The Vietnamese play-to-earn mega hit that captured the headlines in 2021
For anyone interested in web3, Axie Infinity is a name that carries weight. It shot to fame in 2021 when thousands of people started earning a full-time living from it. Lots of people will have seen the cute little NFT characters and some will know that the game involves battles. But what is Axie Infinity and how does it work? Playing the game is the best way to find out. But it makes sense to start with our comprehensive guide.
- What is Axie Infinity?
- Who created the game?
- How do you play Axie Infinity?
- What is the Ronin network?
- Axie Infinity has two in-game tokens
- How much does it cost to play?
- What are Axies?
- How to make money playing Axie Infinity
- Is the in-game economy sustainable?
- Is there Land in Axie Infinity?
- What plans does Sky Mavis have for the future of Axie Infinity?
- Useful links
What is Axie Infinity?
Axie Infinity is a play-to-earn blockchain game where users can breed and battle their NFT characters. It became a mega-hit in 2021, as people played it worldwide to earn a livable income.
Axie Infinity began with a simple battle arena-type format. Players could battle each other or fight the computer in progressively more difficult stages. The in-game critters, called Axies, are based on Nintendo’s retro classic Pokémon.
It regularly sits at or near the top of DappRadar Games Rankings pages and attracts tens of thousands of users on a daily basis. Alongside this, tens of millions of dollars pass through the Axie Infinity smart contracts every week.
Whichever metric you use, Axie Infinity is an indisputable giant of the blockchain gaming scene.
Who created the game?
Sky Mavis is the company behind Axie Infinity. It’s a Vietnamese company, led by co-founder and CEO Nguyen Thanh Trung.
The video game developer was founded in 2017 after its founding group realized the potential of blockchain technology. After investing in CryptoKitties, Trung saw that play-to-earn gaming could provide real benefits to users.
Sky Mavis was valued at $3 billion in 2021, on the back of a $152 million funding round. Since then, the game and its ecosystem have endured a rocky period (more of which later). Today, the company is probably worth much less but is still a giant in the blockchain space.
How do you play Axie Infinity?
As things stand, Axie Infinity is a very simple game. You send your three Axie characters into battle against three other Axies.
This can be in Arena Mode, which is player-versus-player live battles, against someone somewhere else in the world.
Or you could be fighting against the computer, in Adventure Mode. In Adventure Mode, you move through increasingly difficult levels, battling non-Axie enemies.
You take turns with your opponent to do damage to each other. The amount of damage you can do depends on the strength or type of your Axie’s abilities. All of this information is outlined on a card, similar to how Pokémon cards show a Pokémon’s traits.
You only have a certain amount of energy, which means the number of attacks you can do during your turn are limited. The most successful players use their energy tactically to inflict the most amount of damage on their opponent.
When your opponent attacks you, your Axie, if it has that required trait, is able to defend or deflect the attack. But it costs energy to defend against an attack, so it’s not always worth doing. Sometimes, it’s necessary to sacrifice an Axie in order to win the battle.
Sky Mavis introduced Axie Infinity: Origin in April 2022. Aside from a reworked reward structure and updated graphics, much of the gameplay remained the same.
What is the Ronin network?
Sky Mavis created the Ronin network in February 2021. It’s an Ethereum sidechain and was introduced so that Sky Mavis had more control over its entire ecosystem.
Ronin gives users cheaper transaction fees and faster confirmation times than if Axie Infinity had remained fully on Ethereum. Alongside these benefits, ownership of the sidechain means that Sky Mavis can reinvest gas fees into the game.
The network was built specifically for gaming, which means it can host more than just Axie Infinity. In time, Sky Mavis can develop more games and house them on the sidechain. And then, if it wants to, it can invite external developers to build their own games on the Ronin.
Axie Infinity has two in-game tokens
AXS stands for Axie Infinity Shard and it’s the token that makes the Axie Infinity universe turn. It serves as a governance token, which means that holders can use it to vote on how the game develops. The more AXS they hold, the more voting power they have.
Holders of AXS can also stake the token for rewards. Users can go to the AXS Staking Dashboard to find the number of tokens staked, current estimated APR and AXS price. It also has information on how many tokens are given out as daily rewards and the current circulating supply.
AXS reached its all-time high on November 6th, 2021. Since then, it’s followed most other cryptocurrencies on a downward trend and now sits well off its peak. Whether it can regain those levels depends on how Sky Mavis can take the game forward.
Smooth Love Potion is an in-game token that has one very specific function. Players use SLP to breed new Axie NFTs.
