If you've ever visited Vietnam, you'll know it's a staggeringly
beautiful country.
In the Northeast, there is Ha Long Bay whose limestone
islands are among the world's most photographed natural structures.
The country's verdant deplatformed rice fields
have featured on travel, book jackets and magazine covers for decades.
Vietnamese food is famously delicious and the country's
culinary scene is vibrant, inventive and imitated all over the world.
But the one thing Vietnam wasn't renewed for until quite recently
was its start up sector.
Over this area, Vietnam has blossomed since Bitcoin's emergence
and crypto's migration into the media limelight.
Vietnamese entrepreneurs have capitalized on Crypto's popularity
and also created some remarkably valuable crypto companies,
including the likes of Sky Mavis and Kyber Network, to name a few.
These and many other crypto companies are launched from Vietnam
have cemented the country's reputation as a prime location
for tech firms who want to expand their operations abroad.
Case in point Apple recently
moved some of its AirPods production from China to Vietnam, and Google
has shifted a portion of its pixel phone manufacturing there as well.
Similarly, both Microsoft and Amazon have started
partially shipping some of their products from Vietnam as well.
So what's more is The New York Times reports
that Vietnamese real estate brokers are busier than ever
showing their commercial properties to multinational firms like Apple,
who are also eager to expand their operations in Vietnam.
Over the dozens of crypto firms who have launched from Vietnam already.
Sky Mavis, who developed the blockchain based game.
Axie Infinity is by far the greatest success story.
Although it has experienced a dip in popularity since its peak last
year, the game once boasted nearly 3 million monthly active users,
and its market cap today sits at over 770 million U.S.
dollars.
Of course, Axie isn't the only successful crypto firm
to have launched in Vietnam, both at COIN 98 and also Kyber network
have already made a serious waves in crypto
and bought billions of dollars to the industry as well.
These crypto companies no doubt contributed to Vietnam's somewhat
surprising status as the country with the highest rate of crypto adoption on Earth.
That's right.
Vietnam, a country whose economy globally ranks 39th largest
by GDP, is leading the charge towards mainstream crypto adoption.
In fact, one of Finder’s surveys found that 41% of Vietnamese respondents
own crypto.
However, you should bear in mind that finder's figure doesn't represent
the true percentage of Vietnamese people who own crypto, which is closer to 20%
or one in every five people, according to Chainanalysis.
Why do so many Vietnamese people own crypto?
And how is Vietnam outpacing the U.S.
and every European country in terms of crypto adoption?
One of the many possible answers is that Vietnam's government
has a generally positive attitude towards crypto regulation.
So far,
the government hasn't imposed many rules or regulations on cryptocurrencies,
other than to clarify that you can't pay for goods or services with crypto.
For now at least, the government has also recently passed
an investment law that clarified crypto status as a legal investment vehicle,
meaning Vietnamese citizens can legally invest their money in crypto.
Additionally, the country's
Ministry of Finance is developing a digital asset framework
which will set out the country's strategy towards growing its digital economy.
Another explanation for Vietnam's positive stance on crypto is that most Vietnamese
people don't have access to a wide range of investment vehicles
from which they could earn passive revenue.
And a sense crypto soared to record highs in 2020 and 2021.
It's likely that lots of Vietnamese people will saw crypto
as an exciting new profit source and jumped on the bandwagon.
One academic who supports this idea is Bin Nguyen, the senior program
manager of finance at the Royal Melbourne Institute of Technology.
Nguyen studies how Vietnamese people use crypto, and he's found that
the market is strongly retail driven, which means that most Vietnamese
crypto investors
want to actually grow their wealth rather than hedge against inflation.
We should also consider the possibility that some Vietnamese people
are simply buying crypto in order to gamble.
Why would they do this?
Well, the short answer is that most forms of gambling
are illegal in Vietnam, and they also have been for generations.
Most locals can't visit a nearby casino because in order to do so,
they have to prove that their monthly earnings exceed 10 million VND
or $426 per month before they can even get through the door.
For context, the average wage in Vietnam is around
6.1 VND or around $260 a month.
And as such, it's plausible that at least some people are trying to buy crypto
to simply satisfy their gambling urges rather than as an investment.
And let's not forget that most Vietnamese expatriates who live and work
abroad send money home to their families who still live in Vietnam.
These remittance payments could actually account
for as much as 6.3% of Vietnam's GDP.
As such, it isn't surprising
that so many of Vietnam's expats could use crypto to send their money home.
When you consider how low the transfer fees are compared
to those often charged by banks and transfer services,
one final consideration is Vietnam's bank lost population.
Those who live and work without bank accounts research actually suggest
that just 30 million Vietnamese people from a total of 90 million
have a bank account.
Other studies show that Vietnamese people collectively have at least 70
million smartphones or more than twice their number of bank accounts.
Together, these two statistics indicate that Vietnamese people urgently
need somewhere to store their
cash, and crypto platforms can provide a convenient solution.
