Zebedee, a game startup that uses Bitcoin to reward users, raised $11.5 million in its first round of investments. The funds will be used for company expansion. The initiative currently pays Counter-Strike: Global Offensive (CS: GO) players BTC on specialized servers. Funding from Series A will be used to improve its software and infrastructure for in-game micropayments through the alternative to bitcoin payments, the Lightning Network. This network is a second-tier solution that works on top of the Bitcoin network itself, allowing for very small payments without exorbitant transaction fees. According to Zebedee, their platform supports payments as low as $0.0005 in Bitcoin. “The funds raised will be used to fuel all Zebedee shares for the next 24 months, during which time we plan to raise our next round,” said Simon Cowell, co-founder and CEO of the startup, Simon Cowell, via email to Decrypt. He added that in addition to continuing product development, the focus will also be on establishing the compliance rules that permeate gaming practices at global levels. Venture capital firm Lakestar led the Series A round, with participation from Initial Capital, TVP, New Form Capital, among others. Angel investors of the round include gaming industry veterans such as CCP founder and CEO Hilmar Veigar Pétursson and Small Giant CEO and co-founder Timo Soininen.
The startup will also increase its marketing momentum to reach more players, as well as its reach for game developers to expand their use of the platform. The startup's ‘Infuse’ technology — a media player that allows and plays the most diverse video formats — allows developers to both bet and create Bitcoin-centric rewards. In February of this year, Zebedee announced that it had implemented its Infuse to CS:GO, Valve Corporation's first person shooter, allowing players to pay a very small amount of Bitcoin as an entry fee, as little as 100 satoshis, about $0.05, when playing on one of the servers equipped with its Infuse technology. At the end of the game, players earn a BTC reward based on their performance. Zebedee also revealed that it is studying a partnership with potential sponsors to be able to launch CS:GO servers that do not require a subscription fee. In June, Zebedee added an integration of the ‘Zebedee Bitcoin Gaming’ wallet with the Bitstamp cryptocurrency exchange to facilitate withdrawals from satoshis earned during matches. In June, the startup also organized the MintGox Sports Arena event at the Bitcoin 2021 conference, in partnership with Bitstamp and research firm L’Atelier BNP Paribas. The event distributed 1 BTC — at the time, about US$35,500 — in prizes to the contestants. MintGox is a Bitcoin-centric monthly game streaming competition that started in 2020.
According to Cowell, Zebedee's platform had a 287% increase in transaction volume between May and August this year, with a 140% increase in the last month alone. Cryptocurrency gaming projects and initiatives have increased in activity in recent months. The play-to-earn model — play to win — based on Ethereum, Axie Infinity, has generated $1.6 billion in NFT trading volume in recent months as its AXS governance token skyrocketed in value. Meanwhile, upcoming games like The Sandbox and Guild of Guardians saw big NFT sales even before releases. Most of the cryptocurrency gaming scene revolves around Ethereum at the moment.
However, Zebedee's focus at the moment is different. According to Cowell, comparing his initiative to Ethereum's NFT-based games was like "comparing apples to oranges." While Ethereum games are generating large sums of transaction volume based on collectible sales, Zebedee uses Bitcoin and Lightning Network to introduce small bets and micropayments options. “We are using Bitcoin as a payment system that brings real economic activity to virtual worlds,” said the director. “Just as microtransactions have unlocked billions in value, basically launching the free games market, we are now introducing 'nanotransactions' to unlock billions more and pave the way for free play-to-earn,” he added. He concluded: "The growth we are seeing is not hyped in asset speculation." *Translated and edited by permission of Decrypt.co