As our society has advanced in the age of the internet, so has the way we purchase and distribute goods through the use of the internet. Instead of carrying cash and pocket change, we can now be consumers and retailers through the use of digital currency with just a click of a button. This digital currency works as a medium of exchange to secure financial transactions and has changed the way companies see their target consumers. WAX and its President, Malcolm CasSelle, have seen the benefits of cryptocurrency and are not only looking at it as a digital currency, but as a business in itself.
Entrepreneur Malcolm CasSelle is among the many who sees the growing use of cryptocurrency as an opportunity. As the CIO of the company known as OPSkins, CasSelle focuses on the use of digital currency and newly created cryptocurrency within the online gaming marketplace. OPSkins is an online trading platform, where gamers around the world buy and sell digital items using real-life money. Online games and blockchain-based games enable players to trade weapons (sometimes called skins) and other in-game items to each other. These items have value to gamers because they’re used to either improve their game play, adorn their weaponry or characters, or are treated like collectibles. Before OPSkins™ launched in 2015, buyers and sellers of in-game items would find each other through a variety of informal channels and trade with one another, leading to constant scams. Buyers would send the seller money, only to never receive their item. Sellers would send the item to a buyer who would then file a chargeback, and the seller would lose both their item and the earnings from the “sale.” OPSkins was created as a safe alternative to forums like these. The marketplace keeps both buyers and sellers safe by acting as a third-party platform. Sellers trade the item to OPSkins™, not the buyer. Buyers send money to their OPSkins™ account, not to the seller. OPSkins™ then facilitates the trade by releasing the item to buyer and the money to the seller.
But with the launch and subsequent success of OPSkins, they became a competitor in the eyes of Valve.
OPSkins vs. Valve
OPSkins quickly became popular within the gaming community for one simple reason. Convenience. When players buy and sell skins and other items on the Steam Community Marketplace, they are met with a seven-day trading hold. As for gamers trading on the OPSkins platform, it is immediate. This is possible with the introduction of trading bots designed to bypass the trading hold put in place by Steam. So when Valve saw many of their customers switching to this new and quicker platform, a rivalry was imminent.
The firm responded by blocking the trading bots and sending a cease and desist order to OPSkins. As a result of this order, around $3 million worth of digital assets were left unclaimed. According to Malcolm CasSelle, the gamers had abandoned the assets due to decreased value, “This behavior highlights the fact the value of the skins were tightly associated with the variety of important services that OPSkins provides. Once Valve took away the freedom of players to trade on OPSkins, the perceived value of those items greatly diminished.”
Some might look at Valve’s reaction as fair. But for OPSkins, we saw Valve’s move as greedy to force consumers to use their platform. CasSelle expands on his thoughts of the event. “Based on Valve’s public and private statements, as well as its behavior, we firmly believe Valve’s primary motivation in removing OPSkins from Steam was to force people to use Steam Community Market. It has a right to do that of course. It’s their platform. But forcing your customers to use an inferior service just because you want to extract more profit out of them is not a good long-term strategy. Especially when customers have new and better choices. The vast majority of CS:GO (Counter-Strike: Global Offensive) trading customers preferred to use OPSkins when given a choice. But once Valve imposed the seven-day trade hold and then banned OPSkins from servicing the CS:GO community, they were back on the top. Back on top of a much smaller market, however, since many CS:GO item traders left the market once OPSkins was no longer available.”
Valve has claimed that its seven-day trade hold is necessary to combat fraud. With the cease and desist order stopping all trades through the OPSkins platform, CasSelle and the company were inspired to develop a better way to retain instant trading capabilities without the risk of fraud. And so, the creation of WAX was introduced and along with it came opportunities.
What is WAX?
WAX, also known as Worldwide Asset eXchange, is a decentralized platform that enables anyone to operate a fully functioning virtual marketplace with zero investment in security, infrastructure, or payment processing. Created by the founders of OPSkins, WAX is designed to serve the 400+ million online players who already collect, buy and sell in-game items.
