Table of Contents

1. Project Overview

2. 1Q24 Highlights
2-1. Key highlights
2-2. Key metrics
2-3. Night Crows exceeds 420k concurrent users
2-4. “Brioche Hard Fork” for sustainable ecosystem growth
2-5. CEO change and continued advances to blockchain gaming market

3. On-Chain Performance
3-1. Perfomance
3-2. Network Activity
3-3. Network Security
3-4. Development Activity
3-5. Game Ecosystem

4. Recap

1. Project Overview

WEMIX 3.0 is an EVN-based blockchain operated by the South Korean game company WEMADE. It adopts the SPoA (Stake-based Proof of Authority) method, which combines PoS and PoA methods, with Node Council Partners consisting of 40 nodes responsible for block generation, ensuring high security and fast speeds of up to 4,000 TPS. At the core of the WEMIX 3.0 ecosystem are the blockchain platform WEMIX PLAY, the DAO and NFT platform NILE, and the DeFi platform WEMIX.Fi.

2. 1Q24 Highlights

2-1. Key highlights

• Global release of Night Crows led confirmation of growth trajectory of the WEMIX ecosystem.
• Night Crows reached sales of 57.1B KRW in Q1, averaging 2.9B KRW in daily sales.
• Aims for long-term growth of the WEMIX ecosystem through the Brioche Hard Fork, which includes improved tokenomics and community profit redistribution.
• Chairman Kwan-ho Park is the new CEO, and WEMIX’s advances to the blockchain gaming market will continue.

2.2 Key metrics

2-3. Night Crows exceeds 420k concurrent users

The most notable of the WEMIX ecosystem in 1Q24 was the growth led by Night Crows, an MMORPG set in Europe in the 13th century, developed by MADNGINE and published by WEMIX. It utilizes the “Unreal Engine 5,” the 3D game engine developed by Epic Games to deliver realistic graphics and combat.

Source: Wiki Game

Play-to-Earn (P2E) games have faced doubts about sustainability due to token inflation and token value depreciation caused by external factors, and WEMADE had also experienced rapid declines in game cycle due to tokenomics behind the success of MIR4 Global. In order to overcome the  inherent limitations of P2E tokenomics, Night Crows introduced a multi-tokenomics structure based on seven utility tokens and character NFTs. This aims to organically distribute token utility and establish sustainable tokenomics. Also, Night Crows adopted a "tokenization of game assets based on added value" approach to minimize interference in the game economy by external factors. This, in turn, allows the tokenization of the currency and items earned through the user’s time and effort, generating gaming assets. Furthermore, mechanisms such as halting token issuance if the CROW price falls below $0.75 and enabling CROW token issuance after level 45 are to ensure sustainable tokenomics.

Night Crows is currently serviced in 170 countries and has shown strong performance in Southeast Asian and South American countries such as Taiwan, Thailand, the Philippines, and Brazil, surpassing $10M in revenue just three days after launch. This surpasses the revenue of MIR4 Global, which was the highest-grossing game on WEMIX PLAY, by tenfold, making it the highest revenue-generating game among those released by WEMADE. Consequently, this has drawn attention to the possibility of WEMADE turning profitable in Q2.

Furthermore, Night Crows recorded a peak daily concurrent user count of approximately 200k immediately after launch. The concurrent user count continued to rise, surpassing approximately 420k as of April 11. Night Crows holds the highest concurrent user count among games onboarded on WEMIX PLAY, surpassing MIR4. Its success has boosted the virility of WEMIX's gaming ecosystem in Q1 and is expected to continue driving growth in WEMADE and the WEMIX ecosystem.

2-4. “Brioche Hard Fork” for sustainable ecosystem growth

Source: Wemix

WEMIX announced the "Brioche Hard Fork" to achieve ecosystem growth based on sustainable tokenomics and community feedback. The Brioche Hard Fork includes various changes related to the WEMIX tokenomics and policies, which will be implemented on July 1, 2024, informed by feedback from node partners and the community. Key elements of this hard fork includes the following:

• Burning approximately 437,000,000 $WEMIX from the Foundation's reserve to address the dominance structure where WEMIX is often seen as exclusively belonging to the Foundation.
• As a community-led ecosystem, the Foundation’s holdings will be used as resource for ecosystem growth, and the profit generated in this process will be collectively distributed to the WEMIX community.
• Maximum supply will be reduced to 590M to build sustainable tokenomics and block minting halving will be introduced. Halving will occur in block minting every two years until maximum supply reaches 590M after the 16th halving, which is when block minting will cease permanently. This represents 60% of the current WEMIX maximum supply of 980M.
• Revenue generated from funds for enriching the ecosystem will be given back to the community for its growth. Initial capital will be reinvested as funds for ecosystem growth, and the other 35% of the profit will be utilized for growth of community and its value in forms of buying or burning $WEMIX.

High inflation rates have been cited as factors hindering the value appreciation of WEMIX tokens. With the implementation of the Brioche Hard Fork, a significant amount of $WEMIX is expected to be burned, leading to a decrease in inflation rates, which could bring WEMIX closer to sustainable tokenomics.

