The Giant of Southeast Asia, Indonesia Web3 Market Report

Xangle Research외 3명
Oct 10, 2023

The Giant of Aoutheast Asia, Indonesia Web3 Market Report


Research Methodology

This report was created by a team from Tiger Research, Xangle, and Avarik Saga, and Animoca Brands who spent a week in Indonesia, interviewing a number of industry experts and leaders about the Indonesian Web3 market. The main objective of this report was to gain a broader understanding of the unique and complex dynamics of the Indonesian market. As with any market, the opinions gathered from the interviews were at times divergent, but these different perspectives enriched the data and helped us to develop a more comprehensive understanding of the Indonesian Web3 market.


Executive Summary

Indonesia's Web3 market holds massive potential. It boasts the world's fourth-largest population and a thriving market. The majority of its residents are young, with a median age of 30. The government also actively supports Web3 with favorable policies. Currently, more Indonesians have cryptocurrency accounts than stock market accounts. Given this momentum, we believe Indonesia's growth will fuel the Web3 sector and local projects in the future.

However, succeeding in Indonesia requires a deep understanding of its unique landscape. The market is heavily influenced by key political and economic figures. Trading platforms will operate under government oversight. The country is home to a rich mix of religions and cultures. Businesses also face stiff competition from established Web2 companies with regards to talent acquisition. Additionally, there's a noticeable gap in Web3 knowledge when compared to North American and East Asian countries.

This giant is awakening, and its potential remains robust. Our report provides a comprehensive overview of Indonesia's Web3 market, aiming to offer readers clear insights into this promising landscape.

Background: Indonesia, made up of numerous islands, is a nation where diverse cultures and religions harmoniously coexist. Although the country has historically grappled with political instability, there was significant democratization and economic growth after 2000, establishing Indonesia as one of Southeast Asia's leading economic powers. Moreover, being the fourth most populous country in the world, a substantial number of Indonesians follow Islam. Yet, the Sharia regulations, which guide Islamic financial practices, does not seem to be a major roadblock for the Web3 ecosystem.

Regulation: After the East Asian financial crisis, Indonesia adopted strict monetary policies to protect its currency value. The nation continues to enforce stringent restrictions on using cryptocurrencies as a means of payment. Yet, at a higher level, interest in blockchain and cryptocurrency technologies is increasing. The authority of the existing regulatory body, BAPPEBTI, has shifted to OJK, leading to initiatives such as the formation of a dedicated committee for the blockchain sector within OJK. Furthermore, by July 2023, there is an expectation for the launch of a state-owned cryptocurrency exchange system, mirroring the current securities exchange model. This indicates that commercial cryptocurrency exchanges will likely be restricted to legal securities distribution and brokerage roles, akin to traditional securities firms, while the state-owned cryptocurrency exchange will oversee order book management and related tasks.

Infrastructure: Indonesia's Web3 infrastructure ecosystem is in its early stages, and it's challenging to find significant local blockchain infrastructure developments. This is attributed to 1) the lack of a developer community, 2) startups' limited global experience, and 3) the immaturity of the Web3 ecosystem. As a result, like in other countries, blockchains like BNB and Ethereum and wallets like Metamask are primarily in use.

Exchanges: In Indonesia, the CEX (Centralized Exchange) market outpaces other sectors in activity. At present, over 30 exchanges are in operation, and cryptocurrency users make up about 4% of the total population (approximately 10 million)—a figure akin to the number of registered investors on the IDX (Indonesian Securities Exchange). Yet, factors such as 1) high taxes at 0.21%, 2) a lack of product diversity, and 3) concerns over anonymity have led most users to favor global exchanges. These challenges hinder the growth of local commercial exchanges.

Game: Indonesia's Web3 gaming market is in its nascent stage. Still, with a high smartphone penetration rate (70% as of 2021) and residents spending an average of 8.54 hours weekly on games (ranking 4th globally), it showcases significant growth potential. Founders of major gaming companies like Agate and Avarik Saga are expanding their investments in Web3 games. Furthermore, the Indonesian government is offering various incentives to promote the gaming industry and demonstrating a positive stance towards the blockchain sector, raising expectations for the future growth of the Web3 gaming market.

NFT: The Indonesian NFT market is currently at an all-time low due to recent market downturns. Despite high expectations from many investors, transactions are not materializing, and local marketplaces are not garnering significant attention.

