Julia Mahé-Emsallem (MetaFight): "We need to make sport happen differently".

The Big Whale: While it's fairly easy to understand what blockchain can bring to finance or luxury goods, we're wondering what interest it has in MMA (Mixed Martial Arts). Tell us about it!

MMA is a fast-growing sport with constantly increasing revenues. However, this money is very unevenly distributed. It depends on the area, but overall, MMA fighters get little of the value they create, and it's a few organisations, notably the UFC (the leading organisation in the United States), that control the market.

When we launched MetaFight just over two years ago, our aim was to create additional income for the 15,000 MMA fighters around the world. This started with the sales of the fighters' cards. Each card is an NFT on the blockchain that allows them to exploit their image rights without going through the organisations they are in.

As you said, these fighters are in organisations that pay them to fight. How did you convince them to sign?

There is no exclusive contract. The fighters are free to do what they want with their image rights. At the beginning, we contacted them one by one and told them that we didn't have a lot of money, but that we were here to create something for the long term, and that they would obviously get a substantial share of the rights to the cards we were going to sell.

Today, MetaFight isn't just cards. You have a complete game. How does it work?

First of all, we created the digital assets that are the cards, and now we're in the development phase of the game that allows you to use the fighters' cards.

We tested the Alpha version of the game in 2023. There were just over 30,000 players (8,000 NFT card holders) battling it out in battles with an average playing time of almost an hour a day! This phase enabled us to gather feedback and develop the product.

What exactly did you change?

In the beginning, the game was based mainly on probabilities, but the players wanted it to be more faithful to reality, so we developed the model. Today, the better a fighter is in real life, the more likely he is to win in the game.

To make things a bit more fun, we've introduced systems like the fact that, if paired with the right coach, the fighter is even better. You can also add equipment to fighters (up to 5). You can also train fighters using the MetaFight Token, for example by sending them to train in Dagestan.

What type of token is it?

It's a utility token that really corresponds to a game currency devised as part of the Jonum (Games with monetisable digital objects) regulation. It's a currency that encompasses an entire ecosystem. We wanted to avoid the fashion for fan tokens that serve no purpose and have actually caused their holders to lose money.

Many tokens have fallen sharply. How are you going to manage to maintain their price?

We've made sure that it's in everyone's interest to have tokens. Fighters can be paid in tokens, and tokens are also used to improve a fighter's performance in the game or to gain access to cheaper card packs or tickets to live fights.

Where are you today on the token?

The token will soon be released on a regulated platform in Europe. For the moment, the token is still in pre-sale, which is almost complete. This one is almost finished.

After the Alpha version, there's the Beta version of the game. The Beta will be released in July. On the Alpha, we had worked on the probability part of the game, and now we've worked on the secondary reality stats, the whole artificial intelligence part (putting the right coaches), and we've also created avatars that allow you to review the battles that took place in the game.

Who are the first MetaFight users?

Largely sports fans, who play Sorare and other Web3 games, among others.

How do they play?

Fans meet up in rooms and talk to each other with their avatars. At the same time, they can wander around the galleries and buy merchandise. We're currently working on 3D replay.

You'll be able to be in the cage on replay, and within two years we'll be able to do live 3D. Today, the idea is really to experience sport. The big demand from the sports media and sports organisations is how to experience sport differently.

For two years, we've been creating lots of little bricks, and now it's a question of putting them together and seeing how we're going to change the way sport is experienced.

How do you earn money?

By selling packs of cards. There are bronze, silver, gold and legendary packs. We made 250,000 euros from the Alpha version cards in six months. We take a commission on the secondary market and the fighters also have a share. We pay 50% back to the fighters or the organisation.

Today, the main challenge for card games is to manage supply. How do you do this?

There are 511 cards per fighter, except that when they gain a new status, we issue new cards. If we launch a new card, everything that hasn't been sold from the old one, we burn, plus 5% of former holders will be able to burn it by getting access to the new card for free.

That's how we bank on a fighter's career. But we can also decide to keep the 2023 card because it's the fighter's best year and the card will potentially become scarcer.

What is your goal with MetaFight?

Our goal is to be the first in VPN-free streaming. Following MMA using the traditional system is very complicated and expensive for fans. You have to have subscriptions to different channels, whereas here, what we're offering is to follow the matches directly via MetaFight.

The deal is simple: we bring a new audience to the organisations and we sign partnerships with the traditional media to broadcast the matches. After that, we split the rights. MMA made 20 billion views on social networks in 2023, that's an absolute record.

Which organisations do you work with?

Today, we've already announced that we've signed 15 small fighter organisations in Canada, Japan, France and other countries.

What about the UFC in the US?

There will be announcements soon. The aim is to have all the organisations working with us.

Isn't it complicated to work with both fighters and organisations?

It was complicated at first, but given that we signed a lot of fighters directly, we ended up talking to the organisations. We made contracts with the leagues where they are obliged to pay back part of their rights to the fighters. It's a win-win situation.

How did things go with the Jonum regulation? Many people are critical of the text. Is this also the case for you?

There has been a lot of work and progress, but overall, I have to admit a real disappointment because we have to apply KYC (Know your customer) for free games.

With KYC, you lose more than 50% of players. Gamers don't want to give out their identity and proof of address... We've said it several times, we're not a gambling game, so there's no reason to impose the same rules on us as gambling games.

The law is clear: it states that companies can't buy back players' tokens to give them money. Until now, you could take your tokens out of an Exchange with a KYC, and that didn't pose a problem, but now they wanted to add a KYC on entry, which isn't logical.

What do you think should be done?

What should be done is to force blockchains to put in a KYC. There's no point in going to the games, you have to go to the blockchains. On ImmutableX and Polygon, there are passports, and this is developing. That's where we need to intervene, upstream. We can't let this weigh on start-ups. If you do KYC on a blockchain, that can benefit 25 or 50 games.

What is the risk with such regulation?

That companies will leave France. There are countries, particularly in the Middle East, that are making a lot of appeals to crypto companies.

Are you talking to any gaming studios?

We don't make a triple A game and ultimately it's more traditional games that have an interest in using blockchain than us getting closer to them. We have a fairly basic game, but the most important thing is that it's fun. For the moment, we don't have the ambition to bring out a game that comes close to what is done in traditional games.

Could you go beyond MMA?

We are in the process of gradually opening up as a guest to all the other combat sports: boxing, wrestling... After that, the model is of interest to other sports like the NBA, but it's still too early. MMA is a form of POC and why not extend it? Already, if we do all the combat sports, we'll be doing very well. It's a huge market.

Like most crypto start-ups, MetaFight is not yet profitable. You've raised funds twice, in 2022 (€1.2 million), and also a few months ago for around €1 million. Has it been harder than usual? A little over two years ago, almost anyone could raise millions using PowerPoint, money was flowing freely, but things have changed. In fact, that's why many start-ups don't close their round and always leave a mechanism open as part of their raising, in case they meet new investors.

When you close a round, whether it's a pre-seed, a seed or even a series, if you want to raise again, you have to start all over again from a legal and administrative point of view. The technique that many start-ups have used is to leave a BSA Air open, with a threshold, for example 50,000 or 100,000 euros, above which the BSA Air is immediately convertible. This is a very practical system used by many start-ups.