DeFi has seen more than $700 billion worth of spot trading volumes in 2021 and is on pace to settle trillions of dollars of dollar-denominated value flow across public blockchains this year. It also has become the backbone of new global virtual economies, where users around the world can leverage public infrastructure to facilitate new forms of digital commerce.
A flag-bearer for this movement is the most popular NFT game to date, Axie Infinity, where users can purchase NFTs of digital Pokemon-like creatures (called Axies) and battle against other players. For winning a battle, players earn an in-game currency (SLP) that can be traded across various decentralized exchanges.
Axie Infinity has pioneered the idea of play-to-earn gaming economics to fuel eye-watering user traction that now counts more than a million daily active users; up from 500 DAUs just a year ago. It also has created a dynamic self-contained digital economy where users can recycle in-game winnings to breed new Axies or engage with an in-game marketplace that includes digital real estate NFTs.
The success of the play-to-earn flywheel has been big business: Axie Infinity has nearly $2 billion in total NFT game sales, almost 50% higher than the second-highest NFT asset CryptoPunks. But more importantly, it’s offering a life raft for service and gig economy workers in frontier markets during the Covid pandemic. According to The Block, more than half of Axie Infinity’s daily active users on the platform are from the Philippines, where the average daily salary is about $20. Many players in the region have taken up the game as a full-time job or a way to supplement income.
For those of us here that have been anxiously waiting for evidence of product-market fit within crypto that extends beyond trading and speculation, the emergence of a thriving virtual economy centered around a crypto-based game is a welcome development for the industry. It is also an early indicator of the types of new commerce that blockchain and crypto can help to unlock in the coming years.
To Infinity And Beyond
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Cryptocurrencies: developing countries provide fertile ground - In advanced economies, cryptocurrencies are viewed by many in the financial world with suspicion — the domain of zealous “crypto bros” and a speculative and highly volatile fad that can only end badly. But in the developing world, there are signs that crypto is quietly building deeper roots. Especially in countries which have a history of financial instability or where the barriers to accessing traditional financial products such as bank accounts are high, cryptocurrency use is fast becoming a fact of daily life. Read more
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Peer-to-peer trades are sustaining Nigeria’s crypto activity despite a ban - Seven months after Nigerian banks were barred from enabling cryptocurrency transactions, bitcoin remains an actively traded asset in the country, partly due to the presence of platforms that enable peer-to-peer transfers. Read more
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