Virtual land games are getting popular day by day. There are many strong competitors such as Decentraland (MANA), Sandbox (SAND) and Enjin (ENJ), etc. However, Axie Infinity has a unique ecosystem to grow more in the future.
One of the cornerstones of cryptocurrency is its massive ecosystem of decentralized applications. Crypto dApps have the potential to improve and even replace their centralized counterparts in the fields of finance, entertainment, social media, and gaming.
Despite the promise of these protocols though, we’ve yet to see any of them reach mainstream adoption. Many believe though that it’s only a matter of time before a so-called killer dApp emerges and brings crypto to the unwashed masses, and It’s possible that that time has finally come.
Axie Infinity’s innovative later earned concept is attracting more than 300,000 users to its virtual world every day, and this number just keeps going up.
Today, I’m going to explain what Axie Infinity is how it works, how to make money playing it, and whether Axie’s AXS and SLP tokens have any potential.
Disclaimer: All the content converted from Coin Bureau’s “Axie Infinity: The CRAZIEST Crypto Game EVER!” video after getting the whole permissions.
Axie Infinity History
Axie Infinity was founded by Trung Thanh Nguyen, Aleksander Leonard Larsen, and Jeffrey Zirlin in early 2018.
Trung co-founded a multimillion-dollar Vietnamese startup when he was just 19 years old and was also a finalist in the International Collegiate Programming Contest in 2014.
Alexander is a competitive World of Warcraft and Dota 2 player and is the founder of some of the largest gaming communities in Norway.
Jeffrey holds a history degree from Yale and his studies centered around early America’s monetary policies. Jeff is also while playing and was once one of the best WoW players in the United States.
The trio met in 2017 because of crypto kitties the popular NFT game which brought the Ethereum blockchain to a screeching halt at the peak of the previous bull market.
They came up with the idea for Axie Infinity in December 2017 after realizing how unsustainable crypto kitties and other blockchain games were at the time.
This is because none of these blockchain games knew how to align economic incentives for long-term growth and kept fumbling the ball when it came to finding the perfect market fit. Axie Infinity seeks to address these pain points.
To get at Axie Infinity off the ground, the trio sold over 3,500 Axies for 900 ETH between February and April 2018.
This works out to about 650 Grand and I say sold because these Axies would technically be adopted in exchange for ETH.
Around that time the trio founded Sky Mavis a for-profit software company based in Vietnam that develops Axie Infinity and offers a suite of blockchain gaming products and services.
Sky Mavis has since raised tens of millions of dollars from various funding rounds and token sales, which I’ll dive into later. So what exactly is Axie Infinity and how does it work?17 Best Crypto Trading Bots in 2021 (Free & Paid)Best crypto trading bots for Binance, Coinbase, Kucoin, and other crypto exchanges in 2021. Quadency, Bitsgap…medium.com
What Is Axie Infinity?
Axie Infinity is an NFT game inspired by Pokémon and Tamagotchi. It consists of millions of quotes, adorable fantasy creatures called Axies which can be bred raised, and battle.
Axies can fall into one of nine categories that are similar to Pokémon types in that each category has an advantage over another during combat.
To use a simple example, grass beats water, water beats fire, and fire beats grass. The actual combat matrix for Axies can be seen here.
Now, in addition to categories, each Axie has six of over 500 possible body parts. And each of these body parts has three genes dominant, recessive, and minor recessive.
When two Axies have bred the likelihood that these genes will be passed down to the offspring are 37.5%, 9.375%, and 3.125% respectively. This works out to 50% with the other 50% coming from the other Axie.
Some physical attributes are more desirable another’s, this tends to depend on what category the Axie falls into, and what build you’re using for combat.
Now, I don’t have time to get into the nitty-gritty of Axie Infinity combat here, but the main takeaways are that Axie’s fight in teams of three, and their battles can be tested against other players in the arena game mode, or against non-player characters in The Adventure game mode.
When you’re Axie team successfully defeats a foe in PVP or PVE, they earn a small amount of Smooth Love Potion or SLP tokens. SLP tokens are required to breed Axies along with the AXS token, which I’ll explain momentarily.