Developer Ecosystem: Among Southeast Asian nations, Indonesia boasts a comparatively smaller development ecosystem. As a result, even established startups frequently outsource their development tasks to countries like India and Vietnam. In response, both the Indonesian government and private enterprises have shifted their focus towards developer education and training. However, there remains a noticeable gap in the number of developers keen on the blockchain industry. The majority of Indonesian developers gravitate towards established Web 2 startups instead of early-stage Web3 ventures, drawn by superior salaries, job stability, and the allure of working for recognized brands.


Background Knowledge

In order to understand the Indonesian Web3 market, one must first understand Indonesia's complex history and unique cultural background. Therefore, the following is an explanation of Indonesia's history and cultural characteristics provided for the purpose of assisting readers in gaining a deeper understanding of the Indonesian Web3 market.

Brief History of Indonesia

In addition to its geography, which consists of more than 17,000 islands stretching 5,000 kilometers from east to west, Indonesia's culture has been shaped by the influence of numerous external powers over time. In particular, successive Dutch and Japanese occupations have had a profound impact on Indonesian society, culture, and politics. Although Indonesia gained full independence from Japan in 1945, the country has experienced great political instability, with military and democratic governments alternating in power. Today, with a democratic government in place since 2000 and a continued commitment to economic development, Indonesia stands strong as one of Asia's leading economies. Nevertheless, the complex relationship between economics and politics continues to be a major challenge.

Dutch occupation: In the 17th century, the Dutch East India Company (VOC) began to occupy various parts of Indonesia, which would remain under Dutch colonial control for over 300 years. During this time, the Dutch capitalized on Indonesia's abundant resources and consolidated their control.

Japanese occupation and independence: In 1942, Japan occupied Indonesia during World War II. After a brief period of Japanese rule, Indonesia declared independence in 1945. However, the Netherlands did not recognize Indonesia's independence and the Indonesian War of Independence began, which lasted until the Netherlands officially recognized Indonesia's independence in 1949.

Post-independence: Indonesia has experienced several political upheavals since declaring independence in 1945. In the early years of independence, the country struggled to consolidate and stabilize, alternating between democratic and military governments. This political instability negatively impacted the economy and foreign investment. With the end of the military government in 1998, the democratization movement intensified, and efforts for democratic reform and economic growth continue in the 21st century.

Current: President Joko "Jokowi" Widodo, who served in 2014 and 2019, is considered to be the first democratic president in Indonesia's history to achieve a straight-party transition, with no military service and no direct ties to the Sukarno and Suharto regimes. With an approval rating of over 60%, Joko Widodo has overseen significant economic growth. He has since rejected offers to run for a third term, and elections will be held on February 14, 2024.


Macroeconomic of Indonesia

Indonesia's GDP is USD 1.32 trillion, which ranks first among Southeast Asian countries. This figure is nearly 2.7 times higher than Thailand, which is projected to be the second largest country in terms of GDP by 2022. The average GDP growth rate over the past decade is also high, with Indonesia showing the strongest growth among Southeast Asian countries at 4.4%, Singapore at 3.4%, and Thailand at 2.4%. This shows the greater potential and expansion of Indonesia compared to other countries, and we expect this growth to be a driving force for the Web3 industry in the future.

Source: World Bank, Xangle

Source: World Bank, Xangle


Indonesia is the world's fourth most populous country. It is made up of more than 17,000 islands, each with its own unique culture, traditions, and language. The country is also home to a wide variety of religions, with Islam accounting for the vast majority (87%)[1] of the population, and many sources suggest that the Sharia law that binds the Muslim world's communities will have a significant impact on the economy. According to a 2020 government report, the Indonesian government is building a roadmap to increase Shariah-compliant "Islamic finance" to 20% of total finance. However, during the course of our research, we have yet to see a significant impact of Shariah norms on the development of Web3 ecosystems and projects.

Impact of Sharia law: Sharia law has some religious applications, but it does not have a significant impact on the Web3 market. Interestingly, some younger generations are reinterpreting Islamic Sharia law. For example, while Shariah law restricts excessive profits, it also emphasizes the obligation to support one's family, so it is not illegal to monetize cryptocurrencies if it helps support the family.

