Animoca Brands and other VCs are invested to fund the new ZKcandy chain, supported by gaming company iCandy. While the Web3 gaming sector has attracted fewer internal investments, it appears some companies have plans to revive both on-chain activity and gaming. 

ZKCandy, a new L2 created specifically for Web3 gaming, has closed a $4M round with Animoca Brands in participation. As Web3 gaming fell off the narrative map, insider funds are still supporting projects in a bid to revive the mix of traditional and on-chain games. 

🎉 Funding the Future: #ZKcandy has successfully secured $4M 🎉

With participation from @WemixNetwork, @animocaventures, @TheSpartanGroup, @thejinkang (Perlone Capital), @Presto_Labs, @flowdesk_co, @LECCAVentures, @efrontier_io, @prometheuz_io

We're deeply thankful to our… pic.twitter.com/IXclsikc8K

— ZKcandy 🍬⛓️ – L2 Gaming ZK Chain (@ZKcandyHQ) January 6, 2025

Wemix, one of the leading producers of on-chain games also joined Animoca Brands in the funding round. Other participants in the funding included Spartan Group and Perlone Capital. The deal is the first significant funding in the new year, following 12 months of recovering VC inflows. 

“We want to bring in top games and other large IPs and create a space where users can enjoy smooth, secure, and rewarding experiences,” said Lau Kin Wai, CEO of ZKCandy.

Animoca Brands and Wemix have also explored offering free-to-play games without the on-chain component. ZKCandy will offer a seamless tool to add tokens without requiring significant fees. 

The project launched with the support of iCandy, an award-winning game developer focused on the Asia-Pacific region. The company has built more than 500 games, reaching a market of 300M players. The company produces idle games and puzzles, which have been combined in the past with on-chain activity and tokens. 

The public gaming company is based in Australia. The gaming company itself has raised $37.5M through several funding rounds and is backed by a collection of unannounced investors.

Some of the funding rounds come with the support of Animoca Brands and eSports.com.

ZKCandy is based on ZKSync technology

ZKCandy uses ZKSync to create a new fast L2 network, which would become the basis for a new gaming ecosystem. Previously, other L1 and L2 chains carried games, though most became unsustainable due to the dropping price of their tokens. 

Web3 games also tried to include NFT ownership, which led to an outflow of players during the 2022 bear market. Most surviving Web3 gaming projects put the player experience first, while being more cautious with tokens and in-game NFTs. 

The funding for ZKCandy arrives after most L2 chains appear to be available at price discounts. ZKCandy has the advantage of being purpose-built to potentially attract top-level game builders. 

The chain also has the potential for consulting with Wemix, one of the biggest gaming ecosystems. While overall play-to-earn gaming slowed down, some of the top games are still active, offering free-to-play versions. 

Web3 gaming may be on the comeback trail

ZKCandy is still in the testnet stage, where the chain showed its capacity to carry 2.4M wallets. In addition to its on-chain readiness, ZKCandy has a lineup of 25 game titles at various stages of development, including one AAA-grade game with a Tier-1 Hollywood license.

In addition to the on-chain test, ZKCandy will seek out partnerships and promote its games through Telegram. The chain is preparing for its mainnet launch in the first half of 2025. ZKCandy also plans to build its gaming-related AI agents, expanding its Telegram presence as an EVM-compatible gaming network. 

Gaming tokens have taken a hit to their valuation, but they have also proved to be resilient. The market recovered its value, rising to $26B in total capitalization. The category’s resurgence was led by the expansion of Immutable (IMX), which recently reclaimed $1.46. 

Tokens from Animoca Brands’ portfolio are also going strong, with Gala Games (GALA) stabilizing at $0.04 and the Sandbox (SAND) rising to $0.69. Animoca Brands was among the biggest factors in reviving Web3 gaming, by supporting multiple funding rounds. The company, formerly a game producer, became a lead backer in a total of 20 funding rounds in 2024.

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