Prediction Markets, Gaming and the Attention Economy with Carlos Pereira of BITKRAFT Ventures

**SPEAKER_1** (0:00)
This is DeFi Decoded, the conversation show with the leaders, builders and investors pushing the internet's next economic frontier, hosted by Alex Tapscott. This podcast is for informational and educational purposes only, and does not constitute investment advice. Nothing discussed on this show should be considered a recommendation to buy, sell or hold any securities or digital assets.
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**Alex Tapscott** (0:35)
Hello, welcome back to another episode of DeFi Decoded. I am Alex Tapscott. Gaming has long been one of the most powerful distribution channels in technology. Virtual economies, digital identity, and even online social networks really trace their origins to the gaming world. And gaming is big business.
People, users, and games spend billions of dollars, some case tens of billions of dollars on assets. Assets that they buy but they don't own, whether that's in-game assets like skins and virtual identities or weapons and certain kinds of gaming environments. And so it seems like a natural fit that blockchain and gaming should intersect. After all, if you're going to buy an asset, why not own it? Why not have digital property rights to that asset, and be able to decide how it's used and for what purpose, maybe sell it when you're done with the game or move it into another gaming environment should that kind of opportunity arise. And yet despite pretty significant investment in a lot of experimentation, crypto gaming has yet to truly break through. There are many early projects who became overly financialized, prioritizing token speculation over gameplay and user experience. And at the same time, some new technologies, especially AI agents, prediction markets and others are beginning to kind of blur the lines between gaming finance and internet native social systems. I can't help but think that the rise of prediction markets has almost in a way kind of substituted for a lot of the early experimentation that we saw in Web 3 So we're going to unpack all of these different themes, AI, social networks, gaming, crypto gaming, NFTs and prediction markets with our guests. We're very, very fortunate today to have Carlos Pereira, who's a general partner at BITKRAFT Ventures, one of the world's leading investors focused in Web 3 and gaming, but also in AI and a whole range of other different technologies. We're going to cover all of that on today's episode. Carlos leads BITKRAFT's crypto strategy and we discuss why the crypto gaming narrative has yet to reach its potential, but what may still come about from that and where venture capital is flowing today, and whether new kinds of categories are emerging, that he thinks are very exciting as well.
Really excited for this discussion and Carlos, welcome to the show. Thank you for having me. Great. Let's kick things off in the gaming news as a point of departure for the rest of the conversation. As I said in the introduction, gaming always felt like a really great on-ramp for crypto adoption, because gamers already understood digital assets and virtual economies. I remember I interviewed Yatsu, who told me about how when he was playing very primitive games in the 1980s, he was trying to buy assets in virtual world environments, and actually mailed dollars in an envelope to someone on the other side of the world in the hopes that they would be able to give the asset to that person.
Gaming and assets and exchange have always been interrelated. Gaming environments and publishers have generally tried to clamp down on peer-to-peer economies. They've always tried to control it. So again, this seemed like fertile ground for a new gaming experience, where value exchange was part and parcel of the game, enhanced the game, and complemented the game play.
Where would you say crypto gaming or Web 3 gaming is today, and what has surprised you the most about how it's developed?

**Carlos Pereira** (4:08)
I think I agree with you in the intro with this idea of a bunch of money was poured in, and there's not a lot of results to show for, so I think that that's where the category is. I think that what has been interesting, and it makes it a little bit harder to investigate what's going on with crypto gaming, Web3 gaming, Dejavu scheme, wherever you want to say it, is that this softness or the lack of promise has happened. At the same time, that for the most part, venture-backed games or just heavily funded startups in the broader gaming space have also, for the most part, not broken out.
I think that that is much more insightful in thinking about, we're going through a cycle of development regardless of whether it's finance, crypto investors, traditional Web2 investors, people have backed these teams that have left big companies to go to try to make a game. For the most part, there's been every now and then something works. I think it's the nature of venture that not everything is going to work, but certainly the hit rate feels low. It's like, why is that happening? I think that we do have a problem with once you peel the layer, where is gaming demand, where is gaming modernization? Most of that, the meat of that conversation is content distribution, Web2 games, what are males 18 to 35 doing with their time, what's going on in China, these are just totally agnostic to Web3. I think with Web3 or digital assets specifically, I would say a few important things that have happened that sort of like negatively compounded on the softness of gaming overall.