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Value Creation in the metaverse

By McKinsey & Company

1 January 20220

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Behind the Deal: Why We Invested in Donut

The emergence of the financial internet necessitates a new category of interface, leading to the strategic investment in Donut, an agentic browser designed specifically for on-chain economic activity. As blockchain technology shifts from speculative assets toward a functional global financial layer, traditional web browsers remain ill-equipped to handle the complexities of decentralized finance, security protocols, and cross-chain interactions. Donut addresses these friction points by integrating artificial intelligence and agentic capabilities directly into the browsing experience, allowing users to execute complex financial workflows through natural language and automated assistance rather than manual, multi-step transactions. The investment thesis centers on the transition from passive information retrieval to active economic execution. By functioning as an agentic layer, the platform simplifies the user experience for both retail and institutional participants, effectively lowering the barrier to entry for the decentralized web. The scope of this development covers the intersection of Web3 and artificial intelligence, focusing on the immediate need for secure, intuitive infrastructure that can manage digital assets and smart contract interactions autonomously. This shift represents a move toward a more integrated financial ecosystem where the browser acts as a proactive participant in the user’s economic life. The decision to back this technology is rooted in the belief that the next generation of internet users will require tools that prioritize sovereign financial control and automated efficiency. By streamlining the "financial internet," the platform aims to capture a significant share of the growing market for on-chain services. The methodology behind this investment involves a deep analysis of current user pain points in the Web3 space, identifying that the lack of a purpose-built interface is the primary hurdle to mass adoption. Ultimately, the move signals a broader industry trend toward merging AI agents with blockchain infrastructure to create a more seamless and accessible digital economy.

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The strategic decision to reinvest in Cambria reflects a conviction that onchain Massively Multiplayer Online (MMO) games represent the next frontier of digital economies and player engagement. By doubling down on this venture, the investment thesis centers on the unique value proposition of high-stakes gameplay integrated with blockchain technology. This approach moves beyond traditional gaming models by utilizing smart contracts to facilitate real economic consequences within a virtual environment, thereby increasing player retention and emotional investment through tangible risk and reward mechanisms. The scope of this investment focuses on the intersection of decentralized finance and interactive entertainment, specifically targeting the infrastructure required to support thousands of concurrent players in a persistent, trustless world. The underlying methodology for this follow-on investment relies on observed performance metrics from Cambria’s initial phases, which demonstrated a high appetite for competitive, stake-based interactions. By leveraging onchain transparency, the game creates a provably fair environment for asset ownership and trade, distinguishing it from centralized counterparts where developers maintain absolute control over the economy. Ultimately, the commitment to Cambria signals a broader belief that the future of the gaming industry lies in permissionless ecosystems where players are active stakeholders. The transition toward fully onchain logic allows for a level of composability and permanence previously unattainable in the MMO genre. As the project scales, the focus remains on refining the balance between complex game mechanics and seamless blockchain integration, ensuring that the high-stakes nature of the platform serves as a primary driver for a sustainable, player-driven economy.

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Behind the Deal: Why We Invested in Distinct Possibility Studios

Distinct Possibility Studios represents a strategic investment in the evolution of the first-person shooter genre, specifically targeting the intersection of traditional high-fidelity gaming and emerging decentralized technologies. The studio is led by industry veterans who played foundational roles in defining the shooter category, bringing decades of experience from major franchises to a new venture focused on competitive integrity and player ownership. This investment thesis centers on the belief that the next generation of shooters will succeed by combining world-class mechanical gameplay with sustainable, blockchain-integrated economies that empower rather than exploit the user base. The studio’s primary objective is to address the stagnation in the current shooter market by introducing innovative progression systems and transparent asset ownership. By leveraging Web3 infrastructure, the development team aims to solve long-standing issues regarding digital scarcity and the secondary market for in-game items, ensuring that player time and skill are reflected in tangible value. The scope of this partnership covers the full development cycle of an upcoming flagship title, with a specific focus on the North American and European competitive gaming markets over the next several years. Methodologically, the decision to back this team was driven by a rigorous evaluation of their technical roadmap and the proven track record of the founding members. Analysis of current market trends suggests a growing demand for titles that offer the polish of AAA productions alongside the flexibility of decentralized finance. The conclusion of this investment strategy is that Distinct Possibility Studios is uniquely positioned to bridge the gap between mainstream gaming audiences and the benefits of Web3, potentially setting a new standard for how competitive shooters are developed, monetized, and sustained in a digital-first economy.

