How To Fix Axie Infinity | Sustainability & Future of Sky Mavis

to infinity and beyond okay guys today we have a really in-depth discussion on the future the sustainability and the economics behind axi infinity and its parent company sky mavis now axi has undergone ridiculous growth over the past year and arguably has put massive focus on blockchain based games and also arguably fueling this massive venture capital investment wave and crypto based gaming opportunities now novik the company behind the really great gaming newsletter master the meta have recently released a very in-depth research report currently available for free titled axe infinity infinite opportunity or infinite peril the report amongst other issues highlights some of the key problems with the sustainability of axii infinity now just to be clear sky mavis the developers behind axee have been very

open and have also themselves highlighted sustainability as a key issue for the game as well so it is a known issue with us today to discuss axi and sky mavis and to discuss not only issues and problems but to also take an optimistic perspective on potential solutions we have some of the authors from that report including first aaron bush co-founder of novik and the master of the meta newsletter also an investor with the motley fool lars dusay president of level up labs makers of defender's quest and overall industry good guy and finally abumanya kumar also co-founder of novik and the master of the meta newsletter i gotta tell you guys my brain hurts talking about blockchain economics but a super insightful and very educational discussion with these guys coming at you right now

hey guys and welcome it's awesome to have all three of you on with me and i thought we could just kind of dive right into the meat of it by talking about you know axia infinity and just getting straight to the point guys is axiomfinity a ponzi scheme and maybe starting with euler's i like to avoid using labels um because i like to let the data speak for itself and um what the data does say is that axia infinity has had incredible growth that growth is slowing down and as far as we can tell their business model um basically needs the growth to generate income um and that we have some concerns with their current business model there's been a lot of but it's easy to point out that flaw and then get egg on your face later because both amazon and tesla lived for years and years and years with unsustainable growth and they're doing fine now the difference is that amazon and tesla were able to have a soft landing on a sustainable

business model a business model where every customer you have um can generate income right you can monetize this steady level of uh customers the problem axi currently has that we see is that even if they land at a huge amount of customers those customers are essentially a liability because every customer is expecting money out of the system and so as long as you can get increasing growth and more money coming into the system is going out of it you generate income and your economy works as soon as it goes like that it doesn't matter how high this is it seems unsustainable um but the key is they know that and they've made plans to transition to something else so right and large just just to like clarify for the audience when you say that axi requires additional growth meaning it requires more users to come in and uh to to basically buy into the system and once the new user growth slows down then the whole system sort of it then becomes unsustainable is that just to clarify well manu you were the one who did the extrapolation of the axs

graph um so i don't want to misquote you here but um you can you can correct me on this but my understanding is that um i did the deacon's part of the deconstruct part and i we definitely know that the payouts to people playing the game are coming from new money entering the system right and um sky mavis also earns income in the same way off of breeding fees currently and because of that our projection is that the system basically only generates income for anybody whether that's sky mavis or players as long as the player base itself is growing and putting new money in and money do you want to correct me on any of that no i think that that's about right and probably like the one part of it um that i would call out as you know as new players also keep entering the system and keep bringing new money in the the training economy within the game itself is also not encouraging like further trades or even like you know um for slp itself there are trades happening because you know people basically just want to take their money

out and get their daily income but for the axes themselves you know people generally hold that there's no sink for axes in the game so that part of the trading economy is also not like fully healthy at the moment but again like skye mavis knows this and you know they have plans to fix it just that the current version of the game doesn't also enable like a fully sustainable trading economy uh that can that can you know actually uh that can sustain as a business on even a constant set of players probably aaron can like talk about uh the axs projection part of it and like how how how that model works but yeah sure i mean i can jump in and we kind of jump straight into the weeds a little bit i'm talking about the the economics and that's a it's a pretty killer leading question is it a ponzi scheme i think the answer technically is no um it's not as simple as money from new

users going straight to existing users to prop up returns um but there are clear parallels as lars and monuments saying and we can dig into the economics in a bit more detail however however you'd like but really in short axi infinity's um current economy and revenue generation hinges around the act of spending tokens to create new axes or which are the creatures that you play with in the game and you need those new axes to onboard new players and so basically all of the not all but most of the economic of revenue generating opportunity falls around that act and in some form and the floor pla price to get started with three axes is around 350 dollars so it really is purely the demand from new players that is sustaining the price of the various tokens and the axes itself it's not a ponzi scheme because this is taking place in an open market where market participants are setting prices through supply and demand but it is true

that existing players are seeing returns on these assets primarily due to new money from new players flowing into the system if if that were to dry up the revenue for the game would dry up and the income to the the existing players would would dry up too so um it really is hinged upon uh not even just the total number of players you have in the game but the pace at which you're bringing new players in okay and aaron maybe to your point we maybe we could kind of deep dive on the economics but maybe even taking one step back and talking about sky mavis versus axiomfinity and how the economics be like what is the you know how does sky mavis make money from axi infinity was the relationship between the company and the game itself sure i can start on the sky mavis part and then laura's money you can talk a

bit more about the tokens themselves and how they they play into things um but yeah sky davis is developed by sky mavis which is a company that's headquartered in vietnam it was founded in 2018 um you know really by a team that was pretty idealistic and still is idealistic about you know blockchain games being an avenue for economic empowerment and economic opportunity more so than building a fun game it really like in their mind is being made to help people earn incomes and the story until now is really about um improvements that have unlocked different capabilities in the game in 2019 the game was really just getting started they started selling land which i'm sure lars will have a lot to say about that in 2020 sky davis launched their pc launcher mavis hub they started using ronin which is their ethereum based side chain which primarily exists to lower transaction costs and they're

doing some other stuff with it now and they launched their their two tokens slp and axs um and then this year is when growth really started taking off and this um occurred once like the axes the core nft of the game migrated over to ronin where it just became easier to buy and sell it reduced friction for new users to get started and then there's just been a lot of momentum um and fomo around you know players seeing others make money they've raised the sky mavis raised a ton of money to further its ambitions um and now i think the i mean the game has over two million players sky maybe this has 80 employees um and they have pretty pretty big plans for the future and their collective token pool is worth somewhere around 10 billion dollars right now right um so so really sky made this um really really as it stands like the plan is for axs that really is like the governance token that represents like future ownership of the game so the plan

is for sky mavis to um slowly you know decentralize decision making and ownership of the game over to axs holders and money can talk a bit more about that but skype mavis they own it's about like 20 of the the token supply of axs and so that's really like where they have skin in the game and if the game succeeds um then they're the treasury that you know holds the axs grows and the value that goes this guy mavis grows as well and a lot of that they kind of cut the treasury up into different pieces like x percentage goes to the development team some goes to the community for different things and so on and so forth early advisors etc but really it's it's really about that that skin in the game from how activity in the game leads to certain axs going back into the treasury and then the game succeeding so that the value of those tokens rises so that sky

mavis their portion along with everybody else rises as well um so that's kind of like where the game economy in the company intersects but sky davis is working on um a bunch of other things as well we mentioned mavis hub which is essentially their like web 3 steam competitor um and you know a lot of the i forget how much money they raise it was over 100 billion dollars in their series b but a lot of that is going to go probably not as much to axe infinity but some of these other ambitions like actually making the sub potentially more of a steam competitor actually making ronin which is their side chain and now decentralized exchange um more competitive and um potentially bring on new developers and with their own games building on sky mavis's infrastructure alongside axe infinity and that's um that's probably more where sky mavis is like really thinking long term about taking their successful game and building like a multi-tiered platform out of it um but

