Early October 2021 saw the launch of a brand new fantasy game that was set to shape the future of this lucrative section of the gaming industry.
Founded by Jacob Claerhout and Boris Gordts, Visionrare aimed to emulate the success of the fantasy football genre, only this time in the realm of startup investing. The platform, based on Non-Fungible Tokens (NFT) launched on October 6th, and almost immediately pulled in 1000 members. Hundreds of people began bidding on VisionShares, but less than 24 hours later all trading on the platform had stopped.
What went wrong?
Democratising start-up investing
The NFT craze has dominated blockchain industry headlines in 2021. This relatively new segment of the crypto market has built links into digital industries as diverse as fine art and gaming. Visionrare promised to merge NFTs with fantasy investing, all the while offering the earning potential of real crypto dollars.
Similarly to other types of fantasy investing games, Visionrare enabled players to purchase and trade virtual shares in a wealth of start-up companies ? an attempt to “democratise access to the excitement of startup investing”. Although it was free to join, VisionShare NFT tokens started at $5, with some increasing to significantly higher prices.
Initially, the platform attracted those players that were already “deep into play-to-earn games like Sorare and Axie”, but as news of the platform spread, players with more of an interest in investing began signing up to the Visiionrare beta.
An unregulated securities market?
Within hours of launch, however, Visionrare’s founders discovered that auctioning fantasy shares in real and established companies was a completely different animal to creating fantasy sports squads of digital football players.
Fantasy football, which captures the imagination of millions of football fans every year, did set a precedent for what could be achieved when combining digital technology with a beloved, real-life activity. But it did not set a blueprint template for fantasy gaming that could then be laid over other financial activities.
Whilst not intending to, Claerhout and Gordts essentially set up a totally unregulated securities market, given that players on the platform had no underlying assets or control or liquidity in the companies they were “purchasing” shares in outside of the Visionrare platform. As investor Wiliam Stormont commented during the ill-fated launch, what was stopping people from “insider trading and double-dipping” on the platform?
To give credit to the founding duo, when the issues with the platform soon began to emerge, they were quick to announce that Visiriorare would move to a “free to play model”, and every user who purchased shares on the platform was sent a full refund. However, how could two established VCs have made such a rookie mistake?
According to Sifted, the European start-up magazine, the founders were under the impression that because Visionrare was skill-based and had “no access to the governance of a company” they wouldn’t bump into any regulations. The duo even consulted with a corporate lawyer prior to launch and carried out “extensive research” on the matter, but found no evidence to the contrary.
It wasn’t just the Visionrare founders who were surprised by the realities of launching a fantasy start-up either. Several of the founders of the startups listed on the platform were “initially surprised” to see their companies there. Although, as yet, none of the founders has asked to have their presence delisted.
A Quick Recovery
In a masterful attempt to avoid both further controversy and fall foul of any other gaming regulations, Visionrare was pulled and then relaunched as a free to play platform, albeit with the same NFT set-up.
There have been several free-to-play fantasy investing games and platforms launching in recent years with moderate success, including The Telegraph’s Fantasy Fund Manager, which offers the full experience of selecting shares and managing a stock portfolio to gamers.
Players still have the opportunity to compete for monetary rewards in F2P games, only this time in the form of clear financial prizes rather than virtual “returns” on their initial investments.