To ensure that the Axie population remains stable and sustainable, there is a limit on the number of times an Axie can be bred. This number is currently seven with each additional reproduction requiring more SLP tokens.
In terms of back-end, Axie Infinity was originally built on the Ethereum blockchain with Axie’s as ERC721 tokens, naturally, SLP and AXS are ERC20s.
As of April this year, Axie Infinity exists almost exclusively on the Ethereum compatible Ronin Side Chain, which was created by Sky Mavis, for the sole purpose of hosting Axie Infinity.
Ronin is currently a permissions blockchain, meaning it is centrally controlled by Sky Mavis, but what it’s worth Ronin’s validator nodes are run by heavyweights such as Ubisoft and Binance.
How To Make Money Playing Axie Infinity
Axie Infinity’s core philosophy plays to earn and it practices this philosophy by rewarding its users for their time and effort instead of sucking them dry of every dollar they have like most video games.
As you might have guessed these rewards come in the form of the SLP tokens you earn from playing the game, and from selling any extra Axies you breed that you don’t want or need.
SLP tokens can be traded for other Ethereum tokens on decentralized exchanges such as Uniswap or exchange for fiat on centralized exchanges such as Binance.
Axie’s and other in-game items can be sold on the Axie Infinity marketplace for ETH, which can of course then be transferred to crypto to fiat gateway of your choice.
Believe it or not, you can make anywhere between $500 and $1,000 a month playing Axie Infinity depending on the price of SLP, the quality of your Axie pawn, and how much time you spend playing the game.
Now, this might not be much in most developed countries, but this kind of money goes a long way in developing countries.
Whereas most of us were able to pivot in response to the pandemic, many people in poorer nations have seen their pocketbooks pounded into dust.
Axie Infinity has become a lifeline for hundreds of thousands of people primarily in the Philippines and Venezuela, where most of their players are based.
As is often the case in cryptocurrency, those who got in early reap the rewards such as this Filipino chap who bought two houses with his Axie profits in mid-May.
Now, if you’re wondering how the hell this is sustainable, the answer is economics.BlockFi Review 2021: Pros, Cons and Interest RatesToday, we came up with a comprehensive BlockFi review, a crypto lending platform founded in 2017 and has its…blog.coincodecap.com
Axie Infinity Economics
For starters, it’s not possible to create an Axie out of thin air. To get started, you need to buy 3 Axies from the Axie Infinity marketplace.
Logically, better Axie’s cost more money and this can serve as a barrier to entry given that a good Axie team can easily cost more than 2,000 US dollars.
Luckily the Axie Infinity Community came up with a solution to this problem called scholarships.
This is where Axie managers lend out their Axies to players who can’t afford to buy their own, and in exchange and a cut of any SLP their scholar earns while playing.
This allows managers to earn passive income from any unused Axies, and allow scholars to save up the money they need to buy their own t Axie team.
Now, this sounds amazing in theory, but in practice, it’s a bit more complicated as there’s not currently a dedicated app or website to help you set up these contracts.
Everything is currently done peer-to-peer to my understanding, and there are some constraints on the earning side as well.
While there are no limits on how much SLP you can earn from battling against other players, there is a daily limit on the amount of SLP you can earn in NPC Adventure Mode.
I reckon the reasoning here is that it’s very unlikely you’ll win every battle against other players, but you will almost always win against NPCs. This reduces the amount of SLP that’s minted each day.
If you’re concerned about SLP inflation, that’s been accounted for too. I mentioned earlier SLP is used to breed Axies. This SLP is burned.
When you factor in the progressively expensive cost of doing so for each Axie, this offsets a substantial portion of the inflation coming from the SLP being minted to reward active players.
It also helps control the Axie population as it becomes progressively more expensive to breed new Axies, especially when you factor in the for AXS you also need to dish out to do so.
Instead of being burned any AXS used for breeding goes to the community treasury along with 4.25%of all marketplace sales.
Given the popularity of the game, Axie Infinity’s Community treasury currently holds hundreds of millions of dollars in cryptocurrency with 85 million being added in just the last month according to Decrypt. This brings me to the AXS token.
