This is the public version of our post that was originally on September 25th, 2020.

Last night our team purchased 5 Axies for 473.5 ETH worth ~$159k at that time. Recent market moves may have pushed some to the sidelines but we saw the recent turmoil as an opportunity. An opportunity to spend a lot of money on digital battle pets. While this may appear to be a confusing impulse buy at first glance, spurred on by the recent hype around NFTs, it’s actually a purchase we’ve been patiently waiting to make ever since we started Delphi. Few know this, but our very first job as a company was to research the crypto gaming sector for a high profile fund. Our mandate was simple – play the games, see if they’re any fun and scout out opportunities in the sector. One of the projects we came across during our research was Axie Infinity, a game that lets you collect, battle and breed digital pets called Axies. I made 11 test teams, played 47 matches and lost most of them. Even though my poor battle record left me frustrated, I came across a unique opportunity that has been in the back of my head ever since – Mystic Axies. I’ll use an excerpt from our very first research report, dated September 7, 2018, to summarize.

Mystic Axies were rare, finite NFTs with clear utility for battling. As a kid who grew up collecting and playing Pokémon, the thought of establishing a monopoly over the rarest Mystics piqued my interest. I wanted to own the next Mewtwo, and Articuno, and Moltres, and Zapdos. Many times over the past two years, our team discussed pulling the trigger on a Mystic collection that we could call our own but the timing never felt right, until now. With the upcoming launch of Axie Infinity’s new governance token, which we helped design, and momentum for NFTs building, we realized that we needed to act before these assets were out of our reach for good. Our goal was to assemble a top Axie collection comprised of the rarest Mystics in the game, which we could battle and hold for years to come. Questions that kept coming up after our purchase were – “Why these Axies? How do you know which ones are valuable?”. These questions distill how challenging it is to evaluate the NFT market. Because each is unique, nobody knows what to look for. In this post, we’ll explain our rationale behind the Axies we purchased to shed some light on how to approach this space.

There are two primary factors we focused on – 1) rarity and 2) utility. I’ll start by explaining how we ana