Axie Infinity is a Pokémon-inspired universe where anyone can earn tokens through skilled gameplay and contributions to the ecosystem. Basically, it is an online game where players duel by pitting a trio of NFT collectible creatures against each other.
If reading the gameplay description makes you ask: why should I care? Then, you have to look at the NFT charts to fully appreciate why it is not just a “fomo” kind of game. Axie Infinity has been this summer’s star protocol grossing a lifetime volume of around $982 Million. With almost half a million daily active users (DAU), Axie is exploding.
Moreover, this NFT-backed game is largely responsible for putting “Play-to-Earn” on the global gaming map. In the past months, the Axie hype train ran as hot as it’s ever been. The game has been featured on Crypto Publication Coindesk, Broadsheet Singapore Business Times and even on a documentary. Axie Infinity proves that Play-to-Earn corner is a force to be reckoned with in the NFT gaming space.
There are three elements governing the game’s ecosystem.
Axie Infinity is a battle game between Axies. Each Axie is unique and exists as an ERC-721 Non-Fungible Token (NFT). Meanwhile, Smooth Love Potions (SLPs) are earned by playing the game and can be used to breed new Axies. Lastly, AXS is the platform’s native governance token. So AXS holders have the power to vote on key decisions like game functionalities and how treasury funds should be spent. You can jump to the following sections for a more detailed discussion:
What is Axie Infinity and How Do I Get Started?
The play-to-earn game is an original concept of a Vietnamese-based start-up, Sky Mavis. The game studio outfit was co-founded in 2018 by developers Trung Nguyen alongside Aleksander Leonard Larsen, Jeffrey Zirlin, Tu Doan and Viet Anh Ho. Nguyen first got the idea to create Axie Infinity in 2017 after he became fascinated with playing CryptoKitties. Before becoming the CEO of Sky Mavis, he had previously served as the Chief Technical officer for Vietnamese startup Lozi (now LoShip) from 2012 to 2015.
Co-Founder Zirlin shared, “Axie Infinity is one of the original non-fungible token (NFT) projects, and we have already been working on NFTs before anybody even cared about it. It feels very good to see that the world has caught up.”
Axie Infinity’s vision is to create a future where work and pay become one. So they designed the platform to provide a fun, accessible, and educational way to gain exposure to the capabilities of blockchain technology. The numbers affirm that this approach is paying off.
With a market capitalization of more than $2 Billion as of August 4 and projected revenues of more than $1 billion this year, things couldn’t be better for Axie Infinity. Furthermore, Sky Mavis raised $7.5 Million in a seed round back in May so it has enough firepower to maintain a comfortable lead over other NFT projects. Backers include Billionaire and Dallas Mavericks owner Mark Cuban. Moreover, Axie Infinity conducted the final phase of its token sale on the Binance Launchpad, raising a total of $2.97 million.
As of August 2021, Axie Infinity is currently the number one Ethereum-based gaming DApp by weekly on-chain volume. It is also one of the top three most popular gaming DApps by user counts — with over 100,000 unique weekly users.
Axies: The next Pokemon?
Axie Infinity drew inspiration from Pokémon and CryptoKitties. The founder, Nguyen, first got the idea to create Axie Infinity in 2017 after he became fascinated with playing CryptoKitties. So like the collectible digital kittens which led the NFT craze, Axies are cute NFT digital pets.
Each Axie has four different stats: Health, Morale, Skill, and Speed. Each of these plays a crucial role in Axie’s battle mechanics since they decide how much damage the Axie can take, who attacks first, and how much damage it can dish out.
Axies come in one of either six normal classes (Aquatic, Beast, Bird, Bug, Plant, or Reptile) or one of three secret classes (Dawn, Dusk, or Mech). Different classes have their strengths and weaknesses that make them more or less effective against certain other classes. For example, Aquatics are strong against Beast, Bug, and Mech Axies but are weak against Reptile, Plant, and Dusk Axies.
An Axie is made of six body parts: back, ears, eyes, horns, mouth, and tail. Barring the eyes and ears, these parts each have an ability associated with them, and therefore influence the Axie’s capabilities in battle.
Some of the rarest types of Axies are those with Mystic parts — which are only found in some of the original batches of Axies sold during the pre-sale. As of August 2021, one of the last remaining quadruple mystics (#991) is currently listed for sale at 5,000 ETH.
Pioneering a new game model: Play to Earn
In the Axie Infinity ecosystem, Axies and in-game items like real estate, flowers, barrels and lamps, are all tradeable as NFTs. Players can buy and sell them in the Marketplace for a profit. So it is a play-to-earn game because it allows players to earn currency from playing the game as they breed, raise, battle, and trade Axie creatures in the marketplace.
Play-to-earn is a breakthrough from traditional gaming models such as Pay-to-Play. As the name implies, players need to pay first before accessing and advancing in the game. Perhaps the most notorious examples are the video games designed for mobile games. For example, Jurassic World: The Game and Final Fantasy All the Bravest. Axie Infinity’s “gaming for a living” model is even better than popular free-to-play games like Candy Crush and Fortnite due to the potential income from SLP and AXS.
Axie Infinity’s Native Tokens: SLP
Basically, SLP is the in-game currency of Axie Infinity that runs the game. Every time a player wins a duel, they are rewarded in $SLP. It has no cap and is used to breed new Axies. The game burns SLP every time player breed Axies. Players breed in order to produce offspring with special abilities that make them more powerful. They can also aim for other characteristics that are desirable to other collectors.
