The developers of the Zilliqa blockchain have an emerging new business model that they believe will go down as a crypto winter win.
The play, essentially, is to internally incubate a number of in-house digital asset business lines that are designed to be spun out — and then, ideally, raise venture capital rounds of their own that would feed back into their parent company, bolstering its bottom line amid difficult market conditions.
To that end, Zilliqa Research, the developers behind the layer-1 protocol (ZIL), has spun out its developing blockchain-based gaming initiative, the company told Blockworks exclusively.
The new entity, Roll1ng Thund3rz, is led by Valentin Cobelea, Zilliqa’s head of gaming technology, who has been tapped to serve as the affiliate’s chief technology officer. Cobelea is set to keep his current post with Zilliqa in addition to his new role with Roll1ng Thund3rz, where he will lead a staff of 10. Zilliqa proper will have a staff of 60 once the spin-out is complete, the company said.
Matt Dyer, Zilliqa’s chief executive, told Blockworks that there’s of late at the company been a “lot of introspection and reflection of what hasn’t [been] working well in the market,” adding that the firm “felt that it made sense to change and pivot our go-to-market [strategy].”
And it certainly is a pivot, considering that the blockchain launched in 2018 as an ICO that had nothing to do with gaming. The progression to where Zilliqa is now has evolved over the duration, Dyer said.
Long standing mechanisms for layer-1s to capture slices of crypto’s overall market capitalization — also expressed via user growth metrics — haven’t necessarily been clicking in digital assets’ latest downturn, Dyer said. Those include, in the chief executive’s estimation, deploying capital into grants or “maybe just buying tokens and hoping that an ecosystem or business would flourish.”
The first major milestone for the Roll1ng Thund3rz’s rollout is the release at the end of March of the internally developed Web3War, a blockchain-based first-person shooter that’s been in an open beta. The entity is raising capital for a seed round.
The sector had tailwinds behind it in the fourth quarter, with major players such as Brevan Howard Digital backing crypto gaming startups.
Zilliqa’s gaming push has been underway for some time now, Dyer said. The company brought on Cobelea back in April 2022 to that end.
The gist, according to Dyer, of the layer-1’s latest efforts to diversify its revenue streams stemmed from the gaming executive’s hire. Cobelea has since built out an internal team.
“When people ask, ‘How do layer-1s make money? How are they profitable?’” Dyer said. “That’s a very good question…We are coming at it [via] a mechanism of creating a sustainable business [that can be] spun out.”
Revenue coming in from equity streams from Roll1ng Thund3rz’ venture backing is part of the plan. But the general overall idea is to focus on efforts, and related partnerships, to continue growing the gaming affiliate — and additional ventures down the line.
“We feel that if we can start to get some use cases that demonstrate revenue return that isn’t really in place in the space … Naturally, that’ll start to drive attention to Zilliqa, in terms of what we’re doing,” Dyer said. “We all understand the flywheel of the space, and it starts to generate the revenue that people are looking for — like going down a hill.”
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Source: https://blockworks.co/news/zilliqa-web3-gaming-push