Merit Circle DAO & Yield Guild Games Joint Statement
As an update to our official statement regarding the Merit Circle issue that we outlined on May 28, the following is the joint statement that was written and prepared by Yield Guild Games and Merit Circle Ltd in the interest of clarifying YGG’s continued support.
On April 28 2022 Merit Circle Ltd posted an initiative on their forum asking seed investors to outline their contributions so far to the Merit Circle DAO. This was not a requirement of the original SAFT that was signed between Merit Circle Ltd and Yield Guild Games. Yield Guild Games published a topic on the governance forum of the Merit Circle DAO with a breakdown of their efforts to date.
In response, the author of the MIP-13 proposal used YGG’s response as the basis to propose canceling YGG’s SAFT, refunding their initial investment, and removing their MC seed tokens. This however, was never the intention or desire of Merit Circle Ltd.
The proposal singled out one early stakeholder on the basis that it had not provided enough value in relation to how many tokens it held. Merit Circle Ltd does not agree with this view. Yield Guild Games added value in many different ways although they were not often called upon to do so. They were also one of the first ones to post their transparency & accountability thread to share and create a dialogue with the community.
After taking in the proposal and observing the community’s feedback, Merit Circle Ltd reached out to Yield Guild Games. Yield Guild Games worked with Merit Circle Ltd in the hopes of helping Merit Circle Ltd find a workable solution to appease their community whilst honoring the SAFT that Merit Circle Ltd had signed.
We both recognized the arbitrary nature of the MIP-13 proposal and the danger a precedent like this could set for the Merit Circle DAO and the industry as a whole if agreements are not upheld and investors are not respected. The chosen tool was too crude and did not do justice to prior agreements.
The divergence between the prior agreement and the DAOs proposal would have likely led to legal action against Merit Circle Ltd. While the legal question is one that could probably be argued at length, both parties agreed it was better to settle. This would spare both parties from a costly, time-consuming, legal process with uncertain outcomes. None of the parties had to settle, but both parties chose the constructive path to help Merit Circle move forward.
YGG’s early inclusion on the cap table alone, when it was the most well-known guild (valued at nearly $10 Billion), contributed to the success of Merit Circle’s LBP. Additionally to the contributions mentioned in this thread, we would like to add these points to that list.
1. Alongside YGG committing funds, Gabby Dizon also coordinated additional funding from a private angel network that he was a part of to support Merit Circle’s early journey. YGG and Gabby’s support (and financial backing) added significant credibility to the Merit Circle fund raising process.
2. YGG and Gabby made direct introductions to multiple funds and angels during the seed round. YGG was also very supportive in endorsing Merit Circle to other investors during their negotiations.
3. YGG’s team leveraged their status and brand in the industry to ensure that Merit Circle Ltd got their first exposure via Coindesk which helped raise the Merit Circle profile greatly ahead of the public sale.
4. In October 2021, when Merit Circle reached out to YGG asking to lease 1,000 Axie teams (3,000 Axies) to double its scholar base, YGG was open to this request, but the DAO did not proceed with the agreement.
5. YGG also provided advice about Axie breeding when Merit Circle was still looking to define their approach. YGG’s Head of Game Operations shared their industry-leading expertise and insights with Merit Circle directly. Access to this specific information about team composition, breeding, and the broader Axie-Meta that allowed Merit Circle to improve breeding output and efficiency at a greater rate than would have been possible without YGG’s support.
There were other such occasions where Yield Guild Games provided great support as a partner whilst Merit Circle was growing. YGG provided that support in the interest of seeing both Merit Circle and the play-to-earn ecosystem as a whole grow and prosper.
Collaboratively, Merit Circle Ltd and Yield Guild Games came to an agreement that was presented in MIP-14, a counterproposal to MIP-13. A solution that still satisfies the will of the Merit Circle community, but was also acceptable to YGG.
The proposed solution terminates the formal relationship between the Merit Circle DAO and Yield Guild Games. This space would not be where it is today without Yield Guild Games, and not without the Merit Circle DAO.
Merit Circle and Yield Guild Games will continue to give their all to growing the blockchain gaming ecosystem. Through education and onboarding, we are bringing play-to-earn to all corners of the globe so players can upskill and be rewarded for their time spent in game.