0xCitadel Co-Founder Pitches Equity Over Token Raises For Web3 Game Funding

• 0xCitadel chief economist and co-founder, posting as @HedgeEconomist on X, published a detailed argument on April 28, 2026 that token-first web3 gaming raises were structurally broken from inception
• The post states that 0xCitadel's investment contracts do not include the in-game token, with investors buying equity in the company instead of getting tokens at a discount
• The team turned down a quicker raise option that would have required surrendering 30% of token supply
• 0xCitadel is the operating identity associated with The Citadel, a fully onchain sci-fi virtual world built on Ethereum
• The studio behind The Citadel is Yee-Haw Monster Trucks, which raised a $3.3 million seed round in November 2023 led by 1kx with Shima Capital, Hashed, Matchbox DAO, and other backers
• The Citadel project traces back to a group of co-founders who began collaborating in 2021 and was formally incorporated as a studio in 2023
• The post frames the choice as deliberately sacrificing speed and hype for sustainable economy design, with the team taking nearly five years and many investor meetings to find aligned partners

The post-mortem season for token first web3 gaming continues. In a thread posted on April 28, 2026, the chief economist and co-founder of 0xCitadel argued that token first web3 gaming "looks cooked" only because it was always cooked, citing investors who bought game tokens expecting multiples while never caring about company equity or actual game revenue. source The thread doubles as a public explanation for why 0xCitadel chose equity led financing over the more familiar pattern of selling a chunk of in-game token supply to raise capital.

The framing is not academic. The studio is one of a handful of web3 native projects still actively building toward launch in a sector where most peers either shipped, struggled, or wound down. The thread reads less like a theory paper and more like a founder explaining the decisions that kept the team alive long enough to still be working in 2026.

What 0xCitadel Is Actually Building

0xCitadel is the operating handle most often associated with The Citadel, the studio's sci-fi virtual world. The Citadel is a fully onchain and decentralized game built on the Ethereum blockchain, with all game state, assets, and logic intended to run directly on smart contracts rather than centralized servers, designed by a team of co-founders who started working together in late 2021. source The studio incorporated formally in 2023 under the name Yee-Haw Monster Trucks, which raised the project's seed round.

The pitch sits in the same family as other fully onchain games like Kamigotchi, Pirate Nation, and Dark Forest. The thesis is that an onchain world with verifiable rules and player ownable assets can persist as long as Ethereum itself, with no central operator to maintain or shut it down. That framing puts a lot of pressure on the studio's economy design because, in a fully onchain game, a broken token economy is much harder to retrofit than in a traditional Web2 title.

The Token First Funding Pattern The Post Is Pushing Against

The thread frames the failure mode in plain language. According to the post, web3 games in past cycles "mostly raised off of their in-game token, with investors expecting to realize gains at multiples," with backers caring about token unlocks rather than equity or revenue, which created a debt overhang that had to be paid back by selling tokens after launch. source

That dynamic is the failure pattern that shows up across most of the high profile web3 gaming closures of the past two years. Studios raised against future token supply, ran their treasuries on assumptions that the token would appreciate, and then had to either dump on retail to fund operations or wind down. Even projects with genuinely talented teams ran into the same wall once their token cliff hit and unlock schedules collided with weak retention.

The post's stronger claim is that the design was structured to crush the game economy regardless of fundamentals. To make a token first raise even mathematically work, the project did not just need a fun, well designed game. It needed something close to parabolic user growth from launch. Anything less, and the supply pressure from investor unlocks would always overwhelm organic demand for the token.

Why Equity Led Funding Is Hard In Practice

The thread is honest about the trade off. The author notes that 0xCitadel could have closed its round in a few weeks by giving up 30% of its token supply, but instead spent years and "hundreds of meetings" finding partners willing to invest in the company's equity rather than future token allocations. source

That difference matters. Equity led funding for a web3 native game is harder because it asks investors to underwrite a longer, less liquid path to returns. Token rounds offer a known liquidity event the moment the token launches, often before the game itself is in players' hands. Equity rounds, by contrast, depend on the company eventually generating revenue, getting acquired, or building a token at a fair valuation later.

The choice also constrains marketing. The post acknowledges that without live assets, tokens, points programs, or airdrop promises, getting people to even try the game is much harder than for projects that lead with speculative incentives. source That observation is consistent with what most founders in the sustainable economy camp have been saying privately for a while. The web3 attention economy is still tuned toward token launches, not toward games on the merits, which means studios that refuse to pre-launch their token are competing for an audience that has been trained to chase the opposite.

How To Read 0xCitadel's Position In The Current Sector

The 2023 seed round is the relevant funding context for the studio. Yee-Haw Monster Trucks raised $3.3 million in seed funding in November 2023, led by 1kx, with Shima Capital, Hashed, Matchbox DAO, Ready Player DAO, and angel investors participating, all targeting development of The Citadel as a fully onchain Ethereum game. source

That round size is small enough that the team has had to budget carefully but large enough to support a multi year build with a small core team. Pairing that with the public commitment to keep the in-game token out of investor contracts limits how much pressure the studio can be put under to launch a token before the game itself is ready. That alignment is the reason the thread can claim, in 2026, that the team is still building toward a long term sustainable economy rather than scrambling to defend a fading token.

What This Means For Players And Future Backers

For players, the practical takeaway is that 0xCitadel is unlikely to follow the familiar pattern of an early token sale, a points program, and a frenzied airdrop window. The studio is signaling that it will launch its token only when the game and economy are ready, which is slower than most web3 launches but removes some of the worst tail risks of the token first model.

For other founders, the thread is a public template for a different conversation with potential investors. It outlines how a studio can negotiate a round that does not pre-allocate tokens and why those trade offs may be worth it given the visible damage that token first raises caused over the past cycle.

Frequently Asked Questions

What is 0xCitadel?

0xCitadel is the public identity most often associated with The Citadel, a fully onchain sci-fi virtual world built on Ethereum and developed by the studio Yee-Haw Monster Trucks. The project's design intent is for game state, assets, and logic to run on smart contracts rather than centralized servers, with player ownership of assets and rules built into the contract layer.

Why does 0xCitadel avoid token-first funding?

The studio's chief economist argues in the April 28, 2026 thread that token first raises in past cycles created a debt overhang that had to be paid back by selling tokens after launch, which structurally pressured the game economy regardless of fundamentals. To avoid that, 0xCitadel chose equity led funding, with investors buying equity in the company rather than discounted in-game tokens.

How much has 0xCitadel raised?

The studio behind The Citadel, Yee-Haw Monster Trucks, raised a $3.3 million seed round in November 2023 led by 1kx with participation from Shima Capital, Hashed, Matchbox DAO, Ready Player DAO, and angel investors. The April 2026 post does not announce a new round and instead explains the philosophy that has shaped the studio's funding choices to date.

Is there an in-game token live now?

The April 2026 thread frames the in-game token as something deliberately kept out of investment contracts and not pre-launched for marketing reasons. As of the post, the team has not committed to a public token launch event tied to a particular date and has emphasized launching the token only once the game and economy are ready to support it.