Executives are Leaving Wall Street for the High Stakes World of Blockchain Gaming

Fresh, high-flying 26-year-olds working in private equity at legendary asset management firm BlackRock are definitely a rare breed. Even more scarce are those who voluntarily walk away from Wall Street to dive head first into a largely untested emerging market. Yet that’s exactly the path of Paul Taylor, head of strategy at Fancy Studios, who left the $10 trillion asset firm to focus on one of the newest and more exotic uses of crypto, NFTs (non-fungible tokens) and blockchain.

“I loved every moment of my work,” he recalls. “Being surrounded by the best in the business and the never-ending flow of projects was great. The work kept me on my toes every second and it was a wonderful learning experience. I really appreciated the exposure to world-class companies, investors and management teams.”

Still, in retrospect, Taylor admits that the lure of crypto began to rub off on him. As he watched an increasing flow of talent and capital migrate to the blockchain world, he wondered if he was missing out.

“I had been following crypto since 2017 and funnily enough I had a reputation as one of BlackRock’s biggest bears in the space,” he says. “I consider myself a logical person with a healthy level of skepticism, and in the earlier days of crypto there were just so many projects that didn’t have real use cases. Lots of buzzwords and vague roadmaps with no clear little real benefit. I was interested, but not interested enough to seriously consider changing careers.”

Of course, the path carved by Wall Street insiders leaving their lucrative gigs in favor of crypto is now a well-traveled one. Several years after the early flurry of investors in Bitcoin and other digital currencies and NFTs, a new application of blockchain is gaining momentum: “GameFi.” Also known as “Web3 gaming” or “blockchain gaming”, it promises to breathe new life into digital assets and empower players.

A blend of “gaming” and “finance,” GameFi is a term used to describe online activities that allow players to win, trade and own digital assets. These digital placeholders function in games in the form of game characters, currencies and items, and can also be interoperable, meaning they can be used in other games.

“The more I learned about GameFi, the more comfortable I became,” says Taylor. “I talked to the founders of some of the biggest names in GameFi, played tons of crypto games and used my instinct as a gamer to build my confidence in the industry. As a chess player, I thought both short and long term to predict future trends and market adoption, including the opportunities and risks. Finally, I created my own thesis on the industry and had enough conviction to pursue it with my full focus.”

Over the past year, GameFi has quickly become a strategically important sector for crypto and is attracting attention from gamers, as well as funding from investors. According to DappRadar, GameFi currently represents over 50% of all blockchain activity, as measured by unique active wallets, representing users who have recently transacted within the ecosystem. GameFi is also expected to grow into a $50 billion market by 2025, according to research from Crypto.com.

A popular example of this new shift in gaming is Axie Infinity which had a meteoric rise in 2021, hosting 2.7 million daily active users in November and having tens of millions of dollars worth of NFTs traded weekly. Much of the appeal is the crypto tokens used as rewards for completing quests, battling other players and breeding digital pets. As you might have guessed, these digital assets take the form of NFTs that players can buy, sell and trade with others. The inclusion of NFTs is integral to the popularity of the GameFi gaming industry, according to analysts. The concept of true ownership represents a paradigm shift in the industry – players can now own what they spend time and money on.

Although Axie Infinity has experienced a decline in popularity in recent months, other GameFi projects have emerged with variations on the model, attracting capital from investors. In the first half of this year, more than $5 billion has entered the sector, compared to $4 billion for all of 2021. A $600 million fund was launched by Andreessen Horowitz in May, entirely focused on “building the future of the gaming industry. ” A month later, Immutable debuted with a $500 million fund with the mission to “increase the adoption of Web3 games.”

Today, Paul Taylor believes these high-profile bets on GameFi further validate his rationale for leaving Wall Street and jumping into the still-nascent GameFi sector.

“As we saw, GameFi really took off in 2021,” he comments. “Its appeal is deeply rooted in who I am. Growing up, I was the kid who would come home from school and finish my homework as quickly as possible to try and get in a video game session before my parents kicked me off to bed. Then I snuck in at midnight to pick up where I left off. Being a lifer has given me an advantage in deciding whether a GameFi project is legit or just smoke and mirrors. I can play a game for a bit and immediately tell you if it’s fun or not.”

