Merit Circle members want to refund Yield Guild Games’ investment and cancel an agreement between the two, claiming there’s not been enough value-add by the gaming guild giant.

Two prominent names in the play-to-earn scholarship space are at odds after members of the Merit Circle DAO (Decentralized autonomous organization) put forward a proposal to refund an investment by Yield Guild Games because of what they deem as an insufficient amount of value added by YGG.

Yield Guild Games and Merit Circle offer play-to-earn gamers so-called scholarships. Gamers, often in developing countries, can borrow the NFT that acts as an entrance fee for the game. In exchange, the player has to send back a cut of their in-game earnings.

In October, YGG invested $175,000 in Merit Circle to expand its scholarship program. But a number of key members of the Merit Circle DAO deem this investment to be insufficient from a value-added perspective.

Many Merit Circle DAO members expected YGG to introduce further investors and provide social media coverage.

“Unfortunately, we were also disappointed with YGG’s response, as it demonstrates how little value they have added over the past 7 months,” wrote DAO member and investor Sad Cat Capital. “As a VC firm ourselves, we take pride in the activism we do for projects that we love.”

YGG says that the agreement between the two DAOs was an exchange of tokens for capital, and no part of the agreement called for “value-add” services.

All of this highlights a key challenge in the viability of DAOs: As leaderless organizations governed by their members, they are vulnerable to the political whims of stakeholders, who may think they have more control over the DAO than the incorporated, real-world arm of the DAO.

Although many members of the DAO have strong feelings about the role YGG should play, the investment contract was signed by Merit Circle Ltd., the Gibraltar-incorporated counterpart of the DAO, which is controlled by executives of Merit Circle and early investors.

While the DAO members can put forward an improvement proposal on which to vote, it’s not known if the signed agreement has a clause to cancel and refund the investment, thus making any proposal of this nature non-binding.

YGG’s token is currently trading for 68 U.S. cents, according to CoinGecko, down 62% on-month. Merit Circle’s token is at $1.10, and has also faced strong market headwinds, dropping 44% in the last 30 days.

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The funds will be used to acquire yield-generating NFTs and create language-specific educational content.

Ola GG, a regionally-focused partner of the decentralized gaming startup Yield Guild Games (YGG), has raised $8 million to expand play-to-earn gaming in Spanish-speaking markets.

The seed funding round included investments from Galaxy Interactive, BITKRAFT and Arca, among others, Ola GG said in a statement.

The firm said it serves as a “regionally-focused subDAO” and an “extension of the main YGG DAO.” However, Ola GG operates independently from a legal standpoint, it told CoinDesk.

The funds will be used to acquire yield-generating NFTs and the creation of Spanish-language educational content, Ola GG said. Proceeds will also be used to expand the adoption of play-to-earn gaming in the U.S., Latin America and Spain.

“The Hispanic market has many similarities to that of Southeast Asia, which is where YGG was born. With so many people living below the poverty line and lacking access to quality education, we are seeing an equally strong appetite for Play-to-Earn blockchain games and, with it, the adoption of cryptocurrencies,” Ola GG co-founder Clara Bullrich said in a statement.

Bullrich, a partner at the international multi-family office Alvarium Investments, co-founded Ola GG with Nicolás del Pino, who also co-founded Liquid Meta, a public liquidity mining operation. Del Pino also served in the past as a commercial partner at Bitex.la, a Latin American crypto exchange.

Currently, Ola GG has 3,000 scholarship players in its shared reward program, in which the guild keeps 30% of the earnings and does not require upfront compensation. Ola GG allows its members to play Axie Infinity and CyBall, although it plans to eventually support Genopets, Karmaverse and StarSharks, among other NFT games.

In Latin American countries such as Venezuela, many young people are making a living for their families by playing Axie Infinity, as CoinDesk recently reported.

According to Ola GG, the Spanish-speaking market has 230 million active gamers per month.

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