Axie Infinity: What It Is and How It Works

What Is Axie Infinity?

Axie Infinity is an online game that implements blockchain and cryptocurrency concepts to incentivize gameplay. It uses a play-to-earn model where players buy monsters and play to earn non-fungible tokens, in-game currency, and Axie Infinity Shards (AXS).

In June 2022, the original Axie Infinity game, now called Axie Infinity Classic, was shut down and replaced with Axie Infinity Origins. Axie Infinity Classic was brought back in November 2022, and as of July 2024, both versions can be played to earn AXS.

Key Takeaways

• Axie Infinity is an online game universe revolving around Pokémon-esque creatures known as Axies.
• Axie Infinity is different than other online games because of the synergy between standard online gaming and blockchain technology.
• Axie Infinity was one of the first games to monetize gameplay using blockchain in its design.
• To play Axie Infinity, users need to have a Ronin wallet with ETH to purchase three Axies from the marketplace; you can also apply for a scholarship on the community Discord.

How the Axie Infinity Universe Works

Axie Infinity is an online game universe revolving around Pokémon-esque creatures known as Axies. Players can collect Axies as virtual pets with aspirations to battle, breed, collect, raise, and build kingdoms for their Axies. What makes Axie Infinity different than other online games is the synergy it has established between standard online gaming and blockchain. The Ethereum-based game utilizes a design that allows players to own their virtual assets and for the game to reward players who are able to reach an advanced skill level.

To get started, users must go through a multi-step setup process to connect digital wallets, their Axie Infinity account, and a social account, which is detailed in the game’s onboarding guide.

Once the accounts are successfully connected, the player can interact with the digital marketplace and log in with their wallet. To play, users need three Axies, which they can purchase by depositing ETH on their Ronin wallet and buying them on the marketplace. Alternatively, a player can join the Axie Discord and apply for a scholarship.

Once the player has three Axies, they can download the application and start playing. There is a lot of nuance around the cost of an Axie since the average price fluctuates based on factors such as rarity, experience, attributes, and type. At the time of writing, the least expensive Axies are known as ‘Floor Axies.’ Floor Axies are often weak in battle and likely won’t be able to earn much for their owner. At the time of writing, players can expect to pay a few U.S. dollars for a Floor Axie to thousands of dollars for a rare Mystic Axie.

Non Fungible Tokens (NFTs)

In-game digital assets such as the Axie creatures are represented by NFTs. These cryptographically unique tokens confer ownership and allow the player to trade Axies or other assets on the game’s marketplace.

In the realm of NFT projects, Axie Infinity holds the record for the fourth-highest all-time sales. As of July 2024, Axie Infinity generated $4.13 billion in all-time NFT sales, ranking below Opensea’s $37.22 billion, Blur’s $11.13 billion, and LooksRare’s reported $4.86 billion.

Play-to-Earn Business Model (P2E)

The play-to-earn business model is designed to reward participants who add value to the game’s world or ecosystem. This model is predominantly based on making an initial investment of purchasing Axies to begin earning. The user can then play and earn virtual currency to purchase more in-game items.

It’s important to note that this model is not designed to generate a living income, although there are rumors of easy money made in the past. It’s likely that more people have lost money on the game trying to make money from it than have made money.

Axie Infinity Shards ($AXS)

Axie Infinity Shards (AXS) are ERC-20-compliant governance tokens for the Axie Universe. It can be thought of as the native currency of the game: holders can claim rewards if they stake their tokens, play the game, and participate in key governance votes.

The AXS tokens, in addition to being used in the game, are an intentional move by Sky Mavis to decentralize the ownership and governance of Axie Infinity so that the developers and the game’s player community can work together to evolve it.

Smooth Love Potion (SLP) Rewards

Smooth Love Potion (SLP) is a reward token within the Axie Infinity Origins game that players can earn by playing the game in battle or adventure mode (SLP is no longer earned in the Classic version). SLP is a utility token that carries a market value like other cryptocurrencies and can be bought and sold on a decentralized exchange.

SLP is designed to be used in-game, similar to experience points (XP) in other games that can be accumulated and spent.

Virtual Land

Lunacia, the Axie homeland, has tokenized plots of virtual land that act as operational home bases for players’ Axies. The idea behind these virtual plots is that players can purchase them or apply to be stewards (rental). Plot owners can place the plots on the Axie Infinity marketplace and delegate ownership to a steward who rents the land.

Virtual landowners (or stewards) can earn AXS tokens on their plots and different types of resources that spawn in nodes across Lunacia. These resources can be used to upgrade Axies and land.

Is Axie Infinity Coin a Good Investment?

Axie Infinity Shards (AXS) have utility within the game as they can be used for purchases. Outside the game, AXS appears to have some trading volume on several exchanges. It can be held as a speculative investment; however, the virtual currency is put to best use when purchased by players who intend to use it within the game.

Can Axie Infinity Reach $100?

It’s possible that Axie Infinity Shard (AXS) will reach $100. However, it might also crash. The token is best purchased for use in the Axie Infinity game rather than as an investment opportunity.

Is There a Future for Axie Infinity?

Axie Infinity had millions of players shortly after it launched, but the player base has dropped dramatically since. It is still played by thousands of people and is being actively developed, so it may exist in the future.

The Bottom Line

The convergence of the crypto universe with online gaming in the form of Axie Infinity marked an interesting shift in the future of not only online gaming but also the growing importance of digital ownership. The game’s developments since its release demonstrate once again that there are interesting uses for blockchain and cryptocurrencies, and some people enjoy the speculation that accompanies them.

Investors should be cautious before investing in blockchain and cryptocurrency projects, but if the game’s play-to-earn model appeals to you and you enjoy playing it, there’s nothing wrong with purchasing some AXS and using it to play the game.

Read the original article on Investopedia.