they still they still have to make the economics of axiomfinity work as well so i've been talking for a bit go ahead lars no you can go you can go joseph oh i was just gonna ask uh just for our audience and for our slow execs like myself just to like like simplify the relationship between sky mavis and axey so the way i'm understanding what you're telling me aaron is that there is a governance token axs sky mavis owns 20 of that and so from a value perspective they own 20 of the governance token that comprises quote-unquote ownership of axey infiniti but then in terms of like why does the in in terms of the economic incentive to continue development on axia infinity is there continuing economic interest that accrues through the governance token like do they make money every year somehow or on a

continuous basis or is it just the value of the governance token itself that that is the main source of value and that's providing incentive for sky mavis to continue development on axi it's a it's a good question and i think basically what you said yes is correct they own that 20 or so of the token supply um certain activities in the game lead to the treasury that is kind of co-owned by all of the axi holders more actually flows into that game which increases the pool which can be used for development etc but access themselves um right now it doesn't actually do much they they recently launched staking which um doesn't really have much of a purpose it doesn't validate anything but you can stake it and get returns based off of it and that encourages long-term holding and so i assume i actually don't know to what degree um the company and what they own they're staking their

tokens i imagine they're doing some of that but you get some return um from that as well um but i i think it it might help to add a bit more context just by talking a bit more about how the tokens flow through the game too and some of it might come full circle once we get into just other ways that axs can be used and kind of flow around the ecosystem all right and and yeah and it'd be great also like monument you're about to jump in but like if you could also talk about from the player's perspective and the player experience when they're playing the game you know what is that what do the economics for the player look like when they play and then how do they get money out of the game would be would be great to to understand as well yeah i mean at the at the core of it you know maxi infinity is just pretty similar to any kind of turn-based turn-based battle rpg game and it has this you know card battle mechanic in it uh which is which is like a pretty smart

decision i would say especially for a pvp context because you know then no two battles are the same uh because you just you're just fighting like real players with you know pretty uh spontaneous card selection uh moves but um so yeah you know that's uh there are basically these uh two key modes of the game there's like the pve mode uh which is essentially kind of like you know saga map structure you have like 36 levels and you can like keep going from level to level to you know be beat the enemies and you get some amount of slp from it that's the first token right slp the amount of sop you get from those from that mode is cap for uh to a daily amount um so there is like some gap to it over there um but and then the second mode is a pvp mode where you would like you know essentially battle other players to move up a leader board and then depending on your end of season rank you know you would gain slp from that or you know depending

on the wins and your end of season rank you would get slp from that and some amount of axs now uh since like you know 65 60 or 65 percent of the population are these scholars whose primary motivation is i'm just here to basically play the game get as much of slp as i want and then cash it out you know sell it to someone who needs it cash it out get my get my daily pay so you know these players would just come in they grind the daily quests which give you i think like 25 slp per day right now they grind the pve mode which gives you i think 50 slp right now and then they do like a couple of pvp matches and they get some slp from there collect all of that sell it get their daily pay and they're out you know so that's that's kind of like how the majority of the population is making money at the moment

um and then i guess the other part of it the other big system in the game is you know breeding so breeding essentially allows you to you know take it's just like any other breeding mechanic you you get you take two axes breed them it creates a third axi which uh more often than not it has like better stats than the other two um and for breeding you need to like sync some slp and also an axs token that that access token goes back to the community treasury that aaron was talking about right but that is also the only sink uh for slp in the game right now so so therefore like if people don't find the need to breed because you know they're like you know they're okay with the ranks that they're uh hitting uh on on the leaderboard and they're okay with the slp payouts that they're getting per day then you know the need to continuously breed also kind of goes down and that's what we're kind of seeing right now where their taxi population has just gone up to such a great extent and

people are just like moving around the same axis population between themselves you know to an extent and there's no new breeding happening right so like you know then there's no new sl there's no slp getting sunk and it's causing like slp inflation which causes the sap price to go down which makes like the revenue per minute also go down for one of these caller players you know so and they have to like grind more which just becomes a pretty exhausting experience and you know and then you know then the retention issues and things like that so uh it yeah like it spirals pretty quickly um but yeah i mean that's that's probably like jumping onto the next topic but uh that's kind of like how the how the two tokens are working and how like players get money out of the economy right now got it and so just just for clarification and to kind of um uh summarize what you're saying so as a player i would go in i would play this

pokemon style battle game through the course of gameplay i'm able to acquire slp and the axs token and then i can either one sell slps because you need those to breed additional axi or if i myself bred an axi i'm able to sell some of the like more powerful axes that i'm able to breed on openc or something like that and and and all that the getting the money out of the game is basically going to be through like in like an exchange like open c exactly correct yeah and like there's no so like i i don't think sky mavis takes uh any transaction from or any uh cut of that transaction like anything that's happening on any um or any slp exchange that's happening on oh another decentralized exchange like sky mavis is probably not taking a cut from that but now they also like release katana which is their own decentralized

exchange which probably now they're also taking a cut from there i just don't know the details about that but but yeah for all the axi transfers they do take a 4.25 cut so right and then maybe as since you know since we come from the the free-to-play game industry that maybe one of the potential concerns would be you know very similar to many gotcha collection games at some point when you when you have enough sort of power or if the incentive to have increased power would be based upon the pvp battles so long as that increasing power curve and the reward you get for that increase continues then the cycle can continue but then as soon as that levels off then the incentive to breed additional more powerful axi could potentially reduce and it seems like based upon the output from the report that you guys have published that we might be at that inflection point which just to be clear sky mavis is

clearly aware of but we might be at that inflection point where things are starting to not make economic sense the unsustainability which sky mavis themselves has already talked about we may be at that point is that correct yeah one one challenge too is that um one of the things that caused the collapse in price was an intentional policy decision by sky mavis to reduce slp payouts um they made a couple of rule changes one was that anyone who is under an mmr of 800 could no longer earn anything not even in adventure mode single player like if your competitive rank and the arena was lower than that and i think every season your mmr resets to like 1200 and then it only goes down if you suck basically and so i think that was a measure to discourage botting like people just had click farms botting just clicking random cards just to grind through the day randomly you know get their minimum and then just stop with like no human effort so those hall got kicked out um and they also like changed it so high mmr's matt's matchmaking rank that's

your leaderboard rank um so so high skilled players could earn a little more and then lower skilled players would earn like less per win and what this had the effect of i think part of the motivation was because their servers were just melting from the growth and they couldn't handle the growth and then there was also like concerns about inflation it was like a monetary policy move basically um i'm not going to speculate too much on all the motivations behind it but they did it and the effects were all of the really bad players left the game um and so the effect of that and then they will do nerfs and buffs and so like previous teams of axes will sometimes kind of go obsolete maybe that's like to try to drive demand for more breeding but anyway the effect of this is that you used to be able to go on and basically feed is the gamer term on low ranking players and they can make their money because they're 800 mmr they're just there to grind get their daily check you know and you can get an increased mmr based off of that so on our graph we show you the daily earnings you can make based on your mmr that mmr

