Hamster Combat’s Stance Against Venture Capital Funding
The play-to-earn crypto game, Hamster Combat, has recently taken a firm stance against the involvement of venture capital (VC) funding in the Web3 space. During a broadcast to its community members, the game’s administrators criticized the prevailing trend of using community engagement as a means for “exit liquidity.” In their official Telegram group, they stated, “Since our explosive growth began, we’ve received numerous investment offers from some of the biggest venture capital firms in the Web3 space. We’ve turned down every single one.”
This strong statement reflects a growing concern within the crypto community regarding the practices of many Web3 projects. According to Hamster Combat’s admins, “Too many Web3 projects have built audiences only to use them as exit liquidity for their venture capital backers. This has, unfortunately, become the norm in the industry.” This criticism highlights a significant issue: the prioritization of securing funding over creating sustainable and innovative projects that genuinely benefit users.
The Problem with Current VC Practices
The Hamster Combat team elaborated on the negative impact of these practices by explaining that many companies focus on crafting a convincing pitch to attract investment. They often spend the raised capital on marketing, conduct airdrops, or launch initial coin offerings (ICOs), only to abandon their projects afterward. This leaves users holding depreciated assets without any recourse. The admins emphasized, “We stand against this practice. We want the Web3 space to return to its fundamentals.”
The game allows players to take on the role of a virtual hamster CEO of a crypto exchange of their choice, such as Binance or OKX. Gamers can earn points by tapping the hamster on their screens, which can then be used to upgrade their in-game exchanges. Utilizing the TON blockchain, Hamster Combat claims to have amassed 200 million users as of July, indicating a significant level of engagement within its community. Players can convert their in-game coins into HMSTR tokens, which are tradable on various cryptocurrency exchanges.
Community Engagement and Token Distribution
Since its launch in April, Hamster Combat has experienced remarkable growth, boasting 53 million subscribers on its Telegram channel. The upcoming HMSTR token, which will be available exclusively through gameplay, is designed to reward players for their engagement. The developers have reserved approximately 60% of the total supply of HMSTR tokens for players, while the remaining tokens are allocated for market liquidity, partnerships, grants, and rewarding community squads.
Criticism of Venture Capital Funding in Crypto
In recent months, there has been an increasing critique of crypto venture capital firms. An essential part of this criticism revolves around the tendency of these firms to invest in projects that ultimately inflate the valuation of their tokens beyond their initial investment amounts. Such practices often create downward pressure on token prices following exchange listings, leaving public investors to suffer significant losses.
For instance, newer tokens like Aptos’ APT and Sui Network’s SUI saw their values plummet by as much as 70% since their peaks in 2023, while Bitcoin (BTC) has continued to rise and reach new heights in 2024. According to Markus Thielen, founder of 10x Research, “Venture capital funds invested $13 billion in Q1 2022, while the market turned into a steep bear market.” He notes that these funds are now under pressure from their investors to return capital, especially as other sectors, like artificial intelligence (AI), have gained more attention and investment.
Current Trends in Crypto Funding
Despite the criticisms, crypto funding has shown resilience, recording growth over the past three quarters. According to a PitchBook report from August 9, the deal value reached $2.7 billion in Q2, marking a 2.5% increase in total invested capital, although there was a 12.5% decline in the number of deals compared to Q1. This suggests that while the overall amount invested is increasing, the number of projects receiving funding is decreasing, which could indicate a more cautious approach from investors.
Future of Hamster Combat and HMSTR Token
Regarding the future HMSTR token, the developers have made it clear that venture capital funds will access the token in the same manner as regular users: by purchasing it on exchanges after it has been issued and listed. This approach aims to level the playing field and ensure that all participants in the ecosystem have equal access to the token, further aligning with Hamster Combat’s commitment to fairness and community engagement.
In conclusion, Hamster Combat’s rejection of venture capital funding reflects a broader desire within the crypto community to prioritize user interests and innovate without the influence of external financial pressures. As the game continues to grow and evolve, its commitment to transparency and fairness may set a new standard for future projects in the Web3 space.