traditional assets such as houses and stocks are often out of reach for many young people, but Web3 introduces digital assets such as tokens and NFTs, which have a low barrier to entry. This allows young people who are marginalized by the current economic system to participate and thrive.

Second, Web3 redefines value creation and distribution. Through network effects and token economics, users can earn tokens by creating and sharing content on the platform, ensuring that everyone who contributes to the ecosystem directly benefits. This is in stark contrast to the traditional model where profits are concentrated in the hands of a few shareholders or executives.

Third, Web3 is a hedging strategy for companies preparing for the future. As digital technologies evolve, the path forward remains uncertain. By investing in Web3, companies can position themselves to take advantage of new business opportunities and remain competitive in the changing digital landscape.

In summary, Web3 is more than just a technological innovation, it can also be a catalyst for socioeconomic change. By addressing the limitations of the current economic system by offering new forms of asset ownership and value creation, Web3 offers an alternative to existing challenges. However, for Web3 to succeed, it must shed its speculative image and focus on long-term value creation. This will require public education, collaboration with governments, and the development of more real-world use cases, with a particular focus on Asia’s cultural and economic dynamics to drive rapid adoption and growth.

6. Tiger Research Perspective

At CoinFest 2024, we gained valuable insights from a wide range of speakers. However, Yat Siu’s exclusive interview stood out.

The current market is dominated by institutional investors and appears somewhat chaotic, lacking the strong, new narrative drivers that previously energized the industry, such as the explosive growth of DeFi and NFTs during the last bull run.

However, it is encouraging that many projects have focused on strengthening fundamentals during this period. As Yat Siu highlights, there is a growing recognition that the intrinsic value of a project is critical regardless of market conditions. Investors are maturing, and only truly valuable projects are likely to last in the long term.

It is worth noting that many projects have a strong interest in entering the Asian market. Emerging markets such as Indonesia, Vietnam and Thailand, as well as mature markets such as South Korea and Japan, are receiving a lot of attention. As Yat Siu highlights, Asia's cultural and economic characteristics help explain this growing interest. Tiger Research has recognized the potential of the Asian market, and CoinFest's insights have reinforced this view. We expect this trend to only intensify, and we look forward to witnessing its progress at the next CoinFest event.