is not stable for the average player if you were a 1500 mmr a couple months ago you might be struggling to stay over 800 today you know because now you are up against the elite people who are left after evaporative cooling of the audience and um that means and then axi is not purely p pay to win but yours it is really really really hard to succeed without a really competitive team and that what is a really competitive team changes depending on the meta and nerfs and buffs every season so um there can sometimes be like an ongoing investment where you gotta like plunk down cash for a new team or you know make sure to like be constantly breeding and stuff to get new new axis in order to maintain your mmr just to be able to get your daily output out so um that's kind of another undiscussed part is just like how much more competitive and difficult it's been to stay above the water line um since the latest policy revisions and that um one thing that's just really come clear to me is

that these kind of games like the whole sustainability assignment aside is like so like there's traditional games hard to make traditional games and free-to-play balance that economy even in a single-player context even harder got to do two things at once now you've got to manage a free-floating market economy with inflation you got like have a full-time alan greenspan while you're doing these other two impossible things and it's just it's just really underscoring how challenging this this really is yeah lars i thought you made a pretty interesting point in terms of the kind of like the player balancing i i think this is one of the issues that a lot of kind of novice game developers and even even experienced game developers kind of run into where because they don't understand that four especially pvp games you need to not only balance your economy but you also need to balance your player base i mean it's kind of like you know one of the theories behind the fall of uh game of war for example was not so much like a lot of people kind of simplified and say oh yeah they just you know they had massive inflation they

just ran a bunch too many sales and inflated the economy too much but that was according to some smart guys i talked to more based upon a symptom of the player economy becoming unbalanced where you had a lot of high level players but the people that they feed upon uh basically kind of disappeared and because of that player imbalance in terms of the power and and the way that the players interacted with each other once that got allied battle balance then then then you saw inflation then you saw all these other things happen as they try to bring lower players up to the mid tier and things like that so definitely an issue i think that is um not as well understood in the industry as it should be and hopefully an issue that axi can can address if that is a another major point of um of of sustainability issue in the game yeah i mean like you know cutting cutting the slp in flow for

like a complete set of ranks i mean that's like a pretty pretty hard move i mean like why would you play the game you know you know like a majority of your population is coming in to actually like earn money it is a play to earn game and then you just cut off the slp for a huge chunk of the ranks it's right i mean it shows it shows the desperation it could potentially show like lack of you know experience with with this kind of stuff but i mean we can also talk about like what what plans they have uh to fix all of this but yeah pretty pretty hardcore move i would say if i want to be maximally terrible like no one's seen this kind of meteoric overnight growth and so like probably pulling whatever leverage they need to just uh just to like keep the buyers out okay and i and based on the report that you guys have published it sounds like one of the other key issues in terms of the sustainability the game has to do with the amount that

players especially you know and the whole basis behind why they created this game was to provide economic opportunity to for example folks in in you know emerging countries and things of that nature but right now it sounds like the the economic model in terms of from an incentive perspective to play to earn to actually play axe infinity as a job that that inflection point has kind of started to shift can you guys speak to that and what you think the um and we have some data but what what do you think that how that kind of plays out in like the timing of of the impact of that now that the economics are starting to shift for daily players um i can say a couple things one thing is that i think basically um yeah so so i i i think the main thing is that um axi's future constantly depends like any company or organizations or projects on um hope and expectation of future

success right and so that is why they have these white papers and these road maps and like here's all this stuff that's coming next and you see people talk about it's like yeah there's problems now but this new thing is coming and that's going to solve the problem and that's their job right now is to keep hope alive keep hope alive that the next thing coming out is gonna is gonna is gonna address these issues that they're working on it like and so you see them talk about basically two things monetary policy uh to kind of use a metaphor i'm not sure i'm using it in a perfectly economically correct sense um and then uh new features so monetary policy you'll see people like pin their hopes sounds like oh we're gonna add an axis sync you know they talk about releasing axes because like you don't ever hurt them you just release them into the wild you know um so like they talk about it's like there's going to be a way to release axes so that's going to deal with axia inflation and um or we're going to tweak sop or axs or any of those things and that's what i call monetary policy and that's all well and good but none of that like at best that can like delay you know the problems because it doesn't

fundamentally change money out greater than money in um which is the root of the issue and then the new features potentially could fix that issue and our analysis kind of shows that based on what's in the white paper and on the timeline um they don't the new features don't move them away from money out greater than money in um and we have concerns about that and of course presumably they've read the paper and maybe they'll change their minds which would be good for them and for their their system um but that's kind of where we see things now and um a lot of people are basically um putting their hopes in that axis is gonna pull this off they're gonna figure it out they're smart people they have tons of advisors and tons of money and so you know they're they're not fools so hopefully they will they will figure this out but that's that's the thing is it's either monetary policy or new features i think you can't solve this with monetary policy like you you need to pick the right new features and currently the ones on the timeline don't don't um so to simplify right sorry um yeah i was just gonna say to

simplify it yeah go for it yeah so i was just gonna say to simplify for just a little bit um like again right now like most of the growth and like revenue like really hinges on just the growth of new users but another way of putting it is that actually just has a recurring revenue problem like like it's sort of it's sort of that simple um and and you know what lars was saying about like when the vast majority of players are looking to take more than they give that's just economically unsustainable so you almost have to figure out like new i mean it probably falls more on the feature side because you can't use monetary policy to magically change like that law of economics to build sustainability there so you have to add new features that really attract new types of players who are able to give more than they take and that is the core challenge of of what they're trying to figure out and if you look at the different projects

that they're working on like you see that they're building a or they're trying to make like a free-to-play version of the game um which we we don't know actually that much about i think it might have it's you know their plans might have changed over time the goal was that you know it would go on ios and android and steam or mavis hub wherever um and it would just bring people into the x universe and then probably probably you know some percentage of them convert into you know the premium tier of the game where they buy axes and can play for income but you know apart from just the feasibility of like landing on ios and things like that like that doesn't solve the recurring revenue problem that just fuels more user growth um they have been selling land and lars can talk more about some of their their land ambitions but selling land in and of itself like that that brings in revenue opportunity but it doesn't necessarily just

automatically equate to more recurring revenue um and you know they're working on some other things but probably like what we kind of like narrowed in as the core thing that they have to figure out is a lot of the platform ugc kinds of efforts where they can um and it is connected to the land but like create opportunity for anybody to come in and build build new experiences build new mini games create new items whatever that is and really just create more types of modes and more types of games that people are willing to come in and spend money on not take money from and so that really is like the main thing that they have to figure out and so they're basically just trying to build like their own like it's almost roblox like on top of land that that they're trying to to figure out which sounds like a pretty huge undertaking and it is it's part of why they're raising so much money um but that is the core thing they have to figure out they have to figure out how to get all these new creators coming on

to build new experiences that um bring on new types of users that are willing to give more than take and kind of build bring that is what will bring more sustainability to the economy that's that's my view of it at least yeah this is interesting it goes into their platform ambitions you listen to them talk and they talk about being vertically integrated you know they kind of little bit of apple talk um and they keep comparing themselves to steam now they have but but the correct model is roblox roblox is more like what they want to build because roblox is not just um a platform it's a social network you know which ties into the rest of their ambitions but there's basically they're basically trying to build two robloxes and one is on top of axi and one is on sky davis hub and ronin um and they're they're two separate things and they're worth discussing separately um but like the basic ambition for robloxifying axi is they've got this thing called the lunacia sdk

