Today we talk to JonPaul Vega the founder of the Souq G-Commerce site- Souq is lowering barriers to access and participate in GameFi. Our goal is to build the products and services that ensure an open financial system where players can thoughtfully invest in the games they love.
Souq’s debut product is an asset manager for players and guilds to monitor their portfolio and improve the utilization of their holdings. Here is what he had to say…
How is blockchain gaming affecting the adoption of web3 technologies?
We are seeing gaming bring in a whole new profile of users into the blockchain ecosystem; it can potentially onboard hundreds of millions, if not billions of users, half the planet games. Players demand a very polished UX, which is already driving advancements to simplify wallets, onboarding, and on-chain interactions. The entire ecosystem will benefit from these innovations that reduce friction.
We personally see games as a more intuitive way for users to explore and engage in DeFi; games represent a new vector for generating yield through a more familiar paradigm using their economies and gameplay.
What are the various problems web3 gamers face when it comes to in-game assets?
There are three macro problems for players in this space:
Assets can exist across various games, wallets, blockchains, and marketplaces. This makes it difficult to track what you own.
Monitoring the value of what you own and how it changes over time is much harder than fungible tokens. Each asset is unique and requires the equivalent of a digital appraisal.
There is no objective information source or tools that aid in understanding the health of game economies in which a player is holding assets.
Just how big is the web3 gaming industry? Please, can you provide us with some numbers?
There are a lot of privacy rights and anonymity in Web3. There are a lot of privacy rights and anonymity in Web3. Still, we estimate that 4-8 million wallets engage with the top open economy games We are just at the start of this journey, and there are hundreds of new game projects under development.
Popular games have proven they can bring millions of users. We estimate that there are over $3b of NFT assets across the ecosystem today. We estimate that there are over $3b of NFT assets across the ecosystem today. The combined fungible token market cap for games is over $10b. Game DEXs regularly exceed hundreds of millions in daily volume. Please, can you tell us about Souq and its various services?
At the highest level, we organize game assets and structure market information. We have released the first portfolio manager for Web3 game assets. Players connect wallets across any blockchain, and in less than 30 seconds, we help them understand what they own, what it’s worth, and the health of the game’s economies that they participate in. Think Robinhood for video games.
How does Souq help gamers track and manage their gaming assets?
- Main features:
- We are the first game product to support multiple wallet connections across various blockchains. We aim to abstract away the complexity of wallets and chains completely.
- Our portfolio overview gives them track overall performance across owned NFTs and FTs, with the ability to drill into the holdings of any specific game.
- We enrich on-chain data to provide empirical insights into the drivers of a game economy; these measurements are near real-time and available 24/7 365.
- We made a strategic bet on ML and launched the first game, NFT price oracle; players can see the estimated value of any game NFT they hold.
- We have simplified rarity into a 0-100 index that can be applied to any game add have moved beyond just trait calculation to incorporate utility, collection movements, and community sentiment.
- We aggregate 3rd marketplace listings to provide players with the most liquid view of what has sold recently and is currently listed for a game. We will soon incorporate a game marketplace data stream.
- Main features:
How is Souq redefining gaming?
- Our mental model for these games is virtual economies; we see them as the equities markets of the future. We are building the first financial market focused on these economies. Our end goal is to jumpstart the evolution of “GamingPlus” where players can play and own pieces of games. This is what drives and excites us.
How have web3 gaming investments changed in the past few years?
- A version of the lean startup methodology can now be applied to gaming, an interesting macro experiment worth running. Developers can use NFTs and FTs to bootstrap their game development, build an early community, and bypass traditional gatekeepers, effectively proving the potential market before starting the long game-building process. I think this iterative model will allow more capital to flow to more games in earlier stages of development. This creates a backdrop where games generate their cash flow earlier, requiring a less outsized development budget.
There has been a blossom of new content and storyline types. I am impressed by the variety of games in the works. This looks a lot different than the rinse and repeat web2 studio model. There is an opportunity for many new types of game categories to emerge.
How does the Souq open economy work?
We only focus on games with open economies. There are two criteria to meet this qualification 1) its currencies (whether monetary or utility tokens) exist as cryptocurrencies and players can easily convert in / out at any time, and 2) purchases of content (e.g., items) exist as entries on the blockchain and housed in a players wallet ( custodial or non-custodial)Any player of these games can access our platform and get data for free. I am opposed to charging them for information; the critical mindset shift for me is that players must be treated as literal shareholders and entitled to rights across information, governance, and equity.
Are play-to-earn economies the way to go for web3 games, or are there other paradigms we should look forward to?