Bali is a popular vacation destination in Indonesia, and many developers come there to work. In particular, it was publicly known that Russian and Ukrainian Web3 developers were living and working from home on Bali to escape the war. It was reported that Russians living on Bali were unable to conduct financial transactions using Russian ruble due to the financial sanctions by the UN, so they were secretly using cryptocurrency for day-to-day spending. In addition to this, there is also strong support to make Bali the center of the Web3 ecosystem, so major Web3-related events (e.g Coinfest) are held in Bali instead of Indonesia's capital city of Jakarta.

Regulation History

Indonesia's central bank does not recognize cryptocurrencies as a form of payment for fear of currency devaluation, which is likely rooted in the country's experience with inflation following the 1997 East Asian currency crisis. Indonesia's central bank is fiercely protective of the value of its currency, requiring proof of purpose for currency exchange and large cash transactions.

However, interest and investment in blockchain and cryptocurrency technology is expanding. Indonesia hopes to use the technology to improve financial services and revitalize high-value industries. Since 2019, the Commodity Futures Trading Authority (BAPPEBTI, Badan Pengawas Perdagangan Berjangka Komoditi) has been drafting regulations for cryptocurrencies. Within two years, the authority to regulate cryptocurrencies will be transferred to the Financial Supervisory Agency (OJK, Otoritas Jasa Keuangan).

Currently, more than 30 companies have registered as cryptocurrency operators and are operating services. In addition, cryptocurrency users and transaction volumes continue to grow, with approximately 18 million users and a monthly transaction volume of approximately Rp 8.027 trillion (USD 0.6B) as of July 2023.

  • In December 2017, Indonesia's central bank banned the use of cryptocurrencies as payment for goods and services.
  • In February 2019, BAPPEBTI established institutional regulations for cryptocurrency market operations (BAPPEBTI Reg. No.9/2019)
  • November 2019, Indonesian cryptocurrency exchange TokoCrypto becomes the first to receive BAPPEBTI approval
  • In December 2020, cryptocurrencies were restricted to government-designated exchanges in Indonesia and a list of 229 cryptocurrencies (including Bitcoin, Ethereum, etc.) that were approved for trading in Indonesia was released (BAPPEBTI Reg. No7/2020).
  • In February 2021, 68 exchange sites, including Binance, were shut down and made inaccessible in Indonesia after a crackdown on unauthorized cryptocurrency exchanges.
  • In May 2021, Bank Indonesia officially announced the issuance of CBDCs through its social media accounts.
  • In October 2021, there was an announcement of detailed regulations for cryptocurrency exchange operations (Minimum Capital, etc.) (BAPPEBTI Reg. No 8/2021)
  • In May 2022, the Indonesian government decided to impose VAT and income tax on cryptocurrency transactions.
  • In November 2022, an updated list of 383 cryptocurrencies that were approved for trading in Indonesia (including additions such as Klaytn and Solana) was released (BAPPEBTI Reg. No 11/2022).
  • In December 2022, following the passage of the P2SK bill in Indonesia, cryptocurrency regulatory authority will be transferred from the Commodity Futures Trading Authority (CoFTRA) to the Office of the Financial Supervisor (OJK) with a grace period of approximately two years expected to avoid disruption.
  • In June 2023, an updated list of 501 cryptocurrencies that were approved for trading in Indonesia (including additions such as Aptos and Sui) was released (BAPPEBTI Reg. No 4/2023).
  • In July 2023, Indonesia's national cryptocurrency exchange was launched.


Key Findings

Indonesia's Web3 market is growing at a rapid pace. However, we found that the actual Indonesian Web3 market has more intricacies than what has been covered in past articles and reports. This report will provide insights into the Indonesian market by focusing on six key areas: 1) Regulation, 2) Infrastructure, 3) Exchanges, 4) Games, 5) NFTs, and 6) Developer Ecosystem. In doing so, we hope to provide an accurate and comprehensive understanding of the Indonesian Web3 market.


Overall, Indonesia's regulatory environment is evolving into a unique structure hard to find in other countries. From a macro perspective, it is a positive that the Indonesian government is taking a proactive stance toward the Web3 market and embracing it within its legitimate financial markets, but it is worth noting the manner and details of its development. 