lunac is their magical little moon world and then sdk is you know software development kit their api it's basically this we we know very little about it we know very little about we we have screenshots and like a couple ter statements and then kg you know sentences from interviews but what we can put together just from what it looks like is there's some kind of little light stardu valley um animal crossing farmville kind of experience tied to these little virtual land plots and then there's an sdk you'll be able to use to build simple 2d games using axiart assets or whatever where you can create i don't know like some kind of scriptable little mini games and then you have to deploy them on a plot of land and there's 92 000 or 90 000 i forget the exact number but on the order of 90 000 plots of land which they sell in batches i think they've sold like around 10 of them so far and um they're strictly scarce they they've strongly intimidated they're not going to make more um they probably

should go back on that promise in my opinion um but um you can only deploy lan a mini-game on one of these pots of land which is weird to me as a developer because i've seen people try to go up against steam for instance i've read that when i wrote so you want to compete with steam it was based on frustration of getting dozens of pitches in my inbox like we're going to give you 28 revenue share instead of 30 you know and all this nonsense and i know how hard it is to get developers to like create value for you you know i see it all the time like look at epic game store having to go out and give millions of dollars to people just to get them to come onto their platform right and so now you've set up a system where basically you're gonna have to pay virtual landlords for access to scarce plots it's like going back to the xbox 360 days i'm not sure if any of y'all like worked on console games during xbox 360 but they had a fixed number of slots per year for xbox live arcade like one of

the first digital distribution systems and they got allocated just like stupidly like some random third tier japanese publisher and some random french publisher would get like two or three slots somehow just because of their connections and then they would like lord that over like game developers with good games that wanted to go on xbox live arcade and it's like well you must go through me now because i have this slot you know and so instead of negotiating directly with microsoft you also had to negotiate with this middleman and basically pay him rent for access to xbox live arcade and that's the model they're setting up for hey everyone we desperately need people to come create value for us in the name of web3 which is supposed to remove middlemen um here's all these middlemen who paid 1.5 million dollars for land plots who are happy to charge you rent for the privilege of creating value for us i don't know seems like a weird value prop to me and then separately from that you have sky mavis hub which has ambitions about being steam hopefully they will make the same mistake over there but then the

question is okay are they going to be able to leverage all this attention and investment to build a something like a vertically integrated steam for blockchain games you know they've got a lot of cool tech they've got ronin they've got sky mavis hub you know they've got katana decks the one thing they don't have in my opinion this time and some people disagree with me on this because you know they've got this all this attention but steam and roadblocks which are the things everyone compare them to they had time like roblox launched in the early 2000s and most of my colleagues in the industry discovered that they existed like this year right they've been there forever roblox predates minecraft by years you know and they've been just slowly building up until now they just are impenetrable you know and same with steam like steam launch during pc gaming is dead and ea and ubisoft and all these other people just let them go and just take it and um whereas right now everyone wants to be the blockchain platform and people are like yeah but none of them are as good

as skype mavis hub and i'm like yeah i mean none of them have the attention and the funding of skye mavis but there's like 50 bajillion of them so it's it's sky mavis versus 50 bajillion you know so um i would be kind of nervous about assuming that sky mavis is going to be the one that grabs the crown unopposed right and guys just to like maybe simplify and just so i have a good understanding or good high level understanding of what's happening from more of this optimistic perspective right like you guys are mentioning things that sky mavis is working on aaron you mentioned stuff that axi is working on um so maybe we could take it back to like the the more optimistic perspective or solutions perspective so we're and and so maybe we could first start by talking about axi and the things they're tr trying to do with axi to make it more of a sustainable game and then and then if we can kind of go back and reiterate on the on the sky mavis side as well but sounds like from a axi perspective

like lars you mentioned there's an initiative to potentially try to sync some of the um the axes in some way to consume them which is you know very gotcha fusion you know like it's proven like you know you provided enough sinks that could potentially help although i think you've got some concerns about whether just thinking that is enough you mentioned land sales but like could we go back in terms of axi as far as the initiatives to fix axi as a sustainable game um if you know what do you guys think about each of those initiatives and then what else can they do to help make axi a sustainable game i'll say one quick thing and i'll let the others talk um the first one is they have their free to play game they want to come out with axe origin right and so one thing they could just do is make a regular free to play game right free to play games are super sustainable whether you like that business model or not like they bring in more money than they they consume so um the challenge the reason

we criticize it is because they're very disparaging in the free-to-play model which fine like i'm not necessarily a fan either but um i'm not gonna judge anyone works on them i've worked on them um but the thing is that um they want to use it as a growth model is what they said they want to take those users and pour them into axi and so it's like okay well that's you took a sustainable thing and made it unsustainable then the land sales are seem like they're going to discourage people from creating value for them and then um creating axi sinks is part of like the land game play there's gonna be this little like world you can explore and stuff and so it's like yeah you can sync an axi and then you can like get some more resources to do stuff and play animal crossing and like develop your little farm build plot and that sounds cool like it's like okay now i have a reason to spend and like decorate farmville like stardew valley it's like maybe this could attract people like come and stay and move in and like spend money but the challenge is it's like well that's a show for 90 000 people so like make more land dude is basically my pitch um but yeah

i yeah aaron and money what do you guys think in terms of xe sure well i was just going to say it i mean we have been critical but we still have to give credit where credit is due right like sky made this right building axiomfinity they they are very much a pioneer of like an entirely new business model in games and there wasn't a guidebook for them to follow as a as they figure all of this out like we're learning from them as they figure it out they're they don't really have anyone i mean they can learn from the history of games and other contexts economies and other contexts but really like smashing it all together and and one there really isn't aren't examples for them to to follow so they're they're pioneering this they've attracted millions of users and they've created billions and uh market cap for their tokens like that's that's pretty insane and so we can talk about the sustainability of of things here and there but what they've built so far is still like it's pretty it's pretty amazing and they've they've

leveraged that having um you know bootstrapped a lot of it um to be able to build momentum to then raise more money to then solve these problems and so you know through raising money like and maybe some other things to come like for for example like you know i mean i think the policies they had with land originally um they they underestimated how big that they would become and so i think they recognize that they'll have to change something and um lars is sort of the the land wizard here but he's made some interesting points of like sure you could just say make more land or you can devalue land or cut up the same land into different pieces or like in digital worlds you just have a lot more options um at your disposal and though i think sky mavis will just have to think pretty creatively when it comes to land on how they can solve their scarcity problems i don't think it's impossible but we just haven't we just haven't seen um you know what would make us less critical yet but

it doesn't that doesn't mean to say it can't happen um also yeah and they love to be kg they love to surprise us yeah that's all power to them to surprise us um and then of course a lot of the the ugc efforts they're related to land which is sort of like a weird way to do it like um just like just trying to imagine like like yeah how do you discover new game experiences when it's land versus just like a catalog like i i don't fully get it yet i don't and maybe it's it'll come out better than i think but they have a ton of money at their disposal too um and a bunch of investors with deep pockets as well to to potentially create more incentives for um people who who just developers who are looking for places to build and in web 3. and and so the axi infinity treasury their 20 is worth however many billion at at this point plus it wouldn't surprise me as we've seen with other

