Axie Insanity

Except for losing 99% of peak value, it was great

After my boardroom meeting with the crypto kids, their seemingly limitless budget for meals and entertainment conveyed us down the tower and across the courtyard into the champagne gold and black ambience of Joël Robuchon Restaurant.

The contrast could not have been more stark.

While my companions did don jackets and closed toe shoes, they looked out of place among the French finery.

I assume they selected the venue out of a desire to appeal to yours truly, the traditional finance “tradfi” guy who punctuates when texting, which would be funny because this tradfi is no spécialiste when it comes to French cuisine. I could have brought someone who is, but came solo this day and there I sat, the putative grand fromage of Table 7, navigating the order by pretending to consider options when in fact I acquiesced to every recommendation.

Under these circumstances we resumed our crypto confab.

You may recall from last week that my hosts believe digital currency will power the future, while I remain unconvinced. I see no intrinsic value or reason for sustained demand.

They told me in the boardroom that ordinals will play a big part in crypto’s appeal, ordinals being satoshis inscribed with data that make each one unique. This enables ownership to be verified and tracked, but a point of dispute between us was that resulting scarcity would drive the price of bitcoin higher over time. I pointed out that scarcity does not guarantee appreciation, and mentioned the book Number Go Up by Bloomberg investigative reporter Zeke Faux making the same point.

One of my companions paused his fork over green beans and smoked duck liver shavings to tell me that if I only knew more about the Axie Infinity incident, I would glimpse the part that crypto will play in the future. “And it’s a leading role,” he said with self-satisfying authority.

An incredulous chuckle escaped my throat.

I do know about that incident, and had thought the world joined me in viewing it as a cautionary tale, not a validation of crypto’s utility. I prepared my riposte. “The game’s monetary token lost 99% of its peak value. Is that the kind of leading role you see crypto playing?”

From cautionary tale to confidence booster, the Axie incident has been appropriated by crypto boosters. Let’s review what happened, and determine if there’s any way to view it as crypto-positive.