Understanding Axie Infinity - The Trend of Play-to-Earn Gaming
Non-fungible token (NFT) collections like art pieces and videos exploded in popularity in early 2021, but some blockchain-based games were built even before the NFT boom.
In 2021, as NFTs became a dominant trend, the promising crypto game Axie Infinity by Sky Mavis succeeded. When the NFT market declined after the hype, Axie Infinity stood out, experiencing significant growth that surprised many.
Axie Infinity is an NFT game inspired by Nintendo's beloved Pokémon series. In the game, players collect and battle cute creatures through various combats.
However, playing requires an initial investment to purchase Axie NFTs, which can be higher compared to traditional gaming consoles like PlayStation or Xbox. Nevertheless, these Axie NFTs are owned by the players, allowing them to sell or earn rewards in cryptocurrency tokens through its "play-to-earn" approach.
What is Axie Infinity?
Axie Infinity is a monster-battling game where players assemble teams of cute creatures called Axies to battle each other in combats.
The game runs on the Ethereum blockchain with the assistance of Ronin, a sidechain that helps reduce transaction fees and latency. It primarily focuses on turn-based battles against Axie teams controlled by either AI or other players.
Items in the game are represented as NFTs (non-fungible tokens), unique cryptographic tokens that can be linked to digital content. Unlike items in traditional games, NFTs grant actual ownership to the buyer, enabling them to trade Axies on the game's marketplace to earn real money.
Players can also breed Axies, allowing them to build stronger potential teams and acquire additional NFTs to sell on the marketplace. Some Axie NFTs have been sold for prices exceeding 300 ETH or more than $600,000 at that time.
How does Axie Infinity work?
Axie Infinity revolves entirely around NFT items, with no means of play unless you own the three necessary Axie NFTs to form your initial team.
You can purchase them from the Axie Marketplace. You can play on PC, Mac, Android, or iOS and deploy your Axies into battles to earn rewards.
What makes Axie Infinity special?
Axie Infinity takes the engaging premise of Pokémon and adds an ownership element. These Axies belong to you and yield tangible rewards: Smooth Love Potion (SLP) tokens that can be converted into money.
The initial cost to acquire Axies is a significant barrier for many players, but the game offers high financial profitability, attracting numerous participants despite the large initial investment.
"Play-to-earn" might sound like a phrase that arouses skepticism, but we have seen evidence of a player-driven economy forming around the game.
For example, there are thousands of "Axie Scholars" through programs like Yield Guild Games, where Axie owners lend their NFTs to players to use and earn money. Profits are shared among the parties involved; in countries like the Philippines and Indonesia, people are playing Axie to support their families. Whether this is a sustainable model remains to be seen, but it is a potent and revolutionary idea that has been put into practice.
Getting Started with Axie Infinity
Previously, in the Axie Classic version, you needed three Axie NFTs to start playing Axie Infinity, with each Axie's price ranging from $225 to $250.
However, in 2022, the Axie Infinity project faced issues with SLP token inflation, leading to the development of a new version called Axie Origin or V3 to address the shortcomings and mistakes of the previous play-to-earn model.
The SLP token inflation significantly affected the profits of game players, with the price of SLP tokens falling more than 60 times from its peak, and the current price of Axie NFTs is approximately $6 per NFT on the marketplace.
Learning and Playing Axie Infinity Origin
Although Axie Infinity is a gaming project aimed at bringing joy and entertainment to everyone, its essence remains a play-to-earn game that focuses heavily on financial aspects. The creation of the Origin version is seen as a new direction that brings more revolutionary aspects, but it has not been able to alleviate the pain and losses of previous players.
From a positive perspective, Axie Infinity remains a leading play-to-earn game project in the crypto market and is supported and invested in by many major funds. Throughout 2021, Axie consistently led the gamefi market, achieving numerous milestones that gradually built investor confidence in exploring and developing the play-to-earn model to serve and grow the community.
The community of Axie Infinity players remains the largest in the world compared to many other game projects, and people still believe that Axie will once again lead the vibrant gamefi market.
Note that Axie Infinity is not notable for its gameplay but for being a leader in the play-to-earn model. In the future, undoubtedly, many games of various genres will replace the dominance of Axie Infinity, but in the short term, Axie Infinity remains a monument, a benchmark that many game projects and studios strive to pursue.
What is AXS Token?
Axis Infinity Shard (AXS) is the native governance token of Axie Infinity. Currently, you can use AXS to pay breeding fees. In the future, AXS holders will be able to vote on game-related decisions and development, as well as stake AXS tokens to earn rewards within the game.
Over time, Axie Infinity plans to gradually transition into a decentralized autonomous organization (DAO) to allow community governance.
Where to Buy AXS?
AXS is available on cryptocurrency exchanges like Binance, FTX, Huobi Global, or decentralized exchanges (DEXs) like Uniswap and SushiSwap.
To buy AXS on DEXs, you need to connect with a Metamask wallet and have some ETH for gas fees.
Future Outlook
Axie Infinity exploded in late June 2021, shortly after the Ronin migration process and the announcement of a $7.5 million Series A funding round with the participation of Mark Cuban, Alexis Ohanian, and others. Sky Mavis also received support from major game publisher Ubisoft, which advised the Entrepreneur’s Lab. The Series B funding round in October 2021, led by Andreessen Horowitz, valued Sky Mavis at nearly $3 billion.
By September 2021, Axie Infinity had reached a total NFT transaction volume of over $2 billion (which rose to $4 billion by March 2022). Long-term players were rewarded with a $60 million AXS token airdrop in September 2021.
In November 2021, Axie's Ronin sidechain added its own decentralized exchange called Katana, making it easier for Axie players to trade tokens without the need to switch to Ethereum.
Although the price of $AXS tokens and NFT trading volume declined from December 2021 to the first quarter of 2022, the team has begun implementing economic changes to try to counter the collapse. For example, reducing the creation of SLP in the game.
The explosion of play-to-earn gaming has made frequent user experience improvements and guides for newcomers always a challenge for the project development team, requiring many operations and some knowledge of cryptocurrencies.
Co-founder Aleksander Leonard Larsen emphasized that more than half of new Axie players have never used any cryptocurrency applications before, noting that "it's really hard to start playing Axie right now." As part of a major change, Axie Infinity ultimately plans to launch a way to play that doesn't require players to buy Axies, providing new users with non-tradeable and earnable forms but with limitations.
In the Origin version, all players will receive 3 free Axies when they start and can increase the number to 5 Axies through gameplay activities. However, if you want to earn real money, you still need to invest in Axies sold on the marketplace, which are valuable NFTs that will help you mine more tokens in the game.