other blockchains fund um and pretty aggressively just throw money at developers to to kickstart more development on their platform and try to kick start some type of like network effect to build more types of experiences to attract more types of players i think that's totally feasible it wouldn't surprise me at all if they if they announced that that soon um and then yeah free to play i don't have much more to add there um but i from an optimistic lens it's not impossible for them to pull this off we've we really have just been critical about what we've seen so far and um but it's hard to say on things that don't exist yet which there certainly could be a lot to come i think i think like at the end of the day you know like aaron also said they are pioneers and i think sky may was the biggest optimistic take for me would be that they have kind of shown that play to earn can be a thing they've also shown that there's more to be done and because they've shown there's more

to be done it also proves that this model is not really a dead end it just needs to be figured out uh you know um and yeah in terms of like you know what they could be doing i guess yeah it really at least for me it comes back to two things uh which is connected to this you know fixing the recurring revenue problem one is you know uh first of all like yeah you basically are trying to find ways to create more transactions on an existing player base therefore you know just creating a more sustainable trading economy but currently says the player base is mostly people who just want to take money out trying to bring in new players this would be the second point just trying to bring in new players with different motivations so that you know there's more money now flowing in to the economy also so it's just like around these two things you know what can they be doing the bringing players in part comes back probably to the free to uh aspect of it

you know um just opening up the funnel really wide and then allowing people to opt in to the economy like you know do you like if you like the game then maybe invest a couple of hundred to actually get involved in you know this economy and start to own things sell things take part in the trading economy and then the trade the sustainable trading economy part is more like you know new feature creation like you know for example the land part once they actually have the land and then they have like you know different game experiences and more like items that could be bought and sold and you know slp is getting sunk in different ways or axes are getting sunk in different ways it just creates like a way more uh vibrant source source and sync setup you know to keep for example the prices of slp stable so that you know you're still catering to the scholar population for example so yeah yeah all in all for me like their solution parts just come down to these two things like just bringing in more people with more

motivations uh to actually invest in the game and then once all those people are in how do you create a sustainable trading economy that can improve transaction volume on an existing stable player base so right yeah and maybe now shifting the focus to sky mavis because it seems like from a optimism perspective it seems like there's a lot more optimism in terms of sky mavis itself relative to axi right and lars you mentioned a bunch of different initiatives that they're working on as far as like the the hub you know their side chain and things like that and so if you guys were to uh characterize like the top initiatives and what you guys feel are some of the most um the initiatives that they're working on that you feel the most strongly about or have the most potential um could you guys maybe we could go into and i know a lot of you kind of mentioned a few of them but maybe we can kind of you know for again for for our audience and and for me to

like kind of go back and just high-level overview and and then like if we can go into a little bit more depth on some of those yeah because this stuff can get real complicated yeah so the first like the biggest part of like sky maps is infrastructure is like when you study other nft games they're building on commodity infrastructure right so like maybe let's start there you have like an nft of like a monkey or something and that lives on ethereum right and then it's just a and it's just a token it's on ethereum it's traded and the problem people found was oh ethereum is kind of a bad platform to build on directly because it's proof of work which means transaction times are slow and they're expensive and there's a whole environmental argument right you know it's like it's you just like people you you can't do business right and so it's like okay well let's build on l2s that stands for layer two in bitcoin this is the lightning network on ethereum it's all these other side chains that basically you avoid

transacting on ethereum for as long as possible you build up a huge batch of transactions like i don't know how many but like a ton and then you settle them all at once periodically on ethereum but almost all your transactions are happening on this side chain you're basically ignoring ethereum as much as you possibly can you know but you can still use ethereum tokens to do business right you know and so so that was the second innovation that happened and then people like skye mavis is like well what if we had our own l2 side chain rather than using a commodity one that's out there like let's just have one that we control and so they built theirs specifically for axi and when they built that that's when their market like that's when everything went insane because effectively in its current state ronin is effectively just a private database that is public read-only that like anyone can see the transactions on like yeah it's technically a blockchain but it's using proof of authority validation which means like

them and a couple of people are the validators they're just like yeah that transaction's valid i mean it's just like their own private database that they are in charge of and they have promises that it will eventually be decentralized to full proof of stake but that hasn't happened yet so we can evaluate its current state as it's like well a private database is like blazing fast you know it's super efficient um and then there's of course you know talk of okay well let's build future games on ronin like other sky mavis games and other third-party games maybe we'll transact on them um and that is why um they have not made axs the token that stakes on ronin in order to validate it for proof of stake because they don't want to entangle the axi infinity economy with running their infrastructure right does that make sense like they don't want to tie the fate of axi permanently to the fate of their whole infrastructure so like if axi goes to the moon or it explodes or it dies like it's not like steam depends

like infrastructurally on what's going on with team fortress 2. you know what i mean yeah that's kind of the move they have so like they have a token on ronin called ron ron which um i think presumably will eventually become the staking token i'm not sure it's i don't think it's currently used for that but um like the validation token but like right now i think you can just it just exists um in terms of ronin so sky mavis developing ronan is there like what would be the economic incentive for them or what's is it just to help provide the infrastructure that's necessary to enable games like axey infiniti or is there some way that they have they can actually gain economic interest from from ronin itself okay yeah there's a there's a couple of things the first is that they were massively bottlenecked by ethereum being just too slow and too expensive and too wasteful and too environmentally damaging so just by going to ronan just

by going to any side chain their economy became possible and their growth went to the moon right so there's one incentive the second incentive is that if you run the blockchain you make the rules right like you can set up what rules you want to go by so they could keep it under their control indefinitely in their white paper they say they're gonna hand it over to community control eventually and we'll see what that looks like but there's a lot of advantages to start off with something you don't have to worry about some community making some decisions that are gonna screw with whatever your central command wants to do right if you want to enact something you just do it right you know what i mean like if you want to unilaterally ban a lot of stuff on the blockchain take it off like you have complete control over the transactions you can do whatever you want to or need to do that you think is right now um so when you progressively decentralize like if if we can take them out there whether they're going to progressively decentralize by the time they get there they want to have figured out all these like lessons of what things they

you know by the time they hand over the keys to like some democratic set of token holders right the other ask the other part of infrastructure is the decentralized exchange and guys jump in and correct me on anything i'm saying that's wrong um the decentralized exchange is katana so this is where they don't want you to transact on like open c or whatever or any coin based stuff they want you to transact with sky mavis so when you're moving axes around you're doing it on katana which they control right and so the decentralized exchange can help you you know this is an l2 side chain it connects to ethereum so like if you're you know so if you want to put some ether into the system that comes off ethereum and then they can facilitate stuff so that you know stuff's a little easier to move around um them controlling that allows them to set the rules like we get a cut of it or our treasury gets a cut of it or whatever you know and they can set that up now while they have complete control of it and then whether they do or don't decentralize it later like they can shape how that

evolves as opposed to using a commodity chain that already has rules set up that might not necessarily work for them because other games are setting up on change they don't control and they're kind of at the mercy of whatever rules already exist now on the other hand on some of the commodity chains that are already decentralized it's like that's like the point is that they're decentralized and that you can like trust that this company is not going to run off and do whatever it wants and ban all your stuff um but if you are the company it's very advantageous to have something at least right now that you control so you can make sure like everyone wants to have control you know so um so they have control they have the ability to set decisions and then those decisions can hopefully like even in a decentralized situation kind of be honored by the founder effect sort of deal and i would just say live super great oh okay sorry this will be super quick i was just going to quickly add that in the same way with axe infinity a lot of the value accrues to the axs token and sky mavis owns 20 percent of that token supply with ronin a lot of the valuable

