Valuing DAOs: What is Axie Infinity Really Worth?

Decentralized Autonomous Organizations, Axie Infinity & fundamental investing

As a hedge fund analyst who invests in publicly traded stocks, my friend from MoneyLemma watched the blockchain revolution from the sidelines. Blockchain is a transformational technology, there’s no denying that. However, many crypto assets don’t have predictable cash flows. Bitcoin, Crypto Kitties NFTs, NBA Top Shots, Ape Memes - all are innovative and exciting technologies but it’s hard (if not impossible) to quantify the cash flow these assets could generate. Like gold, Beanie Babies or toilet paper during a pandemic, buyers seem to be betting that someone else will pay more down the line. 

However, an increasing number of crypto assets are fundamental, not speculative, in nature. Blockchain technology is being used to build real businesses - businesses that generate cash flow and can be valued on the basis of future cash flow. The rest of this post is dedicated to doing just that: valuing the Axie Infinity Universe, a blockchain-based video game, as if it were a publicly-traded com…