“For over two years we had been working on something vastly better than Steam for the global item trading community. That something is the WAX global gaming platform.” Malcolm CasSelle continues, “It is a platform like no other for the video gaming world. WAX is the world’s first global video gaming platform that is virtual-item-centric. Not publisher-centric. WAX represents a massive shift in how the video game industry is structured.”
The trading on this new platform is done with WAX Tokens which allow virtual goods to be easily tokenized and exchanged for cryptocurrency. These “tokens” are not limited to only video games. The contract underlying the transaction acts as the mechanism that permits trustless trading between buyers and sellers. This allows millions of traders to create their own virtual stores on one decentralized platform, providing instant payments, security, and trust services that will bring millions of new participants into a growing ecosystem. The “WAX Ecosystem” is broken down into five sections.
- Store Owner: WAX enables a new generation of virtual asset traders, similar to how earlier online marketplaces enabled entrepreneurs to become power sellers.
- Guild: Start or join Guilds that self-govern and oversee transactions specifically for your favorite game or game server, and receive rewards for your involvement.
- Transfer Agent: By reviewing and facilitating transactions, WAX members can earn significant fees. With more fees earned, there will be more tokens available for using and accessing the entire ecosystem.
- Appraiser: WAX members familiar with assets and pricing for their favorite games can offer appraisal services to marketplaces in need of valuation and verification services.
- Asset Creator: Entrepreneurial designers and makers will be able to create virtual assets and offer them for sale in their individual marketplaces.
CasSelle strongly believes that WAX is a much better system than OPSkins. With the use of blockchain, WAX can be accessible to anyone and provides its users with access to a worldwide market. This entails a complete catalog of all items for sale in real time. “We felt the future was blockchain, peer-to-peer trading. It’s much more powerful than centralised trading. There are 1,000 more things you can do with it. Plus, if you’re a streamer and have peer-to-peer trading available to you, it means that you can make money trading from your audience. Currently, you’re only making money from advertising. It’s a superior business model for content creators in the gaming space.”
After learning what WAX is and what it can offer, it appears as though this platform is now in competition with OPSkins. OPSkins is a centralized platform as where WAX is a decentralized platform that offers the same services and more at a quicker rate. Malcolm CasSelle claims that they have designed it that way and they are “disrupting ourselves. We have leapfrogged the ‘innovators dilemma.’ OPSkins, running as a business, had an asteroid in deep space with blockchain written on the side of it – that was the existential threat. We have a great centralized business, so what’s the threat? Of course a massive decentralized business doing the same thing. A decentralized datacenter will always be way more efficient than a centralized one because it can go where the power is cheapest. What I see happening is that as WAX becomes very successful, OPSkins will not be the biggest single marketplace in the world – it’ll be one of thousands of successful marketplaces.” With OPSkins being 10 to 20 times bigger than their closest competitor, launching WAX will be giving up a lot of power to thousands of people. But by doing so, there will be countless more marketplaces. CasSelle believes WAX will empower thousands of competitors.
How Will WAX Work?
With all the ability and promises of WAX, it sounds as if everyone might jump ship and adopt this new platform. But it will take time for developers to create games which use WAX’s blockchain. The blockchain is ideal for secondary item marketplaces where these items are bought and sold and fundamentally owned by the gamers themselves. The problem is the developers don’t yet know how to take advantage of that activity. Many developers only see these secondary item stores as taking revenue away from them. However it couldn’t be farther from the reality of what happens. The revenues generated by secondary item trading create a new source of revenue to go back into the game as most sellers end up spending a portion of that in the game they love. This effectively gives the players more money to go spend on the game.
The president of WAX, Malcolm CasSelle speaks on this issue, “The main reason you don’t see item trading is that it’s really hard to create a great game. Once you’ve gone to that level to create a great game, you’re producing new levels, customer support, distribution partners, keeping the game relevant. You have so much to do. The idea of embracing another business model which you know nothing about and is very complicated and has lots of inherent risks. This business model requires a certain amount of experience, knowledge and developer time. When you look at the list of things that the average has to worry about to keep a successful game franchise, they just never get to it.”
