How the Creator League died after 5 days, and why it’s a bad omen for crypto

09/09/2023 03:25

The online video game tournament had enlisted top streamers. But when they found out about the NFTs they went ballistic.

Hey there, it’s tech reporter Alexandra Sternlicht.

On Sept. 2, the world was introduced to the Creator League, a flashy e-sports platform featuring some of the top internet stars and video game streamers, and promotion by none other than MrBeast.

Five days later, the Creator League was dead.

The league’s fiery crash is something that will likely be the subject of much analysis in the coming weeks and months, but the story that’s emerged already shows a bizarre launch strategy involving NFTs, and a fierce backlash by creators who say they were duped. And it paints a bleak picture for the struggling crypto industry.

What happened: The Creator League was going to be a monthlong live-streamed game tournament with $250,000 up for grabs. The teams in the league were captained by elite creators, such as Bella Poarch, Clix, Sapnap, CdawgVA, OpTic, and more, who would promote the tournament to their combined 226 million followers on socials and convince them to purchase a $20 pass to watch the games.

The problem is that these $20 passes were nonfungible tokens (NFTs) whose information was stored on a blockchain, and it appears that the league’s organizer, eFuse, never disclosed this fact to anyone. It turns out that many of the participating creators have a deep antipathy towards NFTs and crypto technology, which they consider to be an inherently scammy business.

When they found out, they went ballistic.

“I accepted to join the creator league not fully understanding the tech behind it,” tweeted YouTuber Connor Colquhoun (known as CDawgVA) on Sept. 3, announcing that he was withdrawing from the league. “I was given assurances that it had nothing to do with NFT's. Given my vocal hatred of such tech, I would never agree to join had I known that.”

There was no mention of the underlying NFT technology in the press packet sent to Fortune ahead of the launch. Reached on Friday, a spokesperson for the company said that eFuse did not inform him that “passes” were NFTs. It seems the only people who knew were the users who learned they were buying NFTs at the Creator League online purchase checkout—and those customers quickly jumped ship, with 95% abandoning their carts at the checkout page when it became clear creators were quitting, according to a source.

A spokesperson for the company told Fortune that it was wrong for the company not to explain the blockchain technology to the press, public, and creators involved. This person also said the company thought it was merely an accounting process and did not need to explain it.

“We used the blockchain to power transparency and create a public ledger so the community knew we weren’t overselling passes,” a company representative told DeCrypt.

The Fallout: Now eFuse has laid off 30% of its workforce as it abandons the Creator League. A company spokesperson said that this is because the staff that built and supported the Creator League is no longer needed.

And the death of the Creator League can be viewed as a barometer for public opinion on NFTs. The industry once defined by a Bored Ape Yacht Club has transformed into more of a singular sinking dinghy. This happened after the Securities and Exchange Commission cracked down on NFTs, calling Impact Theory’s offerings unlicensed securities.

Separately, Fortune is compiling its next Impact 20 list, which showcases startups that are trying to solve the world’s biggest problems in a profitable fashion. We’ll publish it in December. You can nominate a startup (your own or someone else’s) by using this Google form—the deadline is Oct. 23—and if you have any questions about the process, just pop an email to [email protected].

Alexandra Sternlicht

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This story was originally featured on Fortune.com