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This analysis examines the intersection of cryptocurrency and live streaming, tracking the rapid growth of digital asset content across Twitch, YouTube, and Kick. The primary thesis identifies a significant surge in crypto-related broadcasting driven by market speculation, memecoin popularity, and political events. The scope covers global data from July 2023 through June 2025, utilizing a methodology that tracks unique channels with at least 30 hours of monthly airtime while excluding bots and suspicious accounts to ensure data integrity. Findings reveal that the number of unique channels streaming crypto content doubled in the six months leading into late 2024. YouTube experienced the most dramatic growth, rising from 31 channels in July 2024 to over 200 by June 2025. Viewership peaked across platforms in early 2025, with Twitch reaching its height in February and YouTube seeing major spikes in January and June. While Bitcoin remains the most discussed asset with over 500,000 chat mentions in the first half of 2025, Solana has emerged as a dominant secondary interest, recording 171,000 mentions—triple that of Cardano. The geographic reach of this content is notably diverse, with India emerging as a major hub; four of the top ten crypto creators are based there and stream primarily on YouTube. K1m6a is identified as the leading creator with 6.7 million hours watched. Beyond dedicated finance streams, crypto discourse has permeated gaming communities. Just Chatting is the top category for crypto mentions, but Escape from Tarkov and Fortnite lead among gaming titles. Furthermore, crypto integration is deepening in professional gaming, evidenced by high-viewership esports events like the 2025 Mid-Season Invitational, which secured major crypto-related sponsorships.

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State of Web3 in Saudi Arabia

Saudi Arabia has emerged as the dominant hub for Web3 investment in the Middle East and North Africa, capturing 51 % of Q1 2024 venture‑capital funding with $429 million across 163 deals. This concentration reflects a supportive ecosystem that blends proactive government initiatives, a growing pool of local founders, and active participation from international investors. The market is presently skewed toward consumer‑facing applications such as DeFi, GameFi and SocialFi, while foundational protocol development remains limited, highlighting a clear opening for infrastructure builders. Founders of Saudi‑based Web3 ventures underscore the rapid maturation of the sector, citing high‑profile partnerships—including Animoca Brands with NEOM, collaborations with Hedera, and alignment with Vision 2030—as catalysts for growth. Yet they identify three persistent barriers: inadequate user‑friendly interfaces, insufficient public and investor education, and ambiguous regulatory frameworks that impede both builder activity and funding cycles. Sector‑specific use cases—blockchain‑enabled freelance payments, Sharia‑compliant insurance, and localized NFT platforms—are viewed as primary drivers of mass adoption. Government commitment reinforces this trajectory, with $37.7 billion earmarked for esports and $13.3 billion for gaming, complemented by sizable venture funds such as Wa’ed’s $500 million vehicle and 500 Global’s $2.4 billion under management. Notable projects illustrate tangible impact: Tharawat Green Exchange aims to plant ten million trees by 2030, while Ticket Souq has generated $3.3 million in gross merchandise value, serving 36 k users across 55 events in ten countries. Stakeholders agree that clear, supportive regulation, robust education, and targeted technology investment are essential to translate this momentum into sustainable, high‑pay‑off outcomes for the kingdom’s burgeoning gaming, fintech, e‑commerce and proptech sectors.

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The emergence of fully onchain games represents a fundamental shift in digital entertainment by migrating game logic, state, and assets entirely onto blockchain infrastructure. Unlike traditional Web3 titles that limit blockchain use to cosmetic assets or secondary marketplaces, these applications utilize the blockchain as a decentralized server. This architecture ensures that game rules are immutable and execution is transparent, fostering a permanent environment where players possess true digital sovereignty. By removing centralized authority over game state, these ecosystems enable a permissionless "composable" framework where third-party developers can build new features, mods, or economies directly on top of existing game logic without seeking approval from the original creators. Technical advancements in Layer 2 scaling solutions and zero-knowledge proofs have addressed previous barriers regarding latency and high transaction costs, making complex onchain interactions more viable. Current industry trends indicate a move toward "autonomous worlds," where the game environment persists independently of any single entity or developer. This shift is particularly prevalent in strategy and simulation genres, where complex economic loops and persistent world-building benefit most from decentralized verification. While the sector remains in an early experimental phase, the integration of smart contracts as the primary engine for gameplay suggests a future where games function more like open protocols than closed software products. The scope of this evolution encompasses a global developer base primarily focused on Ethereum-compatible networks and specialized gaming appchains. As the infrastructure matures, the focus is transitioning from simple asset ownership to the creation of complex, interoperable systems that allow for cross-game utility and community-driven governance. These developments point toward a new paradigm in the gaming industry where the value is derived from the permanence and extensibility of the game world rather than traditional subscription models or centralized control.

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Value Creation in the metaverse

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