AXIE Infinity — The Play-To-Earn Crypto Model
How would you like to earn rewards from playing a game online? This is not a new concept, but the rewards will be in the form of cryptocurrency. This is what the developers of the Axie Infinity project are offering to players. The project is a crypto-based gaming platform that uses the Ethereum blockchain. According to their website, it allows users a way to earn digital assets in the form of a native token called AXS. Users not only get to earn, but the tokens allow participation in digital governance to determine the game’s policies and procedures. Players of the game can dictate its future, as active participants in its ecosystem.
The Axie Infinity team has built an ecosystem that allows users to earn, participate in development and policies along with an incentive system to benefit users. The game can be considered a part of the Web 3.0 metaverse similar to crypto projects like Decentraland and Upland. These are not like gaming rewards that allow for accumulating points for prizes. These provide a play-to-earn model that rewards and incentivizes players with real-world digital assets that are convertible to monetary value.
The Axie Infinity Game
Playing Axie Infinity is a different type of experience for any type of gamer. The objective of the game is compete with other players in virtual battles using creatures called Axies in return for rewards. Your Axies are unique, with specific characteristics and abilities. The Axie can be represented by another token called an NFT (Non-Fungible Token). The player owns the Axie NFT as their very own and unique digital asset, which they can later trade or sell.
The game needs to be installed by going to the Axie Infinity website and click “Download” (get the version for your operating system). The game is supported on a variety of devices, from smartphones to desktop computers. You also need to create an Axie Infinity account from the Axie Marketplace.
Entering the game requires 3 Axies, which are valued in ETH (Ether). An Axie can cost from a low of $200 to as high as $600. The more unique features and demand an Axie has, the more expensive it will be. Players must have an Ethereum wallet like Metamask and ETH to get started. The best place to get Axies is from the marketplace. As an alternative, according to CoinGecko:
“ … an alternative method to obtaining Axies is to enroll in a scholarship program. These are programs started by other Axie owners who lend their Axies in return for a portion of SLP earnings. An Axie Scholarship Tracker is useful to explore programs that work best for you if you are interested.”
More advanced users can start earning SLP (Small Love Potion) tokens. These are used to breed and level up Axies. SLP are how Axies gain their unique traits and abilities. Players can buy SLP from digital exchanges or directly from other players. They can also earn these tokens from playing the game.
Once you have Axies, you can participate in games. You can join arena battles with your own team. For more rules about playing, visit the Axie substack guide.
The AXS Token Utility And Liquidity
AXS (Axie Infinity Shards) are based on Ethereum’s ERC20 token standard. The token’s utility is for the governance of the gaming platform, allowing holders to decide on policies that run the ecosystem. This includes the approval or support for software upgrades and the direction of their community treasury. What is good about this is that instead of having a few decision makers determine the policies on the platform, it provides users (i.e. players) a say in how things are run.
With the AXS token, its holders can also use it on DeFi protocols. Holders who lock up their AXS can receive more through incentives by staking. AXS can also be used as payment within the Axie ecosystem for buying digital assets like NFTs. AXS can also be traded on popular digital exchanges or DEXs (Decentralized Exchanges) for other digital assets. These features, along with the demand from players, provide liquidity to the platform. At the moment, AXS is available from the Binance digital exchange and the UNISwap DEX.
The Ecosystem
Once you understand the rules of the game, you will realize that this is in itself an ecosystem based on the Axies. The NFTs are what give value to the game. The whole cryptoeconomics around Axie Infinity is about the trade of Axies. Each Axie is unique based on the breeding mechanism that is a part of the game. The better your Axie is, the greater your potential to earn. It also adds more value to the Axie, which can later be sold or traded. It is an investment for the player as they can continue earning and accumulating value by owning the Axies.
