Image souce: Wemix

Table of Contents

1. Project Overview

2. Key Takeaways from WEMIX DAY
2-1. Initiatives to enhance $WEMIX token utility
2-2. WEMIX’s “Prioritize and Focus” strategy

3. 2Q24 On-Chain Performance
3-1. Key metrics
3-2. Network activity
3-3. Development activity

4. Conclusion

1. Project Overview

WEMIX 3.0 is an EVM-based blockchain operated by the domestic game company Wemade. WEMIX 3.0 adopts the SPoA (Stake-based Proof of Authority) consensus mechanism, which combines PoS and PoA methods. A node council partner consisting of 40 verified nodes is responsible for block generation, ensuring high security and speeds of up to 4,000 TPS. The WEMIX 3.0 ecosystem includes WEMIX PLAY, a blockchain gaming platform; NILE, a DAO and NFT platform; and WEMIX.Fi, a DeFi platform.

2. Key Takeaways from WEMIX DAY

2-1. Initiatives to enhance $WEMIX token utility

On July 16, WEMIX announced its strategic direction through WEMIX DAY, focusing on "Prioritize and Focus" to strengthen token utility and community building. Central to this strategy is the launch of WEMIX Pay, designed to enhance the utility of the $WEMIX token and foster a vibrant ecosystem. The goal is to ensure ecosystem sustainability and network vitality by directly linking contributor participation to token utility.

WEMIX Pay: An essential element in the evolving WEMIX ecosystem

Scheduled to launch later this year, WEMIX Pay is a pivotal element in the evolving WEMIX ecosystem. It will allow users of WEMIX Play to purchase game content with $WEMIX. By bypassing traditional fiat payment solutions, which typically charge 20-30% in fees, WEMIX Pay reduces transaction costs to nearly 0%, enabling users to maximize their in-game benefits. This is expected to significantly increase the demand and utility of $WEMIX for game content purchases.

Additionally, 4-5% of the revenue from WEMIX Pay will be allocated for $WEMIX buyback. Based on revenue generated by Night Crows, this could amount to KRW 1.5 billion to KRW 2 billion monthly, translating to over 20 billion won annually. Including other popular games like MIR4 and the upcoming Legend of Ymir, the scale could be much larger. This is a strategy supporting aggressive user acquisition and ecosystem revitalization. Even a conservative one-year buyback estimate of 20 billion won represents about 3% of $WEMIX's market capitalization, significantly impacting token value.

Creating user-friendly environment by offering incentives and mileage services

WEMIX Pay features PLAY tokens and Prime Points to build ecosystem loyalty. PLAY tokens, earned by paying with $WEMIX in WEMIX Play, can be used for in-game collectibles, special items, and features. These tokens will be available for major games post-launch and will be burned upon use, preventing recirculation. PLAY tokens will replace REFLECT (RFT), a synthetic asset token integrating each game token, facilitating the game economy within the WEMIX ecosystem.

Prime Points, the ecosystem's mileage system, are awarded based on consumption within WEMIX Play. Points can be accumulated to unlock benefits such as VIP passes, NFTs, airdrops, and early access to games, fostering long-term loyalty and engagement.

On July 1, WEMIX implemented the Brioche hard fork to restructure Tokenomics and enhance ecosystem sustainability. This major update involved mass burning of WEMIX, introducing halving, and modifying token allocation. Announced on June 25, the hard fork led to a 50% increase in WEMIX token prices

Reorganization bolsters token value, but business expansion poses new challenges

With the reorganization of its tokenomics, $WEMIX has fortified the fundamental aspects of its ecosystem, focusing on 1) establishing a robust payment method and 2) securing intrinsic value through sales linkage. This strategic shift addresses the inherent flaws of the previous P2E (Play-to-Earn) model, which primarily revolved around a "mine and sell" approach. By linking actual sales to token buybacks, WEMIX aims to restore and bolster trust among its token holders.

However, the decrease in financial resources due to the reserve burning introduces a significant challenge for WEMIX from a business expansion perspective. For the WEMIX ecosystem to grow and attract a broader user base, integrating major game IPs is crucial. This integration necessitates substantial funding to attract decentralized applications (dApps). With the reduction of the reserve, WEMIX might find itself at a disadvantage in the competitive landscape of the blockchain ecosystem. Historical precedents, such as the case of Line Link, illustrate this point. Line Link adopted a zero-reserve tokenomics policy to gain the trust of token holders and subsequently burned its reserves. However, this strategy led to a failure in attracting dApp services, ultimately resulting in a merger with Klaytn and the transfer of chain operations.

