BEAM: The Gaming DAO That Kicked Out Its Own Investor, Burned 37% of Tokens, Then Built a $200M Empire
By BCGamer —
Tags: beam
This is a story about a 23-year-old Dutch guy who started an Axie Infinity scholarship program in his bedroom, raised $105 million in 72 hours, had his DAO vote to kick out a major investor for "not adding value," pivoted away from the scholarship model entirely, built his own blockchain, and somehow ended up with a $200+ million treasury.
Welcome to Merit Circle. Or Beam. Or whatever they're calling themselves this week.
The Origin: Axie 420 (Yes, Really)
In July 2021, Marco van den Heuvel was watching Axie Infinity explode in developing countries. The problem? You needed ~$1,000 worth of NFTs just to start playing.
His solution was elegantly simple: buy the NFTs, lend them to players in the Philippines and Venezuela, split the earnings.
He called it Axie 420 Scholarship Program.
(The 420 wasn't subtle. Neither was Marco.)
Within weeks, he had 250+ "scholars" grinding Axie for a 70/30 revenue split. Flow Ventures threw in $200,000 in incubation funding. By August, he'd raised another $1.25 million.
In September 2021, Axie 420 rebranded to Merit Circle and announced ambitions far beyond just one game.
The Launch: $105 Million in 72 Hours
The Merit Circle token ($MC) public sale happened November 2-5, 2021 via a Balancer Liquidity Bootstrapping Pool.
The results were insane:
41 million MC tokens sold
Average price: $2.58
Total raised: $105,576,956
Participants: 3,900
In 72 hours, Merit Circle became the largest treasury in the play-to-earn industry.
The seed round before that had brought in big names: DeFiance Capital, Mechanism Capital, Digital Currency Group, Jeff "Jihoz" Zirlin (Axie co-founder), and Kieran Warwick (Illuvium).
Yield Guild Games also invested $175,000.
Remember that. It becomes important.
The Controversy: MIP-13 and the YGG Drama
In May 2022, a Merit Circle community member named "HoneyBarrel" dropped a bomb.
MIP-13 (Merit Circle Improvement Proposal 13) proposed to:
Cancel YGG's SAFT (investment agreement)
Refund their $175,000
Remove their MC tokens
Kick them out of the ecosystem
The reason? HoneyBarrel argued YGG had "provided zero value" beyond the initial investment. They hadn't participated in governance. They hadn't helped with introductions. They were just extracting value.
Oh, and they were also Merit Circle's main competitor in the scholarship space.
The DAO voted overwhelmingly in favor of kicking out YGG.
Crypto Twitter exploded.
"Seeing a DAO so nonchalantly consider contract breach should tell you all you need to know about 'governance of the people' and why it doesn't work" - Hasu
"Moronic. Why would anyone trust MC DAO in future?" - Multiple people
The problem? YGG had invested in Merit Circle Ltd, not the DAO directly. The legal implications were murky. YGG could sue.
Merit Circle Ltd (the company behind the DAO) scrambled to fix this mess. They proposed MIP-14 as a counterproposal:
Final settlement: YGG received $1.75 million for their $175,000 investment.
That's a 10x return for getting kicked out.
Both parties released a joint statement acknowledging "the danger a precedent like this could set for the Merit Circle DAO and the industry as a whole if agreements are not upheld and investors are not respected."
The relationship was terminated. The lesson was learned. Sort of.
The Pivot: From Scholarships to Infrastructure
Here's the thing about the scholarship model: it was dying.
Axie Infinity's economy collapsed. Token prices cratered 90%+. The "play-to-earn" narrative became toxic. Suddenly nobody wanted to grind games for $2/hour.
Most gaming guilds doubled down on scholarships and bled out.
Merit Circle did something different: they pivoted entirely.
By late 2022, Merit Circle had restructured into four verticals:
VerticalFunctionInvestmentsVC-style gaming investments, treasury managementGamingGame partnerships, player communitiesStudiosIncubating/developing games in-houseInfrastructureBuilding their own blockchain
The scholarship program? Gone. The new focus? Building the infrastructure that games would run on.
The Chain: Beam is Born
In 2023, Merit Circle launched Beam – a gaming-focused blockchain built as an Avalanche subnet.
Why Avalanche? Fast transactions (~1 second finality), low fees, and 4,500+ TPS capacity. Everything Ethereum wasn't.
But here's the interesting part: Beam wasn't just an Avalanche clone. It came with a full suite of tools:
BeamSDK – Integration toolkit for game developers Sphere – NFT marketplace (first to integrate Immutable zkEVM) BeamSwap – Native DEX Beam Bridge – Cross-chain asset transfers
The thesis was clear: make it stupid-easy for game developers to add blockchain features without forcing players to understand crypto.
They partnered with both Immutable and Polygon to expand reach – Sphere became the first marketplace to integrate Immutable zkEVM at launch.
The Token Migration: MC → BEAM
In October 2023, Merit Circle announced something unusual: they were killing their token.
Well, not exactly. They were migrating it.
MIP-28 and MIP-29 passed, converting $MC to $BEAM at a 1:100 ratio. If you had 1 MC, you got 100 BEAM.
