While the world of cryptocurrency isn't entirely new, it has been going through a significant surge in popularity recently. Much of this momentum is due to the success of play-to-earn games, a genre of application that the Axie Infinity game (which we've already discussed in the specific chapter on games) is helping to define. Focused on spreading blockchain technology to a wide audience through a fun and accessible format, Axie Infinity has attracted media attention for its surprising speed of adoption and ability to attract a large number of new investors.
What is Axie Infinity (AXS)?
Axie Infinity as explained earlier is a blockchain game inspired by the successful Pokémon game series, where players can earn tokens through various game activities.
From 2017 onwards, the popularity of online games based on non-fungible tokens has been steadily growing, although it is only with the end of 2021 that they are becoming disruptive. Similar to similar games, such as CryptoKitties (which first, as we've already analyzed, launched the NFT game fad), Axie Infinity invites players to collect, breed, fight, and trade digital creatures called Axies. Each Axie is a unique NFT that can be bred to produce more Axies or traded through an in-game P2P Axie marketplace.
In addition to collecting and trading Axies, players can also earn them in the form of two ERC-20 tokens: Axie Infinity Shards (AXS) and Smooth Love Potions (SLP). As Axie Infinity's primary currency, AXS is the game's central governance mechanism, which players can use to influence the development of the platform.
SLPs are earned by playing Axie Infinity and can be used to breed new Axies, which can then in turn be traded in the game for AXS. Investors who don't want to play Axie Infinity can still buy and sell both tokens on decentralized cryptocurrency exchanges.
Besides these main features, the developers of Axie Infinity have opened up new possibilities for the game, such as extending aspects of the Axie universe to community developers. By doing so, it is hoped that players can form communities that contribute to the game universe through contributions to earn tokens, as well as having a say in how to further develop the Axie Infinity game.
How Does Axie Infinity Work?
Briefly summarized: Axie Infinity is a flexible, open-ended game universe in which players can have their Axies fight in real time, but can also trade them in conjunction with other in-game tokenized resources, such as plots of land. The platform provides various features that players can access to diversify gameplay and find new ways to contribute to the Axie Infinity universe. The main features are collecting, trading, and fighting among Axies, to which are added the construction of territory-based realms and contributions to the game's ecosystem.
Who are the creators of Axie Infinity? (The Story of Axie Infinity).
Axie Infinity was launched in 2018 by Vietnamese gaming studio Sky Mavis and was co-founded by Trung Thanh Nguyen and Aleksander Larsen. The 40-person team working full-time on Axie Infinity is led by Trung, the platform's current CEO, who had a career in software engineering behind him before founding Axie Infinity. Larsen, the game's other founder and current COO, is a former professional gamer who represented the Norwegian national team in Warcraft 3 and DotA, as well as a business development expert.
Since launch, Axie Infinity has undergone major upgrades that have added increasing levels of functionality. Land gameplay, still in internal testing, is expected to launch in 2022, and AXS staking is also on the horizon. Staking is the act of locking a certain amount of Cryptocurrency, for a certain period of time in a wallet to receive a reward.
What makes Axie Infinity unique?
A key feature of Axie Infinity is that the game's developers are committed to building a community of players who will contribute to the game's universe by participating in its governance, and providing player-generated content. This participation is gradually being integrated into the game through the play-to-earn function that revolves around the AXS token. One component of this decentralized structure will be a Community Treasury that will collect revenue generated by Axie Infinity and player rewards from staking. When the governance of the game is sufficiently decentralized, players will be able to decide how the revenues from the Community Treasury will be spent.
Certain game mechanics set Axie Infinity apart from other similar blockchain games. One of these is the integrated population control. As mentioned above, each Axie can only be made to spawn seven times. The developers are aware of the need for a fine balance between population control, whose slower growth pushes values out of reach for most players, and its rapid growth, which instead leads to dangerous inflation.
In addition to a controlled population of NFTs, the Axies themselves possess attributes that give them infinite variety. This creates additional demand among players, particularly when it comes to the rarest Axies, which are already becoming coveted collectibles.
A new feature of the game that the Sky Mavis team has excitedly announced is that the AXS token will soon become an asset that can be staked. Players will be able to accumulate regular rewards by placing their tokens in stakes, but to do so they will also need to continue playing and participating in the governance of the game.
What gives value to Axie Infinity?
