In Momentum Works’ Web3: The inevitable next step? report, we gave an overview of the industry, as well as a few key use cases. Though by themselves these were hyped up over the course of the pandemic, they might actually have long term positive influences over the whole sector.
One such use case is the blockchain game (GameFi) Axie Infinity, developed by Vietnam-based company Sky Mavis. Axie Infinity became a sensation during the 2nd half of 2021, especially in the Philippines, where many ordinary people played it for hours every day to earn tokens, and by extension, a livelihood.
Axie Infinity is, however, highly controversial – just throwing its name out will spark a debate in any group. Some think it is a complete ponzi scheme, while some others think it has demonstrated a proto ‘digital nation state’.
Today, we are launching a new report: Who is Axie Infinity?: whether GameFi’s monarch will maintain its success to explain its logic, its surge in popularity and subsequent challenges, as well as whether its business model is sustainable, or even replicable.
Here are 10 highlights from the report:
- Inspired by a wave of gaming and blockchain (GameFi) innovation, Axie Infinity became a sensation, especially in the second half of 2021. Vietnam’s tech and gaming ecosystem in some ways enabled Sky Mavis and Axie Infinity.
2. Understanding the terms GameFi and Tokenmics are essential to understanding Axie Infinity.
3. Axie Infinity’s rise can be partially attributed to luck. But, it has fostered an engaged community, which led to the creation of guilds and scholarships.
4. Axie’s highs and lows are a valuable lesson for aspiring innovators: its highs, lows, (un)sustainable growth, and mistakes along the way will serve to support future entrepreneurs in their pursuit for increased security, tokenomic sustainability, maintainable user growth, and ultimately successful business models.
5. Axie has catapulted GameFi into popularity: its growth has led to a significant spike in media coverage and industry recognition. This has raised GameFi awareness for investors, ecosystem stakeholders and the general public.
6. Replicating the phenomenal success of Axie Infinity will be hard due to factors including not only product and timing, but also leadership, people and organization.
7. But Sky Mavis is constantly innovating the product, engaging with the community and improving on the technology, currently pivoting Axie Infinity from “play TO earn” to “play AND earn”.
8. Axie was the catalyst for GameFi innovation in Web3: while investors and entrepreneurs are increasingly convinced about Web3’s future potential, without true use cases Web3 will remain whitepapers and speculative tokens.
9. Axie Infinity demonstrated the creation of a real digital economy with millions of users. A lot of GameFi innovation could be refined and built onto other use cases.
10. Regardless, Axie Infinity’s journey has been meaningful for broader Web3 ecosystem development. It is also a demonstration that blockchain can be understood and used by everyone, if the incentives are right.
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