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Esports tech firm eFuse launched a “Creator League” with big influencers like Bella Poarch, iShowSpeed, and Clix last week, and used the massive reach of YouTube giant MrBeast to promote it. But now the company has put the project on hold following controversy surrounding the league’s use of blockchain tech.
Esports Insider and Sports Business Journal reported Tuesday that eFuse has also laid off 30% of its staff, which is believed to have affected approximately 30 employees. While eFuse did not confirm the exact numbers with Decrypt, it said in a statement that the company will go through a “restructuring.”
“The Creator League was an experiment in creator-led, fan-controlled esports,” eFuse CEO Matthew Benson said in a statement. “We remain excited about the Creator League and will take some time to reflect on community feedback and refine its structure. As with all ambitious projects, the path toward innovation is winding. We’re prepared to keep learning and pushing gaming forward.”
8 creators. 4 Splits. 1 CHAMPION 🏆
Here’s everything you need to know about Creator League Season 01 👇 pic.twitter.com/aQoxCsYHeM
— Creator League (@CreatorLeagueGG) September 2, 2023
The Creator League offered fans "Community Passes," which cost $20 apiece and were tied to each of the gamers and influencers leading teams in the esports league. Each pass let viewers join an exclusive Discord server, vote in polls related to the league, and participate in certain competitions.
Soon after the launch, some influencers connected to the league complained about the use of blockchain tech. Efuse said that it is using the Near blockchain to “validate data and log information relating to the community passes.” However, the company claimed in a statement that the passes are not NFTs.
“Within the product, the blockchain provides additional transparency to inventory levels,” said eFuse VP of Engineering Shawn Pavel in a statement.
Creator League Moving Forward… pic.twitter.com/5thVepUIk7
— Creator League (@CreatorLeagueGG) September 5, 2023
“Not tokens. Not transferable. Not fungible. No cryptocurrency involved,” an eFuse representative told Decrypt via email.
As described by the company, however, the passes sound like soulbound tokens—a type of token that is locked to the wallet that initially mints (or purchases) it and cannot be traded. If that is the case, then that's still a type of NFT, even if the restrictions mean that there is no speculative element around them.
“We used the blockchain to power transparency and create a public ledger so the community knew we weren’t overselling passes,” the spokesperson added.
Controversy first began to swirl around the Creator League when YouTuber Connor “CDawgVA” Colquhoun—one of eight creators whose name is being used in the League—said he planned to leave the project.
“I accepted to join the Creator League not fully understanding the tech behind it,” Colquhoun tweeted on Sunday. “Needless to say, with the current information available I'm planning on withdrawing.”
So I'll just be real with you guys, I accepted to join the creator league not fully understanding the tech behind it. Needless to say, with the current information available I'm planning on withdrawing.
I was not told or made aware at any point that there was Blockchain…
— Connor (@CDawgVA) September 3, 2023
“I was given assurances that it had nothing to do with NFTs. Given my vocal hatred of such tech, I would never agree to join had I known that,” said Colquhoun, who has millions of followers across YouTube and Twitch, primarily for his content about exploring Japan.
The pseudonymous OTK co-founder known as “TipsOut” said that the esports organization was also not aware of any NFT elements in the Creator League, and was “told there was no NFT/crypto component.”
OTK and TipsOut did not immediately respond to Decrypt’s request for comment. MrBeast, who promoted the Creator League through his popular YouTube channel as well as his candy brand Feastables, did not immediately respond to Decrypt’s request for comment.
Notably, neither the Creator League’s official trailer nor its Twitter promotional video mention its use of Near.
“Efuse, from my perspective, has always been transparent with me and given me ample information,” Johnson said, confirming that he was made aware of the Creator League’s use of Near.
The Creator League’s own purchase page does not clarify to buyers that they are purchasing something that uses Near on the backend, and its blog posts explaining how the pass works do not mention that the passes are tracked via a blockchain network. Efuse said that it will allow fans to request refunds via email if desired.
When asked for further details on eFuse’s financial relationship with Near, an eFuse representative told Decrypt via email that an “18-month relationship” exists between the two entities.
“They provided a cash grant to exercise their platform and build our tech on top of it. We didn’t make any money on the deal. The grant allowed us to learn and experiment on the blockchain—but again, that was a while ago,” the eFuse spokesperson said.
The Near Foundation did not immediately respond to Decrypt’s request for comment, but a September 2022 transparency report confirms that Near provided a grant of an undisclosed amount to eFuse as a part of its “Ecosystem” funding efforts (the entire category of roughly 29 projects received a collective $133 million in grant-based funding).
This isn’t the first time eFuse, which also owns the news site Esports.gg, has faced controversy. Last year, eFuse Chief Strategy Officer Patrick Klein resigned over sexual harassment allegations made during Klein’s previous role at Ohio State University. In 2020, a university investigation found Klein guilty of violating the school’s sexual harassment policies because of text messages and social media exchanges with 13 different student-athletes.