Exchange registration, licensing, and derivatives authorization system: First of all, the Indonesian regulator operates an exchange registration, licensing, and derivatives authorization system for cryptocurrencies: 

Cryptocurrency exchange registration and licensing system: In Indonesia, BAPPEBTI, a division of the Ministry of Trade, operates a 1) registration and 2) licensing system for cryptocurrency exchanges. There is no significant difference between the registration and licensing requirements for cryptocurrency exchanges other than the initial capital, but the specific conditions of the licensing system are not officially disclosed. Currently, more than 30 exchanges are registered with BAPPEBTI as legal exchanges, but none have yet received a final license from BAPPEBTI. It is expected that the Self Regulated Organization (SRO) that will be launched under Indonesia's state-backed cryptocurrency trading regime, which will be discussed later, will be the final licensee.

Staking and other derivatives authorization system: Although many Indonesian exchanges currently offer cryptocurrency staking services, it appears that they need to obtain written authorization from BAPPEBTI in order to operate an officially legal staking service. Reku, an Indonesian cryptocurrency exchange, reported that its staking service has been approved by BAPPEBTI. However, despite the existence of BAPPEBTI's formal authorization system, the definitions for derivatives in the industry remain unclear. Thus, the absence of BAPPEBTI's authorization does not appear to impose any sanctions.

Supervision of cryptocurrency exchanges: After the passage of the law regarding the development and strengthening of the financial sector (RUU P2SK) on December 15, 2022, the transfer of supervision for securities to the OJK was decided. Therefore, in the case of cryptocurrencies, the supervisory authority of BAPPEBTI under the Ministry of Trade will also be transferred to the OJK with a grace period of approximately two years until 2025, under inter-ministerial consultation.

Indonesian Web3 market experts are generally positive about the transfer of supervisory authority. This is due to the expectation that the transfer of supervisory authority to the OJK, which oversees and manages traditional financial markets such as banks and securities firms, will 1) facilitate cryptocurrency operators' entry into the traditional financial business, and 2) make it easier for them to engage in business with traditional financial firms (e.g., stablecoins). Some believe that unlike BAPPEBETI's lax approach, the OJK will maintain a more rigorous supervisory posture. Consequently, many cryptocurrency operators, especially exchanges, are expected to establish more thorough investor protection and anti-money laundering efforts.

Currently, OJK has a Financial Supervisory Commissioner in charge of regulating and supervising the crypto and digital assets sector. Currently Indonesia is the only country to have a dedicated committee for the blockchain sector under the highest decision-making body for national financial policy. This is a positive sign for the importance and prospects of the blockchain and digital assets sector in Indonesia. In addition, OJK launched the first carbon credit exchange using a private chain on September 26, 2023, and is also working on a CBDC project using a private chain with Bank Indonesia.

State-backed cryptocurrency trading system: In July 2023, Indonesia announced the launch of a state-backed cryptocurrency trading system. This is a unique structure that has not been seen in other countries and is an important factor in understanding the crypto trading environment in the Indonesian market. Market experts have stated that it is designed to make Indonesia's crypto market more stable and transparent.

Indonesia Cryptocurrency Exchange Mechanism, Source: BAPPEBTI, Tiger Research

Indonesia Cryptocurrency Exchange Mechanism, Source: BAPPEBTI, Tiger Research

OJK has designed a cryptocurrency trading model that mimics Indonesia's existing securities trading model. This model is completely different from the existing system where private cryptocurrency exchanges such as Binance and Coinbase manage and monitor their own order books. The overall liquidity of the cryptocurrency market is centralized and managed by a central regulator.

The state-backed cryptocurrency trading system is divided into the roles of 1) custodian, 2) clearing house, 3) centralized crypto exchange, and 4) private crypto exchanges, which are authorized by the state:

The custodian is responsible for the custody (management and storage) of the exchange's cryptocurrency in Indonesia, and will custody up to 70% of the exchange's cryptocurrency volume (under public-private negotiation).

The clearing house will be the custodian and manager of Rupiah (IDR), the fiat currency deposited on exchanges in Indonesia, and will custody up to 100% of the fiat currency (under public-private negotiation).

The state-backed cryptocurrency exchange is responsible for managing the order book and liquidity, including trading volume, of private cryptocurrency exchanges. 

Private cryptocurrency exchanges appear to have a reduced role, similar to that of traditional securities firms, to legitimate securities distribution and brokerage.


Company name

Approval date

State crypto exchange

PT Bursa Komoditi Nusantara



PT Tennet Depository Indonesia


Clearing house

PT Kliring Berjangka Indonesia




Unlike private crypto exchanges, the custodian, clearing house, and centralized crypto exchange in the new system will operate as a Self Regulatory Organization (SRO), similar to the New York Stock Exchange (NYSE).

