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🎮 Binance's Acquisition of FTX: What It Could Mean

by The GNovember 9th, 2022

Too Long; Didn't Read

Binance is buying FTX - what does this mean for web3 gaming? Binance will dump $2 billion worth of FTT tokens on the open market. FTX has invested a lot of money in Solana, one of the most active blockchains when it comes to gaming. The deal is nonbinding, so Binance can pull out of FTX, so it's not clear what will happen to all of these initiatives going forward. Forbes is doing a Metaverse event in the Sandbox.

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What Does Binance's Acquisition of FTX Mean for Web3 Gaming?

The first rule of the bear market is to survive.

And FTX broke that rule.

Here's a quick recap:

SBF (founder of FTX) implied on Twitter that CZ (founder of Binance) wasn't allowed to come to the US.

Then a story leaked in CoinDesk showing FTX's balance sheet.

Surprise, surprise - it didn't look good. Most of FTX's money was locked in different tokens tied to SBF (FTT, SOL, SRM.)

Based on that story, CZ tweeted that Binance will dump $2 billion worth of FTT tokens on the open market. FTT is FTX's token used for trading fees.

People started withdrawing from FTX, and the company paused the withdrawals.

CZ announced that Binance is buying FTX to "save them." (Binance is buying all of their businesses except FTX US.) But the deal is not done. It's nonbinding, so Binance can pull out.

And this is where we are now - the largest crypto exchange buying its biggest competitor.

But we are here to talk about web3 gaming, and this deal could have big implications for the space.

That's because FTX has invested a ton into the industry:

They've their own gaming division that helps companies launch tokens and offer support for NFTs.

FTX bought a gaming studio - Good Luck Games, that launched a battle card game, Storybook Brawl.

They have a lot of money in Solana, one of the most active blockchains when it comes to gaming.
FTX signed the largest esports naming rights deal ever with TSM, rebranding them to TSM FTX.

They also sponsored the North American League of Legends Tournament (LCS.)

FTX launched its $2 billion investment arm, FTX Ventures, which invested in Yuga Labs, Doodles, and Faraway (creators of Mini Royale.)

And it's not clear what will happen to all of these initiatives going forward.

Of all of them, only the FTX Gaming division is part of FTX US.

The remaining partnerships and initiatives were signed with FTX, making them a part of the Binance deal.

While Binance hasn't been as active when it comes to partnership, they're also big supporters of web3 gaming.

They launched a $200 million fund with Animoca Brands to support the industry.

So with Binance looking to acquire FTX, how is this going to affect web3 gaming?

It's bad news for Solana - FTX was a huge investor in the Solana ecosystem, but Binance has its own chain (BNB.) It's likely that they will prioritize it instead of supporting a direct competitor. As a result, games on Solana might suffer.