He adds that his love of strategy and competition really took root the moment he saw a chessboard. Even as a child, Taylor was far from a pedestrian chess player. After learning the game at the age of five, he went on to win his first state scholastic title within a year. It was his first of what became eight state titles. As a seven-year-old, he won his first national school title, the first of four. At just eight years old, he coached a collegiate chess team. By 11am he was taking on (and defeating) 15 players at a time. After turning 13, he quit abruptly, noting that around this age is usually when one decides whether they want to go pro or not. For him, chess was a game, not a career. However, he still plays regularly, albeit casually.

He credits chess with playing a very large role in how he thinks and sees the world, saying that the game is an allegory for many things in life. Taylor says he tends to analyze things mechanically and calculates multiple scenarios over time.

“Gamers represent half to two-thirds of the world’s population, depending on how you define it. In addition, games are among today’s most popular pastimes. And this is not a new trend. In 2015, the League of Legends World Championship event had 27 million viewers, more than the NBA Finals or the MLB World Series. In 2019, the League of Legends World Championship had over 100 million unique viewers, beating the Super Bowl’s 98 million. The younger generations spend more and more time online, and a large part of that time is spent playing games. There’s a reason why games have the highest profit margins of any established industry. GameFi represents the next evolution for gaming, and it’s easy to understand why its potential customers have captured the imagination of investors, he says.

“In my view, it is impossible for a market to reach a trillion market cap and then end up with no value. It is still early days for everything in crypto and there are many emerging trends. Capital will accelerate innovation and quickly find out what works versus what doesn’t. I think GameFi will be one of the big winners. There are, of course, educational, introductory and regulatory hurdles for the industry to overcome, and we’re still waiting for blockbuster web3 games to bring in many more millions of traditional web2 players. However, I am sure that everything will happen within a couple of years.”

After experimenting with a number of GameFi participants vying for player loyalty, Taylor landed on Fancy Studios, a Web3 game studio focused on developing hyper-casual mobile games that use blockchain technology and NFTs. In his role as Chief Strategy Officer, he oversees business strategy, project management and brainstorming on how to scale the business.

The hot game developer was founded last October and has already raised $12.5 million to fund its first titles. Investors represent some of the most notable players in the industry, including Framework Ventures, Illuvium, Merit Circle and Yield Guild Games. To date, Fancy Studios has released two games with more in the pipeline for this year and next. Their first game ‘Fancy Birds’ has been in high demand, with users minting over 45,000 of their flagship bird NFTs, which have now traded over $2 million in secondary volume on platforms such as OpenSea.

“It’s been an amazing journey so far,” enthuses Taylor. “I like the startup culture and being among the first in the industry to really validate your own thesis. I personally think the concept of owning digital assets and being able to use them from one game to another is very powerful. That kind of flexibility has simply never existed for players before.”

He says his own deep connection with gaming informs where he thinks Fancy Studios will take GameFi in the near future.

“It’s always a bit painful to quit one game, to lose all progress to play another game,” he admits. “I can only imagine what the landscape will be like when players expect to own their digital assets and can have a single character to play all their games. I would probably play my childhood RuneScape or Guild Wars character for all my games , he laughs.

Taylor is not new to the world of startups. He has advised Make Ventures Princeton, the university’s premier student-run incubator. Recently, he has mentored blockchain projects, providing insight into GameFi trends, tokenomics, fundraising and other topics. His Wall Street background has also helped him become an active investor in web3 projects, typically participating in the pre-seed and seed stages.

“I’ve always had an inclination towards early culture and the idea of ​​building something new. I think it is important to always have a pulse on what is working now, and also what will work in the future. I think crypto is the next wave of innovation that will bring a lot of new technology into the mainstream and benefit society, says Taylor.

As for the cultural shift he’s experienced in his transformation from Wall Street asset manager to GameFi entrepreneur, he says it boils down to different personalities and meeting environments.

“The biggest difference I’ve noticed is that in crypto they tend to be a little more creative and visionary. Fail fast, break things and build. On Wall Street it was more about maximizing efficiency,” he says. “I plus, a lot of my meetings now consist of a younger crowd wearing t-shirts sitting in gaming chairs talking about game design and whether something looks ‘cool’ or not.”

While it’s probably too early to tell how GameFi will evolve, innovators like Paul Taylor expect it to be a wild ride.

“I think ‘GameFi’ and ‘gaming’ will become synonymous in the public mind sooner than we think,” he adds. “As a gamer, you develop an identity when you play a game, as you customize and upgrade your avatar over time. GameFi will allow you to keep or trade that value as opposed to destroying it, and I think future games (as well as Metaverse) will also require this concept of a persistent interoperable identity to succeed. The transition is already well under way, and I am quite optimistic about the future.”