AXS Tokenomics
AXS is an ERC 20 token used for governance on the Axie Infinity NFT game. AXS is short for Axie Infinity shards, and AXS can be either bought on a cryptocurrency exchange or earned by playing Axie Infinity.
AXS has a maximum supply of 270 million, which is allocated as follows.
50% for in-game rewards by either playing or staking AXS.
8% for community growth and development custodied Sky Mavis
20% for Sky Mavis and the team
7% for advisors
and 15% for the AXS private and public sales which took place at the end of 2020.
These saw AXS has sold for 8 cents to private investors, and 10 cents to retail investors raising a total of around 3.8 million dollars.
AXS token allocations are subject to various vesting schedules, which can be seen here.
Note that 100% of the AXS sold to retail investors was immediately available, and AXS had an initial supply of around 60 million.
Besides the public and private sales of AXS, Sky Mavis has secured nine million dollars in VC funding and as race and other 4 to 7 million dollars from their land sales so far. But before we get into that, let’s take a look at the charts for AXS and SLP.
AXS And SLP Price Analysis
AXS has had a pretty good run over the last month, and it makes me wonder just how much higher it could have gone if the crypto market hadn’t been crashing.
AXS was one of the weekly winners in last week’s crypto review, and in it I highlighted the fact that AXS was coming down from its all-time high.
It seems to have settled down around the $15 range, but it could go as low as $10 if this bear trap persists.
In terms of how high AXS could go by the end of the year, I reckon $100 is a more than reasonable expectation, especially if Axie Infinity continues to see user adoption.
It certainly helps that AXS has a medium-sized market cap meaning it has a lot of room to grow compared to other cryptos.
Not only that but AXS’s lengthy vesting schedule means it’s unlikely to see any serious price suppression from selling by the team, advisors, and private investors.Crypto Tax Software — Top 5 Best Bitcoin Tax Calculators [2021]Whether you’re new to crypto or if you have been in the space for a while, you’ll need to pay taxes.medium.com
Now that said it’s not entirely clear how many new AXS will make it onto the market from playing and staking rewards in the future. If these rewards are too generous it could crash the price of AXS.
Now thankfully tokenomics are top of mind for the folks at Axie Infinity, and that’s clearly seen with SLP.
In contrast to AXS, SLP continues to rally against all odds and will probably hit another all-time high by the time this post hits Medium. This is probably because SLP has no initial allocation of any kind. It was minted from zero by Axie Infinity players, which technically means it’s a fair launch cryptocurrency, and you don’t see many of those these days.
As a result, 100% of SLP’s supply is in circulation and its small market cap means it doesn’t take much money to move it up or down. Hence why it’s listed in Binance’s innovation zone for volatile assets.
More importantly, SLP’s supply is very equitably distributed on both Ethereum and the Ronin side chain. Given these facts, it would not surprise me if SLP outperformed AXS in terms of percentage gains by the end of the year. However, it looks like the real money maker is going to be Axie Infinity’s land.Pionex Review 2021 | Free Crypto Trading Bots and ExchangePionex is the rising start that provides tools for trading automation. 9 crypto trading bots are provided on Pionex…medium.com
Axie Infinity Land
Some of you might remember hearing about the largest sale of digital land which took place in February this year. The price tag for that plot was 1.5 million dollars, the location was Lunacia, Axie Infinity’s virtual world.
Axie Infinity is still in the process of rolling out Lunacia even though the first-ever land sale took place way back in January 2019.
Similar to Decentraland (MANA), Lunacia consists of over 90,000 plots of customizable tokenized land called terra.
Oddly enough only about 17,000 terra will be player-owned. As you can see on the map there are 9 types of terra. These are Lunas Landing (Center) in red, Genesis Land in black somewhere, Mystic Land in light blue, Arctic Land in white, Forest Land in green, and Savannah or Desert Land in orange. There are roads rivers and resources too.
In contrast to Decentraland’s initial land sales, Axie Infinity’s initial terra sales involve purchasing land chests at a fixed price. These can even be purchased with feared and there have been two so far.
