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At the South Korea Blockchain Week, Cryptopolitan had the wonderful <a href="https://www.cryptopolitan.com/exclusive-we-interviewed-yat-siu-the-godfather-of-web3-here-is-everything-we-learned/">opportunity to sit down with</a> the legendary founder of Animoca Brands and Outblaze, Yat Siu again. 
Animoca has a long portfolio with over 540 investments in web3 projects. This includes stakes in top blockchain and NFT companies like Axie Infinity, OpenSea, and Dapper Labs. 
“Every gaming project I spoke to at Korea Blockchain Week is either part of Animoca or wants to be,” said Yaroslav Belkin, who was with Yat. 
This time, we wanted to discuss the future of digital ownership and web3, two things that are very near to Yat’s heart. Right off the bat, we asked him: 
“What are your thoughts on the balance between user-generated content and corporate-controlled environments when it comes to digital ownership?” 
His response? User-generated content (UGC) is the backbone of internet growth, and corporate entities should be learning to leverage it rather than trying to dominate it. 
“When YouTube started, people were posting videos using other people’s content, and copyright holders were up in arms,” he said. “But it’s this user-generated remixing that drove YouTube’s viral growth.” 
<h3 id="b-the-internet-is-nothing-without-ugc-b">The internet is nothing without UGC</h3> 
For Yat, UGC is the key to future innovation, and it’s not something corporations can ignore. “Older musicians are making money on content they released 20 or 30 years ago because of TikTok. That’s the power of UGC,” Yat said. 
He added that while big brands can streamline content production, they still need user-driven content to expand their reach. He pointed out that UGC and corporate-controlled content need to work together, but there’s no denying that UGC is what drives new growth. 
We then asked him about the current state of digital regulations. Yat believes that the future of crypto and NFTs is about consumer protection. “When you buy a car that doesn’t work, you’re entitled to a refund, right? Web3 should be no different,” he said. 
The web3 believer brought up how regulations are changing and adapting all around the world, like in Hong Kong, Taiwan, and Japan. But Yat stressed that:&nbsp; 
<blockquote>
 “It’s more about consumer protection than anything else. Before regulation catches up, we have to rely on trusted brands. It’s like choosing a restaurant with good ratings—you want to buy from brands you know.”
</blockquote> 
While speaking about the growing trust in certain brands, Yat touched on how Animoca Brands has managed to become a dominant player in blockchain gaming.&nbsp; 
He acknowledged that it’s tough for smaller companies to break through, but once you’re a leader, the challenge becomes maintaining that position. 
When asked what’s next for Animoca, Yat admitted that the company’s future is constantly changing, so, “The jury is still out,” he said. “But I would say this. We will continue to invest to grow the web3 ecosystem.” 
<h3 id="b-crypto-needs-institutional-support-b">Crypto NEEDS institutional support</h3> 
“The total crypto market cap is around $2 trillion,” Yat explained. “Bitcoin dominates 58-60%, but altcoins have also grown significantly.” One year ago, the total market cap of altcoins was around $200 billion; now, it’s closer to $500 billion.&nbsp; 
But Yat pointed out that only some altcoins have performed well, and many haven’t. The reason is institutional support. He said: 
<blockquote>
 “When Bitcoin ETFs were introduced, they signaled an institutional entry, and that’s where altcoins have lagged.”
</blockquote> 
Comparing it to traditional finance, he explained that in the U.S. equity market, over 80% of investments come from institutions. “People trust projects that are backed by institutional credibility,” said Yat. 
<figure id="attachment_584816" aria-describedby="caption-attachment-584816" style="width: 100%" class="wp-caption alignnone">
 <img loading="lazy" decoding="async" class="wp-image-584816 size-full" src="https://www.cryptopolitan.com/wp-content/uploads/2024/09/IMG20240904152109-2.jpg" alt="‘It’s all about reputation’—Yat Siu on how trust will define web3’s winners and losers" width="1920" height="1125" srcset="https://www.cryptopolitan.com/wp-content/uploads/2024/09/IMG20240904152109-2.jpg 1920w, https://www.cryptopolitan.com/wp-content/uploads/2024/09/IMG20240904152109-2-300x176.jpg 300w, https://www.cryptopolitan.com/wp-content/uploads/2024/09/IMG20240904152109-2-1200x703.jpg 1200w, https://www.cryptopolitan.com/wp-content/uploads/2024/09/IMG20240904152109-2-768x450.jpg 768w, https://www.cryptopolitan.com/wp-content/uploads/2024/09/IMG20240904152109-2-1536x900.jpg 1536w" sizes="(max-width: 1920px) 100vw, 1920px">
 <figcaption id="caption-attachment-584816" class="wp-caption-text">
 Yat Siu, the founder of Animoca Brands with Yaroslav Belkin, co-founder of Cryptopolitan
 </figcaption>
</figure> 
Yat also spoke about the importance of institutional backing during intense market volatility. He mentioned the resilience of projects like Solana, which managed to keep running even when its token dropped to $15 during the FTX collapse. 