So if many developers aren’t yet putting out games that use this blockchain technology, how will WAX be relevant and useful? WAX has already solved the problem for digital collectibles, both blockchain based and non-blockchain based. Based on what we’ve seen with OPSkins, we now know the interest that the gamers have for using these secondary item marketplaces will only grow. CasSelle believes that this high demand from gamers will help boost the WAX ecosystem and its audience. Some game developers have taken notice of this growing trend and CasSelle feels WAX is ahead of the curve. “All these indie developers that are looking at item trading are embracing it. That’s why what we’re seeing is this watershed moment where item trading will become pervasive.”
With more marketplaces joining the blockchain comes more transparency and faster transactions. The speed of these transactions have already been demonstrated with the new WAX ExpressTrade instantaneous exchange protocol that OPSkins uses for non-blockchain game items such as the ones in Counter-Strike. The same modules are being used for WAX and it appears that users can expect the same level of speed. But with the abilities that this technology has shown, there will still need to be a high demand for blockchain games for WAX to be successful.
OPSkins basically took what Valve did with Steam and made it better. We’ve seen this with the game Counter-Strike: Global Offensive. Valve created the game with the ability to buy and sell secondary items. OPSkins came in and made it faster for gamers to see results. The game is wildly popular with millions of players. It’s a huge success, but there aren’t many like it. WAX’s success is only dependent on the success of the game itself. CasSelle acknowledges this issue and plans to build a bigger portfolio of blockchain games. He is expecting that the traditional gaming industry will start leaning towards these types of games and states, “At least 10 of the top 50 game companies are considering blockchain. Triple-A games are now considering tradable items. The CFOs at these company don’t like it. They are justifiably cautious. But development is going ahead.”
The Future For WAX
With millions of users and the growing demand for blockchain games, it appears that Malcolm CasSelle is justifiable for his confidence that WAX will be successful. WAX has already landed many partnerships with credible companies including Terra Virtual, Forge Arena, Bancor Network, GIFTO, and Robot Cache. Not only has the popularity grown for blockchain games, but also that of the use of cryptocurrency. We’ve seen it with the Bitcoin phenomenon. “We are big into crypto but we had to build our own payment processing.” CasSelle says. “In our marketplace, many items are small value. There is no point offering a digital asset for 50c only for it to spend $2 in fees to send. Transaction fees on other blockchains are too expensive. We need fees in the form of micro pennies.” Its low costs like this that will bring more consumers to the platform. For many of these consumers there may be a lack of knowledge on the possibilities that come from this new platform. That’s why WAX and OPSkins both offer asset classes. Classes like these teach what you can do with your cryptocurrency. With millions of users and growing at the rate of about 200,000 per month, the transaction speed requirements are more than what the industry of cryptocurrency can support. CasSelle sees this as a possibility for “changing the crypto world” by pushing its current limit, and increasing its reach indefinitely to support a mass market audience. He demonstrates the confidence in that possibility saying, “While on our roadshow we visited every crypto expert and source of funds we could find. What we found was universal appreciation of our product.”
The new decentralized platform has also teamed up with the massively online strategy game known as War Riders. The game is based on earning cryptocurrency, customizing vehicles and battling opponents. CEO of Cartified (creators of War Riders), Vlad Kartashov is more than excited about the partnership. Kartashov feels players should have full control over what they’ve earned and for the first time, a truly decentralized gaming economy is created by giving power back to the players. It’s not what the game is, it’s what it represents. For CasSelle, blockchain-based games like these will bring more opportunity for the cryptocurrency community to get involved. While these blockchain games are becoming more popular, the need for a trustworthy marketplace like WAX will grow as well. “Integrating War Riders to that ecosystem is an exciting move for us and for the blockchain-based gaming community as a whole.”
It’s quite possible we may witness a new phenomenon of a completely decentralized gaming market. As consumers learn more about the possibilities created by WAX, we could all be running our very own Amazon.