Currently, licenses to act as a self-regulatory organization have been granted to one entity each for the position of custodian, clearing manager, and state-backed cryptocurrency exchange. The license for the state crypto exchange carries significant power and information about the crypto trading business in Indonesia. There has been considerable competition between local and foreign companies to obtain this license, with a number of scandals and court cases.

Restrictions payments via cryptocurrency: Although cryptocurrencies have been recognized as assets (Bappebti No. 8, 2021), their use as fiat currencies or in electronic payment systems is still strictly limited. For instance, a cryptocurrency-based e-payment business with the slogan "Bit Island" was conducted in Bali. However, the business was suspended after more than 100 merchants participating in the business were the target of a crackdown by the Indonesian National Tax Agency and OJK. As such, Indonesian Web3 officials believe that it is unlikely that a legal and settlement currency other than the rupiah (IDR) will be put into use in Indonesia in the near future.

National Efforts to Join FATF: Indonesian financial authorities are reportedly working to join the Financial Action Task Force (FATF) at the national level. Joining the FATF will have a positive impact on the international recognition of Indonesia's anti-money laundering regime and improve the international creditworthiness of financial institutions. This could lead to increased foreign investment and expansion, and the Indonesian Web3 market could benefit from it as well.



We found that Indonesia's Web3 infrastructure ecosystem is in its early stages. In particular, development on infrastructure such as its own Layer 1/2 and wallets were found to be very minimal. In the past, Layer 1 developments such as Vexanium[2], a local blockchain developed in Indonesia, have not achieved significant results. This is due to a combination of factors, the main ones being: 1) limited developer community, 2) lack of experience in global projects among startups, and 3) immaturity of the Web3 ecosystem. As a result, globally popular blockchains such as BNB and Ethereum, and wallets such as Metamask, are the popular choice: 

Layer 1/2: According to crypto infrastructure provider Chainstack's findings[3], BNB dominates node infrastructure usage in Asia, with BNB taking 72.1% and ETH taking 25.4%. Similarly, the majority of projects originating from Indonesia are on ETH and BNB platforms. Polygon, Base, Near, Algorand, and Tezos platforms also have a certain amount of community activity. Base, in particular, is known to be expanding its activities in Indonesia by hiring local staff. These teams have been hosting events and programs to engage with the local crypto community.

Regional protocol preferences, Source: Chainstack

Regional protocol preferences, Source: Chainstack


Wallets: We were unable to identify any significant players outside of custodial wallets provided by exchanges in Indonesia. Yet similar to other countries, Metamask was most widely recognized. Crystal Wallet, developed in Singapore, was also found to be in use by some DeFi users. In Indonesia, many people still store their cryptocurrencies on centralized exchanges (CEXs), likely due to 1) low adoption of DeFi applications and 2) the ease of use and security of centralized exchanges.

Private Blockchain: The private blockchain market for enterprises in Indonesia is still in its infancy, but it is expected to become more active. Currently, some public organizations are already preparing pilot projects utilizing private blockchains. For example, the carbon exchange project and CBDC project led by the Indonesian government are known to apply private blockchain technology. Other major companies in the financial sector and other industries are also expected to announce various projects utilizing private blockchain technology. D3Labs, a local startup focused on private blockchain, has also recently finished a successful fund raise. This trend is expected to further promote the adoption and utilization of blockchain technology in Indonesia.


Exchanges(CEX, DeFi)

Indonesia has one of the most active cryptocurrency exchange-centric markets in the world. Between 2014 and 2018, when the crypto market was in its infancy, a number of crypto exchanges were created, with more than 30 exchanges still in operation today. The number of customers using them exceeds 17 million. Excluding duplicate accounts, it is estimated to be around 10 million, or about 4% of the total population. Considering that there are 11.8 million retail investors registered on the Indonesian stock exchange, it is clear that cryptocurrencies are highly attractive as investment assets in the Indonesian market.

However, due to 1) high taxes on local exchanges (totaling 0.21% for buying and selling), 2) lack of product diversity, and 3) inability to trade anonymously, 50% to 70% of users in the low-cap market reportedly use global exchanges such as Binance. This situation has limited the growth of local exchanges in Indonesia.

