Yat Siu, a veteran venture capitalist with a decade of experience in cryptocurrency investments, has seen it all. As the co-founder of Animoca Brands, a Hong Kong-based venture studio and game developer, he has helped build one of the most influential brands in Web3 culture. According to data provider CoinGecko, the market capitalization of tokens issued by Animoca's portfolio companies exceeds $45 billion.
The crypto winter of 2022-23 posed a significant challenge for Animoca, with tokens of many portfolio companies dropping nearly 90%. During the darkest days of this period in February 2023, even the Financial Times questioned whether Animoca would survive.
Of course, times have changed. In 2024, Bitcoin's price surged over 120%, a pro-crypto U.S. president took office, and Animoca recently expanded its Hong Kong office space nearly fourfold despite a contraction in traditional financial markets in the region.
Siu now believes the crypto industry is at an inflection point, similar to what he observed in the 1990s when the internet first began transforming business.
The Stablecoin Revolution in Global Trade
During a recent interview at Animoca's Hong Kong headquarters, Siu recalled how the city's garment industry—now largely vanished—relied on physically shipping samples to clients for approval during the production process. Without modern tools like Slack, Dropbox, or FTP, and with fax machines providing insufficient resolution, companies faced significant delays and costs.
"People used to design patterns and ship them to the U.S. via DHL," Siu explained. This process took several days and cost some companies up to $80,000 per month.
Siu previously operated one of the first broadband internet service providers, which offered a solution. The service allowed garment factories to perform high-resolution scans—previously difficult due to bandwidth limitations—and send them to Western clients. This innovation made the client review process "infinitely cheaper" and more efficient, eliminating what Siu called the "crazy" reliance on physical delivery for design approval.
Siu compares this breakthrough to the emergence of stablecoins and predicts traditional financial institutions will eventually adopt them at scale.
"If you want to conduct commercial trade with the United States, you will need to have crypto rails," he predicted. "Over time, this becomes a business friction... If someone says, 'I want to send you some Tether or USDC,' and the other party says, 'I can only accept wire transfers,' it won't work."
In Asia, stablecoin usage is already common in areas like supply chain finance, Siu explained. With profit margins declining in industries like fashion, using wire transfers to pay supply chain partners doesn't make sense when stablecoins are readily available.
"Stablecoins are becoming indispensable for reducing the cost and speeding up these transactions," he noted.
In Siu's view, this represents the first part of crypto's mass adoption by 2025.
Memecoins Evolving Beyond Speculation
The next phase of adoption involves memecoins expanding beyond mere tokens to become comprehensive blockchain ecosystems.
"I expect memecoins to launch their own L1 or L2 solutions," Siu said. "They're no longer just tokens; they're building communities and ecosystems. Memecoins are essentially cultural symbols that capture attention and build narratives that resonate beyond financial speculation."
Siu pointed out that NFTs are following a similar trajectory, evolving from standalone assets to components of broader ecosystems.
"NFT projects are no longer just about issuing tokens; they aim to create ecosystems with cultural and symbolic value," he said, citing examples from Solana's growing memecoin collections, some of which are now launching NFTs to enhance engagement and deepen community connections.
Siu emphasized that for memecoins and NFTs to achieve lasting success, they must evolve into platforms where communities can "build games, applications, and other experiences beyond just speculation."
The Future of Crypto Gaming
Web3 gaming isn't a new phenomenon, but previous efforts have struggled to gain consumer traction. During the 2021 bull market, major studios incorporating NFTs into AAA titles like Ubisoft's Ghost Recon series received lukewarm market responses.
Similarly, Web3-native games like Decentraland failed to attract player bases matching their multi-billion dollar token valuations. Other games like Off the Grid promised to bridge Web2 and Web3 gaming with high-quality visuals and a "game-first, crypto-second" approach but faded from prominence within weeks.
Despite these challenges, Siu remains optimistic about crypto gaming's future.
