Hype about Axie Infinity – What’s behind the Online Game?

Earning money with your favorite pastime is probably a dream not only for young people. The eSports sector has been showing for years where the journey can go if the market grows accordingly. Similar developments have emerged in the gaming sector in the past; there, too, players are increasingly finding opportunities to combine the pleasant with the useful. Or, to put it another way, more and more people around the globe are earning money through their gaming activities. One example: the game Axie Infinity. The popular online game is rapidly developing into a playground for game fans who are almost incidentally increasing their income at the interface with the crypto world. And this by no means applies only to a manageable group of users. Within the community of the virtual card game, the number of those who secure profits is constantly increasing.

Where there is Light, there is also Shadow – Observers See Definite Dangers

However, there are definitely experts who view the trend skeptically and warn of the danger of becoming a victim of a kind of snowball system. So what is behind the game Axie Infinity, thanks to which many people around the world have become crypto traders who, among other things, had fallen into unemployment due to the pandemic? Especially in many areas of Asia, the game can boast a large fan base. Investors who have decided to enter the platform hope to make a high profit through the combination of online gaming and the crypto sector in the form of non-fungible tokens (NFT). And there are definitely a number of success stories. However, these reports are, as I said, countered by warnings. One point of criticism refers to the supposed potential of the business model for fraud and abuse. Often it is first the game itself that captivates beginners. Only in the second step do many users develop an interest in cryptocurrencies such as Bitcoin.

Game Costs in the System Recently Significantly on the Rise

If you want to classify Axie Infinity, you could probably say: The game is at the top of the list of the largest online games, but at the same time it is as controversial as few competitor offers in the industry. Axie Infinity is about collecting crypto cards, which in turn can be traded on the platform. The backers include the convinced crypto fan and billionaire Mark Cuban. In addition to other big names in the crypto world, Cuban participated in the financing of the manufacturer Sky Mavis, which brought the company around 7.5 billion US dollars. The number of users (more precisely, the daily active users) already broke the one million mark in the summer. The consequence of the success: Anyone who wants to enter the universe of Axie Infinity must bear state buy-in costs (at times almost 1,000 US dollars for three Axies). The game is therefore basically no longer a community for everyone.

Corona Led to a Significant Increase in Active Players

According to the provider, countries such as Brazil or the Philippines are where Axie Infinity is particularly in demand. According to current figures, about four out of ten players come from the Philippines, where Axie Infinity is in fact becoming the main source of income for more and more people. These are therefore often states in which the pandemic has left particularly clear economic traces. Initially, the Ethereum blockchain formed the basis of the game. The card game, which turns out to be a mixture of parts of crypto technology and a payment format, has long since developed into the NFT collection with the highest market value (as of 09/2021) in the gaming sector.

Breed and Buy Axies or Fight against other Players

For obvious reasons, many experts draw a parallel to the Pokemon universe with Axie Infinity. In the online world, players take control of a wide variety of monsters, which are called Axies and visually resemble splashes of color. Users earn rewards in the network, which are paid out in two coin versions. The game is played in rounds – either on a normal computer or via a mobile app. Users can choose to acquire land or buy equipment. In addition, the creatures can be fed, trained or bred.

At the same time, Axies can be sold to other users for cryptocurrency. Players also have the opportunity to challenge other users or their Axies to a fight. Winners receive victory bonuses in SLP. Bonuses and credits are also available for Axie sales as well as reaching a predetermined minimum number of fights. As I said, the Ethereum blockchain plays an important role in the network, with the operator generating revenue through the integrated play-to-earn approach. The concrete assignment of Axies and equipment items to certain players is achieved by registering items and monsters as non-fungible tokens in the system. As far as the competition between Axies is concerned: Winners are rewarded in the form of coins, which are credited in the Axie Infinitiy currency Small Love Potions (SLP).

