Yat Siu: Creating the Most Impactful Unicorn in Web3

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Yat Siu, co-founder and executive chairman of the web3 gaming powerhouse Animoca Brands, is a name familiar to many in the crypto world—except to those who manage access to the media area at TOKEN2049. “They turned me away!” he shares, slightly flustered as we finally connect on the staircase after a brief delay. A prominent figure or not, here, media badges hold all the power. For a moment, I revel in my newfound influence.

With a smile, I extend my hand. “Great to meet you,” I say. He responds warmly, offering me his business card with his details printed on it. Despite being one of the most significant figures in web3, Yat Siu lacks the colossal ego often seen in other crypto entrepreneurs. He even navigated his way here without being shadowed by a team of assistants or public relations staff.

Yat comes across as grounded, modest, and courteous, communicating fluently and maintaining focus, even standing firm when others attempt to interject, such as when Scott Melker from Wolf of All Streets tries to lure him away. “I’m currently in an interview,” he smiles, “but we have a meeting later.”

From a diligent student to a leading figure

Starting his life in Vienna before relocating to Hong Kong, Yat’s story is one of inspiration. Born to a mother who was an opera singer and director and a father who played instruments, he was compelled to dive into music, “like a good Asian kid,” despite his enthusiasm for gaming and a desire to channel his focus differently. Nevertheless, music served as a crucial stepping stone in his career.

“My journey toward tech began with music; that’s how I learned to write composition software,” he explains, “which ultimately led me into tech. There weren’t dedicated computer science degrees back then—just raw coding, and through a free online service called CompuServe, I got my start at Atari.”

While studying at the Vienna Music Conservatory, Yat found himself in an environment where he was “very much a minority,” absorbing lessons beyond music composition. Although he was fluent in German, he often faced what he termed “innocent racism,” often hearing comments like, “So, your parents must have a restaurant?”

“There are a billion Chinese people,” he emphasizes, “and we don’t all run restaurants!” He chuckles, acknowledging that many others in the area indeed were involved in the culinary world.

Witnessing the extremes of capitalism

Yat’s mother worked at the Komische Oper located on the Eastern side of Berlin. “Back in the 80s,” he recalls, “Eastern and Western Europe were distinct, and the Berlin Wall was still standing.” He regularly crossed the border to see his mother and visited places behind the Iron Curtain, including Prague and Budapest, in the former communist regions.

“Experiencing that entire area gave me a hands-on view of what communism entailed, the extremes,” he states. “It left a lasting impression.”

Yat saw a range of environments, from “capitalist but not fully” Austria to the “money-driven” USA and the “overzealous capitalism” in Hong Kong. “I’ve seen the full spectrum,” he notes, “where there are seemingly no boundaries in place.” Hong Kong, notably, only introduced social security in 2000.

“Before that, you’d see 70-year-olds working to push trash carts uphill. That exemplifies unregulated capitalism’s extreme impact. Such observations have definitely shaped my worldview.”

While he does not advocate for socialism, he can easily identify the shortcomings of a system that fails to protect its most vulnerable citizens. “Maybe a middle ground exists,” he suggests. “We still endorse capitalism; we don’t see socialism as the solution, but capitalism needs a fair form. We believe web3 can provide that by enabling tokenization, allowing everyone to become stakeholders.”

Empowering through digital rights

With an estimated worth of $5.9 billion as of August 2022, Animoca Brands boasts over 500 companies in its investment portfolio. While primarily focused on gaming, Yat insists that Animoca offers much more than that. He elaborates:

“We started in gaming due to being a gaming studio—and we were one of the first examples of a web2 company transitioning into web3—not a crypto-centric entity but a conventional gaming firm that recognized the potential.”
“Out of our 573 portfolio companies, roughly 165 are in gaming. While it certainly plays a significant role, that’s not the entirety of our focus. Our core mission revolves around promoting digital property rights and enhancing financial literacy through stakeholder capitalism. Web3 redefines equity by placing ownership in everyone’s hands.”

He likens this concept to using an Apple product, pointing at my phone resting on the table recording our conversation. “How many individuals who use Apple products are shareholders in Apple?” he asks, intrigued by my thoughtful expression.

“By using an iPhone, you’re contributing to Apple’s revenue—not only because of your initial purchase, but also through promoting the brand. Each time you buy an iPhone, you elevate the network’s value. How many have bought Apple products because they saw yours? Yet, are you compensated for that? No. Do you reap any rewards from it? None at all, right?”

He further illustrates this point using Uber as an example, noting that drivers earn modest wages and will likely face job loss due to automation. “An ESA program could benefit Uber drivers since they play a vital role in enhancing the network’s value. If they had shares in the company, they’d likely be more content and secure even as Uber moves towards autonomous vehicles. The aim is to create a healthier society with long-term viability and better capitalism, and we see stakeholder capitalism and tokenization as the answer.”

A pioneer in blockchain and the internet

Yat and his team were motivated to explore web3 not for Bitcoin or the financial aspect, but rather because of NFTs in 2017. “Our studio played a role in the development of CryptoKitties in its formative stages,” he shares.

