- Hewie Rattray, the founder of Kiyo Capital, has backed some of the UK’s biggest crypto companies.
- Now he’s focused on NFTs after co-founding a play-to-win game called The Pit.
- He shares how he gains exposure to the metaverse through NFTs and how he invests in DeFi.
“My thesis when it comes to investing is to back community-backed industries because I feel they have the best chance of survival,” said Hewie Rattray, founder of Kiyo Capital.
That strategy has paid off for Rattray, who’s helped build out some of the UK’s leading cryptocurrency firms, such as KR1 and Argo Blockchain.
KR1, the digital asset investment firm, has surged 383% year-to-date on the Aquis stock exchange. Meanwhile Argo Blockchain is dominating in the bitcoin mining space, with its share price rising 159% year-to-date.
Rattray is now on the other side of the table after co-founding a non-fungible token game called The Pit, where NFT creatures battle against one another to win prizes. The game, which has yet to launch, is already set to be acquired by Pioneer Media, an early- to mid-stage gaming and NFT investment firm, for around $7.15 million.
NFTs exist on the blockchain and uniquely represent either digital or real-life assets such as art, real estate, or game artifacts. The world of NFTs is bringing together Rattray’s two core interests — gaming and crypto — and he’s incredibly bullish on its future.
“I see where we are with NFTs right now as akin to where we were with bitcoin and crypto at the end of 2016, the end of 2017,” Rattray said. “Very few people can understand it and see beyond just animal JPEGs, which are really just the genesis of it.”
Rattray is referencing popular profile picture projects, such as Bored Ape Yacht Club or CryptoPunks. Individuals who buy into one of these projects secure their own unique piece of digital art, which are often used in profile pictures and seen as a status symbol.
“I think [CryptoPunks is] the genesis collection of the industry really and I think having one of them gives you a certain amount of stature in the NFT world,” Rattray said.
While profile picture projects are enjoying mainstream attention today, NFTs are gaining momentum in the gaming world as they illustrate their viability, Rattray said.
For example, the play-to-earn game Axie Infinity has garnered attention in recent months as players in the Philippines started to make more money from the game than in some traditional jobs.
“Play-to-earn is definitely going to be one big part of the industry that’s going to stay and survive and thrive over the next 5 to 10 years,” Rattray said. “On the flip side, it is somewhat time consuming to play these games, especially if you have a full time job in the Western world, it becomes more of a hobby you could possibly do after work and not rely on it like they do in the Southeast Asia community.”
Rattray’s game The Pit is more play-to-win than play-to-earn, which he admits is a risky strategy. He’s chosen to focus on a classic 2D gaming style with NFTs rather than create something that fits within the metaverse, which is the idea of a fully immersive 3D virtual world — a concept that has certainly caught the attention of Mark Zuckerberg.
While The Pit isn’t focused on the metaverse, Rattray still believes in the vision and is investing in a number of NFTs and projects that link into that vision.
He’s purchased plots of virtual land on Decentraland, which he said is one of the more mature metaverse projects. Rattray also highlights Treeverse as another interesting project with significant venture backing.
“I think it’s not going to be like there’s not going to be a Facebook of the decentralized virtual world,” Rattray said. “I think everyone can thrive and prosper, it’s going to be such a big market, where we’re all going to participate that I think no one will stand out.”
Rattray’s also invested in a number of profile picture projects, which can represent digital identity within the metaverse, and he’s joined the decentralized fund HeadDAO.
Securing passive income
In addition to holding NFTs, Rattray’s also found success in earning passive income from Axie Infinity by providing loans, or scholarships, to aspiring players.
To play in Axie Infinity, the player must buy three Axie creatures before starting the game. This upfront investment is out of reach of many players, so a
group has formed with around 100,000 members who are either looking for or providing loans to play Axie. The recipients of these loans are known as scholars, and in return they provide the lender with a cut of any future in-game revenue.
Rattray created a completely informal agreement to provide several so-called scholarships. It’s a natural, organic community that has escalated, he said.
“It was just a really cool thing to do and it earns me a few hundred bucks worth of ethereum every month,” Rattray said.
In terms of Rattray’s broader crypto portfolio, he’s reluctant to pick specific winners. Instead, he chooses to spread his investments across a range of layer-one blockchains such as bitcoin, ethereum, and solana.
“I find the good thing about being in crypto early enough is you don’t have to have too much rhyme or reason about how you allocate your funds within crypto,” Rattray said. “I mean I haven’t put any money into crypto since 2016 because I just utilize portfolio growth to spread that around.”
“I think that’s the easiest way to get mature exposure basically to the industry,” Rattray said. “PancakeSwap and Uniswap are both so big and so well used. It’s difficult to see how someone’s going to take much more business off them and grow into their own.”