In developed countries, gaming NFTs and the alternative revenue stream they can provide may not be taken seriously, but in developing countries, these have revolutionised how people make a living and provide for their families.
Analysing the impact the Play 2 Earn ‘phenomenon’ has had, is Michael Penner, CEO at Lynx Global Digital Finance Corporation. Penner has over twenty years of international experience as a C-level executive, building digital infrastructure businesses and strategic partnerships across Asia, the Middle East, and Africa. He has significant hands-on expertise in building strategic partnerships and working relationships that have allowed for the successful launch and operation of digital communications, data analytics, and financial and payment technology networks in several countries around the world. Penner is a licensed Chartered Financial Analyst. He told The Fintech Times:
Trend or The Beginning of a Fundamental Change
On February 21st many industry news sites announced news that Axie Infinity “became the first non-fungible token (NFT) series to cross the $4billion mark in historic sales “ This is an extraordinary statement in so many ways.
- A single blockchain-based game has generated $4billion in sales in an extremely short time. Most businesses take years if not decades to reach this number.
- The fact that Axie Infinity was created by the Vietnamese company Sky Mavis makes -Southeast Asia the epicentre of this new economy.
- 40 per cent of the 2.78 million average monthly players are from the Philippines.
- This is a completely new asset, a new economy that is being driven out of Southeast Asia and spreading around the world like wildfire.
Every time we see one of these unplanned or unexpected technology adoptions, we liberally throw around the terms ‘paradigm shift’ or ‘black swan’ implying that this phenomenon could not be foreseen. It is a change in our reality whether a dramatic shift of the norm or an undiscovered norm that could only come into existence through an instant realization of a new reality.
Neither of these is really the case of the leadership and excellence of the people of Southeast Asia, to build and adopt this new digital asset infrastructure that in one NFT series has demonstrated the shift of blockchain, digital assets, and cryptocurrencies from an alternative financial structure to a ‘real’ digital asset that can be owned, transferred, improved, and even re-financed. This is a complete ecosystem where active labour and skill generate an increase in asset value that can successfully monetise that labour into a living wage.
Emerging Markets: The Fastest Adopters of Innovative Technologies
Despite the apparent surprise that this new market and technology adoption came out of the region this really should not be a surprise. After all, the region and emerging markets like it have been driving the adoption of apps like WhatsApp since they were first introduced. Countries from the Philippines to India to Kenya to Brazil, have been the fastest adopters of innovative technologies that are able to deliver a service to the users with lower to no disposable income that can provide innovative new ways of delivering a necessary service.
If we jump back 10 to 12 years, we can say that the world has transformed drastically, when it comes to Internet access, digitisation, and communications. At that time Internet access was still very much only a developed world service. With the introduction of smartphones and 4G networks in the developed worlds, the digital divide was becoming greater as telecommunications services providers in developing and emerging countries were still rolling out 3G services and most users were operating a feature phone or basic smartphone. The haves and have-not economies were clearly delineated by who had access to high bandwidth Internet and who did not.
WhatsApp, Viber and WeChat, and Facebook offered the capability of communicating around the world, setting up storefronts, businesses at drastically lower costs (often no cost) than the mobile operators. This was still considered to be a free service, not a serious affair. But the people of Southeast Asia and other emerging markets grabbed the opportunity and used it for the value it provided them. It exposed them to the ability to communicate, save costs, do business and enabled them to be a part of a new digital economy. Within a span of a few years, these markets emerged from low internet penetration to equaling that of the developed market with some of the greatest app innovations happening in these markets. In 2014 Facebook bought WhatsApp for $19billion has grown to 450 million subscribers from 100 million in 2012. Since then, mobile super apps like WeChat, WhatsApp, etc. have created new economic ecosystems operating outside of the traditional infrastructure.
Heading to a Play-2-Earn Economy
What does this have to do with the explosive development and adoption of Play 2 Earn in Southeast Asia? Quite a bit. What we are seeing is the same innovation, the similar wholesale adoption of a new platform that operates outside of the normal infrastructure and system of doing business as we have been for the past 12 years.
The covid-19 pandemic restrictions and lockdowns were very severe in Southeast Asia as governments were afraid that the local health infrastructure could never support any type of widespread outbreak. Its effect was immediate and dramatic. People were confined to their homes with curfews and other restrictions. Millions lost their sources of income and their ability to communicate with each other and generate any kind of income to pay for the essentials.
Owing to these circumstances, Play-2-Earn gaming adoption broke out wide-scale across the Philippines and surrounding countries. By playing Axie Infinity and other P2E games, Filipinos were able to own an asset and create value. This value had a truly clear economic value in the digital world. The increased uptake of players continued to increase the value of these assets. As the value of the gaming assets grew, making it unaffordable for many, a new economy was created – scholars. By the nature of the underlying smart contract of the NFT it is now possible to own an asset and hire a scholar to play the game on your behalf under a revenue share, or another type of payment arrangement. There is a lot of discussion about NFTs today.
Is a Bored Ape worth that much? Is this nothing more than another Beanie Baby, or another collectible fad? Is it just another bubble waiting to happen? In developed countries, these are exceptionally good and valid questions. But in a country like the Philippines, we are seeing something very different. Similar to the adoption of WhatsApp and similar App technologies 10 years ago, the people of Southeast Asia have adopted and innovated a new technology that has enabled them to bypass the economic limitations of their current situation and create a new asset, a new economy, and a new type of worker; the virtual manufacturer. I think that if we really want to see what the future holds for blockchain, NFT’s and cryptocurrencies, we need to look to the people who have adopted these technologies and created an utterly new economy that exists outside of the systems that we have in the developed economy.
Play 2 Earn gaming could be a new beginning of a new type of digital system that pulls the technologies of Industry 4.0 into a single integrated platform that anyone in the world can participate in. Going by the current trends, it won’t be incorrect to say that the potential for the Play-to-Earn economy is huge in the emerging markets and can open new doors of financial inclusion in the region.
About Lynx Digital Global Finance:
Lynx Global Digital Finance Corporation (OTC: CNONF) is accelerating the digitized economy for the underbanked and underserved emerging markets in Southeast Asia. Through strategic partnerships and acquisitions, Lynx is developing a digital payment platform that connects mission-critical financial services in a single technology layer enabling any enterprise to meet their local, regional, or international business needs.
