Yat Siu has seen a lot in his decade of investing in crypto as a venture capitalist.

The Hong Kong-based venture studio and game developer Siu co-founded, Animoca Brands, has grown to be one of the most powerful names in Web3 culture, with data provider CoinGecko pegging the market cap of tokens issued by Animoca’s portfolio companies at more than $45 billion.

But the crypto winter of 2022-23 proved to be a tough test for Animoca, with many of the tokens from its companies down nearly 90%. At the depths of these dark times in February 2023, the Financial Times even wondered if Animoca could survive.

Times have changed, of course. The price of bitcoin surged over 120% in 2024, the U.S. has a pro-crypto president soon to assume office and Animoca recently almost quadrupled the size of its office space in Hong Kong, even as the local traditional finance market there retreats.

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Siu now sees the crypto industry as being at an inflection point similar to the one he observed of the internet back in the 1990s when it first transformed business.

Back then, Hong Kong’s garment industry, now a relic of the city’s past, was reliant on physically shipping its samples to clients for inspection during the production process. There was no Slack back then, nor Dropbox or FTP, and the resolution provided by fax machines wasn’t sharp enough to be useful for this task.

“People used to design their patterns [and send them] to America by DHL,” recalled Siu in a recent interview with CoinDesk at Animoca’s Hong Kong headquarters. The process took days to complete and cost some firms as much as $80,000 a month, according to Siu.

Siu, however, offered a solution. He operated one of the first broadband internet service providers that allowed for garment factories to do high-resolution scans — difficult before because of limited bandwidth — and send them over to clients in the West.

The use of broadband internet made the client review process “infinitely cheaper” and more efficient, eliminating the need for what Siu called the “insane” practice of relying on physical delivery for design approvals.

Siu equates this innovation to the advent of stablecoins and what he predicts will be their eventual mass adoption by traditional financial institutions.

“If you want to do commerce and trade with America, you will need to have crypto rails,” he predicts.

“As that develops over time, this becomes a business friction…If someone says, ‘I want to send you some Tether or USDC,’ and the other side says, ‘I can only take a wire transfer,’ it just doesn’t work,” Siu said.

In Asia, the use of stablecoins is already common in areas like supply chain finance. The fashion industry, among others, is seeing margins decrease, Siu explained, and it just doesn’t make sense to use a wire transfer to pay supply chain partners when stablecoins suffice.

«Stablecoins are becoming indispensable for making these transactions cheaper and faster,” he noted.

This, as Siu sees it, is the first part of 2025’s mass adoption of crypto.

Memecoins making community

The next part, in Siu’s mind, is a broader expansion of memecoins into an entire blockchain ecosystem.

“I expect memecoins to launch their own L1s or L2s. They’re not just coins anymore, and they’re building communities and ecosystems,” Siu said. “Memecoins are essentially cultural symbols. They’re capturing attention and building narratives that resonate with people beyond financial speculation.”

According to Siu, NFTs are following a similar trajectory, shifting from standalone assets to integral parts of broader ecosystems.

“NFT projects are no longer just about launching a token; they’re about creating ecosystems of cultural and symbolic value,” Siu said, pointing to examples like Solana’s growing collection of memecoins, some of which are now launching NFTs, to enhance engagement and deepen their connection to their communities.

For memecoins and NFTs to achieve sustained success, they must evolve into platforms where communities “are building games, applications and other experiences, not just speculation,” Siu noted.

Crypto gaming gains momentum

Web3 gaming isn’t exactly a new phenomenon, but efforts so far haven’t resonated with consumers. During the 2021 bull market, moves by large studios to incorporate NFTs into games like Ubisoft’s AAA franchise Ghost Recon were met with a chilly reaction by the market. Likewise, Web3 native games like Decentraland haven’t been able to capture a player base that reflects the billion-dollar-plus valuation of their tokens.

And other games like Off the Grid, which promised to bridge the gap between Web2 and Web3 gaming via slick visuals and a focus on gaming first and crypto second, seemed to fizzle out after a few weeks.

Siu, however, remains optimistic about crypto gaming.

He sees gaming as a powerful entry point for Web3, where culture, community and ownership converge to create something much larger. In this ecosystem, trading in-game assets becomes an integral part of the gameplay itself, evolving naturally from concepts such as skin trading that many are already familiar with from games like Counter-Strike.

“To bring in the Web2 gamer, the focus needs to be on building a network effect, creating a game that’s fun and engaging, with the added benefits of ownership and trading,» Siu said. «In 2025, we’ll see games where Web2 gamers won’t even distinguish whether it’s a Web3 game or not. They’ll enjoy it for what it is, and the blockchain benefits will be a bonus.”

«They’ll just want to play,» he added.

Reputation as currency

No economy is able to function without trust between parties and counterparties. While the transparency of blockchain helps create an environment of higher trust, there needs to be a system to measure reputation as well, according to Siu.

«Reputation is a currency. It’s not just about rewards but about how the network values you and your contributions,” Siu said.

He explained that a reputation network, such as Animoca’s Moca ID, would do just this. Moca ID allows for one unified, but decentralized, method of identification across all of the companies in Animoca’s portfolio.

In theory, this would be similar to traditional finance’s Equifax, allowing for services such as unsecured crypto loans — a big change from the current system of over-collateralized loans.

“If you don’t have a reputation, I can’t build trust with you,” Siu said. “Imagine building your reputation over the years. Would you risk losing it in one bad action?”

Not all about the profits

As a venture capitalist, Siu is after a return, of course. He’s also a strong advocate of capitalism and the benefits it brings, and, in prior interviews, has said that many peoples’ feelings of despair and inequality have come from a lack of financial literacy, which results in inequality.

Those that don’t have the opportunity to own things and generate yield won’t be able to understand capitalism, which, while imperfect, is still the best option for society, according to Siu.

«Web3 can save the capitalist narrative by turning users into stakeholders and co-owners,» he’s said before, warning that «the roots of communism came from feelings of inequality.»

For Siu, Web3 represents an opportunity to build a better form of capitalism, one that’s more inclusive and participatory. And he urges the industry to focus on the transformative potential of blockchain rather than short-term profits, warning against the “FOMO mindset.”

“Let’s remind ourselves that [crypto] is actually helping us build something bigger,” Siu said. “It’s great that we’re all making money and the industry is wonderful, but let’s remind ourselves why we’re really here.”