Darren Kleine

Despite the ups-and-downs of the last year in crypto, Framework Ventures co-founder Vance Spencer said his on-chain gaming thesis hasn’t changed.



“It’s become clearer in terms of how it plays out,” he said, adding: “It takes probably a couple years to build a game” and a hundred or a hundred and fifty million dollars. “And that’s not even including marketing and advertising.”



At Blockworks’ <a href="https://blockworks.co/event/permissionless-2023">Permissionless conference</a> in Austin, Texas, Spencer said first-mover advantage will play an important role in who succeeds in the nascent crypto gaming subsector.&nbsp;



“That means that the people who started building in the last bull market, it&#8217;s probably going to be one of those to market first,” he said.&nbsp;



Spencer said the timing of potential on-chain game releases has also become more clear, with the expectation that “three to four to five well-financed, well built-out, important games” will launch within the next six to nine months.



“A lot of people want to own assets. It&#8217;s the difference between playing poker for fake money versus playing it for real money.”&nbsp;



Spencer insisted that crypto games can be fun, although they don’t seem to exist yet. “We just need more shots on goal.”



“If you think about <a href="https://blockworks.co/tag/defi">DeFi</a> back in 2020, 2021,” Framework Ventures co-founder Michael Anderson said, “a lot of those were just really incentivized games.” He explained it’s a matter of iteration, building on previous formulae but adding more fun elements to the picture.



<h2 class="wp-block-heading">Clones incoming</h2>



Spencer pointed to the <a href="https://blockworks.co/news/friend-tech-financialization-goldentre">Friend.tech phenomenon</a> as an example of how the gaming market will likely play out on a larger scale. The <a href="https://blockworks.co/news/base-next-internet-jesse-pollak">layer-2 Base network</a> social app emerged from a quiet <a href="https://blockworks.co/tag/web3">Web3</a> social app scene, he said, suddenly drawing “five million revenue in the past two months.”



“All of a sudden, there’s 50 Friend.tech clones.”&nbsp;&nbsp;&nbsp;



It’s the same dynamic in every market, Spencer observed. The familiar pattern took place in early DeFi, with a few protocols proving product market fit, he said, after which “everybody chased them.”



“We&#8217;re now seeing the true believers build it out,” Spencer continued. “The next phase is going to be the chase, or one of them actually works and then all the [venture capitalists] get super fired up and start funding competitors.”



Having recently returned from Korean Blockchain Week, Spencer observed that developers from the region are building “probably 50 to 100 games in the next couple years.”&nbsp;



“It’s going to happen,” he said.



Comparing the relatively slow growth of successful crypto games, Spencer argued that many early internet ideas were not actually failures — they just took years to succeed, when key technological improvements finally enabled their original visions to work. “There was just a mobile phone size hole or some UI aspect that was missing.”



“That’s going to happen with crypto, as well.



Spencer appeared to feel most confident about growth in DeFi and <a href="https://blockworks.co/news/real-world-assets-tradfi-defi-tokenization">real world assets</a>, saying he sees “basically, 100% certainty of those growing another 10 to 100X.” On-chain gaming faces a more challenging path, with about 60 to 75% odds of being “absolutely huge,” Spencer said. “It’s just a matter of iteration.”



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Framework Ventures

Crypto games need ‘more shots on goal’ to win, says Framework Ventures’ Spencer

Morgan Chittum

<div id="highlights-block_624af03a29568" class="highlights">
 <ul>
 <li>Framework Ventures and Delphi Digital are two of the leading investors in the round</li>
 <li>Polemos announced a strategic funding round of $2 million in November</li>
 </ul>
 
</div>



Polemos, a GameFi platform and play-to-earn guild, announced a $14 million seed round on Monday. This brings the startup and forthcoming decentralized autonomous organization (DAO) to a $100 million post-money valuation.&nbsp;



The capital will go toward staff expansion, gaming investments and tech development, Polemos co-founder Sascha Zehe told Blockworks.&nbsp;



“We have significant costs for the development of the tech, and that is one part where we want to heavily scale both the team and also contractors to build even better and faster [on the] main tech stack that we&#8217;re aiming to put into the space,” Zehe said.&nbsp;



Polemos currently has around 25 employees but expects to reach at least 50 by the end of the year.&nbsp;&nbsp;



Framework Ventures and Delphi Digital are two leading investors in the round.&nbsp;



Michael Anderson, co-founder of Framework Ventures, told Blockworks that gaming guilds like Polemos are the “potential next phase of what an esports franchise could look like.”



“Guilds [are] something that have existed in games for a long time, but now that we have NFTs, we have massive swaths of players that are coming into these games. The role of a guild has a much more pronounced function within this ecosystem than previously,” Anderson said. “It’s one part asset management, one part technology company, and one part recruiting and marketing.”



Other participants in the round include QCP, GoldenTree, IOSG and LD Capital, along with the founders of Sushiswap, COTI, Tokemak and Altered State Machine.



Last year, Polemos announced a $2 million strategic raise at a $40 million valuation.



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<li><a href="https://blockworks.co/newsletter/forwardguidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</li>



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