This was also true for Animoca’s MOCA token, which launched during a challenging period but still performed well. “We had institutional backing, and that’s why we succeeded,” Yat said. 
Yat noted that the rise of institutional-grade tokens will shape the future of the altcoin market. “It’s not just about valuation. If the wrong user holds your token, it’s going to be dumped, no matter how low the valuation is,” he said. 
This is also why he wants Animoca to be a bridge between traditional institutions and the crypto industry. He explained that they’ve mastered how to deal with these institutions, and to him, that was a big step in making Web3 mainstream. 
Yat believes that while the consumer side of Web3 has grown, it hasn’t kept up with the explosion of new tokens. He explained that attention in the crypto market has become too diluted due to the flood of new projects and tokens.&nbsp; 
“pump.fun alone created 2 million new tokens in the last six months,” Yat said. When discussing the future of scalable Web3 ecosystems, Yat pointed out that Web3 is already functioning as a kind of metaverse, creating jobs and opportunities for people. He said: 
<blockquote>
 “If 100 million people wanted to join Web3 tomorrow, they could. The system wouldn’t break.”
</blockquote> 
<h3 id="b-what-does-web3-need-b">What does web3 need?</h3> 
Yat believes the future of web3 depends on how well new users get onboarded and how distribution happens. That’s where TON and Telegram come in. Animoca is the biggest validator and investor in TON, who’s been pushing hard to expand the ecosystem. And Yat believes:&nbsp; 
<blockquote>
 “They’ll force big names like Apple and Google to catch up.”
</blockquote> 
When asked about the drama surrounding TON CEO Pavel Durov and France, he straight-up said, “We’re not stressed. The ecosystem is growing, no matter what’s happening with Pavel.”&nbsp; 
He acknowledged that TON’s early launch had some hiccups, but the token system is proving strong, and the project keeps moving forward. Yat believes the resilience of TON is what’s going to secure its long-term success. 
He compared it to Ethereum’s early days, saying that people used to lose their minds over minor issues with Ethereum, but look where it is now—a core part of crypto.&nbsp; 
The way Yat sees it, TON is on the same path and will eventually overtake Telegram as a platform. He said the problem with Web3 right now is that there are too many scammers. 
He broke down how digital identity could be the key to building that trust in decentralized systems. If someone owns a Bored Ape and holds onto it, while someone else keeps flipping theirs for profit, that should mean something. 
<h3 id="b-digital-property-and-network-states-b">Digital property and network states</h3> 
Toward the end of the conversation, Yat explored the concept of digital property ownership and the potential rise of network states. 
“We’re already seeing DAO (Decentralized Autonomous Organization) governance systems where people vote and are elected, so a kind of digital politics is happening,” he said.&nbsp; 
But Yat doesn’t believe that network states will replace traditional governments anytime soon. Governments have a monopoly on violence, and that’s not going to change, he pointed out. 
Instead, Yat sees a future where existing governments integrate blockchain and network principles into their systems. Countries won’t disappear, but they’ll adopt decentralized methods like blockchain voting and transparency to stay relevant, Yat predicted.&nbsp; 
He compared this evolution to how monarchies in Europe transitioned into democracies. Looking decades ahead, Yat was hesitant about predicting Animoca’s exact role but remained optimistic. 
“I don’t think any company can be on top of Web3 because of its permissionless nature,” he told us.&nbsp; 
For the Godfather of Web3, the goal is not to dominate the ecosystem but to influence and mold it. He explained that Animoca’s portfolio, worth nearly $2.34 billion, plays a bigger role in building network effects than simply holding value. 
“We’re like DAO administrators or a political voting bloc in the future of network states,” Yat added. He believes that if Animoca succeeds, billions of people will own digital property and manage their lives virtually. 
“We’re trying to build that future, but it’s still a way out,” Yat said. For now, he’s focused on getting people their digital property rights and ensuring they understand the value of these assets. 
Written by Yaroslav Belkin and Jai Hamid

‘It’s all about reputation’—Yat Siu on how trust will define web3’s winners and losers

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