AXS Token Gives Users a Say in the Network

Anyone who wants to breed Axies independently and does not want to buy them pays for this service. Namely in SLP as well as in the second system cryptocurrency Axie Infinity Shards (AXS). The latter – unlike SLP – is limited by the developer to a contingent of 270 million units. AXS is a so-called governance token and is characterized by the fact that holders can influence the (further) development of the game. SLP, on the other hand, serves only to enable players to reach steadily higher experience levels and game levels, so to speak. The game goal is not surprising. Of course, the goal is to gradually build up the most valuable collection possible as a community member. Through your own breeding or the purchase of Axies. Important: Collecting Axies is not an end in itself. Instead, renowned crypto exchanges such as Binance enable the trading of Axies. Purchase and sale are made in Ethereum at the respective daily rate.

Axie Infinity Tokens Increasingly in Demand on Exchanges

In this way, players can actually earn real money, because Ether can in turn be exchanged for fiat currencies on trading platforms. The SLP rate was just under $0.1 at the time of going to press. The AXS rate has now reached a level of well over 100 US dollars. Particularly rare Axies combinations achieve particularly high prices within the online game. Axie Infinity is now attested to have a high potential for addiction precisely because of the good earning opportunities. Reports say that in extreme cases, players spend a large part of their everyday life in the gaming world. However, this is not a unique selling point of this game, but a general risk. This should be especially clear to people who have problems drawing their own (temporal and economic) boundaries. Of course, also from an economic point of view, since the Axie Infinity universe, like many games, works according to the “pay to play” approach.

From the costs for new Axies, groups have now developed on social media portals such as Facebook, in which players with little capital borrow AXS tokens from other members of the community against high commissions. The value of all NTFs traded on the in-house marketplace recently exceeded the threshold of 22 billion US dollars for the first time.

Manufacturers are Already Taking Measures to Minimize Risk

The rapid growth of the platform, developments such as AXS lending and the allegedly lack of transparency are increasingly calling consumer advocates to the scene. The accusation: Axie Infinity could become a snowball system. Although the impressive success story of the online game attracts countless new users, which supports both the SLP demand and, as usual, should continue to fuel the rate of both currencies for the time being. Critics, however, point out that a decline in trading volume and active players could quickly lead to massive rate slumps. The huge interest worldwide could trigger hyperinflation. The developers have reacted to this risk by limiting breeding and the maximum SLP circulation supply of 270 million units. But the system still owes proof that these safety measures fulfill their purpose. Simply because the “worst case” has not existed to date. Analysts such as the experts of the Coinmonk platform are particularly taking the wind out of the sails of those players who want to make Axie Infinity a permanent job.

Evaluations of the Mentioned Page Showed, for Example:

Only one in 700 players could probably achieve an income like a normal full-time job. The other 699 active would therefore at worst only incur costs. The consequences are obvious, especially when players have also borrowed AXS for a fee.

NFT Market with Trend Reversal towards the Gaming Sector

So far, little is to be seen of a slump. The operators can be happy about the entry of further influential investors. In addition to the mentioned billionaire Cuban, the game manufacturer from Vietnam was also able to welcome Alexis Ohanian, one of the founders of the Reddit portal. Axis is also mentioned in various financial media worldwide, with aspects such as the massive growth, the expansion of the AI platform or the increasingly decentralized orientation attracting particular interest as an argument for the NTF network. The general change in the NFT sector could play into the provider’s cards in the future. While the art sector has long accounted for the lion’s share of the volume in this environment, crypto-based online games are becoming increasingly important.

Sky Mavis Plans to Build and Develop New Business Areas

Regardless of the demonstrably existing risks for players, the comparatively low volatility (fluctuation range) of the NFT market speaks for further growth. Axies Infinity has now made up a lot of ground on the large platforms for trading art collectibles. The AI developers are nevertheless aware of the risks. This is at least suggested by the company’s plans. Revenues from advertising activities, new sponsoring partnerships and the introduction of other game offers (or even Axies without a sales option) are some possible approaches to strengthen the game platform in the coming years and attract users who are not only interested in the quick return. Well-known brands from various areas such as the fashion world could decide to enter the game world in order to win new customers there on the basis of NFTs. Despite all the criticism, the manufacturer has long been looking beyond its previous core business.

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