How I Value Digital Collectibles

By @Jihoz_Axie, Growth Lead @Axie Infinity

Stella, rocking her “Legendary” Spirit Crown Body Part

With the rise of decentralized gaming and digital collectibles more and more people have been reaching out to me asking for advice on how to enter the space in a smart, efficient way.

Please note that nothing I say in this article is financial advice, only my thoughts based on 6 months of non-stop exposure to these markets and a bit of research.

Magic the Gathering: a Case Study for Digital Collectibles?

I believe that the holy grail for decentralized/games and collectibles is to create an ecosystem similar to Magic the Gathering. Thus, when I entered the space I did some research on Magic Cards and how they have held value and appreciated over the years.

My initial research taught me that Magic cards are valued as a function of 3 crucial inputs: scarcity, utility, and aesthetics. I have deemed this combination of inputs the “Triple Threat”.

Scarcity can be defined as the total supply of the collectible. Utility is defined as the usefulness of the collectible. For example, how powerful a magic card is when used in a match. Aesthetics is harder to objectively appraise, but collectibles/cards that are deemed beautiful can carry a big premium as they are seen as works of art as well.

The Alpha Black Lotus

A good example of the “Triple Threat” is the “Alpha Black Lotus” from Magic the Gathering.

There are only 1100 Alpha Black Lotuses in existence. Thus, these cards have a pre-set scarcity. The “Alpha” tag is referring to the release deck. The Black Lotus is also one of the strongest cards in the game! In fact, Black Lotus has been banned in many tournament modes. Lastly, the Black Lotus is considered to be one of the most beautiful MTG cards.

This triple threat has culminated in Alpha Black Lotuses selling for 15,000 $ + USD in recent years.

Applications to Crypto-Collectibles

I use the “Triple Threat” framework when assessing the value of crypto-collectibles. I look for rare things that are both powerful and beautiful.

We can look at market data straight from the Ethereum blockchain to see if these principles have held true.

Genesis: Triple Threat Appeal?

The first example I will use is the collectible that actually introduced me to Blockchain gaming: Genesis, the #1 CryptoKitty.

Aesthetics: Genesis is a beautiful piece of art work, one of Guille’s from Axiom Zen’s finest creations.

Scarcity: Genesis is the #1 CryptoKitty. There can obviously only ever be one, #1. In addition, Genesis has an Exclusive tag, which is also quite rare in their universe.

Utility: Genesis has a genome that is similar to the other 99 “Founder” cats. These cats are the only Gen 0 Kitties that will have the “Jaguar” and “Orangesoda” Genes. These Genes are also purebred, meaning that each founder has a 50% chance of passing on one of these genes to their offspring. If 2 founders are bred, the chance of having an Offspring with OrangeSoda and Jaguar is 100%. This Kitty is also “famous” within the decentralized gaming community and could potentially be used to market other projects. For example, if Axie Infinity bought Genesis and named it “Axie Infinity” that might cause some people to look into our game.

Genesis sold for 250 ETH despite the fact that I find the Utility input actually quite low since it cannot be used in any battle/card game(at least not yet).

Mystic Axies in Axie Infinity

Pointy Nyan Mystic Ears and their upgraded Legendary form

The next example I will use is from Axie Infinity, our game that is centered around collecting, breeding, battling, and raising adorable fantasy creatures called “Axies”.

The collectibles in our game that I believe best exhibit the “Triple Threat” are Mystic Axies. Mystic Axies are special Axies that could appear when “rolling” the “Origin” Axies from our pre-sale. The Axie Infinity team also has a stash of AOC coins which are special ERC20 tokens that can be exchanged at a 5:1 ratio for Origin Axies. Our community can earn these tokens by creating content, winning contests, and in the future, winning battle tournaments.

Mystic Axies possess special body parts called “Mystic Parts”. These parts(and their subsequent part evolutions) have unique skins. In addition these are the only body parts that can be upgraded to Legendary. Let’s walk through the three inputs:

Scarcity: The supply of Mystic Axies are limited by our contract. The total supply of “Origin Axies” has a hard cap of 3993. Axies with the Origin Tag and Origin gene pool will never be sold by the Axie Infinity team again. This means that the gene pool of Origin Axies is totally controlled by our Pre-Sale supporters.

When “Origin Axies” are rolled, each of the 6 body parts has a 1/18 chance of having a mystic part. This means that each “Origin Axie” has~ 33% chance of possessing a Mystic part. Axies can possess more than one Mystic as well and these double,triple, and quad mystics are even rarer!

Supply of Mystics and chances of multiples

Single Mystic:Supply= 1325 Chance → ((1/18)*6= 33.33%

Double Mystic: Supply=205 Chance→ (1/18)^ 2 * 15 = 0.046 = 4.6%

Triple Mystic: Supply=17 Chance→ (1/18)^ 3 * 20 = 0.0034 = 0.34%

Quad Mystic:Supply=3 Chance→ (1/18)⁴ *15 = 0.00014 = 0.014%

Penta Mystic: Supply=0 Chance→ (1/18)⁵ * 6 = almost impossible

Hexa Mystic: Supply=0 Chance→ (1/18)⁶ * 1 = almost impossible

Godly Quad Mystics

As of the writing of this article, there are 3628 “Origin Axies”. Of these, 1325 are “Mystic” or ~36% of the “Origin” Population.

Based on the Math, *if* all Axie Origin Coins are redeemed and the hard cap is hit, there should be approximately 1453 Mystic Axies in the game. That’s a pretty low number, especially if Axie Infinity is able to garner anywhere near the popularity of Magic the Gathering(we think it can).

Spirit Crown’s associated battle move will use the spirit’s of fallen Axie teammates for extra power!

Utility: Mystic Parts are the only body parts in the game that can be upgraded to level 4, “Legendary Parts”. These parts will the most powerful Battle moves, making them quite useful in our PVE and PVP battle systems. For example, the “Spirit Crown” legendary part displayed above possesses a move that will get stronger as the teammates of the Axie fall in battle.

Aesthetics: Mystic parts and their upgrades will have unique skins. Most importantly, Legendary parts will have artwork a whole notch more impressive and God-like than their lower level counterparts.

The sales data from Etherscan backs up the idea that Mystic Axies have “Triple Threat” potential. The current cheapest “Mystic” Axie is listed at .6 Ethereum. One just sold this morning for .75

The most expensive Axie sold through our sales contract was a “Triple Mystic” Axie that sold for 9.5 ETH.

I hope you guys found the “Triple Threat” framework useful. I’ve been frustrated by seeing many people rush headfirst into crypto collectibles, make bad decisions and then complain after realizing they deployed their capital in an inefficient manner. Not everyone sees Crypto-Collectibles as an investment. However, if you are one of the people interested in investing in this space, I think this framework might be useful to you.

Much Love,


P.S. If you’d like to get in contact with me and discuss the ideas I’ve presented here please feel free to send me an email at [email protected] or find me in the Axie Infinity Discord: . You can also find me on twitter @Jihoz_Axie

For more information please join the conversation on our Discord or follow us on Twitter. Also remember to clap and share if you like this content.

Axie Infinity:

How I Value Digital Collectibles was originally published in Hacker Noon on Medium, where people are continuing the conversation by highlighting and responding to this story.

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