It’s an ERC-20 token and is available to swap and purchase on a variety of centralized and decentralized exchanges. Most players prefer to earn it by beating opponents in battle.
It reached an all-time high July 31st, 2021 when it reached $0.399. Similar to AXS, it’s fallen far from that peak. You can see how much it’s dropped by visiting a token price site.
The price of SLP has caused controversy among the Axie Infinity community. In 2021, when gamers were earning and selling SLP to make a living, Axie Infinity found fame as the posterboy for the redistributive power of web3.
As the rising price of SLP relied on a constantly-growing user base, Axie Infinity’s drop in popularity has led to a corresponding fall in the price of the token. The gamers who made a living from the game, most of whom come from south-east Asia, can no longer play it to make the money they used to.
How much does it cost to play?
Players need three Axie NFTs to start playing Axie Infinity. With the cheapest ones currently on sale for $3, it costs about $9 to get involved.
Previously, when the game was at the height of its popularity, the entry costs were over $1,000. The most expensive Axie ever traded is Angel, when it changed hands for 300 ETH.
The best way to find out how much it will cost you to start playing Axie Infinity is by visiting the marketplace and find three Axies that you like the look of. How much they cost is how much you’ll need to pay.
What are Axies?
Despite the game’s aesthetics being inspired by Pokémon, the in-game NFT characters are actually based on Axolotls, the Mexican walking fish.
They are built to the ERC-721 standard which means they’re non-fungible tokens (NFTs). Once someone buys an Axie, they own it.
Axies are the key and entry ticket to the entire game. Over the past 18 months, their value has been on a volatile trip. They’re currently experiencing a low period and are very affordable
How to make money playing Axie Infinity
This is a tricky question to answer because the days of serious earning potential from Axie Infinity appears to be in the past. This isn’t to say they can’t come again, but as things stand, it will take a long long time to earn money playing Axie Infinity.
As we saw earlier, you can stake AXS tokens to earn a healthy yearly return. This is a good example of passive income where you just lock up your money and watch the returns roll in.
You can also take the risky option of speculating on the price of AXS. If you think there’s a good chance that it will appreciate in value over the coming months and years, you can buy some now and wait for it to go up. If you do, you can sell it for a profit. Bear in mind this is a risky strategy and is not advised by DappRadar.
Is the in-game economy sustainable?
So far, sadly, the answer is no. Earning money, or even maintaining steady price levels, with Axie Infinity relied on a constant influx of new players. Unfortunately, when those new players dried up, the prices dropped considerably.
This is because Axie Infinity’s economy relies on three assets: SLP, AXS and Axies. And Sky Mavis kept pushing out a constant stream of the former while players kept breeding the latter. It’s similar to a central bank continually printing more money to give to more people while also giving those people their own printing press and unlimited ink.
The Verge has a good article about how Sky Mavis did not plan for a sustainable economy and paid the price when the market turned.
To compound the negative effects of their poorly-planned in-game economy, Sky Mavis suffered a $600 million hack in March 2022. Hackers took over the voting nodes that control decision-making for the network and took a record-breaking amount of USDC and ETH from the system.
The Ronin bridge to the Ethereum mainnet came back online in June 2022 and Sky Mavis has largely repaid users’ stolen funds. But the exploit didn’t come without a cost, both reputational and fiscal.
Is there Land in Axie Infinity?
Axie Infinity’s first land sale took place in 2019. Since then, there hasn’t been a huge amount of utility for those holding it. It comes in the form of NFTs and there are five types, in order of cost:
In July, Axie Infinity introduced Land staking for holders. Stakers can earn AXS tokens as a reward for locking up their assets.
What plans does Sky Mavis have for the future of Axie Infinity?
Firstly, Sky Mavis needs to fix its unsteady economy. The company made changes to this effect in February 2022 but needs to be done before in-game asset prices become less volatile.
More independent developers will start contributing to the Axie Infinity ecosystem. The Builders Program was launched in January 2022. In May, Sky Mavis gave the green light to 12 projects with the goal of creating diverse and interesting games for the platform.
The goal seems to be to broaden Axie Infinity’s offering by developing genuinely fun games that people will want to play for reasons beyond making money.
Project K is also in the works, with K standing for Kingdom. Despite being slightly shrouded in mystery, the idea behind Project K is to turn the existing Axie Infinity platform into a more interactive digital ecosystem.
We can infer from this that Sky Mavis plans to create a virtual world out of its current platform that they hope will become an essential part of the metaverse.