In the CEX space, Indodax and Tokocrypto appear to dominate the market, but many Indonesian retail investors are believed to be using global unlicensed exchanges, which are estimated to account for around 50-70+% of the market. The Indonesian government has blocked internet access to unauthorized exchanges, but many users have been able to circumvent this by using VPNs.

  • Indodax: Founded in 2014, Indodax has consistently maintained a high share of the Indonesian cryptocurrency market, most notably with a 42.0% market share in 2023.
  • TokoCrypto: After being acquired by Binance in 2022, TokoCrypto collaborated heavily with Binance. This allowed it to pull ahead with 43.0% of market share by 2023.
  • Upbit Indonesia: Upbit Indonesia briefly took the market lead in 2022, but is losing ground in 2023.
  • Reku: An exchange that is expanding its market share with an easy-to-use customer UI/UX, Reku was the first exchange to receive approval to launch a staking business in Indonesia.
  • NOBI: In addition to its role as an exchange, it also provides 1) high net worth asset management and 2) OTC trading with a focus on staking. Reku is also aiming to manage various institutional client assets in addition to retail customers.


Currently, Indonesia imposes taxes on purchases (0.11%) and sales (0.10%) for each transaction. This has led to frequent user migration from BAPPEBTI-registered exchanges to external platforms such as Binance. Some have argued that this taxation system reverse discriminates against legitimate Indonesian exchanges, and the Indonesian Blockchain Association and others are reportedly in discussion with the government over this issue. Under the new state-backed exchange system, the burden on investors is expected to be exacerbated by a heavier self-regulatory organization oversight and corresponding fees. The Indonesian National Tax Agency has revealed plans for public-private negotiation regarding this issue since this year, and it is expected that some improvements will be made.

While there is a publicly available list[4] of tradable cryptocurrencies in Indonesia, there are currently no exchange-specific or common standards for listing and delisting cryptocurrencies. In addition, it is a widely known fact that exchange officials and BAPPEBTI have been known to directly intervene in the listing of new projects, making it difficult to establish transparency and trust in the cryptocurrency market. More transparent regulatory oversight is needed to ensure investor protection.

In Indonesia, there is no direct on and off ramp in exchanges, but through a Payment Aggregator. This works similarly to a typical payment gateway (PG) company structure. Payment Aggregators work with various banks and other financial institutions to ensure efficient payment flows. Through them, users can deposit funds securely, and then easily conduct transactions such as buying and selling cryptocurrency.

VC investments are also centered around exchanges, with Indonesia's largest tech company, GoTo Group, entering the crypto space in 2022 with the acquisition of Indonesian crypto exchange PT Crypto Maksima Koin. However, we were unable to confirm any significant collaboration or results from GoTo Group.



Indonesia Gaming Market Size and Forecast, Source: PwC Global Entertainment & Media Outlook 2018-2027

Indonesia Gaming Market Size and Forecast, Source: PwC Global Entertainment & Media Outlook 2018-2027

The Indonesian gaming market shows steady growth with a very mobile-friendly environment, with a smartphone penetration rate of around 70% as of 2011. According to Limelight Networks' global market research, Indonesians spend an average of 8.54 hours a week playing games, ranking fourth globally behind China, Vietnam, and India.

Despite high market expectations, the Web3 gaming market is still in its infancy. The main obstacles are 1) limited developer experience and capabilities, and 2) a lack of Web3 awareness among gamers. In addition, the low ARPU (Average Revenue Per User) compared to developed countries also hinders the development of the gaming industry. As a result, the number of Web3 game companies in Indonesia is limited, and there is also a lack of Web2 game companies in general.

Nevertheless, some talented first-generation founders are making efforts to develop new games and improve the ecosystem. In particular, two companies are seen as the twin leaders of Indonesia's Web3 game industry: 1) Mythic Protocol, developed by Arief, the founder of Indonesia's leading game company Agate, and 2) Avairk Saga, which is being developed by Indonesian expatriates.

In addition, the Indonesian government is working to promote the gaming industry as the next big industry growth drivers. According to the 'Indonesia Content Industry Trends in 2023[5]' report by the Korea Creative Content Agency, the Indonesian government is actively involved in the gaming industry and offers incentives to investors who invest in it. 1) Capital-intensive companies exceeding Rp 500 billion (approx. USD 32 million) are exempted from 100% of the corporate tax for up to 20 years, and 2) investments of Rp 100-500 billion (approx. USD 6.4-32 million) are exempted from 50% of the corporate tax, so the game ecosystem is expected to become more active in the future. In addition, the government's favorable attitude towards the blockchain industry is expected to lead to an explosive development of the Web3 gaming market.