There doesn't need to be just one reason to explain why Crypto is so popular
in Vietnam.
However, we should also consider the fact that several Vietnamese crypto companies
have enjoyed extraordinary success over the past few years,
which will have boosted the popularity of digital assets within Vietnam.
Take Coin98 for instance, which was founded by Thanh Lee
and Vinh The Nguyen in the city of Ho Chi Minh in 2017.
The company has enjoyed a remarkable success
in its relatively short history, and it's also very popular across Asia.
In case you aren't familiar with Coin98 it's a DeFi platform through
which you can move and swap assets and also different tokens across
different blockchains and earn interest from staking and also yield farming.
Most of its services revolve around its multichain compatible wallet,
which lets you interact with all your crypto wallet on different blockchains
like Ethereum, Binance, Smart Chain and Solana by using just one password.
At the time of this video,
the platform's token C98 at a market cap of over $50 million.
Although it was floating around at $1 billion in August of 2021, crypto firms
like Coin98 draw the attention of foreign investors
and the global crypto community to Vietnam,
which is great for Vietnam's economy, especially its startup sector.
Another platform which has enjoyed similar success and raised
Vietnam's profile within the crypto space is the Kyber Network,
a decentralized exchange DEX aggregator and liquidity platform.
In layman's terms, Kyber provides liquidity for various DEFI applications,
including its own DEX, and it also lets you exchange
various tokens and coins without an intermediary.
During its initial funding round in 2017,
the Kyber team raised $52 million, which at the time
made it the most successful startup in Vietnam's history.
And in April of 2022 at the Kyber network became the third of Vietnamese
crypto firm to reach $1 billion in a market capitalization.
So both Coin98 and Kyber achieved success remarkably quickly and also both
helped to solidify Vietnam's reputation as a hub for crypto investment.
However, neither comes close
to matching the success of Vietnam's runaway crypto success story.
Actually, Infinity Axie Infinity is a NFT based
game developed by Sky Mavis, which launched in Vietnam.
In case you haven't played Axie Infinity, the game involves
creating adorable little monsters and battling them against
other equally adorable little monsters who belong to other players.
Unlike other turn based games, your whole team battles another team
at once as opposed to one character battling another character each term.
If you win your battles, you can either gather up smooth love potion or SLP,
which essentially works like experienced points,
except that you can sell them for profit or consume them
to actually breed more axes, which you can also sell for profit.
Actually was partially inspired by CryptoKitties,
a blockchain game that momentarily took over the world in 2017
and by Pokemon, which needs no introduction and which uses
a similar turn based fighting system to that which of actually uses today?
Unlike most of the video games that came before it, you actually own
your in-game items in actually including your creations called AXS.
This is because each axie is an NFT, which means that you can sell your AXS
and also SLP.
This NFT based functionality remedied that Web3 gamers
see as a fundamental flaw in Web 2.0 gaming model that you don't actually own
your in-game items and can therefore lose access to them arbitrarirly.
Axie runs on the Ethereum blockchain, which is the most used blockchain
for NFT, is and has a dedicated sidechain called Ronin,
which reduces the fees for trading axes and other in-game items like SLP.
This Ronin sidechain was considered a huge success
by the Axie community right up until it was hacked in March of 2022.
North Korean hackers fooled a Ronin engineer
into downloading a document riddled with malware
that also let the hackers control Ronin's validator nodes.
This let them drain it $600 million from the sidechains fund,
and most of which belong to the actually player community.
In the months leading up to the Ronin hack, 2.5 million people were playing Axie
every month and it was also trading at $10 Billion in a market capitalization,
which made it one of the most popular and valuable games on earth.
But how did this plucky startup in Ho Chi Minh,
achieve an enormous success in such a short time span?
The answer It seems that axes play to earn model
hit the markets at the perfect time when much of the world was locked down
and also unable to work in countries where most people can't work from home
like the Philippines and Vietnam actually provided something of a lifeline
as it gave them a way to earn some much needed cash during the lockdown.
When word got out about how much money you can make from playing a video game.
Axes Popularity exploded overnight.
The game's monthly player account soared from 20,000 in July 2020
to nearly 3 million in December of 2021.
This was great news for Axie’s community and even better news for Vietnam.
Axes.
Success led to many discussions in the media about the country's
new start ups as a fast growing startup hub.
Unfortunately, Axes runaway success eventually led to an inflationary problem
caused by too much sloppy farming and not enough axes being created.
And the only way to destroy SLP is by creating
AXS, displays, Sky Mavis efforts to intervene.
This inflation caused SLP price to crash, and at which point
millions of players sold their axes and abandoned the game.
At the time of this video axes
monthly player count is hovering at around 470,000 players,
regardless of axes currently diminished player count
or whether its popularity will ever recover.
Most will agree that axes served as a huge onramp
for thousands of new crypto users, especially in Vietnam.
This and Vietnam's bustling crypto startup scene undoubtedly
contributed towards the crypto's growth throughout 2020 and 2021
and will certainly continue to do so in the future.