“Magic drives, not money. My goal is to build things and do magic”, – Vlad Panchenko, CEO and co-founder of DMarket
Vlad Panchenko is the CEO and co-founder of DMarket, an online service that allows gamers and game developers to buy and exchange game items. The company has existed since 2017, it has 90 employees in Ukraine, and 10 people work around the world.
On the air of the Big Fish Youtube channel, Vlad talked about cryptocurrency, the development of the VR games industry and entering the ICO.
We are in between games and cryptocurrencies. We make software and applications for the gaming and blockchain industries to create cool virtual worlds where people can live and provide services. How did I start my business? At first I was a student who loved to play and made money by localizing computer games. Then I started selling games, but that business ended in the second week when I spent all the money on purchasing.
Then everyone – Ebay, PayPal – banned me for trading keys to games. I managed to get through, and my first business grew – trading games with direct contracts. From it developed into a business with skins, that is, files that allow you to transform the appearance of game characters or objects. At our peak, we sold 15 million games a year. The turnover was tens of millions of dollars.
ABOUT BUSINESS ON SKINS
We wrote our own repository and made a parser for all games in the world. Therefore, we knew who was selling for how much and could predict what it would cost. For example, I could buy Battlefield at a 50 percent discount a year before release, and then resell it for a profit.
Gradually, we felt the pain of business – the inability to withdraw money. We started a project to withdraw money: we wrote bots and were engaged in arbitrage. We made a one-page site, in which about a million dollars were invested in a year. The essence of the project is this: bring a knife from the game and sell it not for $ 300, which will not come to you immediately, but for $ 250, but right now.
E-COMMERCE AND JOB CREATION
We do e-commerce, only for virtual worlds. We sell it as a white label, that is, a type of partnership in which one company produces goods or services, and the other sells them under its own brand. We ourselves connect other games and blockchain ecosystems to ourselves. People who create or trade content do well in these worlds. We can say that I have created a couple of thousand jobs in the virtual space. Such is the creator economy.
From the first day of the existence of the business, we launched a project on our blockchain. We sell all our items, even CS-th ones, just like that. We built a gateway to swap items on the air. In parallel, I was engaged in arbitrage at Mt.Gox (an online service for exchanging digital currencies). Then the stock exchange died, the money was stolen. This temporarily cooled my passion for cryptocurrencies. But, despite this, we decided to invest 10% of the company’s turnover in cryptocurrency.
ABOUT ICO EXIT
In 2017, we released a cryptocurrency to raise investment to create a product. We raised $ 19 million, although in fact I spent a lot more money. Because in Ukraine, no matter how cool your idea is, it is unrealistic to realize it. Therefore, we decided to follow the classic venture path and find more investors.
The product requires a lot of money: for example, now we have done integration with one game, and this is a couple of dozen people on each side to create the engine, and half a year. Now we have 42 payment systems around the world – to enter and exit, which is even more difficult, because almost no one pays money to people. We pay out millions of dollars a month.
ABOUT VR GAMES TODAY
It’s one thing to make a PlayStation game that a lot of people use, it’s another thing to work with VR. But everything starts somewhere: when YouTube appeared, it was scary to look at, but now ingenious things are coming out. Really cool games and cool things will happen with VR when everyone has it lying around at home. It will happen in less than 5 years. What will win in the end? A pin to the head. You experience realistic sensations not in a dream, so the future is behind the chip in your head. But it will take 10+ years.
ABOUT MONEY AND PURPOSES
I want 2 billion in cash. What for? In general, there is nothing. It’s just a goal. But if you ask me what is interesting to me, then I will answer that this is not about money at all. I see 3 interesting things in front of me: teleportation, dream control and combat robots. And the third is the closest to the gaming industry, so we will train them in games. When you play, you will actually train the neurons of my robots.
My goal is to build things and make magic. Drive is magic, it is not money that drives. We push physical things into the virtual world, and they are more expensive than the real ones. We do the impossible and give you the opportunity to do it.