Is Axie Infinity a Ponzi Scheme?

To bring this back to Axie Infinity, it’s a decent game and, honestly, better than most blockchain products I’ve played around with, but my overall verdict is that all of this would be better without cryptocurrencies involved at all.

The interesting thing about Axie Infinity is that, just like Ponzi and Madoff, it has a fundamentally unsustainable economic model that depends on inflows from new players to fund payouts to existing players. But here’s the weird, mind-bending part of it: everybody knows! The team knows, their investors know, ordinary players know—and they talk abo... See more

The other argument for Web3, one that I think is a bit generous, but worth considering, is that Web3 solves a central problem with the way we’ve made money online for the last three decades: scale. In an internet determined by advertisers, everything must reach a level of scale that is both impossible to maintain, and possibly unhealthy for society... See more

In reality, Axie is not a nation. It does not have a functioning economy. It’s more like a well-intentioned small-town employer that is struggling to pay its workers, because the primary thing the workers do—play Axie—does not create sufficient economic value.

In short: people keep participating and buying in because they are betting Axie can figure out a way to make it sustainable. It’s kind of like if the original Ponzi was more honest and pitched the scheme as a way to raise funds and build an audience he could leverage into a sustainable business. The way Axie plans on doing this is to try and grow t... See more