2-5. CEO change and continued advances to blockchain gaming market

Source: Dart

WEMADE announced through board resolution that Hyun-guk Chang resigned as CEO and Park Kwan-ho, the Chairman, was newly appointed as his replacement. Meanwhile Chang's position has changed to Vice Chairman. Park Kwan-ho, the new CEO, is the founder of WEMADE, established in February 2000, and holds a 39.39% stake in WEMADE.

There have been speculations that Chang's resignation was to reduce WEMIX's legal risks, but Chairman Park has denied these allegations. Park mentioned at the regular shareholders' meeting on March 29 that speculations regarding legal risks are groundless. He also emphasized that although Chang has stepped down, WEMADE's endeavor to enter in the blockchain gaming market will continue. He cited the global success of Night Crows and announced future releases such as Legend of YMIR and MIR5. Despite brief controversies surrounding legal risks, WEMADE's expansion in the blockchain gaming market appears to continue unabated.

3. On-Chain Performance

3-1. Performance

In Q1, WEMIX 3.0 saw a sequential revenue increase of 43.2%, reaching $3.16M. However, net income experienced a -22.2% sequential decline, dropping to -$16.6M. The rise in revenue was driven by increased fee revenue from higher daily transactions, while the decrease in net income was attributed to higher token incentive expenses. Despite the widening net profit deficit, it is noteworthy that the decline in net profit was less pronounced compared to the revenue increase.

*Token incentive fees refer to the expenses incurred for newly minted tokens used to validate blocks on the network or paid to validators from the reward pool.

3-2. Network activity

In Q1, WEMIX 3.0 experienced a 4.3% QoQ growth in daily transactions, reaching 1.37M. The daily transaction count remained relatively stable until mid-March but has surged by over 50% since the launch of Night Crows—an MMORPG game published by WEMADE on March 12. 

The daily active wallet count on WEMIX 3.0 experienced a slight decline since February, but has rebounded following the launch of Night Crows. In 1Q24, the daily active wallet count on WEMIX 3.0 increased by 15.5% QoQ to 9.26k. Notably, this rise in daily active wallets surpassed the increase in daily transactions. This indicates that the uptick in transactions during Q1 was not confined to a limited number of wallets but was accompanied by a surge in user influx. This is likely attributed to the steady growth in Night Crows’ user base.

TVL for WEMIX 3.0 in Q1 dropped by 31.5% QoQ to $20.31M. TVL also saw an increase following the launch of Night Crows, but declined after news broke of the resignation of former WEMADE CEO Hyun-guk Chang. This decline likely reflects rumors suggesting that WEMIX made the decision for Chang to step down to mitigate legal risks.

3-3. Network security

WEMIX 3.0 operates on a node council partner structure consisting of 40 nodes, known as "WONDERS," responsible for block generation and network security. As of April 22, 2024, 29 out of the 40 nodes have been assigned participants. In Q1, eight companies, including SUHO.IO, MADNGINE, Chroma, and Ubisoft, joined the council partners. Currently, there are 128.4M $WEMIX tokens staked on the WEMIX 3.0 network, accounting for 36% of the total supply.

3-4. Development activity

In Q1, the total number of smart contract deployers and smart contract deployments on the WEMIX 3.0 network amounted to 635, marking a significant -89.9% decrease from Q4. This decline signifies a slowdown in the deployment of inscription-related contracts in Q1 following a surge in Q4. Excluding December 18, when over 5,000 contracts were deployed, the decrease in development activity from Q4 to Q1 is approximately -24%.

3-5. Game Ecosystem

During Q1, WEMIX expanded its gaming ecosystem by launching and signing various games. A total of five new blockchain games were released, and 20 blockchain games signed onboarding agreements to be played on WEMIX. The new games introduced in Q1 include GATOR_Zeroverse, Oil War, MIR2M: The Grandmaster, World of the Abyss, and Night Crows. Additionally, onboarding deals were secured for a variety of genres, including casual, sports, and strategy games, as well as RPGs such as Rebirth Heroes, Ritmi, and World of the A.

4. Recap

WEMIX 3.0 has witnessed remarkable ecosystem expansion with the launch of Night Crows in 1Q24, laying a strong foundation for future growth. Since the introduction of Night Crows, it has seen enhancements across various on-chain metrics, including daily transactions, daily active wallets, TVL, and more. Notably, Night Crows emerged as the flagship title within the WEMIX ecosystem in 1Q24, attracting a peak of 420,000 daily concurrent users. In addition to Night Crows' success, WEMIX continued to broaden its gaming ecosystem by introducing five new releases and securing 20 onboarding deals. Furthermore, WEMIX announced a Brioche Hard Fork aimed at further expanding the blockchain ecosystem in the medium to long term.

Despite experiencing a temporary slowdown in on-chain performance due to rumors of legal risks, WEMIX 3.0 has since addressed this issue and is now positioned for mid- to long-term growth. At the shareholder meeting, Chairman Kwan-ho Park reaffirmed the company's steadfast commitment to the blockchain gaming business, highlighting plans for sustainable expansion of the ecosystem. Under the new operating framework, WEMADE further emphasized its dedication to achieving profitability through enhanced cost efficiency.

Despite the controversies, WEMIX's growth in 1Q24 is evident. In particular, the success of Night Crows will be pivotal in the expansion of the WEMIX ecosystem. We anticipate WEMIX to capitalize on this momentum from 1Q24 and achieve significant growth in 2Q24.