In Axie Infinity, the income typically comes in the form of Smooth Love Potion (SLP). Players need to complete and enter quests, arena mode and adventure mode in order to earn SLPs.
Players can choose between three daily quests. They can claim a fixed 50 SLP every day by finishing all the quests. To complete daily quests, players need to do 3 things. The first is to do daily check-ins. Then, complete 10 Adventure mode levels. Finally, win 5 arena matches. Since quests include adventure mode and arena matches, there would be additional rewards in completing daily quests.
Arena mode is where players battle it out against each other according to their rating or trophies. The higher the trophies, the more experienced players a player would likely go against. The lower the trophies, the less experienced players a player would likely go against. This is similar to many other PvP (Player vs. Player) games.
Finally, the third option is the adventure mode which is the more casual area of playing Axie Infinity. Players go up against bots disguised as Monsters, not Axies. It is the easiest and most passive way to earn SLP since players can continuously earn and win. In turn, it creates a reliable stream of SLP.
In general, experienced players find arena mode more valuable because winning against higher-ranked players yields higher SLP Rewards. For beginners, the adventure mode would be easier and reliable for earning an income for SLP. It has no time limit, meaning that there is an unlimited thinking time, unlike arena mode which ranges between 30 seconds to 1 minute.
Axie Infinity’s Governance Tokens: AXS
AXS is now the largest gaming cryptocurrency on the market. AXS holders have a vote in the governance of the game’s ecosystem and can also use it to get a share of the community treasury. The governance token has also seen an impressive rise recently, up about sixfold in recent weeks.
AXS is currently trading for $43.52 and it reached an all-time high of $46.17 11 days ago. It is currently listed on 45 exchanges with the top exchanges being Binance ($239.74M), Upbit ($134.13M), and FTX ($105.84M).
If you’re curious about what triggered the $AXS and $SLP break-out this month, we have to look at the breeding component. Players need both AXS and SLP in order to breed new axies, and every new player must buy them to get started. In late June, Sky Mavis decided to double the AXS payment for the breeding, making it more expensive to create new teams to sell. In effect, the prices went up and volume skyrocketed as well.
Through AXS, people can bet on the Axie ecosystem without actually participating in it. This is quite tricky because speculators can move the price in the direction that suits them. Right now, that direction is “up,” but they could just as easily crash the price when they take profits at the top.
How much do I need to start playing?
The lowest-priced Axies available today cost around $400 and the most expensive ones sold for 300 ETH (almost $550,000). You need to buy three Axies to be able to participate in the game. Here’s how you can do it:
- Buy ETH from a cryptocurrency exchange such as Binance.
- Create a MetaMask wallet and deposit your ETH into it.
- Create a Ronin Wallet account and deposit your ETH into it using Ronin Bridge.
- Go to Axie Marketplace and log in using your Ronin Wallet.
- Buy at least 3 Axies.
- Download the Axie Infinity game client from the website.
You can save up on some Ethereum transaction fees by purchasing WETH (wrapped Ether) directly into your Ronin wallet. The cost of each Axie depends on the current price of ETH as well as a lot of different factors. So make sure to do a lot of research first on what traits to look out for when buying Axies.
Once you have a starter team ready, you can download the game client and sync your Axies. Then, you can start earning and playing.
Since it is already expensive to enter the game at this point, there is an alternative route. The Play-to-Earn characteristics of Axie Infinity led to the formation of the Axie Infinity scholarship economy. Essentially, this program enables well-heeled players, known as Managers, to lend out a team of three Axies to workers, known as Scholars.
These Scholars then use the team of Axies to grind for SLP and other rare items and share the loot with the Managers. The Manager might also provide educational resources and mentoring to the Scholar, helping to maximize their yield per day. Currently, investors get around 40% of the pot.
Axie Infinity prohibits multi-accounts. This is the gap in the game that Scholarship programs solve. Through sponsoring scholars, managers can deploy more than three Axies at a time without violating the multi-account rule.
Yield Guild Games is the biggest player in this space. YGG is a play-to-earn gaming guild, bringing players together to earn via blockchain-based economies. Under the scholarship program, Axie owners loan their monster NFTs to players who can earn money via in-game rewards tokens. It has 25,000 gamers and counting within its organization, spread across more than 12 countries.
Two months ago YGG raised $4 Million to power Play-To-Earn games. Then last week, the project raised $12.5 Million in 31 seconds after the token sales. According to YGG, now that the token sale has concluded, the launch of the YGG DAO is officially underway. The first order of business is to distribute tokens to the YGG community to reward their early participation.
Crypto Whale Flying Falcon, was one of the first to contribute to the “Sponsor-A-Scholar” program set up by YGG. He agreed to back 50 Axie Infinity players through the program. According to reports, 70% will go to the player, 20% to YGG’s community manager who trains and manages the player, and the final 10% to YGG to cover gas fees and breeding costs.
Creating Job Opportunities in the Philippines
The Play-to-Earn model found an unlikely fit in developing countries that are not tech havens. 40% of Axie Infinity’s almost half a million daily active users live in the Philippines. “Not surprising because those who lost jobs during the COVID-19 pandemic can earn more playing. Axie Infinity than the $900 per month average income that they might earn otherwise.”
Last week, one of the country’s leading broadsheets released an article about the game. It highlighted the “Play-To-Earn” model as a means to put food on the table. Philippine Daily Inquirer featured the story of 17-year old, Zedric. “He was offered a scholarship through a friend who endorsed him to a manager he found online. Now, a month after he started his scholarship, he is earning above minimum wage and can finally pay off his family’s monthly electricity and water bills, as well as reward himself with a bike.”