What is Axie Infinity (AXS) and How Does it Work?
What is Axie Infinity (AXS) and How Does it Work?
In the summer of 2021, a story began to emerge from the Philippines that would change the world of gaming forever. In the midst of a global pandemic and widespread unemployment, a new digital economy was booming. It was a world populated by cute, cartoonish creatures called Axies, and for thousands of people, battling these creatures in a simple online game had become a full-time job. This was the dawn of Axie Infinity, the game that didn't just popularize the concept of Play-to-Earn (P2E)—it proved its world-changing potential.
I once spoke to a father of three from a small village outside of Manila who had lost his job as a delivery driver. He heard about Axie Infinity from a neighbor and, with the help of a "scholarship" program, was able to start playing the game. Within a few months, he was earning more than he had in his previous job, providing for his family by battling his team of three Axies. "For me, it was not just a game," he told me, his voice filled with emotion. "It was a lifeline."
His story is a powerful testament to the revolutionary idea at the heart of Axie Infinity: that the time and skill a player invests in a game should generate real, tangible value. This article will provide a deep dive into the world of Axie Infinity, explaining its core gameplay, its two-token economy, and the P2E model that took the world by storm.
What is Axie Infinity? The Five-Minute Explanation
Axie Infinity is a blockchain-based game inspired by Pokémon, where players collect, breed, raise, and battle fantasy creatures called Axies. Each Axie is a unique Non-Fungible Token (NFT), meaning that it is owned by the player, not the game developer. The game was developed by the Vietnamese studio Sky Mavis and runs on the Ronin Network, a custom-built sidechain of Ethereum.
The core of the game revolves around turn-based card battles, where players use a team of three Axies to fight against either computer-controlled opponents (in Adventure mode) or other players (in Arena mode). By winning these battles, players can earn cryptocurrency rewards.
The Dual-Token Economy: AXS and SLP
The economy of Axie Infinity is powered by two distinct tokens:
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Axie Infinity Shards (AXS): This is the primary governance token of the Axie Universe. AXS holders can participate in the governance of the game, voting on key decisions about its future development. AXS can also be staked to earn rewards, and it is required for breeding new Axies.
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Smooth Love Potion (SLP): This is the primary in-game reward token. Players earn SLP by winning battles in the game. SLP is not a governance token; its sole purpose is to be used as the fuel for breeding new Axies. Because it is earned through gameplay and required for a key in-game activity, SLP became the primary token that players would cash out for real-world income.
This dual-token system created a complex and dynamic economy. The price of Axies, the value of SLP, and the demand for AXS were all interconnected in a delicate dance of supply and demand.
The Play-to-Earn (P2E) Model Explained
The P2E model of Axie Infinity was groundbreaking. Here's how it worked:
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High Barrier to Entry: To start playing, a user needed to purchase three Axie NFTs from the marketplace. During the peak of the game's popularity, the cost of a single Axie could be hundreds of dollars, making the entry cost for a new player well over $1,000.
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The Rise of Guilds and Scholarships: This high cost led to the creation of "scholarship" programs, run by gaming guilds like Yield Guild Games (YGG). The guild would purchase the Axies and then lend them to new players (the "scholars"). In return, the scholar would play the game and split their SLP earnings with the guild, typically in a 70/30 or 60/40 arrangement. This model was the key to the game's explosive growth, as it allowed millions of people to start playing without any upfront investment.
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Earning and Cashing Out: Scholars would play the game daily, earn SLP, and then cash it out on a cryptocurrency exchange for their local currency. For many in developing countries, this was a life-changing source of income.
The Challenges and Evolution of the P2E Model
While revolutionary, the original P2E model of Axie Infinity proved to be unsustainable. The economy was heavily reliant on a constant influx of new players to create demand for new Axies and to buy the SLP that existing players were earning. When the broader crypto market entered a bear market and the hype began to fade, the price of both Axies and SLP collapsed, and the earnings of the players plummeted.
In response to this, Sky Mavis has been working to evolve the game from a "Play-to-Earn" model to a "Play-and-Earn" model. The focus is now on creating a game that is fun and engaging in its own right, with the earning potential being a bonus rather than the sole reason to play. They have launched new versions of the game, such as Axie Infinity: Origins, which is free to play, and are continuing to build out the Axie universe with new experiences.
The Future of Axie Infinity
The story of Axie Infinity is a cautionary tale about the challenges of building a sustainable digital economy. However, it is also a story of incredible innovation and resilience. The game is still one of the most popular and well-known projects in the blockchain gaming space. The future of Axie Infinity will depend on its ability to transition from a speculative P2E game to a mature and sustainable gaming ecosystem. The team is focused on building a fun and engaging core gameplay loop, expanding the Axie universe with new land-based gameplay, and continuing to empower its massive and passionate community.
FAQ Section
1. Can you still make money playing Axie Infinity? While it is no longer the lucrative income source it was at its peak, it is still possible to earn money by playing Axie Infinity, especially for skilled players who can compete at a high level in the arena. However, it should not be considered a stable or reliable source of income.
2. Do I still need to buy three Axies to play? No. With the launch of Axie Infinity: Origins, anyone can now play the game for free with a team of starter Axies. However, you will not be able to earn cryptocurrency rewards with these free Axies.
3. What is the Ronin Network? The Ronin Network is a custom-built sidechain of Ethereum that was created by Sky Mavis specifically for Axie Infinity. It allows for much faster and cheaper transactions than the Ethereum mainnet, which is essential for a high-volume game like Axie.
4. What is a "gaming guild"? A gaming guild is an organization that invests in the NFTs of blockchain games and then lends them out to players. They play a crucial role in the blockchain gaming ecosystem by lowering the barrier to entry for new players.
5. Is Axie Infinity a good investment? Investing in AXS or Axie NFTs is a bet on the long-term success of the Axie Infinity ecosystem. The project has a strong team, a massive community, and a powerful brand. However, it also faces significant challenges in its transition to a sustainable economic model. As with any crypto investment, it is high-risk and you should do your own research.
Summary
Axie Infinity will forever be remembered as the project that ignited the Play-to-Earn revolution. It was a cultural phenomenon that demonstrated the power of blockchain technology to create new economic opportunities and empower communities around the world. While the initial hype has faded and the economic model has been forced to evolve, the legacy of Axie Infinity endures. It is a testament to the idea that games can be more than just entertainment; they can be a source of income, a platform for community, and a laboratory for building the digital economies of the future. The journey of Axie Infinity is far from over, and its continued evolution will be a crucial story to watch in the ongoing development of the blockchain gaming space.
References
[1] Axie Infinity Official Website [2] Investopedia: Axie Infinity: What It Is and How It Works [3] CoinMarketCap: What Is Axie Infinity? [4] Axie Infinity Whitepaper: AXS [5] Tokenomist: Axie Infinity (AXS) Tokenomics [6] Zipmex: Axie Infinity Game Explained