crew to the ronin token and i actually don't know what percentage of token supply sky mavis owns but i'm sure they have their their stake of what of what goes on there and so that's just sort of like the crypto model that you see in a lot of places it's almost like a labs model like you build projects you build infrastructure that you slowly decentralize but you kind of hold your your x percent of the token supply which is the core team's reward and they can work for games it can work for infrastructure etc yeah so you own a stake in the network so as the network becomes valuable you become richer right right so the ronin economic incentive is by them owning some percentage of the ronin token and the more popular ronin side chain becomes the more value cruise to sky mavis and then on the exchange side just basically you know exchange fees which makes makes a lot of sense so okay those those definitely i i i get that definitely sounds like from a sky mavis perspective you know there's there's a lot more you know

sustainability and optimism in terms of sky mavis relative to to axi which i mean again not not that axis dead or anything but that there's certainly a lot more challenges for for axi and seems like a lot more optimism on the sky mavis side and um as long as you mentioned some other things that they're also working on um you mean on the blockchain side so like well there's made this hub okay mavis hub is probably in my mind it really is the two like there are two main projects that are not axi it's the like everything going around with ronin and then mavis hub and so mavis hub is their web three steam competitor uh which i mean there's a pretty big opportunity for that since steam said they're not going to support games with tokens and epic you know hasn't said no but they also haven't been like actively supporting it you know so there is an opportunity for others to come in and be supportive and more actively try to build out that ecosystem so there is an opportunity there for

someone to take and sure why not mavis hub and again i think a lot of it will come down to like how do you um incentivize developers and you know just throw money at um you know exclusives and and things like that sort of like how we saw like epic game store get off the ground through its incentive model i'm sure we'll see some version of that some web 3 version of that um for for mavis hub and others as they kind of fight for for market share but that that really is the other big model there yeah and okay yeah could we um dig into that a little bit more and as far as like i my understanding of why steam didn't want to support a crypto based games or one of the reasons is because of the economic incentive right like if they're not getting their their commission platform commission and it's all happening on an exchange or things of that nature then like what what would be the business model behind the the web3 steam steam

kind of business model how do they how do they extract economics from that platform or is that they just want to build it and they'll figure it out i i mean i think part of it i mean there still might be some elements that are similar you can still take you know x cut of certain transactions not everything needs to be a token not everything needs to be an nft so part of it can be the same but yeah when it comes to some of the other like web 3 elements i actually don't know i'm kind of curious to see what they do i don't know lars money if you have any other thoughts on what that business model is i'll be curious to see i'll be curious to see like what they end up using the wrong token for eventually right like would that also help with you know incentivizing developers to build on the platform and therefore like you know these developers also end up getting some stake uh with that token and yeah the more games that are you you know using the katana decks and also the

uh also the uh ronin side chain the more value that accrues to the run uh token and therefore developers can share in that upside so like i yeah i don't know if like you know that that would make sense but um that could be like one potential direction it gets into i think that makes sense to some degree just like they're going to be selling like more their like infrastructure as a package to developers like come on mavis up come on ronin um it's kind of your one-stop shop for your infrastructure needs maybe yeah it keeps talking about vertical integration so i would imagine some apple style stuff was like you got to use all their stuff and you got to use it the way we say um at least if they're if at least if they actually mean vertically integrated in that sense like sky mavis hub is interesting because it's the least web 3 of all the stuff like it's just an installer right it's like team fortress 2 and cs go is why people downloaded steam and then it's like oh you can get all this other stuff and so installs is the real value

there is it's like that's the asset that they've got is that network effect of already being on your hard drive that's why roblox doesn't run in a browser but it doesn't matter because every kid has it installed so it might as well be as if it was just already in your browser you know any roblox link will just it's on browser yeah like like roblox just happens on any kids computer because everyone has it you know and so having that value gives them a lot of negotiating power because right now it's like oh you want to launch a crypto game where you're going to launch it steam you know are you going to launch it on you know mobile you're not going to launch on any app stores oh you got to come to us right and then you know how do they accrue value to that it's like they don't have a tokenomics model hooked up to it that i know of but it's like well you're doing business with them and they will find some way to um make that advantageous for them network effects and platforms are just a classic way to you know get a lot of money and they'll figure some way to do that um and because because it just makes them the power broker for distribution which is just huge like that might be more

valuable than anything else got it okay and maybe another question i can ask is just in terms of so a lot of things are happening from an axi perspective and the sky meters perspective and i i think aaron to your point like they should be incredibly proud of the achievements that they've they've kind of accomplished to date and like in terms of what they've been able to do but i'm i'm wondering if you guys could talk about kind of the impact you think that sky mavis and axe have had in terms of the crypto industry and you know i talked to some venture capitalist investors who are telling me that you know it's literally like half of all their deals now are crypto based but in terms of what you guys think the impact has been on the industry in terms of whether it's from an investment perspective or otherwise and then assuming like axi does kind of fall you know what do you think happens in in terms of again more broader strategic implications sure i i can start this off

um and then i'll hand it over quickly but yeah i mean i think that there even though there are some negatives primarily like there's a lot of people out there just chasing short-term money more so than building something great and sustainable there there are quite a bit of positives i mean sky mavis is pioneering an entirely new business model um that you know has intrigued a lot of people so we're probably going to see quite a bit of game design and economic design innovation across the industry and um i mean also we're just going to see like we're entering a period where we're just going to learn so many lessons from both x you know x infinity and the sky davis team and just some some so many other teams too that um are going to start launching in the next you know few months years and the hype means that investors are willing to fund more teams who are trying to advance the industry in this new direction teams that are making games teams that are building infrastructure teams that are making tools um etc it doesn't mean that it'll all work but there's enough capital

talent and momentum in place i think ensure that some successes do happen whether it's axi um or someone else um i do think just like one other thought that another potential negative though is that um because of axi infinity many people perceive blockchain games as synonymous with play to earn and and sometimes it's something that's just unsustainable uh to begin with which i think drives a lot of the negative and skeptical sentiment you see in a lot of circles when in fact at least how i view it play to earn really is a subsection of what blockchain games can be blockchain games at the highest level really are about enabling player ownership of some type and that can spur different kinds of economies uh sure but it's not necessarily all about income playing to earn and not all of these games even need their own tokens and the importance of nfts to the game

experience can exist on a pretty wide spectrum i think and there and i think really there are just many more paths to success with player ownership of digital assets then immediately comes to mind because of xc infinity just dominating the spotlight right now yeah i mean yeah at least for me you know like i said initially like i think three points in terms of um you know what sky may what impacts crime avis has had on the broader crypto thesis uh but yeah the first one for me uh is yeah sky wave is basically shown like okay you know play-to-one can be a thing i i think that's it's just it's just like the one the first case study that has received significant traction and has gained a lot of eyeballs both from players and you know a future developer community so i think like sky mavis has

has basically made made this concept of play to earn a blockchain gaming or just like the broader concept of player owned economy something that will be here to stay i don't think that's going anywhere now people just need to figure it out uh second point i feel is it is i think scammer is at least like you know through our analysis and what we learned and also you know through a survey that lars also ran uh on his twitter i think it's also shown like why it's important to not just focus on this play to an aspect but you know thinking more about it in this play and earn aspect where you know the the play to earn kind of implies you know finance first and fun second but play and earn more implies fun first and you know finance opt-in instead so you know basically if you don't have a fun game the people are not going to retain and if you if you make a finance first game people are just going to be

