How a VC firm that turned $700K into $4B is betting on the future of crypto gaming

VC firm Hashed was founded in 2017 when a group of founders and engineers from South Korea pooled $700,000.

Fast-forward five years and more than 150 investments later, and Hashed’s treasury now totals over $4 billion and it is still 100% owned by the firm.

Crypto gaming is one of the main pillars of Hashed’s investment thesis, serving as the focal point of a $200 million fund announced in December. While Hashed is actively investing in the emerging Web3 gaming ecosystem, their ambitions don't stop there.

In this episode of The Scoop, Baek Kim, general partner at Hashed, joins host Frank Chaparro to explain how Hashed has taken additional steps to help shape the future of crypto gaming.

As Kim explained during the interview:

“We realized that there are so many gaps in the industry where we don’t want to be just waiting, as investors, for founders to show up to solve those problems, but we want to do more and be hands-on in a product building manner.”

According to Kim, one of the main problems currently facing crypto gaming is sustainability. Indeed, existing crypto gaming projects are fading in popularity, according to data collected by The Block Research.

While projects such as Axie Infinity have tried to poach outside talent to reverse shrinking user bases, Hashed has created its own "metaverse ventures studio" with a team of over 80 people in order to help talented game developers incubate more sustainable Web3 games.

According to Kim, the sustainability of a Web3 game comes down to content:

“I think crypto and the Web3 space at the current moment of growth, is a very unique opportunity for our generation. It’s a unique opportunity to create original IP success. When we look at the history of the number one success stories, it is always original content.”

While existing crypto games largely rely on financial incentives instead of sustainable content to retain their users, Kim notes that games like Axie Infinity are “fun enough to hang out in the Discord channel.”

In fact, Kim suggests that interacting with crypto gaming communities outside of the game can be even more fun than actually "playing games." This is a phenomenon that Kim believes is “quite unique about crypto gaming.”

During this episode, Chaparro and Kim also discuss:

• How VC firms can create positive feedback loops
• The problem of identity in Web3
• Web3 friction points

This episode is brought to you by our sponsors Fireblocks, Coinbase Prime & Chainalysis
Fireblocks is an enterprise-grade platform delivering a secure infrastructure for moving, storing, and issuing digital assets. Fireblocks enables exchanges, lending desks, custodians, banks, trading desks, and hedge funds to securely scale digital asset operations through the Fireblocks Network and MPC-based Wallet Infrastructure. Fireblocks serves over 725 financial institutions, has secured the transfer of over $1.5 trillion in digital assets, and has a unique insurance policy that covers assets in storage & transit. For more information, please visit www.fireblocks.com.

About Coinbase Prime
Coinbase Prime is an integrated solution that provides institutional investors with an advanced trading platform, secure custody, and prime services to manage all their crypto assets in one place. Coinbase Prime fully integrates crypto trading and custody on a single platform, and gives clients the best all-in pricing in their network using their proprietary Smart Order Router and algorithmic execution. For more information, visit www.coinbase.com/prime.

About Chainalysis
Chainalysis is the blockchain data platform. We provide data, software, services, and research to government agencies, exchanges, financial institutions, and insurance and cybersecurity companies in over 60 countries. Our data powers investigation, compliance, and market intelligence software that has been used to solve some of the world’s most high-profile criminal cases and grow consumer access to cryptocurrency safely. Backed by Accel, Addition, Benchmark, Coatue, Paradigm, Ribbit, and other leading firms in venture capital, Chainalysis builds trust in blockchains to promote more financial freedom with less risk. For more information, visit www.chainalysis.com.