Long-time players of popular blockchain-based game Axie Infinity are laughing all the way to the bank this week as the game’s governance token, AXS, has surged more than 800% in under a month to an all-time high of US$29.08 on Thursday. Although it has dropped a little since, the price leap is good news for players, who are rewarded in cryptocurrencies and non-fungible tokens for breeding, training and battling Pokémon-like creatures in the game that are known as “Axies”.
“Well, as of now, I can quit my day job,” an Axie player told Forkast.News. Preferring to be identified by his account name on popular app Discord, through which he spoke with Forkast.News, “Porky” said he had seen his income balloon to US$20,000 for July thanks to the price surge. Porky is not your average player, however, and understanding how he is able to earn that kind of money by playing a game means learning about how Axie Infinity’s play-to-earn model works.
Axie Infinity began life on the Ethereum network, but migrated to the Ronin sidechain in May, which led to a sharp increase in interest in the game. Players need three Axies to play the game, each of which is a unique NFT. When players battle Axies, they are rewarded with a token known as SLP — Small Love Potion — which is required to breed further Axies, an essential part of the game.
Players can liquidate SLP into either Ether or Tether, or transfer it directly to other players. SLP also saw a surge this month, reaching an all-time high of $0.4003 on July 13, according to data from CoinMarketCap.com, which also contributed to an increase in players’ income.
Although the game may appear complicated to the uninitiated, Porky said: “It’s easy if you know how the blockchain works.”
Developing-country market
The game has a huge following in countries such as Venezuela, Cuba and India, where crypto coins earned by playing the game goes much further than it would in a wealthy country. For Porky, and many like him in the Philippines, the game’s rise came at the perfect time.
“At first, it was because of the pandemic,” Porky said, explaining how he came to play the game. “I tried to make use of my spare time to help to make money. And then I started playing in the stock market, [but] the market was very slow because it’s really a ‘red’ market during a pandemic. Then I turned to cryptocurrency [but] then the market’s volatile.”
It was the game’s ability to bring in supplementary income under difficult economic conditions that brought it to Porky’s attention. He soon began breeding Axies to sell to other players. At press time, an entry-level Axie cost 0.203 ETH (US$389.70) on the Axie Marketplace, up from 0.1594 ETH when Forkast.News reported on the game at the start of this week.
The most expensive Axie sold was transacted last November for 300ETH, which was worth US$130,000 at the time, but which adds up to more than US$600,000 in today’s market. Axie Infinity also featured one of the earliest high-profile non-fungible token sales amid the NFT craze earlier this year, when an NFT of a plot of land in the game sold for 888.2 ETH in February, US$1.5 million at the time.
Ethereum’s price spike back in May “changed everything” Porky said. The game became even more profitable — and expensive — and that was when it took off in the blockchain community.
In order to help players overcome the increasingly high barrier to entry, some established players, such as Porky, offered “scholarships” to beginner players. Players who take up such offers are known as “scholars” and are given the Axies required to start playing the game so long as they split their earnings with those who brought them into the game.
When Forkast.News first spoke with Porky, before the recent surge this week, he had 40 scholars in his program, earning him a tidy sum.
Any experienced player who spends time on an Axie Infinity Discord server will be inundated with requests for scholarships from hopeful players looking for an opportunity to start playing the game.
“[The scholarship program] is doing good, and those scholars — it’s changed a lot of their lives,” Porky said. “Those are the personal stories of my scholars. They have enough money to improve their house, they are not in debt any more, they can pay for their tuition fee for school, they can pay for medicines for their relatives, they can even support their relatives.”
The team behind the game
“I view [Axie Infinity] as a bit like blockchain gaming’s “Angry Birds” moment,” said Yat Siu, a founder and a board member at Animoca Brands, an app development company and lead investor in Axie Infinity in 2018. Angry Birds was the first breakthrough that brought gaming on devices into the mainstream. It was simple to control and understand, but difficult to master, and featured cute little creatures, much like Axies.
Siu argues the spread of Angry Birds is similar to the way in which Axie Infinity is introducing blockchain to a wider audience that is more likely to access it through something enjoyable such as gaming rather than through detailed technical explanations by experts. Axie Infinity is also building awareness of NFTs.
“Never mind mainstream adoption for the general world,” Siu says. “We haven’t even hit crypto mainstream adoption for NFTs yet.”In 2018, Animoca brands had already made some successful investments in NFT projects, so when choosing to invest in Sky Mavis, the firm behind Axie Infinity, Siu said it was less about the technology and more about the team and its vision. Sky Mavis always intended Axie Infinity to be able to supplement the income of people in developing economies, and Siu said that thanks to its being based in Vietnam, the team was perfectly positioned to address the needs of the communities it was trying to reach.
“You need to be in a place where you’ve witnessed these economic challenges closer to home in order to understand how to solve the problems for those kinds of communities,” Siu said. “It’s just that upbringing, background, the whole empathy around solving this isn’t going to be as apparent for someone who grew up in New York [as it is to] someone who is in Southeast Asia.”
Sky Mavis’s gambit seems to have paid off for it and the game’s players — at least those who were able to get in early. But with the price of the tokens now so high, concerns are being raised over the long-term viability of the play-to-earn model.
Siu said that’s where the ingenuity and the strength of the community came into play. The scholarship program was an invention of the community, creating an opportunity to both increase its own productivity and help bring younger players into the game. Gamers have always been inventive in their own communities. The difference is that Axie Infinity scholarships offer them a direct way to earn money for their efforts instead of having to rely on intermediaries such as streaming services.
“Human potential actually happens every day in games all over the world,” Siu said. “The only difference about something like [Axie Infinity] is that now that potential is realized in value. What has always been the narrative — and it has already happened years before — is now reaching a critical mass.”
Another concern, however, is the prospect of diminishing returns as the number of players increases. But Siu said it wasn’t problematic, because the amount of SLP is unlimited and generated by players simply playing the game. That participation constitutes an economic fly-wheel, generating tokens to keep the economy humming.
“The more humans participate, the more value is generated in the ecosystem,” Siu said. “The more value is generated [in the] ecosystem, then — at least in theory — there’s more economic opportunity. But of course, the variable — which is very different from something binary — is that human economic participation is not equal for every human because we’re not robots.”
What’s next for players?
Porky, for one, believes the game’s long-term economic model is sound, and he expects prices to keep rising as it continues to evolve and grow its user base.
“In the crypto space, everything is possible, it can profit very high,” Porky said. “That’s why I’m still in the game now.”
Thanks to the price surge, Porky plans on quitting his job and investing his earnings, both back into the breeding and scholarship program and outside of the game. He wants to help more people who cannot afford to play the game gain a chance to experience what he has.
“Axie changed a lot of lives for those who believed in the game,” he said. “It changed my life.”
When asked if he would say anything to Siu, Porky replied: “We believed in the same cause.”
That appears to have paid off for both of them.