Valuing DAOs: What is Axie Infinity Really Worth?

There’s one catch here, and that’s the dilution of the token. If someone were to buy 100% of AXS tokens today, they would only actually own ~25% of tokens in five years. That’s because Axie Infinity is printing more tokens at a really aggressive rate. Therefore today’s token holders wouldn’t actually get $19 billion - it’d be more like $5 billion.

However, an increasing number of crypto assets are fundamental, not speculative, in nature. Blockchain technology is being used to build real businesses - businesses that generate cash flow and can be valued on the basis of future cash flow. The rest of this post is dedicated to doing just that: valuing the Axie Infinity Universe, a blockchain-base... See more

Anytime there is a transaction in Axie Infinity, a percentage of the transaction goes to the Axie community treasury. This is a common revenue model:. Today Axie takes 4.5% of every transaction.  Right now, “transactions” mean buying, selling, and creating Axie creatures, but almost anything is possible down the line - from selling virtual plo... See more

Anybody who wants to play Axie Infinity has to use real money to buy SLP cryptocurrency; that’s the price of admission.

The Axie Universe has a self-contained economy. Players can buy and sell digital goods. For example, players can buy and sell Axie (the Pokemon-esque creatures). This economy is built around two cryptocurrencies: AXS and SLP.

Here’s a different valuation method to consider. Remove AXS tokens from the equation. If Axie Infinity were a regular video game, how much profit, in USD, would the platform generate? That forecast can be used to approximate the intrinsic value of the company. Since AXS tokens have economic ownership of Axie Infinity’s cash flow, the tokens can be ... See more

AXS is the Axie Infinity governance token. Governance tokens are to DAOs what equity is to corporations. Token holders vote on how to run the business and can elect to distribute profit from the business to themselves.

When Axie Infinity launched, AXS tokens were owned by the creators and developers behind the game & private backers. The platform then issued additional AXS tokens that were sold to the public. Today, tokens are bought and sold similar to equity shares. As discussed later, new AXS tokens continue to be issued to key stakeholders (developers, pl... See more

The most optimistic scenario for Axie Infinity, the absolute ceiling, seems to be $3.7 billion. Right now, there are 60 million AXS tokens trading for $77 a piece. At that price, buying every token would cost about $4.5 billion. $4.5 billion sale price for a business worth, in the best possible scenario, $3.7 billion. Even if Axie Infinity becomes ... See more