He views gaming as a powerful entry point to Web3, where culture, community, and ownership converge to create something larger. In this ecosystem, in-game asset trading becomes an integral part of the gameplay experience, naturally evolving from concepts like skin trading in games like Counter-Strike that many players already understand.
"To attract Web2 gamers, the focus needs to be on building network effects, creating fun and engaging games, and adding the benefits of ownership and trading," Siu explained. "By 2025, we'll see Web2 gamers not even distinguishing whether it's a Web3 game—they'll enjoy it for what it is, with blockchain benefits as an added bonus."
"They just want to play," he added.
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Reputation as Currency
No economy can function properly without trust between parties and counterparties. While blockchain's transparency helps create a higher-trust environment, Siu believes a system for measuring reputation is equally essential.
"Reputation is a currency," Siu stated. "It's not just about rewards; it's about how the network values you and your contributions."
He explained that reputation networks like Animoca's Moca ID enable this by allowing unified but decentralized identification across all companies in Animoca's portfolio. Theoretically, this would resemble traditional finance's Equifax, enabling services like unsecured crypto loans—a significant departure from the current overcollateralized lending system.
"If you have no reputation, I cannot establish trust with you," Siu said. "Imagine the reputation you've built over years—would you risk losing it with one wrong move?"
Beyond Profit: Web3's Transformative Potential
As a venture capitalist, Siu naturally pursues returns and is a strong advocate for capitalism and its benefits. In previous interviews, he has argued that much of the desperation and sense of inequality people experience stems from financial illiteracy rather than inherent flaws in capitalism.
Those without opportunities to own property and generate yield cannot properly understand capitalism, which, while imperfect, remains society's best option, Siu has suggested.
He previously stated that "Web3 can save the capitalist narrative by turning users into stakeholders and co-owners," warning that "the roots of communism come from a feeling of inequality."
For Siu, Web3 represents an opportunity to build a better form of capitalism—one that's more inclusive and participatory. He urges the industry to focus on blockchain's transformative potential rather than short-term profits, cautioning against a "fear of missing out" mentality.
"Let's remind ourselves that crypto is actually helping us build something bigger," Siu said. "We're all making money, the industry is great, that's fine—but let's remind ourselves why we're really here."
Frequently Asked Questions
What are stablecoins and why are they important for global trade?
Stablecoins are cryptocurrencies pegged to stable assets like the US dollar. They enable faster, cheaper international transactions compared to traditional wire transfers, making them particularly valuable for supply chain finance and cross-border trade where efficiency and cost reduction are critical.
How are memecoins evolving beyond mere speculation?
Memecoins are transforming from simple tokens into cultural symbols that build communities and ecosystems. Some are developing their own layer-1 or layer-2 blockchain solutions and creating NFTs to enhance engagement, representing a shift from pure speculation to meaningful ecosystem development.
What challenges does Web3 gaming face in attracting traditional gamers?
Web3 gaming must overcome skepticism from traditional gamers who may associate blockchain elements with speculation rather than enhanced gameplay. Success requires focusing on creating fun, engaging experiences first while treating blockchain features as value-added benefits rather than primary selling points.
How does reputation work in blockchain ecosystems?
Reputation systems on blockchain create trust networks where participants' historical behavior and contributions are recorded transparently. This enables features like unsecured lending based on reputation scores rather than collateral, similar to credit systems in traditional finance but with decentralized verification.
Why does Yat Siu believe Web3 can improve capitalism?
Siu argues that Web3 transforms users into stakeholders and co-owners through mechanisms like token-based ownership. This creates a more inclusive form of capitalism where participants have financial literacy opportunities and can benefit directly from the value they help create.
What timeframe does Siu predict for mainstream crypto adoption?
Siu anticipates that 2025 will be a pivotal year for cryptocurrency mainstream adoption, with stablecoins becoming essential for global trade, memecoins evolving into full ecosystems, and Web3 gaming reaching traditional gamers without them noticing the underlying blockchain technology.