like hopping from game to game depending on where they're going to make the maximum revenue per hour you know uh so so yeah so that that's like the second point and yeah probably like similar to what aaron said maybe said slightly differently i think um because of this synonymous nature of you know blockchain games with play to earn and kind of missing the broader point about player owned economies i think skymayors has also contributed to increasing a mental divide between you know game developers like the more traditional ones versus people who would be open-minded to actually explore uh you know implementing player owned economies uh in in in a sustainable way so uh i think that dividers also you know as kamehameha is kind of like you know increase that divide also a little bit but uh with the number of new developers coming in and especially like a lot of now traditional game developer

minds coming into the space i think over time that divide is going to decrease because we will just start to see more and more examples of you know how it can be done or how it should be done in in a in a better way uh and sky mavis has basically it will be it will be a case study to remember forever uh right basically people will just learn from it you know and sky moves itself will learn from themselves so right and so many you think plato earned is here to stay in like lars and aaron maybe like we could speak to that aspect because you know clearly axi infinity is sort of inflecting the wrong way right now in terms of that model but clearly that was one of the the original thesis behind sky mavis developing axi do you guys how do you guys think the play to earn model kind of you know nets out longer term and um and you know hopefully you know and i'm certainly rooting for it for axe and sky mavis to figure it out but even

if they don't figure it out what do you think that that suggests about the plato earned model longer term i think one thing i want to just touch on is that one of my frustrations with the blockchain space is because it's got so many people who come from outside of games is that you know we talk about i mean it is a new space but the precedents for every individual thing we're doing are not new and i know you have to be kind of a super obsessive historical nerd to know the precedent so i don't blame anyone for not noticing some of these things but like um if you dig really hard you can find a precedent for almost anything and one of the things i like to say is microsoft excel is a play to earn app right but the snake is not eating its own tail the value that is feeding the playing and the earning of the playing is is because the playing is generating real value right for someone out there who can then go and do something with you know like a novik report that i did with my plato earn at microsoft excel you know that generated earnings for me um and so

axe infinity in this way is very um it's very accelerationist all of the things that aren't going to work because of the massive fomo and the massive vc investment is going to happen so fast we are figuring it out fast the conversation has already moved from play to earn to play and burn right people are already realizing it's like oh you can't have someone put in five dollars and take out six and so now the conversation's like okay let's build game models or people put in five and maybe can take out one or three you know which basically takes us back to high school where my friend had an everquest account and then played the game and then when it was done with it sold his level 60 um account on ebay you know and he sold it i think for like a thousand dollars i was like wow he's like yeah but we put in the time i put to like level that up that's like less than minimum wage now that was on a great market it was against the tos so like the future could be games where it's like okay it's kind of more like magic the gathering maybe where it's like nobody's really making money playing magic the gathering except like the top pro players but it's like yeah your deck is going to maintain some value and it'll go down by about half when the new

block comes out but you know you can offload your assets and not be left with nothing and magic the gathering is deceptively difficult for them to keep that economy running it's quite an achievement not just anybody can do it so beware but it has been done there's president for it presumably someone could do that in the blockchain space i can keep an open mind for that but like i think you're going to see this accelerationist movement where it's like we start with all these lofty dreams of all this utopia we're going to build a nation and all this and then it there's so much money in it and it accelerates so quickly we don't have to wait five years to figure out what isn't isn't gonna work we're gonna find out in like three to four months you know as we are doing now so like the conversation's already moved to play and earn and i don't know if it's gonna move from that to something else um but that's kind of my perspective i also think um the the really harsh side of the accelerationist stuff is going to come out like i was making predictions of a cryptoculture war and turns out to be not much of a prediction because it was already happening by the time i was saying that you know like um

right now like me even being as this critical can already get me in trouble with some of my friends for not being even more critical right like i have friends in the game industry who will get blocked um for openly admitting to working on an nft game or saying anything nice about them because um just the the pr has been so badly managed and just the outright scam projects have been so at the forefront that it's really created this really black cloud over the whole space and um what's going on with axi is certainly not not helping and um there's also the part of it's like okay we need to like a lot of people will tell me that it's like okay we are um it's new you know hold back your judgment a little like let's not throw the baby with the bathwater and i get that because i'm keeping an open mind that like we could do some interesting things with this tech but at the same time we're playing with fire and i think we need to acknowledge that because

scholars in the philippines now some of them are graduating and they're buying their own assets before they're mostly just taking money away from westerners and they're playing this fun game it's like good for them honestly you know maybe some people in the west will lose money but whatever you know it's like some people in the philippines get you know more than the minimum wage to you know play virtual pokemon in principle that maybe feels weird but it's like who's being harmed but now that people in the philippines are graduating and buying their own axes like now they're investing in that system and if axi collapses and they're left holding the bag like now we've done real damage you know and so um and then people get mad about that right and so all those chickens come home to roost really quickly like we're rolling down the hill so fast and i'm not saying like everything's terrible and everyone's evil or anything like that i'm just saying like we kind of don't know what we're doing and um whatever things good and bad are being caused we're gonna find out soon and um that that's mostly what i'm just trying to say is that it's like it's just i'm just i'm just overwhelmed by how quickly everything is moving and how

much we're discovering and how much like things that were theoretical questions months ago are having like you can send out phds right feast like like ma like um dissertations on on any number of things like right now that would become like foundational work for decades you know it's just all happening so fast and not all of it is just like academically interesting like some of it is gonna like leave some people really spitting mad and so um how's that all gonna shake out i don't know in terms bring it back to axi are they gonna be able to get a soft landing i don't know i i want the best for everybody to be clear um and i think kind of rambling now so i'll just put a period at the end of the sentence um by a quick take yeah my quick take is that play to earn isn't here to stay if it means the vast majority of players are here to take more than they earn and that echoes some of what lars was saying just how it's been defined so far kind of defies the laws of economics but that doesn't mean that um other

types of games other types of blockchain games aren't possible and i do think you know positive some economies are possible um i also think we're probably still just scratching the surface on kind of the new emerging design space and economics space and even like tech space that that um is being unlocked on this i think we will see more games like axey infinity games that prioritize um play to earn first and foremost to kind of build and bootstrap an audience and then take the winnings to reinvest the building sustainability in other ways i think we'll also see the reverse of that company our company is working to build like amazing games build an audience of millions of people and then start to integrate more economic player owned economy tokens etc like into games in different ways i think that's we'll see some of that i also think we could see you know both at once like not really leaning on either side but trying to

find a really balanced approach from the beginning we'll see teams doing that um i think we'll see some teams incorporate nfts but not use tokens parts of some games might be player owned but it won't be designed for income generating opportunities at all and you know these these nfts might not be designed to be worth hundreds thousands of dollars they're just you know kind of they're just there and like 99 of nfts won't be worked that much and maybe that's okay and in a lot of settings you still own it you can still do stuff with it um it's not designed to for you to get rich but it still is cool that you can like do new things um with nfts and i think that lastly i would say i think that loot even though it's super crude at this point and probably got overhyped at the beginning um it does show that starting with just base nft assets and then opening them up to a developer community to build with is potentially another path

