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.
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To Infinity And Beyond
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Industry News
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How Joseph Lubin became Wall Street’s crypto whisperer - A great long read from the FT on Joseph “Joe” Lubin, a Canadian programmer in his mid-fifties and founder of the Brooklyn-based financial software-maker, ConsenSys. Read more
The Fintech Startups Plaid, JPMorgan, and Stripe Could Buy Next - Fntech startups have targets on their backs. Big banks and payment processing companies, propelled by the jump in online commerce during the pandemic, are snapping up software firms that help consumers pay, trade, and borrow online. Read more
NFT marketplace OpenSea sees $3.4b transaction volume in August - With increased demand and attention driving up the prices of high-profile NFT collections, prices are also on the rise for Ether, Solana and other smart contract blockchains used to create NFTs. Solana hit its highest trading price ever last week, with Ether on the road to a similar record. Read more
El Salvador leads world in adopting bitcoin as official currency - President Nayib Bukele, who has pushed for adopting the cryptocurrency, says it will help Salvadorans save about $400m the government calculates is spent annually on commissions for remittances, while giving access to financial services to the unbanked. Read more
Amazon’s cashierless ‘Just Walk Out’ tech is coming to Whole Foods stores - After launching it in Go stores and then bringing it to larger Freshsupermarkets, Amazon’s cashierless “Just Walk Out” tech will soon arrive in two Whole Foods locations. The service, which lets you pick up goods from shelves and (yep) just walk out, is coming to new stores in Washington DC and Sherman Oaks, California next year, the company announced. Read more
Nasdaq data to aid blockchain-based tokenized stock trading - DeFiChain will offer tokenized stocks corresponding to the underlying price of listed companies such as Apple Inc., Tesla Inc., Amazon.com Inc. and GameStop Corp., the statement said. The tokenized stocks will be collateralized by cryptocurrencies, which means traders won’t have to go through an intermediary such as a broker. Read more
Coinbase gets Wells notice from the SEC on Lend product - Coinbase was warned by the Securities and Exchange Commission against launching a product that would allow consumers to earn interest on their crypto holdings, saying the agency will bring an enforcement action if the company goes ahead with its Lend product. Coinbase expressed surprise at the SEC’s move, in a blog post, adding it plans to delay the launch at least until October. Read more
Uruguay’s fintech tycoons powering payments for Netflix and Amazon - Four alumni from Uruguay’s biggest private university started payments firm dLocal in 2016. Today they are the most successful entrepreneurs in their nation’s history, worth a combined $10b. Read more
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
Mastercard buys crypto intelligence firm CipherTrace - Mastercard continues to strengthen its digital asset capabilities, buying cryptocurrency intelligence outfit CipherTrace. Financial terms were not disclosed. Read more
LA’s SoFi stadium, Square ink 10-year deal for contactless payments - Square, SoFi Stadium and Hollywood Park will be working on “seamless commerce” as the entertainment and sports industries evolve alongside customer demands. Square’s products and services “will power commerce and contactless payments across every checkout and purchase point, spanning hundreds of concession stands, bars, roving hawkers and merchandise retail stores,” per the release. Read more
JPMorgan buys restaurant reviews group behind Zagat guide - The deal comes as America’s largest bank looks to win a greater share of the payments consumers make while dining out. The US bank said it acquired The Infatuation, which in just over a decade has grown from a New York-focused “where to eat” blog into a restaurant and bar review media and event empire, for an undisclosed sum. Read more
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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