The Interview-Crypto: The Great Minds Leading the Play-to-Earn Movement

In this podcast, Axie Infinity Co-founder, Jiho Zirlin is joined by YGG's Gabby Dizon, where they talk about Axie’s ever-growing community and how they are embracing decentralization in gaming.

The Interview-Crypto features interviews with industry experts from major crypto firms. The entire series is available on Real Vision, a financial education channel that releases daily episodes in the form of in-depth analyses, documentaries, and interviews.

This episode of the Interview-Crypto is hosted by Yan Liberman and Anil Lulla of Delphi Digital, a research firm focused exclusively on crypto and digital assets. Anil, Delphi’s COO, is focused on designing and implementing long-term strategies and contributing to the firm’s ongoing research, while co-founder Yan manages the quantitative side at the firm, developing predictive on-chain metrics, dissecting various types of Automated Market Makers, building models for research reports, and designing token economies for projects on the consulting front.

Anil and Yan interview Gabby Dizon, co-founder of Yield Guild Games (YGG), and Jeffrey “Jiho” Zirlin, co-founder of Axie Infinity. 

Together, they discuss the importance of having strong community support in order for projects to survive in the DeFi (decentralized finance) space. Gabby also talks about the time he met with Jiho and the Delphi team to pitch the idea of a decentralized gaming guild (which eventually became YGG), and Yan explains the role of the AXS token in the Axie ecosystem - as not just as a utility token - but also as a governance mechanism for a truly decentralized game economy.

The following is an excerpt from the discussion. Listen to the full podcast here.  

The Play-To-Earn Revolution in Gaming - Real Vision

Anil (8:33): So Jeffrey, obviously I think Axie Infinity is one of the very obvious Metaverse plays before the “Metaverse” was a buzzword. And what you have constantly said is that you guys have been working on your first product which is still in alpha. So what do you mean when you say that? What is the first product in, and how does that work?

Jiho (8:56): We see ourselves building an entire universe. We see Axie Infinity not just as a game but as a fully functional digital economy that is starting to take on these characteristics of a nation. We have this really engaged community with deep social and economic ties to each other. We share pastimes, culture, so we see this as much more than a game and we think that this could be very impactful for the way online communities work together, play together, moving forward and we are still quite early in development. 

We have been working on Axie since 2018, and that is not a lot of time considering we have built a wallet, a sidechain, gaming features, because players obviously want new and more content. We are also working on a DEX (decentralized exchange) because 25% of our players are unbanked right now and we have a really amazing opportunity to provide some basic financial services to our many users who have not been able to have a stable source of income, like a debit or credit card. 

We are aiming to leverage the network effect. So one of the problems of blockchain and crypto is that there are no widely adopted crypto apps, and one of our goals is to become the first blockchain consumer app that hits a certain scale where we can leverage that position to move into a bunch of verticals: financial services, e-commerce. We can become like the Disney of crypto by gobbling up IP. 

I think because we have hit this scale and have reached this level of network effect, I think it opens up a lot of opportunities if we keep our feet on the gas pedal.

Anil (11:24): An important thing to dive into is just how strong that community is. In the crypto world, “community” is a word that is thrown around for every protocol and token and one thing the Delphi team and I realized just being in your Discord when it was a fraction of what it is today, with its 800,000 players, is how strong the community is. And in DeFi or other sectors of crypto, liquidity is commodity, but so is community to some degree, where you see very strong DeFi protocols almost lose interest if their number isn’t going up, or they aren’t innovating fast enough, whereas the Axie community, you guys were building through the bear, but getting stronger by the day. So what is your retention rate for the Axie Infinity community?

Jiho (12:17): So it's quite rare for important Axie community members to leave the ecosystem, I could count them on one hand, the number of super important, influential people in the community that have left, so in terms of our retention rate 9/10 players that own Axies on the first day are still playing a month later. Obviously it's not just the game that people play for fun but there are also economic aspects to it, it is a side-gig and for many people a main source of income. We keep people within the ecosystem and even in the early days when Axie was small we knew that the growth would compound because we weren’t bleeding people, so it was just about being relentless and rolling that snowball.

Anil (13:30): Not only have you kept community members but also inspired people to start their own thing, which is why Gabby’s story is so amazing too. So Gabby, when did Yield Guild start, how did that come about? How did you know that this was something that you would dedicate your life to?

Gabby (13:48): So even as far as two to three years ago, I had been thinking about the idea of a blockchain-gaming guild, which is like the evolution of what a World of Warcraft or RuneScape guild, but the concept of these guilds owning their own assets was really compelling to me. I honestly don’t think it would have been possible until Axie’s land gameplay came out, and I just kept it in the back of my head. 

During this time when Axie’s scholarships came out and the concept of lending out pure Axies to someone else who would play with them and do a revenue share was when I realized that the concept was viable. That is also when I reached out to Jeffrey last year and said, “Hey, I wanted to do a game farming guild and start with Axie Infinity” and I targeted the Delphi team specifically because you guys designed the AXS token and I just knew that the team would get it, and I was right. So that is how Yield Guild got started.

Anil (14:53): You mentioned the AXS token, so I would love for Jeffrey and Yan to go into this. Jeffrey where does the AXS token come into play and Yan what does this mean for crypto gaming in general and where does the AXS sit there?

Jiho (15:09): So the AXS token protocol aligns the incentives between everyone in the Axie ecosystem, so developers, players, content creators. You can look at it as a slice of the Axie universe, so we have basically cut up the Axie universe into 370 million little shards and we are giving them out to our players and are allowing them to earn these tokens. We want Axie to be the first game to be owned and operated by the community that plays it. So this is a really long-term goal, albeit a gradual process of getting there. The idea is that Sky Mavis, we are the inventors and creators of Axie Infinity, but long term we want to be only one of many significant entities that are building on top of this universe and in order to do that we have to decentralize the ownership. It can't be something that is owned only by us.

Yan (16:16): As Jeffrey mentioned, it is a really important coordination tool, so the idea is that a foreign quarter percent of all marketplace spent goes to a treasury and all of the breeding fees go to a treasury, so there will be other utility or things to spend on in the future as the game evolves all of that in-game spend will pool in a treasury which is owned by the token holders. So it can be distributed to them and used for incentives, it will likely be deployed in ways that we haven’t thought of yet, because of all the levels that are built on top of the game. This token grants you access to the cash flow of the platform and also enables you to have governance rights that will evolve in the future as well. 

In terms of the distribution of the token, one of the things that will be enabled soon will be a way to enhance play-to-earn, so the idea is that you want your community to own the game and this type of idea is certainly new to the gaming space, and it is definitely here to stay, in terms of creating stickiness within the players which we are seeing happen here, building a community and giving people not only the enjoyment of being able to play a game, but now they get to benefit of the financial upside and growth of the game. If you think about the previous game models where people come to play for fun, but here you are creating entire economies and ecosystems where you do have people playing for fun, but also, people that want to play-to-earn, and those are the people that want to speculate on the financial upsides of these NFTs and the middle of all of that is the AXS token that creates mass alignment across everyone. So all the early players, and even the people that come into the ecosystem now, aren’t just giving away their time to play a game, they also have ways of benefiting the game and creating impact which adds a lot of engagement in the community where they can think of creative things, grow the ecosystem, or go through governance and make changes. 

We think that this is a really novel way for games to be communities, rather than a game maker and a set of players sitting on opposite sides of the table, where you always see that dichotomy in the traditional gaming world.

You can check out the full podcast on Real Vision

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