with a completely new design space that didn't exist before that's just like barely getting started and it's kind of hard to predict what we'll go with there but i think we're we're still so much at the experimental phase right now we've barely scratched the surface of all of the different paths that this can go actually is just one narrow like one super narrow path of of what is possible to build and that's really exciting and so i think 2022 is going to be a huge year um you know lars was saying that things are moving so fast it does feel like the industry parts of the industry are just like speed running development and learning right now and i think that 2022 is going to be a continuation of that as a lot of the projects that have started getting a lot of funding have been hyped up actually launch and get going um we're gonna learn so much um in 2022 and from there on out it'll just be interesting to see what sticks and what you know what what players flock to for not just making money but for fun and an

entirely new kind of way right and guys i know we're running like one yeah connect oh sorry go for it yeah if i could just make like one quick connection to uh jk statewid but uh the yeah the thing i said is not like play play to earn is here to stay but okay what i more believe is the concept of player owned economies being here to stay and i mean we shouldn't forget like you know those economies also have existed uh to some extent in the past you know um the ownership part of it could be questioned but you know the val like you know value in value out economies have existed in the past just that now there's also a technology that can really enable and unlock the ownership aspect of it um and yeah like aaron said plato earn is one way to do it but it's not the only way and you know he listed out all these other ways that it could actually evolve but yeah my my overall take and thesis is more that the player owned economies is more

here to stay not the play to earn part of it okay but yeah yeah guys i was about to say that you know we i know we're running a little long here so i thought maybe we could just wrap with maybe in terms of so axe has gotten all the visibility everybody knows about axiomfinity and sky mavis but if we were to think about and aaron you you mentioned a bunch of different opportunities in other companies maybe we could end with some of your thoughts in terms of some of the other game projects or companies or things that that the audience should be aware of in terms of who could become the next axie infinity and then any final message that you guys have for our audience and maybe starting with you lars well i am a radical rabble rouser and so for me i am still kind of skeptical about whether we actually need blockchain for most of these things because i feel like it's mostly used frankly for marketing hype i see a lot of game projects that have no real interest in nft but they know they stick that word in they can get 10 million dollars in funding like that at least right this second and so

they do um and so i think the potential of blockchain i'm keeping a narrow mind open for i like that kind of phrase i just used a narrow mind open to um for what this can be used for and i think it requires that you bite a lot of the bullets of the decentralization rhetoric instead of using them as promises it's like play your own economy what does it really mean to give the players ownership well if they if the app is an open source then most of the value of my nft lives in the embodied like control i have over the closed source app itself right so but if i open source the app now you can fork the app and the embodiment of it on the blockchain and use a different client um to embody your app and that kind of fulfills that promise in a certain way you know dows and stuff like i think they're basically a fancy way to like sell shares and get around the fact that you can't sell shares to non-accredited investors like i wonder how you actually enforce control over that given that you know um

like real companies embezzle and do things their shareholders don't want all the time and those can actually be sued so i think like power of the purse might be a way that taos could actually enforce power where it's like we hold the tokens the cryptographic votes determine whether the purse opens up to pay the company to do the thing so the company will do what we want because the power of the purse maybe that could work um but generally i think most blockchain projects don't actually need blockchain but they do need it to get funding and i think i want to see projects that bite all the bullets on the promises instead of being like well decentralized eventually it's like we're decentralized now like let's do this let's do the cypherpunk dream and and make it work and um oh by the way the ip is open it's not just like the code isn't just open source vip is also a public domain like let's make the toohu project you know and actually be community owned and just like go all in and just see what happens can you make money doing that who knows but i would really like to see someone do that

um just because i'm crazy aaron i maybe lean a bit more optimistic um but i guess i would say if you looked at cryptocurrencies five years ago it was pretty obvious that the top 10 lists would greatly change by today and that's what happened and going forward from today it'll still change quite a bit too and that's the way it's going to be with crypto games as well i bet the the top 10 list even like the top one list is going to be entirely different in five years and whoever has a pole position is probably going to change more than once too and probably whoever has the lead at different times they're probably not even live yet or maybe even announced yet so um it's it's hard to say but i do think you know there are a bunch of other interesting games out there that we can at least learn from um and keep our eye on for when they go um public our our next deconstruction is going to be on zed run which is a horse racing game so i'm curious to see how that um turns out um novik we're working with immutable on guild of guardians which is

a mobile rpg that we're pretty we're pretty excited about um and then you see other games out there like a rory is a jrpg that looks kind of interesting obviously star atlas has been getting a ton of a ton of hype we'll see to what degree they can live up to the hype but there will still be something to learn there in terms of what they're building elluvium is an open world rpg game that's getting a decent amount of attention that i'm curious to see how that plays out so i feel like i'm more at like the curious phase of seeing where all these will go before i can say this one so sorry it's sort of a cop-out answer but we're kind of looking all over the place but it's hard to make a call i'm like this is going to be the next one without seeing you know anything really be live too much yet yeah i'd probably call out the same names uh there's also like this one other game i forget the name but it's a crypto unicorn game which i found kind of interesting so i'm also keeping an eye on that one uh

but but yeah uh in terms of like yeah projects to keep an eye on i think yeah i'd probably call out the same names that aaron did uh in terms of just an overall take or actually before i get to that maybe another set of games that i would keep an eye on are the games that are now getting built from the traditional like the more mainstream game developers coming into the space you know i think like that inflow of knowledge from people who have been in the game design trenches for 25 30 years like what that does to crypto game design evolution that'll be just super interesting to see so i'm i'm quite curious about that but yeah in terms of an overall take um yeah you know like i said i'm yeah i'm kind of like i i believe on on this longer term uh topic of you know the player owned economies being here to stay whether it's on the blockchain or it's not on the blockchain i mean

you know i i don't know if uh it could be a philosophical discussion to have uh it's true that you know a lot of the things that the blockchain enables don't really need decentralized databases like centralized databases can do all of those things as long as the people behind the centralized databases decide to enable it uh you don't need like the decentralized but if the market is going to move towards you know wanting blockchain then you know who really cares uh i guess uh so so yeah so it's it's questionable whether it'll happen on the blockchain or not but uh but yeah the concept of player owned economies is something that i'm very very interested in and now it's starting to surface again and if there was like i always ask myself like i used to ask myself you know like what could be free to play as like a model and i don't know i'm slowly like uncovering like a new answer now in in this space

uh i guess when since you also asked like you know what would my message be uh or uh or you have to like people listening i would say um yeah try to like enter enter the space with an open mind because even the three of us are like you know the four of us when we when we did this report five of us we just learned so much just going in with an open mind and you know just like diving in head first completely delaying our judgment on things until we had the data and we just yeah it just like it just like you know expanded our knowledge so much about the space and there's so many new things to learn about what's happening over here so for anyone you you know try to get into this with an open mind and and just explore and you know delay your judgement until uh for as long as you can uh but yeah i mean if it's not for you it's not for you but

why not give it a try at least all right great and on that note for the audience thanks so much for hanging this long if you have not checked out the report uh axi infinity infinite uh infinite i forgot what the title is infinite uh peril or infinite opportunity or something like that opportunity of infinite peril all right i'll have a link to that report i'll have a link to that report as well as links to contact information for lars aaron and manu thank you so much for your time and for the audience catch you next time thanks everybody bye [Music] [Music] you