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At least 400 million gamers worldwide currently spend over $50 billion annually on trading in-game assets. These virtual items and “skins” – cosmetic wrappers that modify the appearance of a character or object but have no functional utility – are reshaping the economics of the online video game industry.
Few people outside of the video gaming world are aware of the magnitude and volume of this phenomenon, yet, much like cryptocurrency, millions of people assign real-world value to items that only exist in the virtual world. Because some virtual items, particularly skins, are rare, collectors assign extraordinary values to them.
Many people right now are scratching their head as the price of Bitcoin eclipses $5,000. But compare that to the highest price ever paid for another purely digital in-game object – a staggering $6 million.
Although there are only 4 million active cryptocurrency owners in the world, they have a lot in common with in-game item traders. They both deal in digital property of substantial value, face counter-party risks trading with other people across the world and share common concerns about the security of their online wallets and transactions. They also both endure the difficulties of trading digital items in a fiat-centric world. Uniting these two groups into a single ecosystem could usher in significant positive change for both industries.
The centralization handicap
Even though in-game item trading ultimately happens between individual video gamers, many transactions are cleared through a multitude of regional centralized marketplaces. These consignment marketplaces exist as digital middlemen to eliminate the counter-party risks of trading with people who do not know each other.
The marketplaces are mostly regional in order to cater to an audience within a specific geography that shares a common language and common currency preferences. Cross-border trading is often limited, due to prohibitively high currency conversion costs, especially when dealing with the small dollar valued transactions.
Significant responsibilities lie on the shoulders of the virtual item marketplace operators: most importantly, to provide access to adequate item selection and strong liquidity. Balancing supply and demand is tricky. Success only becomes possible when a critical number of buyers and sellers are active on the platform. In addition to item liquidity, marketplacgames must provide security, settlement and payment processing
Centralized consignment marketplaces have their limitations. Simply introducing cryptocurrency as a payment option, to combat the difficulty of cross-border transactions, is helpful but insufficient.
A disruptive force from within
OPSkins, the world’s leading marketplace for online video game assets, has dedicated significant time and resources to overcome the obstacles within the industry. Notably, OPSkins has focused extensively on secure item settlement, along with accessibility and transaction speed. The masterminds behind this successful operation are now launching a new project called the Worldwide Asset eXchange (WAX) — a platform to disrupt the very industry in which OPSkins operates.
WAX is a decentralized platform that enables anyone to operate a fully functioning virtual marketplace, with zero investment in security, infrastructure, or settlement. With the inclusion of WAX’s simple marketplace widget, video gamers will have access to a worldwide market, with blockchain trust and transaction verification.
“The current virtual item trading industry is fragmented across hundreds of mostly regional marketplaces, creating significant supply and demand imbalances,” said William Quigley, CEO of OPSkins. “WAX solves this issue by creating a global virtual item platform accessible to anyone, providing a complete catalog of all assets available for sale in real time. Such a repository, when coupled with a reliable and low cost settlement network, vastly improves price discovery, market liquidity and growth.”
The WAX widget can be integrated into any website so buyers and sellers won’t have to navigate away to a centralized marketplace. This opens up an opportunity for a wide array of websites to reap the benefits of an already exciting market. It’s very much like how affiliate marketing opportunities paved the way for “power sellers” on Amazon and eBay.
WAX Tokens will play a twofold function: they will store value for the item they represent in the trading process, and they will also be the mechanism for the smart contract which moves the item from seller to buyer.
Impeccable track record
WAX is the next step in a series of successful ventures for its founding team. The team at OPSkins invented the concept of real money virtual item trading for video game assets and built the gold standard under which this whole industry operates. OPSkins currently facilitates over 100 million purchases annually from millions of customers in 95 countries.
The leadership team has an impressive track record. WAX CEO, William Quigley, is a world-renowned venture capitalist, famous for being the first institutional investor in PayPal. He also co-founded the widely used Tether coin and is CEO of OPSkins. WAX COO, Jonathan Yantis, invented the concept of real money virtual item trading and created the first and biggest virtual item marketplace, IGE. WAX Lead Designer, John Brechisci Jr., is the founder and CTO of OPSkins. He brings a deep understanding of the skin trading industry to WAX. WAX President, Malcolm CasSelle, is CIO at OPSkins and was formerly President and CTO at tronc/Tribune Publishing. He built four digital media technology companies from startup to successful exit, in IPO or trade sales to public companies.
The WAX Advisory Board is formed of seasoned industry veterans with a knack for successful ventures. Dave Anthony, the creator and developer behind Call of Duty, will bring his creative and logistical expertise to WAX. Anthony Di Iorio, co-founder of Ethereum, joins WAX with a mastery of blockchain technology. Brian Fargo, founder of Interplay Entertainment and inXile Entertainment, will add a deep understanding of game development and distribution.
WAX Token Pre-Sale partners include Pantera Capital, Galaxy Digital Asset Fund, HyperChain Capital, and Bo Shen, founding partner of Fenbushi Capital and Blockassets.
Value for all
Based on blockchain technologies, the WAX Token will enable 1.8 billion gamers worldwide to quickly and easily harness the power of a dedicated virtual item decentralized exchange. The WAX platform will give virtual item collectors access to a global pool of available inventory. WAX smart contracts will provide safe item settlement.
By decentralizing the virtual item market, WAX will expand the the already sizeable $50 billion video game virtual item trading market, and in doing so, will bring substantial benefits to both the global video gamer community and the blockchain-based economy as a whole.
The WAX Token will be released to the public during a Token Generation Event which will open on November 1st at 9 AM EDT. See the WAX website for more information.