Cryptocurrency

Is It Really Dying?

It is without a doubt that Axie Infinity is still the number one and the largest play and earn blockchain game since its launch in March 2018. With a mass number of 2 million active monthly users at the start of the year 2022, the game heavily relies on the play and earn concept. As of this day, the game is facing a major economic crisis that results in the rapid decline of players.

We now face this inevitable questions:

Will Axie Infinity still be profitable in the months or years to come? Can it survive this season of a downtrend? What can we actually learn from the experiences that we had with it?

📍 What is Axie Infinity, and how does the game work?

First off, let’s talk about the background of the game itself. Created by Trung Nguyen and Aleksander Larsen of the blockchain game lab Sky Mavis, the premise of Axie Infinity is to accumulate players to an open digital universe whose economy is highly lengthened by the growth of users and ownership of digital pets, which we address as “Axies.”

Axie Infinity is a Pokemon-inspired 2D turn-based blockchain game. Every Axie has a set of genes and body parts that determines its strength and weaknesses against other Axies in the face of battle. In total, Axies have four traits: health, morale, skill, and speed. Furthermore, these traits will depend on the purity and body parts your Axie has.

Should you wish to learn more about these cute and adorable Axies, feel free to check and visit the Axie Infinity website at axieinfinity.com

There are two (2) battle types that you can play: Arena mode and Adventure mode. Before you can actually start playing, you must first purchase three (3) Axies from the Marketplace. Your Axies will serve as the base layer in the game.

The Arena mode will match you up with other players in a 3v3 battle with your respective Axies. The Arena mode is a good brain exercise as it tests your intuitive and critical thinking skills. Before committing to a specific move or combo, you have to think carefully of the consequences, just like playing chess. The Adventure mode, on the other hand, is more of a training for beginners to fully understand the game’s flow and mechanics.

📍 How do people earn from the game? What are digital tokens?

Players receive Smooth Love Potion (SLP) tokens by winning a match in the Arena mode. Its value is based on the market’s movement and demand. Players have the option to take a profit in the game by breeding their Axies and selling the offspring in the marketplace. The price of the Axie that was bred will depend on its rarity and body parts, as this will determine the utility of the cards that will be used in the game. Players, scholars, and managers alike can also exchange their earnings to fiat currency through different cryptocurrency wallets and allow them to purchase whatever they desire to acquire.

It is really nice to take a look back on the days when Axie Infinity was at its peak. Back in July 2021, an average player can gain 150 SLP per day. However, this was reduced to half as early as August of the same year due to token oversupply. Basically speaking, you can earn nearly $1,500 in a month with a fixed 150 SLP earning per day before August (1 SLP = $0.33). Sounds really amazing, isn’t it?

To date, an estimated value that you can earn will be based on your in-game skill as well as the total energy count you have in your account. In a month, let’s say your Axies are somehow following the current meta with at least 100 SLP earnings per day, you can earn about $15.6 (1SLP = $0.00521). The price difference did not really age well.

Axie Infinity Shard (AXS), on the other hand, is the native governance token of Axie Infinity. You will be rewarded with AXS tokens if you can make it into seasonal leaderboards. Currently, Axie Infinity is on its final season for version 2, which shall end on June 24, as duly announced by the team. This shall pave the way for the full deployment of the Axie Infinity version 3, also known as the Axie Infinity: Origins. AXS tokens are also required for breeding the new generation of Axies. Moreover, AXS holders are able to vote and take part in the decision-making with respect to the game’s future development. AXS tokens can also be stake for passive income. In the near future, Axie Infinity plans to gradually shift into a more decentralized autonomous organization (DAO) to allow for community governance.

📍 What is currently happening in the Axie Infinity, both in the game and its economy?

The growth of the Axie Infinity community is a major factor that affects the development of Axie’s ecosystem and tokenomics. Evidently, there exists the ideal inflation rate that allows the developers to come up with their max potential to improve the game and deliver more. It is a slow progress and development which entails some unpleasing moments that are actually happening today; Axie prices are getting lower and lower compared to its expected cost, rewards are gradually being decreased, and the cries of masses to sustain the economy by implementing burning mechanisms keeps getting louder and stronger. On November 06, 2021, the price of a single Axie was over USD 150. Today, it is under USD 5.

The over-inflation of its token, mainly the SLP, is not very healthy as the game progresses. It faces an economic breakdown that needs to be managed as soon as possible.

Recently, Axie Infinity is showing signs of decline with SLP and AXS prices dropping considerably in the past few months. With that being the issue, the daily active users also dropped rapidly and are now down to 588,087 active users (in-game battlers) compared to the number of active users back in January 2022, which is around 2,780,533.

