Japanese game developer CyberStep is jumping fully into the crypto space, setting aside millions of dollars to create a crypto reserve. They’re officially renaming it as CRYPTECH Capital and targeting eventually a billion-yen (US$8.85 million) war chest. Bitcoin, Ethereum – the usual suspects. As a founder myself, looking at this move, I can't help but wonder: Is this a stroke of genius, a calculated hedge against the future, or just another case of Web3 FOMO amplified by the echo chamber of crypto Twitter?

Asian Founders: Inspired or Skeptical?

The truth is that the Web3 space is kind of noisy. Every startup says they’re working on the next big thing, decentralizing everything and making everyone rich. And with a lot of new and exciting technologies hitting the market today, it’s easy to get distracted from the big picture. Just check out how audaciously CyberStep—a publicly traded company—is moving the needle!

I chatted with Kenji, the founder of a Singapore-based blockchain gaming startup. His take? "It's interesting. CyberStep has the resources to actually do something meaningful in this space. Most Web3 game projects are just vaporware. They have existing games like Toreba to integrate with, and that's a huge advantage." He’s cautiously optimistic, viewing it as a possible validation of the overall Web3 gaming space.

In early November, I had a chance to talk with Anya, who manages a decentralized finance (DeFi) platform in Hong Kong. She was far more skeptical. A stockpile of Bitcoin and Ethereum? That’s not Web3 innovation, that’s just… buying crypto. We’re talking about treasury management honestly, not developing on Web3. She raised a valid point: Is CyberStep truly embracing the decentralized ethos, or just adding a layer of crypto veneer to its existing business?

What makes me such a skeptic is the fact that a lot of these Web3 projects simply aren’t useful. Frankly, it looks like some people are just rebranding old ideas with blockchain buzzwords. They’re just trying to bring in investors who’ve never seen the real technology at its core. The much bigger question is, though, might CyberStep have a chance of building something actually useful with that massive crypto reserve. Or will it merely languish, deridingly bobbing around the market, a speculative digital treasure trove with no tangible value. The market's unpredictability is a crucial consideration.

Regulatory Landmines: Navigating Asia's Patchwork

Here's the cold, hard truth: Asia isn't a monolith. While the regulatory landscape for the crypto space shouldn’t be surprising—a patchwork of rules and restrictions—many in the industry have expressed frustration. What is legally required and widely practiced in Singapore could be quite the taboo in China. Japan, where CyberStep is headquartered, is known for its progressive attitude toward crypto. Even in Japan, the rules are still a work in progress.

Let’s say CyberStep makes a multimillion-dollar investment in this exclusive Web3 gaming mechanic. They’re blindsided when regulators in one of their key markets declare it out of compliance. All at once, their entire strategy is upended. This isn’t simply to protect against market risk, but political risk as well. It’s not even about racing that they’re trying to bet on a future that regulators won’t let them have.

Even more anxiety-inducing is the precedent this would set for other Asian startups. If CyberStep’s crypto gamble does indeed flop due to regulatory issues, it might send a larger chill through the market. This would further scare off other investors from jumping into the entire Web3 ecosystem. We need success stories, not cautionary tales.

Beyond Hype: Building a Real Web3 Future

CyberStep’s decision is a dangerous wager, to be sure. While the first round investment target of 200 million yen is big, the final target of 1 billion yen is huge. The phased approach they’ve taken is certainly a wise one, as it gives them the flexibility to respond to market conditions. The real test will be if they can actually turn this crypto stash into something of real value. This path to conversion is imperative for their customers, users and shareholders.

Here is a quick summary of what CyberStep has to do:

  • Develop innovative in-game economies: Create systems that give players true digital ownership and control over their assets.
  • Enhance user engagement: Use blockchain technology to foster deeper connections between players and the games they love.
  • Offer real utility: Move beyond speculative assets and build applications that solve real-world problems.

If they’re able to pull all that off, then this crypto gamble might be worth it. If they’re just going to hoard Bitcoin and Ethereum, they’re just doing what everyone else is doing. They’re just betting on price inflation even more than everyone else. In the predatory and arbitrarily regulated world of crypto, that is a game anyone can win, but one that anyone can lose.

Perhaps, perhaps, perchance, this is the beginning of some real breakthroughs. To me, right now, it feels like more of a well-funded experiment. Just like any good experiment, the outcome is anything but assured. Looking forward to seeing how this will happen though.