Back then, blockchains were notoriously inefficient, and spikes in transactions led to significant congestion, soaring fees, and extensive waiting periods for confirmations. Ethereum was virtually the only option for a gaming decentralized app, and CryptoKitties dramatically revealed the issue of blockchain scalability.

“CryptoKitties essentially jammed the Ethereum network,” he laughs. “Our company later branched out to become Dapper Labs, where we became early investors. One of our team members even co-founded it, making it feel like family.”

I inquire if this experience led to any doubts regarding blockchain’s potential for gaming or if he simply entered the arena prematurely. “We were aware we were pioneers,” he responds. “That’s connected to our background.”

As an early internet innovator in the 1990s, Yat Siu is well-acquainted with cutting-edge technologies, having started one of Hong Kong’s first internet service providers. “We experienced congestion issues previously. I ran an ISP with a small bandwidth of 64k, catering to numerous customers.”

My eyes widen. “That must have been incredibly slow,” I remark. “You can’t even begin to fathom how slow that was! It was slower than 2G!” he laughs. I can hardly envision how businesses operated in a pre-broadband world.

“I would say that 2017 and 2018 marked the emergence of crypto as a cultural phenomenon,” he muses. “While crypto, and specifically Bitcoin and blockchain, represent a financial movement, the cultural shift emerges distinctly through NFTs. That’s what drew us in.”

A vision for collaborative web3 expansion

From the early crypto landscape to the present, Animoca Brands has been essential in fostering the web3 environment. “We realized the need to support investments beyond gaming to catalyze growth. We expanded our reach to infrastructure investments as well.”

Animoca Brands was among the first investors in OpenSea and has supported projects like Polygon and Flow:

“Essentially, we’ve invested in all the L1s and L2s currently being developed. This strategy is why we’re a significant ecosystem investor. To expand this field, we must back enterprises that will help realize its potential. The opportunities in web3 are immense due to the numerous gaps that exist—it’s a nearly limitless expanse.”
“It’s comparable to forming a nation,” he adds, “including railroads, telecommunications, infrastructure, and road systems. Everything relies on the other component. We still have a long way to go—we’ve made tremendous progress compared to seven years ago, but we’re not yet at our full potential.”

Pathway to widespread adoption

One of Animoca Brands’ primary focuses is to introduce cryptocurrency to the masses. Yat sees gaming as the key to achieving this critical mass, but he also emphasizes investing in education as an essential strategy. Just this morning, he mentions, Animoca Brands made a $10 million investment in Open Campus to support a student loan financing platform named Pencil Finance.

“Pencil Finance operates as a DeFi student loan initiative,” he explains. “Why is this significant? In regions like the Philippines and Indonesia, a typical student loan is around $500, so a $10 million investment could make a substantial impact. This infusion will help onboard students from a lending perspective. Think about how PayPal and Venmo grew—they provided financial services to students lacking bank accounts and, importantly, needing funds for their education.”

This reflects an expansive view of the future: cultivating potential customers from a young age and within a digitally fluent environment. He continues:

“Why would we, as a gaming company, invest in such initiatives? Because it facilitates the entry of young individuals into web3, crucial for establishing a basis for future expansion. Are we the only ones who gain from this effort? No. However, our 573 portfolio companies could see benefits as well. If we successfully onboard a million students, they become participants in web3. It’s not a zero-sum scenario. In web3, value circulates.”

Commitment and steadfast resolve

Yat is wholly dedicated to advancing web3, and few have contributed as significantly to its development as Animoca Brands. Over the years, has he faced tests of his commitment in a field characterized by rapid fluctuations and unexpected turns? He takes a moment to reflect:

“The FTX incident set the industry back by a few years. It was alarming. It heightened the precarious regulatory environment, particularly in the U.S. However, it also serves as a method of sifting through what isn’t viable. Ultimately, the timing of challenges is unpredictable, but they reveal true character.”
“The key lies in mental resilience. Can you handle stress? Can you confront challenges? Can you endure criticism from the community, discontent among your staff, or pressure from investors? That’s an example of the character test.”

I nod, recalling the numerous upheavals of 2022 and previous years. Yat and I entered the crypto space simultaneously, but in crypto years, 2017 seems eons ago. Despite this, Yat’s demeanor is calm, reflecting his strong character rather than simply good genetics.

Did he always anticipate the rise of a unicorn? Did he envision Animoca Brands becoming a major force in the industry? He shakes his head vigorously before expressing:

“No, not at all,” he replies, pausing briefly before adding, “When embarking on ventures or any pursuits in life, your actions lead to unpredictable paths, and you must adapt as you go. That’s how I’ve navigated my journey.”

I have more inquiries but feel conscious of taking up 40 minutes of his time, which he graciously shares. Plus, Scott Melker is waiting nearby, eager to seize the opportunity. One final piece of wisdom before we wrap up?

“Doubt or hesitation often hinder progress. You may make mistakes, and we frequently do. However, you must have conviction and pursue your goals; failing to do so is far worse than taking action.”