We believe that the best way to understand YGG is by comparing the DAO to an alternative asset manager like Blackstone, which specializes in real estate and private equity.
The big difference is that in addition to managing its own money, Blackstone also manages other people’s money, which accounts for a large proportion of the $ 730 billion in AUM, and fees. Notwithstanding the difference, the revenue streams are similar.
- Blackstone earns management fees, which are a fixed percentage of AUM. This is very similar to the rental yield that YGG earns from scholars utilizing its digital NFT assets.
- Blackstone earns principal investment income on its own funds These realized or unrealized gains on proprietary funds are a more volatile revenue stream. This is similar to the VC funding that YGG carries out. All of YGG’s funds are proprietary and the DAO should see substantial mark-to-market gains as investee companies move through funding rounds towards an eventual ICO.
The returns on YGG’s investment into Axie has been incredible. On Axie NFT assets of $ 7.5m, the YGG community has generated over $ 12 million in the past six months. That equates to an annualized ROI of around 330%. Of course, the players and the community managers retain 90% of the in-game earnings, with YGG Treasury receiving 10%. As such, the ROI to the Treasury equates to an annualized ROI of 33% on its Axie assets. This compares favourably with the long-term performance of Blackstone funds that boast an IRR of around 16%.