Why? The Beam ecosystem had become so dominant that having a separate "Merit Circle" token made no sense. Everything was Beam now.
The migration deadline: October 26, 2024.
By the deadline, 97.1% of all MC tokens had migrated to BEAM.
The Tokenomics: Deflationary by Design
Here's where Merit Circle/Beam differs from most DAOs: they actually burn tokens.
Original supply: 1 billion MC (100 billion BEAM equivalent)
Tokens burned: ~37% of original supply
Current supply: ~58-63 billion BEAM
Buyback mechanism: DAO revenue used to buy and burn BEAM
In Q1 2024 alone, 141 million BEAM tokens were purchased with DAO funds and burned.
This isn't just talk. The supply is actually decreasing.
The L1 Transition: Breaking Free
In December 2024, Beam announced it was becoming a sovereign Layer 1 blockchain.
Thanks to Avalanche's Etna upgrade and ACP-77 proposal, subnets could now operate as independent L1s with their own consensus mechanisms.
The Horizon upgrade (early 2025) transitioned Beam from Proof of Authority to permissionless Proof of Stake.
What this means:
Anyone can run a validator node (with 1 Node Token + 20,000 BEAM staked)
Validators earn transaction fees + protocol fees from BeamSwap, Sphere, Bridge
Network becomes truly decentralized
Avalanche showed support by minting $500,000 worth of Beam Node tokens and committing to run validator nodes.
By March 2025:
58,000+ Node Tokens minted
2+ billion BEAM burned through the node sale
Beam officially operating as L1
The Treasury: $200+ Million War Chest
Let's talk money.
As of Q1 2024, the Merit Circle/Beam treasury held $201 million in assets:
That's a 70% increase from the previous quarter.
Key investments include:
Aethir – $1.5M seed + $10M in node purchases (decentralized GPU infrastructure)
Berachain – $750,000 in $100M Series B
Sophon – Significant stake + incubation support
Saga – Early investment, value increased to $250M+
The DAO isn't just holding tokens. They're actively deploying capital and getting massive returns.
The Games: What's Actually Building on Beam?
Here's what separates Beam from vaporware chains: games are actually launching.
Flagship titles:
Forgotten Playland (March 2025)
Party game developed by Duckland Games + Vermillion (Beam Foundation collaboration)
Available on Epic Games Store
20+ minigames, $FP token integration
First true "Beam-native" game
Trial Xtreme Freedom
Other games building on Beam:
The strategy is smart: hide the blockchain. Trial Xtreme doesn't call NFTs "NFTs" – they're "Overdrive Bikes." The wallet isn't a "wallet" – it's a "Pass." Players don't need to know they're using blockchain.
The Current State (2026)
The Good:
$200M+ treasury with 40% in stablecoins
Successfully transitioned to L1 with permissionless PoS
58,000+ node tokens minted
97%+ token migration complete
Deflationary tokenomics actually working
Games launching on Epic Games Store
Partnerships with Immutable, Polygon, Avalanche
Strong DAO governance (when they're not kicking out investors)
The Concerning:
Token still down significantly from ATH
Web3 gaming adoption still slow
Most games not yet live
Reputation damage from YGG incident
Competition from Immutable, Ronin, other gaming chains
The Honest Take: Merit Circle/Beam is what happens when a gaming guild realizes the scholarship model is dead and pivots to infrastructure.
They've executed the pivot better than anyone expected. The treasury grew through a brutal bear market. They built real products. They shipped actual games. They transitioned to a sovereign L1.
But they also kicked out an investor via DAO vote, which scared off some potential partners. And their native games still need to prove they can attract real players at scale.
The Investment Thesis
Bull Case:
$200M+ treasury provides multi-year runway
Deflationary tokenomics with active burns
L1 sovereignty gives flexibility
Epic Games Store presence = mainstream distribution
Strong VC portfolio with Aethir, Berachain, Saga
Gaming-first approach vs. general-purpose chains
Node staking creates token sink
Bear Case:
YGG drama damaged reputation
Web3 gaming hasn't found product-market fit
Competition from better-funded chains (Immutable)
Token down 90%+ from ATH
Most games still in development
DAO governance can be chaotic
My Take: Merit Circle did what most DAOs fail to do: adapt.
When scholarships died, they pivoted. When MC token was confusing, they migrated. When subnets were limited, they became an L1.
The YGG situation was ugly, but it also showed the DAO actually has teeth. For better or worse, the community controls direction.
With $200M in the treasury, active development, and games actually shipping, Beam is one of the few gaming chains that might actually matter when (if?) Web3 gaming takes off.
The Bottom Line
From Axie 420 scholarship program to sovereign Layer 1 blockchain in three years.
That's either impressive execution or manic pivoting. Probably both.
The Ferguson brothers at Immutable built infrastructure from day one. Marco van den Heuvel started by lending Axie NFTs to Filipino gamers and figured out the rest along the way.
Both approaches can work. Beam's approach is just... louder.
Not financial advice. The author may hold positions in projects discussed. Always DYOR. And if you're an investor, maybe add value before the DAO votes to kick you out.