Hamster Combat challenges Venture Capital funds

Crypto news: Hamster Combat, the Telegram game that has captivated millions of users since its launch in April, has chosen to forgo Venture Capital funds, criticizing the practices of “liquidity exit”.

Let’s see all the details below. 

News: no VC funds for the crypto game Hamster Combat

As anticipated, Hamster Combat, the crypto play-to-earn game that has conquered the market, has recently criticized the funding model by venture capital in the world of criptovalute.

In particular, he defined it as an operation of “exiting from liquidity.” 

In an announcement made on Tuesday to the community members, the game developers revealed that they had rejected all investment offers received from major venture capital firms in the Web3 sector.

The administrators of the game in the official Telegram group have stated the following: 

“Since our growth exploded, we have received numerous investment proposals from some of the largest venture capital companies in the Web3 space. We have rejected all these offers.”

The developers have highlighted a widespread issue in the Web3 industry. That is, too many projects have been launched with the primary goal of enriching their backers, rather than creating real value for users.

“Many Web3 projects build an audience only to turn it into a liquidity strategy for their venture capital supporters. This has become a common practice in the industry. We strongly oppose this approach and want to bring the Web3 space back to its fundamental principles.”

Instead of focusing on innovative and sustainable projects, many companies in the sector prefer to attract funding, spend it on marketing, and subsequently abandon the project, leaving users dissatisfied.

Dizzying increase in users for Hamster Combat

We remind you that Hamster Combat offers a unique experience where players can impersonate the CEO of a exchange of cryptocurrencies like Binance or OKX.

Through the platform, users interact with a virtual hamster to earn points that can be used to improve their exchange in-game. 

Using the blockchain TON, the game reached the impressive figure of 200 million users in July. Players can convert the coins earned into HMSTR tokens, which are exchangeable on cryptocurrency exchanges.

Launched in April, Hamster Combat has quickly amassed a large fan base, with 53 million subscribers on its Telegram channel. The only way to obtain future HMSTR tokens is by playing, with 60% of the total supply reserved for players. 

The remaining 40% will be allocated to market liquidity, future partnerships, ecosystem grants, team rewards, and other projects.

The criticism of VC in the crypto world: an uncertain future for tokens?

In recent months, the role of venture capital (VC) companies in the cryptocurrency industry has been heavily criticized. 

These criticisms focus mainly on their investment approach, particularly in crypto projects whose tokens are valued at much higher levels compared to the initial investments of the same VC.

This dynamic tends to create a downward pressure on token prices after their public listing, often leaving retail investors at a loss.

For example, recent tokens like APT by Aptos and SUI Network have recorded a drop of up to 70% from their 2023 highs, even though Bitcoin (BTC) has continued to grow, reaching new peaks in 2024.

This trend has raised concerns among investors, who are wondering if the VC investment model is truly sustainable for the entire crypto ecosystem.

According to Markus Thielen, founder of 10x Research, VCs invested approximately 13 billion dollars in the first quarter of 2022, just before the market turned into a deep bear trend. 

Now, with artificial intelligence (AI) having become the new focus of investments, these companies are under pressure to return capital to their investors.

Despite the market decline, funding in the cryptocurrency sector has shown signs of recovery in the last three quarters of 2023. 

According to a report by PitchBook on August 9, the value of transactions in the second quarter reached 2.7 billion dollars, an increase of 2.5% compared to the previous quarter. 

However, the number of operations has decreased by 12.5%, a sign that the industry is still facing significant challenges.