Following this, last March 2022, Axie Infinity lost USD 625 million in cryptocurrency value to a so-called Lazarus Group, a cybercrime group based in North Korea. This has seeded mistrust amongst its players and community. The value of AXS, SLP, and RON evidently dumped. Sky Mavis has been trying to recover the lost cryptocurrency and is still in the process of restoring whatever was stolen through the Ronin Network Bridge.

📍 How is Axie Infinity’s Economy? Is it really dying? Is Axie going to die?

The objective of each player who owns NFTs and wants to earn by playing is, of course, the profitability of the play and earn game that they had dived into. If the game’s economy is not sustainable, it is without question that players’ engagement and retention would be hard to maintain, especially in the case of those who entered the game market when the prices of Axie are at their peak in hopes of finding a rewarding investment opportunity.

As we all know, there are a lot of ways and ideas to balance the price of SLP, but, unfortunately, none of it was implemented at the time being which damages the reputation and sustainability of Axie Infinity’s future.

Although the growth has slowed down, and the play-to-earn model might not be profitable for most players today, Axie Infinity’s development is relentless. Lots of promising and exciting features and game modes are expected to be deployed in the months to come, not to mention the Land gameplay, which is heavily inspired by Farmville, a renowned agriculture-simulation social network game. I won’t dive deep onto that for now as there hasn’t been that much info about the land gameplay.

One big problem that’s worthy to mention with regards to the development of Axie Infinity is that majority in the community are after the SLP price. A huge amount of players decided to quit because of the token’s present value. Some are forced to sell their Axies at half the price they paid due to the fear of losing more than what they had willingly invested, while others are holding their assets, waiting for major updates that will help and hype the value of the token so they can take their respective profits.

📍 Think twice! Should you play Axie Infinity in 2022 and in the upcoming years?

There are so many NFT games that also bear the play and earn mechanic after Axie Infinity paved its way to become the number 1 play and earn NFT game that came out last year, but truth be told, none of them were able to topple what Axie Infinity has delivered. While others are still in the process of making their game sustainable, some have already resorted to inhumane tactics such as scams and rugpulls, taking the large profit from their investors in an instant that they can actually gain from hyping up their game.

The Axie Infinity developers are still working tirelessly to bring forth more content and in-game developments. Despite the Ronin Network breach, Sky Mavis and the team still successfully released the alpha version of ‘Origins’. Though it took a week of delay to the said date of release, the game is now accessible and is open for feedback from the community.

According to Jeffrey Zirlin, also known as Jihoz, co-founder of the project, a short-term solution is needed before the full release of Origins: If the supply of SLP is not enough in the release of the new game version, there will be changes in how SLP is being issued to avoid overpriced Axies. To ensure continued growth and demand, the team also invested in marketing campaigns through Facebook and Twitter sponsored ads.

The Axie Infinity team confidently tweeted that they have the funds and treasury to develop the game for the next ten (10) years. Furthermore, Sky Mavis also received a lot of applications for the builder’s program. Recently, they have released the initial list of approved proposals. It is indeed a new realm of opportunity and possibilities for the community to grow. The builder’s program will help increase the utility of Axies as new game modes will inevitably be introduced and implemented.

As mentioned by Psycheout- Aleksander, the team assured the public that they’ll be doing improvements to address all the important issues in preparation for more players to come.

📍 What can we learn from this?

The economy of Axie Infinity to date is considerably flawed. It collapses when the number of newcomers decreases or stops. The token that people gain from the game should have more utility in such a way that it will become scarce and increase in value, making it profitable for the players who honestly support the game. At the end of the day, the community/people are to decide if they will continue to pledge their loyalty to the game and invest their funds.

In an ideal Web3, there should be plenty of use cases for the native currency or governance token to have a healthy value. As we all know, for now, there is only one (1) use case for AXS and SLP tokens, and that is breeding, which has become a very little part of the game due to the oversupply of Axies.

In conclusion to this, blockchain gaming, GameFi Metaverse, etc. is quite a new thing that needs to be improved due to its issue on sustainability. In the coming years, a solution to this recurring problem shall indubitably arise. This is going to change the way we look and give value to Web3 gaming.

We all have our fair share of ups and downs in the crypto scene. The bear market is just a part of the story. Are you going to give up now because things are going south? Or are you going to trust the process and think long term? The answer is always on you.

Friendly reminder — Do not forget to do your own research before entering and committing to a project and, of course, invest only what you can afford to lose!