First and foremost, games need to be delightful forms of leisure that pull you into a world. If that requirement is not met, they will not succeed. I think there will be a lot of paradigms, and I imagine the most successful games will find ways to serve all types of players (grinders, leisure, investors, influencers, professionals). There are many games to look forward to, like Sipher, Parallels, Start Atlas, and MechaFightClub. We are in a gaming renaissance; the future is bright.
Please, can you tell us about Souq’s multichain capabilities?
Today we support ETH/Poly game assets across both ERC-721 and 1155 formats; we are currently expanding to Solana; additional layer 2s and alternate L1s will follow. By Q3, we expect to cover 95% of all games.
How does Souq’s fast player onboarding benefit gamers?
There is an immense amount of friction across the Web3 ecosystem, preventing and complicating adoption. Ken, co-founder/head of product, has a maniacal focus on detail and UX experience; all players need to do is connect their wallets; it takes less than 30 seconds to populate the entire experience; it is a magical experience.
Please, can you tell us about the Souq portfolio manager?
You can see an overview of your portfolio, broken down by NFT and FTs. We monitor assets you have already sold and inform you of realized gains and losses. Players can see the performance of their holdings on a per-game level and can drill into the game view.
We highlight your NFTs and pull in data market intelligence so you know how the individual NFT and its associated collection perform relative to that game’s broader market. We estimate the current value of each NFT and provide you with an easy-to-understand rarity score to compare it with other game items.
For any NFT in-view, we pull 3rd party marketplace listings for items in a similar rarity range across recent sales and current listings. You can view what a contemporary item sold for, how long it was listed, and where it took place. If you want to purchase or list an item, we give you data to strategically buy or price your item to sell quickly.
How is entertainment gaming changing with the emergence of web3 technologies?
We are seeing a new level of social and community blending inside gaming. Players get propriety rights on top of entertainment value; this enables a new consumer relationship and gameplay types that were not possible with closed economy games
Congratulations on your recent successful raise! What’s next for Souq?
Our key focuses over the next six months.
- Expanding blockchain support, improving our product experience
- Pulling game marketplace data into our platform
- Reaching 100k unique wallet connections and $500m of assets connected to our platform.
- Become the trusted source for information about your holdings and game economies and a distribution channel for new games.
Please, can you tell us about your roadmap?
- Enhance information about game economies; players must have a complete set of the most critical insights.
- Building out a new metric that will help players understand if items are over or underperforming in a game version
- Expanding our feature set around to simplify buying, browsing, and listing items
- Simplifying token and staking reward experiences within our platform
What are the yield-generating opportunities for players within the Souq ecosystem?
We need to hit the scale of users and assets before focusing on yield opportunities. We see five high-level yield opportunities for an open economy game; our mental model is liquidity pools where players can deposit NFTs or FTs. Souq actively manages them to grow game economies and generate yield. There are Rentals, Collateralized Lending, Currency Swaps, Economic Stabilization, and Arbitrage. There will be deeper game-specific strategies in the future.
How are game economies changing the world today?
I think about it from a value capture standpoint. Game devs put in the blood and sweat to build these fantastic experiences. Players put in their time, money, and resources to turn these experiences into cultural movements. Neither of these parties captures much value, but they are integral to the success of any game.
The holding company usually captures the value and, more often, the stockholders of these companies. These later parties don’t actively contribute to the game. Web 3 games can remove these more extractive downstream parties and actively reward the key participants.
What is the backstory behind Souq?
Ken and I worked together previously for three years. We love gaming and economies and decided to build easy-to-use analytics revenue products for Roblox devs; at one point, we had 100 million monthly player data streams hitting our backend. We met Artem and convinced him to leave Uber and work with us full time.
We learned a lot about gaming and user behavior, specifically this phenomenon of games where players were trading and collecting items, and it became as important as playing the game. We deemed this insight “mercantile behavior”. When the first versions of blockchain games came about, we saw this phenomenon applied much more effectively and couldn’t deny the future potential of the simple concept of ownership.
Where do you see the web3 gaming industry in the next half-decade?
Wow, great question. I think gaming has the best opportunity to bring in hundreds of millions of players, and it only takes one popular game to supercharge the ecosystem. I also believe that we will have more and more of our wealth exist in a wholly digital form inside of games and more people playing an active role in these economies.
The game market cap, defined by tokens and NFTs, will exceed $100 billion. Leisure time will shift away from social media to games, and you will see companies developing new strategies to stay relevant. The future is bright; open economy games will play an essential role in defining rights for individuals in Web3.
What is your overall mission for Souq?
We exist to help players become owners of the games they love and participate in the economic upside these virtual worlds offer.