Crypto startups and Decentralised Autonomous Organisations (DAOs) are making their mark in Southeast Asia, which is encouraging blockchain technology innovation and investments. A DAO is a community-run organisation that began as an idea in 2016 in the decentralised crypto funding scene before ending months later due to a cyber attack. It can now take on several forms depending on its members’ needs, including fundraising, investing, buying exclusive items, and connecting.
The development of financial technology (fintech) created new opportunities for the region. Once the COVID-19 pandemic escalated, countries increasingly adopted digital solutions, such as online payments, with the number of users set to reach 466.97 million by 2026. According to research in December 2021 from Statista and milieu Insights, more than 53% of the respondents in several Southeast Asian countries expected the cryptocurrency value to rise within five years. The Business Research Company report also predicted that by 2023, the blockchain market would recover from the COVID-19 pandemic to reach USD $15.88 billion.
Adoption of cryptocurrency in Southeast Asia and barriers (or opportunities) in the market
With funding trends potentially shifting to the negative because of rising energy costs and inflation worldwide, startups may need another investment source. Cryptocurrency and DAOs in Southeast Asia offer startups an untapped source of investment for product development, expansion, and operational capital.
Here are 5 of the top DAOs in Southeast Asia:
Bangkok-based GuildFi is a community-based and interconnected Web3 ecosystem of games and non-fungible tokens (NFTs), ensuring interoperability on the metaverse. Users have the option to join guilds, play games, acquire digital assets, and earn money. Using their GuildFi ID, players may also track their statistics across several games.
Last year, DeFiance Capital, Hashed, Pantera Capital, Coinbase Ventures, Dapper Labs, and other investors contributed USD $6 million to GuildFi. In order to improve the gaming experience, the funds will be used to maximise player benefits within the games and enhance the Web3 infrastructure of its platform.
Crypto-investing platform Zignaly launched a DAO to democratise access to funding opportunities for startups. The community uses a social-investing model whereby users from anywhere in the world can access decentralised and dynamic financial tools, trade tokens openly on the marketplace, contribute to the DAO to earn rewards, and generate profits.
In March, Zignaly raised USD $50 million, bringing its total funding to USD $53 million. Its investors include the Global Emerging Markets Group, AU21 Capital, Sino Global Capital, Ledger Prime, Ascend E, and Disrupt Ventures. The company will use the funds to enhance the global adoption of its platform and improve its product offerings.
Yield Guild Games (YGG) SEA
Yield Guild Games (YGG), a Taiwanese company, offers an ASEAN subDAO known as YGG SEA, that enables users to obtain and manage NFTs used in the metaverse. The ultimate goal is to create Southeast Asia’s biggest play-to-earn (P2E) ecosystem. Its players come from Vietnam, Thailand, Singapore, Indonesia, and Malaysia, and the community can access several games similar to a guild and earn crypto or tokens.
Thus far, YGG SEA has raised USD $15.5 million in three funding rounds from Solana Ventures, Arca Funds, Evernew Capital, Digital Currency Group, Crypto.com Capital, Polygon and others. By increasing its P2E gaming and entering more Southeast Asian nations, the company hopes to become established throughout the region by 2024..
Blockchain-game developer Sky Mavis created Axie Infinity, a popular NFT-based P2E game where players take care of digital pets called Axies in a virtual world and earn cryptocurrency.
In response to the cyberattack that caused a loss of USD $624 million in April, Sky Mavis raised USD $150 million. Investors included Binance, a16z, Dialectic, Paradigm and Accel. The company plans to use the funds and its working capital to compensate users affected by the hack.
In order to link individuals in Asia and Australia for networking, socialising, and project collaboration, Elroy Cheo and Kiat Lim founded a private, members-only community. The company will initially have an NFT-based social networking app but will expand into the metaverse with gaming and event hosting. The goal is to build a community that connects people after the suffering and lost sense of belonging many experienced due to the COVID-19 pandemic.
With blockchain technology and DAOs in Southeast Asia significantly impacting the region’s business ecosystem, crypto startups will likely continue emerging and providing alternative solutions to the traditional monetary system. Funding trends show that investors see the sector’s potential not only for growth but also for providing substantial returns on investment.
As such, expect the crypto funding scene to receive additional financial backing from local and foreign investors. If the crypto world is well managed, it can provide inclusive access to the financial markets and verifiable transaction ledgers while delivering alternative avenues for investment. However, because of the vulnerability of cryptocurrencies to scams, cyberattacks, and volatility, utmost caution is advised.