The easiest way to think of terra’s chests is like a lottery ticket for a certain type of land. If you get lucky you’ll get a piece of land with rare items on it or even clinch a plot of Genesis land.
Another difference between Decentraland and Lunacia is that the latter has NPCs, dungeons, and even law. According to the Lunacia website quote, Lunacia is under attack it’s up to you and your Axies to help the princess fight off creatures called Chimera while rebuilding and strengthening the kingdom. Sounds legit to me.
The biggest dividing factor between Lunacia and other crypto worlds is that you can earn both AXS and SLP for completing tasks and fighting foes.
This money will be much needed given that Lunacia land is scarce relative to the number of players. As a result, the cheapest plot of land on the Axie Infinity marketplace is currently listed for 7,000 dollars in ETH.
Now one lucky lad who managed to snag up some terra last year recently cashed out with a 92x return on investment. But the craziest part is Axie Infinity is only just getting started.
Axie Infinity Roadmap
Axie Infinity’s roadmap is clearly detailed in Axie Infinity’s white paper, which doubles as its documentation. Thanks for that chaps it makes doing research much easier.
Anyhow as you can see here land features in Lunacia will be fully implemented by the end of 2022, and these include a Lunacia SDK which will essentially serve as a map editor to facilitate the creation of in-game content.
The next thing coming up for Axie Infinity is AXS staking which will add another dimension of demand for the AXS token.
Interestingly enough VC firm Delphi Digital is helping Sky Mavis with the tokenomics of AXS staking and they even published a paper.
While the details of AXS staking are still being worked out it looks like you’re going to have to stake your AXS for one year, if you want to earn rewards. These rewards won’t come automatically. Your AXS staking rewards will weigh heavily on how much you’re playing the game and how often you vote in governance proposals and community treasury spends.
Governance is another major milestone on the Axie Infinity road map, but it’s going to be a while before we see anything close to a decentralized autonomous organization.
Axie Infinity’s own documentation notes that Sky Mavis will continue to have most of the voting power until at least 2023.
As explained by co-founder Alexander Larson, this is to ensure that no malicious actors destroy the game.
Now on that note the Ronin chain has been under strain from the waterfall of users playing the game. Sky Mavis is hoping to make Ronin scalable enough to host the hundreds of millions of users that have yet to come.
To secure Ronin’s security Sky Mavis is planning on making Ronin a public blockchain, meaning it will have its own token that can be staked by validators and possibly delegators.
Now in a more recent interview with Alexander, he explained that they want to avoid selling the Ronin token to VCs and whales. As with SLP, they want the Ronin token to end up in the hands of the community.
Now details about the Ronin token sale will soon be released, but knowing Sky Mavis getting your hands on the Ronin token will require a lot of AXS, SLP, and hours in front of the screen with your Axies. If you have plenty of all three consider yourself lucky.
Conclusion
There’s a lot I want to say about Axiefinity but this post is getting long, so I’ll keep it short. I think Axie Infinity is one of the best design projects in cryptocurrency. Everything from user experience to tokenomics has been carefully thought out and implemented. This is not that surprising given that its founders have been on the front lines of gaming economics since they were kids.
The best part is that all of them are dedicated to the core values of cryptocurrency. Their vision is to quite literally create a virtual economy where you can own and operate your own businesses, save, invest, and spend your money without ever having to touch a bank.
These aren’t just empty platitudes either because the proof is in the pudding, thousands possibly tens of thousands of people have been kept afloat by Axie Infinity’s in-game earnings. A few hundred have managed to make life-changing amounts of money.
Compare this to the crony capitalist behavior we often see in cryptocurrency where VCs get rich and the rest of us barely reap the rewards. Since day one every milestone set by Sky Mavis has been accomplished on time. When something they built was anything less than perfect for their users they scrapped it without hesitation and tried something else.
This level of commitment to consistency, quality, and community is very rare both inside and outside of cryptocurrency and it’s fundamentally what Axie Infinity owes its success to. There is still so much room for Axie Infinity to grow too, and it might just be the killer dApp that will take cryptocurrency mainstream.
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