As China says goodbye to the Year of the Ox and welcomes the Year of the Tiger, crypto in China also enters an era of tough survival.
After months of government crackdown, most projects have either moved their headquarters abroad or become extremely quiet. Since no project can really market to Chinese nationals, many Chinese projects now count the majority of their users abroad.
But Chinese retail investors have not shown any sign of slowing down. Metaverse (元宇宙) continues to be the hottest buzzword. During the annual government-sponsored Chinese New Year TV gala, a skit weaved metaverse and Dogecoin into the plot, which sent DogeKing, a shitcoin, up 50x.
As a popular Chinese slang phrase goes, “If you don’t enter a tiger’s den, you can’t get a tiger’s son.” (不入虎穴焉得虎子.) Will 2022 be a year for those who venture into the tiger’s den?
Wild Bet 1: China will produce the next hit crypto game
China, often referred to as the gaming capital of the world, takes up 25% of the global video game industry. There are 665 million players who spent over $45 billion on video games. No other country comes even close.
But the recent crackdown, including a freeze on extending new game licenses, means that many game studios have to either shut down or seek business abroad.
Or they can come to Web3 and build blockchain games that require no licenses.
This is why I believe we will see a flood of new crypto games from China’s marginalized game studios. They are incentivized to move to crypto, where capital is abundant and regulation is absent.
Yet challenges remain. To start with, game development is a years-long endeavor that requires intense capital. Unlike DeFi projects, one cannot simply fork an existing project, twist slightly, and launch a new product. Gaming requires patience.
Second, the next successful crypto games will have to combine both crypto elements and playability. The success of Axie Infinity and the like is not replicable anymore. New games must lure people to play for fun rather than just for tokens. Gaming studios need to collaborate with crypto natives to help them design the tokenomics. Those who crack both will win the category.
Wild Bet 2: Chinese tech giants go big on NFTs
One could easily argue that the rise of NFTs saved the Chinese crypto community from disappearing. At the height of the government crackdown, it was the enthusiasm of trading JPEGs that gave many people hope that crypto in China would survive.
One of the most watershed moments was when Jay Chow, a famous Chinese musician, launched a series of bear-themed NFTs. The NFTs got so famous that your Da Bing correspondent’s mother started asking, “What’s that cute bear NFT backed by Jay?”
NFTs are still somewhat nascent in China. Most activity happens on OpenSea. Big tech companies such as Alibaba, Tencent, and Bytedance have tested the waters but at a very small scale. For example, Tencent issued NFTs as anniversary gifts to its employees. Alibaba tested NFT-themed mobile app backgrounds for selected accounts.
In 2022, NFT could have a mainstream moment in China. Wild bets include a China-friendly OpenSea competitor, major Chinese IP franchises launching NFTs (like “Journey to the West”), and NFT collaborations with celebrities tied to real-life experiences like concerts.
Rather than cautiously testing the waters, these tech giants might just venture right into the Tiger’s den.
Wild Bet 3: The rise of a thousand DAO
Since crypto has gone underground in China, DAOs have become the natural entity to house those lonely crypto souls. According to a Bankless report, a majority of the DAO participants are Chinese.
DAOs will continue to dominate among Chinese crypto fans. First and foremost, participating in a DAO is the only way to gain firsthand information. Rather than relying on paid crypto media, getting into a Discord and being part of a DAO gives you the real inside scoop.
Second, DAOs are fluid. There’s no restriction on one’s role in a DAO. As long as there’s contribution, there’s reward. This fits perfectly for Chinese participants who either have full-time non-crypto jobs, or wish to participate in multiple DAOs. You get back what you’re able to put in.
Lastly, instead of participating in Western DAOs, Chinese crypto investors are increasingly looking at organizing their own DAOs, ranging from investment DAOs to NFT collecting DAOs. The best example is MAODAO, an NFT collective that unites like-minded NFT enthusiasts to move the industry forward.
Looking back at Da Bing’s 2021 predictions, many have come true, while others were very wrong. We did see tightened regulation, but did not expect it to be quite so destructive. The 2022 wild bets will likely turn out the same. But as they say, you gotta venture into the tiger’s den to get the tiger’s son.
https://decrypt.co/92777/3-wild-bets-crypto-china-2022
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Source: https://decrypt.co/92777/3-wild-bets-crypto-china-2022
