The viral play-to-earn crypto game Hamster Combat, which has attracted millions of users since its launch in April, has made headlines by rejecting all venture capital funding offers and condemning the practice as an “exit liquidity” tactic.
A Stand Against Venture Capital
Hamster Combat developers recently announced in a Telegram broadcast to their community that they had turned down numerous investment offers from major venture capital firms in the Web3 space. The game’s admins announced, ‘Since our explosive growth began, we’ve received numerous investment offers from leading venture capital firms in the Web3 space. However, we’ve declined every single one.”
The developers expressed their concerns about the current state of the Web3 industry, where many projects allegedly use their audiences as exit liquidity for venture capital backers. They stated, ‘Too many Web3 projects build audiences only to exploit them as exit liquidity for their venture capital backers. Sadly, this has become the norm in the industry.”
Instead of following this trend, the Hamster Combat team is committed to returning to the fundamentals of the Web3 space by focusing on creating innovative projects that generate real value and revenue, rather than simply securing funding and leaving users with losses. “We stand against this practice. We want the Web3 space to return to its fundamentals,” they said.
About Hamster Combat
Hamster Combat allows players to step into the role of a virtual hamster CEO of a crypto exchange of their choice, such as Binance or OKX. Players earn points by tapping the hamster on the screen, which can then be used to acquire upgrades for their in-game exchange. The game operates on the TON blockchain and has gained massive popularity, boasting 200 million users as of July and 53 million subscribers on its Telegram channel.
The game’s in-game currency, HMSTR tokens, can be traded on cryptocurrency exchanges. Notably, 60% of the total supply of HMSTR tokens is reserved for players, with the remaining 40% allocated for market liquidity, future ecosystem partnerships and grants, and other incentives.
The Growing Criticism of VC Funding in Crypto
Hamster Combat’s stance on venture capital funding comes at a time when crypto venture firms are facing increasing criticism within the industry. The focus has been on projects where tokens are given higher valuations than the firms’ initial investments, leading to significant losses for public investors once the tokens are listed on exchanges.
As previously reported by CoinDesk, newer tokens like Aptos’ APT and Sui Network’s SUI have seen their value drop by as much as 70% since their 2023 peaks, even as Bitcoin continued to rise and hit new highs in 2024.
Markus Thielen, founder of 10x Research, highlighted in a June report that venture capital funds invested $13 billion in Q1 2022, right before the market entered a steep bear phase. “Those funds are now facing pressure from their investors to return capital, as artificial intelligence (AI) has emerged as a hotter theme,” he said.
While crypto funding saw a dip in 2023, it has experienced growth in the past three quarters, with a PitchBook report from August 9 indicating that deal value reached $2.7 billion in Q2. This marks a 2.5% increase in total invested capital, though there was a 12.5% decline in the number of deals compared to Q1.
As for the future of Hamster Combat’s HMSTR token, the developers have made it clear that venture funds will only be able to access the token in the same way as other users—by purchasing it on exchanges after it is issued and listed.
