Table of Contents

1. Project Overview

2. Highlights of 3Q 2023

2-1. Major Events & Updates

2-2. Key Metrics

3. On-chain Performance

3-1. Financials

3-2. Network Activity

3-3. Network Security

3-4. Development Activity

4. Gaming Ecosystem, Major Events, and Partnerships

4-1. Gaming Ecosystem

4-2. Major Events

4-3. Partnerships

5. Recap

1. Project Overview

WEMIX 3.0 is a blockchain based on EVM operated by the Korean game company WEMADE. WEMIX 3.0 ensures high security and fast speed of up to 4,000 TPS by adopting the SPoA (Stake-based Proof of Authority) method, that combines PoS and PoA methods where Node Council Partners of 40 validated nodes handle block generation. The ecosystem that composes WEMIX 3.0 includes the blockchain game platform WEMIX PLAY, and DAO and NFT platform NILE, as well as the DeFi platform WEMIX.Fi.

2. Highlights of 3Q 2023

2-1. Major Events & Updates

Major Events of 3Q: Reveal of the omnichain project, unagi, launch of L2 Kroma mainnet, Launch of WEMIX rewarding program, PoET, Wepublic new feature update, launch of PNIX DEX

• Omnichain project unagi was revealed for expanding WEMIX 3.0 ecosystem. It’ll help secure inter-operability of blockchain networks and provide user-friendly environment.
• WEMADE subsidiary Lightscale launched Ethereum L2 Kroma mainnet. Kroma will attract users and assets of the Ethereum ecosystem into the WEMIX ecosystem.
• PoET program was launched that rewards participants that contribute to the WEMIX 3.0 ecosystem. This also contributed to sharp increase in transactions in 3Q.
• Among 4 of Wepublic’s major features, proof of ID, proof of qualification, and proof of balance have been updated.
• PNIX DEX, an orderbook-based DEX where WEMIX Play-onboarded game tokens can be traded.

Continued expansion of WEMIX Play gaming ecosystem

• The addition of five new games, including C9: Golden Continent, MIR2M: The Dragonkin, IcarusM: Guild War, Soul Seeker Knights, Taming Master: Pet Guardian, bringing the total to 37 games onboarded.
• Additionally, Infinity Saga X entered beta service, and ORANGE BANANA PUNCH and 'Valkyrious' initiated pre-registration.
• A total of 14 games, including Tank Battle Heroes: World War, Wind of CHAOS, TNT Bomb Commando, signed onboarding contracts with WEMIX Play. Various genres such as RPG, shooting, puzzle, simulation, and sports are included.

Active partnerships beyond gaming: SK Planet, Pyth Network

• There are plans to strengthen the partnership between WEMADE’s blockchain business and SK Planet’s OK Cashbag through strategic collaboration.
• There are also plans to develop real-time data using Pyth’s price feed through active collaboration with Pyth Network.

2-2. Key Metrics

3. On-chain Performance

3-1. Financials

WEMIX 3.0 recorded quarterly revenues of $0.2M (QoQ +757%) in 3Q, but the net loss amounted to -$5.0M (QoQ net loss cont’d). The rise in daily transaction volume, particularly from September, contributed to the reflected growth in fee-based revenues. However, the net loss is sustained by the ongoing burden of token incentive costs*. Although quarterly losses persist, the gradual reduction in the magnitude of losses signifies a positive trend toward improving profitability.

* Token incentive costs are defined as expenses newly issued for block validation on the network or rewarded to validators from the reward pool.

3-2. Network Activity

The daily transaction volume of WEMIX 3.0 remained relatively stable until the second quarter, but a significant surge was observed starting from the third quarter. Particularly in 3Q, there was a remarkable increase, with an average of 323,000 transactions per day, representing a substantial 1568% growth QoQ. This surge appears to be correlated with the introduction of the PoET program, where $WEMIX is provided as rewards, primarily driven by increased bot activity following the program's launch in September.

The daily active wallet count exhibited volatility over the last four quarters, from 4Q of the previous year to 3Q of the current year. 1Q saw fluctuations due to the relisting of $WEMIX, while 2Q experienced variations associated with major events such as exchange hacking. In 3Q, the introduction of the PoET program contributed to an increase in daily active wallets, as similarly observed in the daily transaction volume starting from September. The average daily active wallet count in 3Q was 2,800, reflecting a 13% decrease QoQ.

WEMIX 3.0's TVL faced a sharp decline in 4Q of the previous year to 1Q of the current year, mainly due to issues related to the designation and delisting of $WEMIX. However, excluding this period, the TVL has remained within the range of $11M to $18M.

3-3. Network Security

WEMIX 3.0 operates with a structure where a Node Council Partner (a.k.a. 40 WONDERS), consisting of 40 nodes (40 WONDERS), is responsible for block generation and network security. As of the end of the second quarter, 18 participants out of 40 nodes were designated. In the third quarter, three new entities joined, including the Klaytn Foundation, the blockchain infrastructure service company HashQuark, and the blockchain security firm CertiK. This brings the total confirmed Node Council Partners to 21. Currently, the amount of $WEMIX staked in the WEMIX 3.0 network is 115.0M, equivalent to 11.8% of the total supply.

