How my mistakes can help you win in Web3 Gaming!

This is a story, my story with Web3 Gaming. Why should you care? Because the word on the crypto streets is that Web3 Gaming is set to be the cherry on top during the next bull run. And I don’t want you to make the same mistakes I did!

How it all started?

It was a cold dark winter night back in the middle of 2021. Argentina just won the Copa America against Brazil in the Maracana and the Buenos Aires vibe was getting better and better. Regardless of the cold weather, people were warm in their hearts. But guess what, I wasn’t.

The crypto market was soaring and my initial initial investment tripled in my first year and still I was feeling empty. I was longing to work on web3, to be an active part of the ecosystem and not just a trader. I’m a builder that seeks for personal connections and that’s not something that one can find on TradingView nor Bybit. My desire to get a web3 job felt almost impossible.

I don’t know if you were in the crypto space in the middle of the last bull run, but if you weren’t let me tell you that it was a circus. One would hear on a daily basis WAGMI, “Have fun staying poor” and “To the moon” being shouted by these super confident Degens. 90% of them are long gone.

One day, a Serbian friend of mine invited me to join an “Exclusive” Telegram crypto group. I love her deeply and couldn’t say no to, because trust me, I would have left the second I was invited to join. They threw on a daily basis the “next big thing” or the next “Ethereum killer” or “the next Doge”, even some said “This is going to be bigger than BITCOIN”.

This is a pretty accurate description of myself entering the Axie ecosystem

When I was about to leave the group, one of these Degens told me about Axie Infinity, a Pokemon like game where you can earn tokens by playing. He didn’t say much but Web3 and Gaming seemed like the perfect blend so I jumped in, without knowing it was going to be one of the biggest rabbit holes I’ve ever been. You don’t know me, but trust me, that’s saying a lot.

My Axie journey

To make a long story short I started with the more straightforward strategy, buying Axie teams and scout for scholars. Being an argentinean it wasn’t that hard since our economy is so bad that earning a couple extra hundred bucks can make your month. Consider that our minimum wage is between 100–200 usd.

Basically the main idea was to buy 3 teams of virgin axies, breed them 4 times and in 5 days have 4 more teams to give to new scholars.

Sounds perfect right? Well it wasn’t. Every new scholar needs to get onboarded, you have to control that they play every day, pay them every 15 days and stay updated with the game’s meta and keep them motivated to play (train them, give support, etc).

Despite all the difficulties, we grew fast in just a few months and without even planning it, I was managing a team of 4 people and having around 40 scholars. 80% of our time and resources were spent on scholars when it wasn’t our main revenue stream. That’s why a change was needed.

Let’s start Breeding!

While we were playing and getting stressed with scholars, we were breeding not only to satisfy our scholar needs but also because it was our main revenue stream. It took us between 2 and 3 months to focus solely on breeding.

We thought and tried plenty of different strategies. From trying to get something really expensive and hard to breed to just breeding the most “commodity” Axie.
What would you do??

Fancy Breeding

Personally I was more drawn to breeding really high quality Axies and becoming an expert on one or two really hard to get Axies. Guess what happened?

In our first batch we were really successful because we bought the parents for 0.3 ETH, bred 5 Axies and sold them for 1 ETH. One that was perfect was sold for 0.54 ETH. Great right?
No, actually this was the worst thing that could happen to us. Because then we started innovating and taking these same risks and lost most of the ETH we spent on “Fancy Breeding” as I used to call it.

Mainly because you can have great odds on getting good breeds, but luck is a big element and one bad batch can hit you really hard. Another element is liquidity. These types of Axies took almost 2 weeks to get sold. That doesn’t seem like a lot, but in this market, it was an eternity. We planned on renewing our whole stock every 5 to 8 days and having to wait for one extra week impacted our cycle. Remember that this is a highly volatile niche and low liquidity is the worst thing that can happen.

Planteros Viejos — Plant Breeders

At the same time we were breeding plants. Why? Because it is the most used Axie. 90% of all teams have a plant and some even have 2 (I used to play with an all plant team, but I’m weird). It was the most liquid Axie by far. The margins weren’t super crazy (compared with the Fancy Breeding) but with 4 breeds and if there weren’t crazy variations in the price of SLP or AXS, then we could do between 10 and 25%. Which is still insane. What can give you 10% every 5 days?

A picture of our Breeds back in the day!

This changed everything. After realizing this, we kept only 5 scholars and all our focus was on breeding plants. We became experts in plants and had like 4 different types that all had plenty of liquidity. Take in consideration that the Axie market had 30M usd of daily volume back in those days.

We had a couple of months making on average 20% every 5 days. We sold 200 NFTs per week and created almost the same amount for the next batch. We were re-investing all the time. We are an “all-in” type of people hehe.

What happened? Where did we fucked up?

The market started crushing. We rode the wave down for a while until it didn’t make sense anymore. All in all it was an amazing experience and even though we could have left earlier, that wasn’t our mistake. Nor it was our “all-in” kind of mentality.

Our mistake was to expect some stability on the market. We were doing plans assuming that the market and prices were going to suffer changes but not with that speed. And at some point we were left with some worthless NFTs that even free are expensive.

But that’s not all folks… I can name a bunch of different mistakes, but let me leave with this Golden Nugget I got. That works for EVERY web3 game.

Advice for the future.

This year has just started and I do believe that Web3 Gaming is going to be huge this year and during the entire next Bull Run. So what’s the best way to be involved in this sector?

Whether it is Axie Infinity or a Ronin network game, Illuvium, any Gala games, any Enjin game, and so on, you SHOULDN’T PLAY THE GAME.

You should only play the game if you LIKE it. If you want to invest and take the most out of it, you shouldn’t be selling their NFTs nor nothing. All you have to do is buy the GOVERNANCE token (NOT the UTILITY token), sit back and enjoy. Let’s dive a little deeper.

Most games have 3 different tokens. The utility & governance token (fungible) and the NFTs. Let’s take Axie as an example:

When you won a match, you won SLP (utility token) that you can use in-game to breed. That was its utility.

AXS on the other hand, is a governance token, where every holder can vote and be part of the game changes. Governance tokens are usually tied up to the success or failure of the project. Utility tokens as well, but not as much as the governance one and usually have worse tokenomics.

Then we have the NFTs. These can be Axies, lands (with its different tiers), items and legendary Axies (only change in aesthetics). Most of the NFT volume was driven by Axies and there are plenty of strategies for each “category” of NFTs. I used to focus on breeding commodity Axies, but that’s still not the best because of what I said before. It works only on a stable market or on a bull market.

If I would have bought AXS at the beginning and double down each week, I would be in a much better place. Not only that, I could have more room to play with. Because I couldn’t sell a half of an Axie, I had to sell it all or nothing. With a fungible token you can do that plus stake it, farm it and never worry about liquidity. You can sell it whenever you want 24/7.

Final Thoughts

If you are thinking of getting exposed to Web3 Gaming, then look no further than to the Governance token, NOT utility one.

Play and get involved into the ecosystem ONLY if you want to and you find it funny. If you want to invest, then the best way to get exposed is to buy the governance token and enjoy. Of course there are a lot of arguments to be made to this statement. Even I was, at some point, getting better results breeding than what AXS had increased. But in the long term, you have to be a genius and make close to 0 mistakes to have a better result than the increase of the governance token in the long run.