Now we move back to 2018 when Axie Infinity is launched, arguably one of the biggest P2E games in the world while simultaneously being one of the biggest non-fungible token (NFT) projects until this day. It was developed by Sky Mavis, a Vietnamese developer, with Trung Nguyen being the co-founder and current CEO.
In this article, we will look to break down what Axie Infinity is, how it works, why it is important in the crypto gaming sphere, and why you should keep it on your radar despite a more recent exodus of players from the game.
Source: Axie Infinity Whitepaper
What is an NFT P2E Game?
Also referred to as simply crypto games, NFT P2E games allow full ownership of in-game assets through a process of “minting” (creating) NFTs on the blockchain. This approach of having in-game items and in-game currencies as cryptocurrency opens up a new avenue for players looking to make some money by playing their favorite games.
Namely, in-game skins, weapons, characters, and other assets are minted in the form of an NFT and used in the broader metaverse, where they can be traded or sold. Needless to say, a rare item can fetch a pretty penny on the secondary markets.
While most P2E games are free-to-play, some more popular ones, like Axie, require a user to buy an Axie before being able to earn while having fun.
At the moment, there is a sprawling marketplace for in-game skins that are being sold on marketplaces like Dmarket, where skins for CS:GO, Team Fortress 2, DOTA2, and Rust, among other games, are being sold. At the time of writing, there are over 11 million skins in this marketplace alone, with over 80 million transactions recorded in blockchain NFT.
There are numerous marketplaces where such transactions of in-game items occur, highlighting how big of an economy can spring up around in-game items, trading, buying, and selling.
Axie Infinity runs on the Ethereum (ETH) blockchain, utilizing a sidechain called Ronin, whose main role is to reduce fees and transaction times.
In Axie Infinity, players collect, breed, and mint creatures, called Axies, which are then used to battle other Axies in the world. If this concept sounds familiar and the first thought that springs to mind are Pokemon, then you are right. A three-on-three battle with the goal of eliminating the opposing team is how the gameplay dynamics take place, where each turn, players have an opportunity to play cards with the goal of ensuring victory.
Like other online games, Axie also offers a player-versus-player (PvP) mode as well as a player-versus-environment (PvE) mode, aiming to make the player and his team of Axies stronger.
Getting Started with the Game
Unlike traditional games, getting started with Axie requires some more work from the users, as simply purchasing, downloading, and installing is not the end-all and be-all for this game. Users are required to open up a Ronin wallet and load it with ETH, after which users are free to buy their first Axie.
Axies are digital creatures, for lack of a better description, just like Pokemon. They cost real money to buy; however, users can breed Axies and sell them on the secondary market, with a record-breaking Axie being sold for 300 ETH in November 2020 (roughly $170,000 at the time).
Traits define the role of the Axie in battle, along with stats like health, morale, skill, and speed, all of which are dependent on the class of the Axie and its body part. An Axie with developed traits and strong stats can still fetch a hefty price in the secondary market.
Users have the option of trading the in-game currency for real money or other crypto tokens, as each ranked PvP battle offers a reward of Smooth Love Potion (SLP) tokens. There is another token tied to the game, Axie Infinity Shards (AXS), which represents the game’s governance cryptocurrency.
AXS is a bit more complex than SLP, as staking AXS gives the users a chance to vote on future patches of the game, along with staking rewards that are offered for lock-up periods. Furthermore, AXS is used to breed Axies and to participate in the economy of the game.
Source: Axie Infinity Whitepaper
To make the game more complex and to strengthen the P2E aspect, the developers added a land-owning component to the game. Users can buy plots of land that act as homes or bases for Axies. Over time these plots can be upgraded and sold for a profit.
In March 2022, the Ronin network was targeted by hackers who made off with $620 million worth of assets from the network. According to credible reports, Lazarus Group and APT38 were responsible for the hack, aiming to use the funds to sponsor the North Korean regime.
Allegedly the hack occurred after one of the software engineers working on Axie applied for a job at a fictitious firm. After going through the interview process, the engineer was given an “official offer” from the company in the form of a .PDF attachment, which contained malicious code used to infiltrate the Ronin network.
Equally important, the gamers were fully reimbursed by the Sky Mavis team after the Ronin network was rebuilt, according to a company blog post.
Future of Axie and Crypto Gaming
Following the Ronin hack, a new instance of the game, Axie Infinity: Origin, was announced, aiming to offer veterans of the game a chance to keep playing the game while the hack was being resolved in the background. In addition, tweaks were made to make the game faster, more dynamic, and more fun for new and existing players.
Perhaps the biggest change was that players were now given three Axies to start their journey, effectively making the game free-to-play but with a catch. The catch is that the free Axies cannot be used to earn rewards, still requiring Axies bought with ETH to be able to earn. Additionally, earning by playing PvE mode has been removed, therefore, only 1-on-1 battles with other users have the potential of offering rewards.
Axie Infinity staying power will, in large part, be determined by the active community around it. The developers themselves have managed to create a thriving in-game economy, a fun world, and a dynamic battle game featuring strange digital creatures. In the last 30 days, on October 26, 2022, Axie still ranks among the top 10 crypto games.
The gaming industry is set to benefit from the application of blockchain technology and innovations are just beginning to scratch the surface of the potential application of blockchain for gaming. As games evolved and fused with the internet for online play with friends, tokenization could establish fairness and norms around in-game currencies.
Shifting to in-game assets, blockchain’s democratizing feature could ensure that fraudulent items are removed, it could create scarcity with rare items, and finally, incentivize users to make more in-game purchases if these items become transferable across games.
Though still far from being ubiquitous, the economy that grew around some crypto games clearly points to blockchain’s potential to revolutionize gaming and democratize asset allocation across all classes in society. At the moment, there is much more work to be done to make this vision a reality, but keeping an eye on this sector is sure to be fun, informative, and those brave enough, lucrative.