For this month's Project Review, we are taking you through BreederDAO, one of our portfolio companies aiming to improve the supply chain of blockchain game-based NFTs. This review will share background information, the BreederDAOs tech stack, and our project analysis on what we like and where we see growth potential.
What is BreederDao?
BreederDAO is a digital asset factory specialized in breeding and crafting quality in-game assets at scale for some of the largest guilds in the Metaverse, which enables them to supercharge their growth. Their in-house tools focus on producing high-quality customized NFTs of blockchain games at scale, such as renowned Axie Infinity, Crabada, Cyball, and Sipher. The native token, $BREED, powers the BreederDAO factory and is key to the viability of its core technology.
The team is led by CEO Renz Chong and backed by great institutional investors, including a16z, YGG, and Delphi Digital, which secured the project 12M in Seed and Series A Round.
Providing solutions for the multibillion-dollar Gaming industry
Over the past years, millions of players flocked to the blockchain gaming industry, mainly due to the growing popularity of P2E games like Axie Infinity. More often than not, P2E games require an upfront investment from players before they can earn. Guilds have made P2E games more accessible, as individuals can play without upfront cost by lending assets in exchange for a percentage of future earnings. With this in mind, P2E gamers are growing at an average rate of 15.9% month-on-month, and the demand for gaming NFTs is increasingly overtaking supply. Consequently, leaving guilds with a liquidity problem, where they need more assets (NFTs) to lend at a faster and more frequent rate. This is precisely why guilds are now looking to game-and guild-agnostic providers like BreederDAO, who can create gaming assets at scale.
BreederDAO’s technology stack
One can compare BreederDAO’s relationship with guilds to that of a traditional supply chain - where you don’t have one company producing everything end to end but different companies at different parts of the supply chain. In this case, BreederDAO sells digital assets to guilds at a set price, which guilds subsequently lend to players.
BreederDAO has and will continue to create proprietary in-house tools to breed and craft large quantities of gaming assets. Their in-house tools aim to set the industry standard for specialized and customized gaming assets by combining game mastery and data analytics.
Outlined below are the six various aspects of their technology stack:
- Marketplace analytics - Identifying the build and traits;
- Live financial analytics - Maximizing profitability;
- Tokenomics and in-game data lake - Buying resources;
- Trait optimization engine - Optimizing asset quality;
- Facilitated asset propagation - Manufacturing the products;
- Asset pricing model - Selling assets.
For more details, read the Tokenomics section of their whitepaper ➡️ here
Guild and Game Partners
Some of the largest guilds in the metaverse, including YGG and Earn Guild, were early adopters of BreederDAO’s services. With a focus on quality asset creation at scale and using their game expertise to create an empowered economy, BreederDAO aims to onboard the next billion players into the metaverse. Apart from the previously mentioned games, BreederDAO is by no means slowing down in creating other game partnerships. In the last quarter, Monkey League, Blast Royale, Ultiverse, League of Kingdoms, and many more partnered with BreederDAO to ensure they can continue to create and supply best-in-class assets to their communities.
Organizations like BreederDAO, who work in partnership with both guilds and games, ensure that NFT production is not a limiting factor in the rapidly growing P2E economy, making them crucial for the growth and progress of blockchain gaming projects.
Our Analysis
BreederDAO has been one of our best-performing portfolio companies. Without a doubt, as high-profile VCs back this project, they have capital and expert advisors to continue developing their roadmap. Diving a bit deeper into the project, here are a couple of our thoughts on what makes BreederDAO a strong project:
Why we think BreederDAO is a promising project:
- BreederDAO’s technology cuts down the time to breed new assets by a minimum of 50%. This allows them to increase the rate of asset creation by 10%-20% MoM depending on the demand. The technology stack also enables the creation of highly desirable traits, which is highly advantageous for gaming teams and guilds focused on strategic gameplay.
- The gaming industry is not just growing exponentially, but with over 2.8 billion gamers, valuing the industry at $160 billion, it is actually bigger than the music and movie industry combined - $96billion. Currently, gaming is still skewed to Web2, however, with more games shifting to Web3 and blockchain technology. There are now over 10,000 blockchain guilds providing over 317,000 assets to players. BreederDAO is in a good position to be first in the market to capitalize on this growth.
- The team is tackling an issue often faced in emerging markets - namely liquidity of cash to play games and buy assets. Because of the shortage of supply, assets can get expensive for both guilds and players. BreederDAO’s providing more supply makes gaming more accessible as guilds are able to buy and thus people with less capital to play. It’s a great way to give the opportunity for more people to earn passive income.
- BreederDAO removes the scaling constraint for guilds while still ensuring to keep its NFTs for the players to increase the output.
- The native token $BREED had a successful launch auction last April. They were able to sell a total of 34.2 $BREED tokens on Copper, raising a total of $20.7M USDC.
In the Whitepaper, the team put together a great overview of its solutions compared to that of individuals and guilds. Click below to see the full chart ➡️ here
Nevertheless, considering the current market conditions, the question arises if the team and its technology will be able to keep up with the demand once the market picks up again. Furthermore, BreederDAO has an ambitious roadmap as they plan to have over 50 game integrations and partnerships with 1000 guilds in the upcoming year.
Key Milestones and What’s next?
Back in July 2022, BreederDAO took the first steps toward becoming a fully-fledged DAO, by empowering $BREED holders to make their voices heard. They launched their governance platform and put forth their first proposal, the DAOstitution, the central article of governance through which BreederDAO will be run—which DAO members voted to ratify after necessary discussion. The team will continue working on their constitution and involve the community in making decisions.
Finally, October marks BreederDAO’s first year. Follow their socials to keep up-to-date as they revisit their Y1 achievements, as well as activities and plans to engage and reward community members in the month.
