Sky Mavis, the company behind leading non-fungible token game Axie Infinity, has raised US$152 million in a Series B funding round with a valuation of nearly US$3 billion, according to news outlet The Information.
- Led by venture capital firm Andreessen Horowitz, Sky Mavis said it will use the funds to improve its blockchain gaming infrastructure and build a distribution platform for other blockchain-based games. As part of the deal, Arianna Simpson, general partner at Andreessen, will join the board of Sky Mavis.
- The funding round’s timing is inauspicious, however, as the game posted its first month-over-month loss since its historic rise earlier in the year began, with profits in September falling 40% from the previous month. While still significant, the NFT-based game last month earned 64,933.71 ether (ETH), worth US$220.32 million — down from US$342 million in August, according to data from Axie World.
- Axie Infinity’s growth was led by its play-to-earn function, which allowed players to earn the in-game cryptocurrency “SLP” by breeding and battling Pokémon-like creatures known as Axies. However, as the game has grown more popular, the price of SLP has steadily decreased after hitting a high of US$0.3355 in June, falling more than 80% since then. In order to help address this, developers have recently adjusted the amount of SLP players are rewarded in game in an effort to recalibrate the supply.
- “There was too much supply of SLP, and no one was breeding [Axies],” an Axie player who prefers to go by his online name “Porky” told Forkast.News recently, adding the previous system disincentivized the spending of SLP from creating new Axies. “SLP is a free money, it just generates and generates. That’s why it crashed, and the [developers] had to balance it.”
- Sky Mavis has also recently announced it plans on developing its own decentralized exchange for the game in order to lower the friction for players who want to trade SLP and the game’s governance token AXS. Unlike SLP, AXS has continued to increase consistently in value in recent months, with its price jumping over 100% in a matter of hours after the announcement of the DEX was made, briefly reaching US$153.57. It has since declined quite steeply, however, and was trading at US$123.03 at press time, according to CoinMarketCap.