There are now over 1 million players and growing. It is also being played in many countries around the world, earning $485 Million in revenues since July 2021. Its developers, Sky Mavis, have come a long way as a gaming company based in Vietnam. The success of the game shows that there is a large market with crypto-gaming ecosystems in the metaverse. It has become popular in countries like the Philippines, Brazil, and Venezuela. A lot of players also come from developing countries, so it shows grassroots appeal. During the COVID-19 pandemic, as a result of lockdown policies, it has helped provide a way to earn income among the less privileged.
It shows that crypto has no boundaries when it comes to usage. As long as users have access to the Internet from their devices, they will be able to play Axie Infinity. The ecosystem is open and available to all, no matter what your background or financial status is. That has the widest reach to attract more players who want to earn with digital assets.
Benefits Of Blockchain To Gaming
Axie Infinity can also highlight the benefits of having a blockchain-based ecosystem for gaming. First of all, the platform does not use a third party for paid ad solicitations. The ecosystem generates its own means of income, and not from companies that can monetize what should be given to the players. This helps to prevent fraud from scammers who can use popular platforms like this to target victims.
A blockchain is transparent, so it can provide records to settle disputes and prove ownership of game items and rewards issued. This is good for the gaming platform because it can prevent cheating by the players. Likewise, it can prevent the gaming platform from cheating the players. This can minimize bad behavior among both parties. If it was truly a glitch in the game, the network can verify this and not issue erroneously issue rewards. If there are no glitches, then the gaming platform must reward the players what they are due. This can also settle disputes among players when it comes to items like ownership of Axies.
The blockchain also verifies transactions with finality that cannot be overturned. It runs on a decentralized network of nodes that validate recorded transactions. Therefore, once rewards are issued, the gaming platform cannot reverse them. Sometimes gaming operators can come up with excuses like machine error, so they don’t honor players with their rewards. There is really no way to know if that was the case or not. A blockchain can prove whether or not there was a malfunction when it issues rewards since the data is validated by a network first before it is committed. This truly benefits the players.
Players also have a right or say in the direction of the game they are playing, which is sadly not available in traditional gaming. Not only are they playing to earn, but earning the right to participate in governance with the AXS tokens. That is a value to the players because they can vote on certain changes that help benefit the majority instead of just a few people who are part of the ecosystem.
Synopsis
Axie Infinity introduces a new business model for game developers. Rather than building platforms that are sponsored by third parties, the blockchain can be used as the foundation for a direct way companies can interact with their users. In this case, the players of the game don’t have to go through a third party, which is better for companies to maximize their revenues. This shows that the future of gaming can be done through a blockchain rather than just corporate sponsorship.
The play-to-earn model is also providing an alternative income stream that is helping those who have been affected by the pandemic. A large base of these players comes from developing countries (based on Axie’s own data), so it is economically beneficial to those in need. They not only play for entertainment, but it is now a way to survive as well. All players need is a device with access to the Internet, and they are all set.
The continued success of play-to-earn will still depend on the market demand. As long as there are players and liquidity is sustainable, then the ecosystem will continue to thrive. There are also large communities of players that have formed that continue to drive further growth on the platform. This is attracting government attention in some places due to regulatory purposes. These are part of financial regulations which aim to properly collect taxes on crypto earnings, including play-to-earn systems.
Some critics say that the initial investment is a little too much, but there is the potential to earn back that money. There are also ways (e.g. scholarship program) the platform helps lower-income players who cannot afford 3 Axies. Since the price is market-driven by demand, it is necessary to determine prices that give the NFT and the tokens more value.
Axie Infinity and related blockchain-based gaming ecosystems are good for the cryptocurrency space. This is particularly a big boon for DeFi due to the NFT market. It helps to onboard more new users to cryptocurrency as they gain exposure to digital wallets and ETH. This provides a real use case for blockchain technology that can be used as a business model for future game development.
Disclaimer: The information provided is not financial advice. It is for educational and reference purposes only. Do your own research always to verify facts.
First Published In The Capital — 8/30/2021
(Photo Banner Credit: By cottonbro)