Given that tokenomics within the blockchain gaming industry has only been explored for about five years, there is no definitive solution yet. While WEMIX's new tokenomics is certainly advantageous for maintaining token value, expanding services within the ecosystem presents a more complex challenge. Grants have proven to be the most direct method for attracting dApp services. Therefore, WEMIX needs to offer additional value propositions, such as user acquisition incentives and administrative support, to effectively overcome these hurdles and sustain its growth trajectory.

2-2. WEMIX's “Prioritize and Focus” strategy

WEMIX adopts a "prioritize and focus" strategy to ensure network revitalization and sustainability. In response to developers deciding to cease services for their games on WEMIX Play, WEMIX also decided to discontinue additional services beyond game offerings. From April to July 16, five games were shut down, leaving 23 active games on WEMIX Play. Additionally, the non-game service una Messenger has been discontinued, and una Wallet will be phased out by October. Play Wallet and NFTFi will continue to be available but limited to specific countries. This strategic reduction is expected to lower costs and enable the company to enhance its primary games and services.

WEMIX remains committed to its flagship games, Night Crows and MIR 4, while actively seeking new blockbuster titles. Both Night Crows and MIR4 have consistently maintained high user numbers since their launch, accounting for the majority of WEMIX's active users. Despite the discontinuation of several games, the success of Night Crows and MIR4 has led to an increase in peak daily active users on WEMIX. This demonstrates that WEMIX's "prioritize and focus" strategy has been effective in the short term.

WEMIX will continue to expand its game ecosystem for mid- to long-term growth. Although the company has previously onboarded numerous games to offer diverse content, it will now concentrate on attracting users through a select number of key games. Legends of Ymir Global is slated for release in late 2025, followed by Project M, developed by the creators of the Ymir series. With the reduction in the number of game services, the success of future onboarded games will be crucial. If these games succeed, combined with the reorganization of tokenomics and enhanced token utilities, the WEMIX ecosystem is poised for rapid expansion.

3. On-Chain Performance

3-1. Key metrics

3-2. Network activity

The WEMIX network exhibited mixed behavior regarding transactions and active addresses during Q2. The PoET campaign, initiated in Q3 of the previous year, concluded in mid-April. This campaign, which started on September 1st, was a block reward distribution program designed to incentivize builders and users contributing to the WEMIX ecosystem. While the campaign generated a significant number of transactions, its conclusion has led to a search for more substantial and effective methods to develop the network. Consequently, the current daily average of 70,000 transactions is primarily driven by gaming activities.

The number of active addresses increased during the second quarter, likely due to the influx of new users attracted by the success of major titles like Night Crows and MIR4, as well as heightened activity following the announcement of the una Wallet shutdown.

In terms of TVL, the impact of WEMIX, which constitutes the majority of its capital, is significant and tends to fluctuate with changes in the price of WEMIX tokens. In the second quarter, TVL decreased as the cryptocurrency market continued to correct from the first quarter. However, since mid-June, the price of the WEMIX token has been rising, reversing the downward trend. In the long run, the burning model announced during WEMIX DAY is expected to positively influence TVL.

3-3. Development Activity

Development activity and the number of developers saw a decline until the second quarter due to WEMIX's major business overhaul. Following this reorganization, development activity is anticipated to increase with the introduction of services centered around WEMIX Pay.

4. Conclusion

Following the leadership change in March, it took approximately four months for the WEMIX blueprint to be unveiled. During this period, concerns arose regarding the direction of the WEMIX chain and its surrounding platform, especially after the resignation of WEMIX project CEO Hyunguk Jang and subsequent business restructuring. However, the recent WEMIX DAY event aimed to address these concerns by outlining the company's strategic direction. Although the presentation was brief and lacked specific roadmaps, it was sufficient to alleviate immediate concerns about the WEMIX business.

A significant change is the token holder-friendly tokenomics. The introduction of WEMIX Pay, which facilitates $WEMIX for in-game payments, and the allocation of a portion of sales for $WEMIX buybacks to establish a payment method and intrinsic value is a positive development for token holders. However, the reduction of financial resources due to reserve burning poses a challenge for onboarding new dApps, similar to past experiences with the LINK project. A solution to this issue is imperative.

While the overarching strategy was revealed during WEMIX DAY, the focus now shifts to the execution of this blueprint. Given the strategic focus on key areas, it is crucial for major IPs to launch as successfully as previous titles, and for new blockchain elements to function seamlessly. WEMIX, having pioneered success with MIR4 Global in the Korean Web3 industry and ventured into new domains, is positioned to carve out new milestones starting from WEMIX DAY.