3-4. Development Activity

The development activity on the WEMIX 3.0 network has shown some volatility. The number of smart contracts deployed in 3Q of this year decreased by 57%, totaling 439 compared to the previous quarter's 1,028. However, while there is a slowdown in development activity QoQ, there is still a significant 96% increase when compared to 1Q.

4. Gaming Ecosystem, Major Events, and Partnerships

4-1. Gaming Ecosystem

In 3Q, the cumulative number of Play Wallet subscribers reached 9.25 million, showing a 9% increase YoY and a 1% increase QoQ, and the upward trend in quarterly growth continues. Additionally, in 3Q, five new games were added, bringing the total number of games on WEMIX Play to 37.

The newly released games in 3Q include C9: Golden Continent (7/12), MIR2M: The Dragonkin (7/18), IcarusM: Guild War (8/23), Soul Seeker Knights (8/30), and Taming Master: Pet Guardian (9/25). As of November 23, based on concurrent users, IcarusM: Guild War ranks 4th, Taming Master: Pet Guardian ranks 6th, and Soul Seeker Knights ranks 7th, indicating their popularity. Additionally, Infinity Saga X (TBD) has initiated beta services, while ORANGE BANANA PUNCH (10/5) and Valkyrious (10/25) started pre-registrations. There were also many onboarding contracts signed in 3Q, 14 games in total, including Tank Battle Heroes: World War, Wind of CHAOS, and TNT Bomb Commando. The games span various genres, including RPGs, shooters, puzzles, simulations, and sports.

4-2. Major Events

Reveal of omnichain project, unagi

The WEMIX Foundation has introduced the omnichain project unagi to ensure interoperability among blockchains. Unagi supports various blockchains, including WEMIX 3.0, Ethereum, Polygon, Arbitrum, Optimism, Avalanche, BNB Smart Chain, and Kroma, and comprehensively offers services such as una Wallet, unagi Swap, and unagi Scan. The WEMIX Foundation aims to secure users and assets from diverse blockchain networks through unagi Chain that forms a mega-ecosystem.

Launch of L2 Kroma mainnet

WEMADE's subsidiary, Lightscale, has launched the Kroma mainnet on Ethereum Layer 2, combining optimistic rollup with ZK proof. Kroma plays a pivotal role in transferring users and assets from the Ethereum ecosystem to the WEMIX ecosystem. Starting out as a chain for blockchain games, Kroma plans to support Night Crows Global, scheduled for release in 1Q next year, and later expand its ecosystem into areas like DeFi and NFTs.

Launch of WEMIX rewarding program, PoET

PoET (Proof of Ecological Transaction) is a program that rewards contributors to the development of the WEMIX 3.0 ecosystem. It distributes a portion of block rewards generated in WEMIX 3.0 to builders who develop verified dApps and users who generate transactions using those dApps. PoET aims to create a self-sustaining structure that promotes the growth of the WEMIX ecosystem, fostering healthy development and expansion.

Wepublic updates

Wepublic, a platform for forming and operating DAOs, that ensures fairness in the decision-making process, and supports transparent fund management has undergone updates. Three new protocols have been added: 1) Proof of ID protocol that ensures identity without personal information using DID, 2) Proof of Qualification protocol using SBT to prove affiliation, and 3) Proof of Balance protocol using Mirror tokens to prove financial transparency of DAOs. The Proof of Results protocol that enables proposal submissions and voting is expected to be updated later on.

Launch of PNIX DEX dApp

PNIX DEX, an orderbook-based DEX, allows trading of game tokens from games onboarded on WEMIX Play. With the launch of PNIX DEX, the order functionality, previously available through PLAY DEX in the Play Wallet, will no longer be accessible. In the first quarter of next year, six of the seven tokens from Night Crows Global, excluding $CROW, will be tradable on PNIX DEX.

4-3. Partnerships

SK Planet

WEMADE, the operator of WEMIX 3.0, entered into a strategic partnership with SK Planet. The aim is to strengthen the partnership between WEMADE’s blockchain business and SK Planet’s OK Cashbag. Moreover, WEMADE's Chairman of the Board Park Kwan Ho plans to purchase $WEMIX using the proceeds from the sale of shares, amounting to KRW 15B from mutual investment in each other’s shares.

Pyth Network

WEMIX 3.0 is set to integrate with the Oracle solution Pyth Network to sync price data for over 300 assets, including crypto assets, stocks, ETFs, and Forex. Services that benefit from the integration of price data include DAO and NFT platform NILE as well as DeFi platform WEMIX.Fi. It’s expected that this collaboration will design DeFi services in the WEMIX 3.0 ecosystem more securely by leveraging accurate real-time data.

5. Recap

In 3Q 2023, WEMIX 3.0 achieved significant growth in its ecosystem and laid the foundation for future expansion. Transactions increased by over 1500% QoQ, leading to improved profitability along with the highest quarterly revenue this year. The WEMIX Play game ecosystem at the core of the WEMIX 3.0 ecosystem also sustained growth. The cumulative number of Play Wallet users continues to show quarterly growth, and 3Q also witnessed the release of five new games and the signing of 14 onboarding contracts. Lastly, WEMIX 3.0 unveiled the omnichain project unagi to ensure interoperability among blockchain networks. And the release of the Kroma mainnet on Ethereum Layer 2 further establishes the groundwork for future growth by expanding into the Ethereum ecosystem.