Axie Infinity (AXS) tokens and Smooth Love Potions (SLP) are both used during play in the Axie universe to breed and trade Axies, which can in turn be used to generate other tokens through trading and play.
In addition, the limited supply of AXS makes it a scarce commodity, and thus potentially a good store of value in the long run, as the token is not in danger of being depreciated by unlimited inflation.
How many Axie Infinity Shards (AXS) are out there?
Out of the total supply of 270 million AXS, there are currently (2021, early 2022) only 67,884,916 in circulation.
It is estimated that all 270 million AXS tokens will be in circulation by 2026.
Other interesting technical data
Axie Infinity primarily operates on the Ethereum blockchain, and both AXS and SLP are ERC-20 tokens tradable on the Ethereum network. However, due to concerns about congestion on the Ethereum network and gas fee fluctuations, the Sky Mavis team launched and continues to develop Ronin, a custom-created sidechain based on Ethereum. Ronin is designed to enhance the player experience and allow Sky Mavis more control over the future development and scalability of Axie Infinity itself.
Although Ronin will primarily rely on a dedicated wallet hosted by the platform, the developers have stated that they are committed to allowing players to withdraw their tokens on the Ethereum mainnet.
Mainnet is a "main" "network" on which a blockchain project runs. Being a fully functional blockchain, mainnets can be used to send and receive any transaction, in the form of cryptocurrency or non-fungible tokens (NFTs), among others, or information transfer.
How is the Axie Infinity network protected?
Both of Axie Infinity's primary tokens (AXS and SLP) are ERC-20 tokens launched on the Ethereum network, and are secured by Ethereum's Proof of Work consensus mechanism. To avoid the congestion resulting from the POW model, Sky Mavis, the aforementioned development studio behind Axie Infinity, developed its own sidechain, known as Ronin, on Ethereum. To help secure Ronin, the developers have hired what they like to call an all-star team of players and other partners in the crypto and NFT space to act as network validators. The Ronin sidechain also features a dedicated wallet where tokens owned by players can be transferred.
How to use Axie Infinity
Axie Infinity Shard (AXS) tokens are currently used primarily to breed new Axies, but Sky Mavis plans to add new features to the token itself in the future.
Payment: Axie Infinity players can use AXS to play games and make payments. It is possible that players will need to own some AXS to participate in future NFT sales or transactions.
Governance: although token governance features are still under development, developers are committed to transitioning to decentralized governance of the game ecosystem. Players will be able to trade part of their AXS in exchange for voting rights. Token governance functions are expected to have already been introduced in 2021, while the decentralized organization is expected to hold the majority of votes by 2023.
At the forefront and Leader in crypto game deployment
Axie Infinity is certainly not the only blockchain and NFT-based game in existence, but with a market capitalization that has skyrocketed to over $2.5 billion and its obvious popularity evidenced by its ever-growing community of players, we can say that Axie Infinity is quickly becoming a leader in the emerging play-to-earn industry.
Part of this success is certainly due to the Axie Infinity game, which boasts unique features that can attract players to try to earn money while they play, but it also fits into the overall surge in popularity that has occurred in the crypto gaming landscape.
If it continues to add features, such as staking, that tend to maintain its player base and attract new users, Axie Infinity will most likely further consolidate its position as a trend-setter in this extremely interesting niche of the cryptocurrency universe.
Frequently Asked Questions about Axie Infinity
What are the statistics associated with Axies?
There are four statistics that determine each Axie's performance in combat, and they depend on the Axie's class and body parts. First, HP determines the damage an Axie can sustain before being defeated. An Axie's morale affects its chances of dealing a critical hit. When an Axie plays multiple cards at once, its skill level adds extra damage. Finally, the speed of Axies in combat determines their order of play.
How does Axie breeding work?
Players can select an Axie in their inventory, click on "Breed" and choose which Axie to breed it with. To breed Axies, in addition to the fixed cost of 4 AXS, you must have SLPs. The cost starts at 150 SLP the first time an Axie is bred and goes up to 3,150 SLP for the seventh time. The new Axie will hatch as an egg and take five days to reach maturity.
The trading volume, in Euro currency and over 24 hours of AXS, is €223,544,182. AXS is currently ranked #29 among all cryptocurrencies by total market capitalization, with a capitalization of €6,436,945,006. It has a circulating supply of 67,884,916 and a maximum supply of 270,000,000 AXS, as detailed above.