There were more than 20 game companies in the region where Indonesia's major engineering universities are located, such as Bandung and Yogyakarta, but most of them were mainly developing outsourced games rather than creating their own IP. This has limited the development of the industry into a higher value-added industry, even within the gaming sector. This structure has also limited the ability of companies to attract investment and grow. Especially, the history of relying on outsourcing rather than creating their own IP has been a major obstacle to the continued growth and technological development of the game business.

Indonesia's Web3 gaming ecosystem is just beginning to take off, and Avarik Saga and Mythic Protocol are at its center. Avarik Saga is a JRPG game being developed by Kevin Cahya, formerly of East Ventures, a leading Indonesian venture capital firm, and a group of game industry veterans with overseas experience. With a team of about 50 employees, the game is expected to launch next year.

Mythic Protocol is a Web3 project from the founders of Indonesia's leading game company Agate, which recently raised a USD 6.5 million seed round from crypto VCs Shima Capital and Alpha Ventures. Agate has more than 200 employees and has released popular games such as Juragan Terminal and Valthirian Arc: Hero School Story on Steam. Given the success of P2E games such as Axie Infinity, Thetan Arena, and Splinterlands in Indonesia, there are high expectations for future Web3 games from Indonesia.


NFT (Non Fungible Token)

Indonesia's NFT market has been weakening in recent months, hitting an all-time low. Many investors had high expectations for significant profits, but the NFT market did not pick up due to a global market downturn. Most Indonesians prefer to use global marketplaces rather than local ones. If we look at the market share of the Indonesian NFT marketplace in 2022, OpenSea accounts for 95%, Blur takes 4%, and other marketplaces make up the remaining 1%. Collectible art collection-type NFT projects such as Karafuru and Mindblown were once popular, but the excitement seems to have died down.

Share of NFT Marketplace trading volume in Indonesia, Source: Statista, Xangle

Share of NFT Marketplace trading volume in Indonesia, Source: Statista, Xangle

Developer Ecosystem

Indonesia does not have a large development ecosystem compared to other Southeast Asian countries. The reality is that many Indonesian unicorns, such as Tokopedia and GoJack, have outsourced development to countries such as Vietnam to address the shortage of development talent. To improve this situation, the Indonesian government and companies are making great efforts to educate and train developers, especially by investing heavily in education and training programs. However, there is still a shortage of developers who want to work in the nascent industry. Many Indonesian developers prefer to work for Indonesian unicorns, which offer 1) higher salaries and job security and 2) better name recognition, rather than working for early-stage Web3 startups. According to data released by Github[6], due to such efforts, the number of new developers in Indonesia in 2022 recorded a growth of 36% compared to the previous year, showing significant effects

Developer Growth By Country, Source: Github

Developer Growth By Country, Source: Github is the largest and most active blockchain developer community in Indonesia. Currently, the community has more than 1,400 members in its Telegram group and supports the growth of blockchain developers through various trainings and events. In parallel, several companies have opened Whatsapp groups to help foster a community of developers. 

Various national educational institutions have recognized the importance of blockchain education. Starting in the first semester of 2024, BINUS University plans to offer a blockchain miner program. In addition, Prof. Andry Alamsyah from Telkom University is leading the research for Indonesia's CBDC Garuda project. In addition, Bandung Institute of Technology (ITB), University of Indonesia, and Gadjah Mada University are also consistently producing excellent developers in the blockchain space. The efforts of these schools are expected to significantly support the growth of Indonesia's blockchain and technology industry.


This report has been prepared with materials believed to be reliable, but no warranty, express or implied, is given as to the accuracy, completeness, or suitability of the information. We disclaim any liability for any loss arising from the use of this report or its contents. The conclusions and recommendations in this report are based on information available at the time of preparation and are subject to change without notice. All projections, estimates, forecasts, objectives, opinions, and views expressed in this report are subject to change without notice and may differ from or be contrary to the opinions of others or other organizations. This document is for informational purposes only and should not be considered legal, business, investment, or tax advice. In addition, references to securities or digital assets are for illustrative purposes only and do not constitute an investment recommendation or an offer to provide investment advisory services. This material is not directed at investors or potential investors.

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