With the invention of cryptocurrency, smart contracts, and NFTs has come a new business model for the gaming world: play-to-earn. Play-to-earn games are those in which participants have the ability to earn digital assets that have real market value by simply playing a game.
Axie Infinity tops numerous lists as the current most popular play-to-earn game, but in fact the Tamagotchi craze of the late 1990s served as inspiration for the characters in the game. Axie Infinity is also a lot like Pokemon in that most of the game involves players collecting and battling different anime-like creatures.
How Does AXIE Infinity Work?
Axie Infinity is a play-to-earn crypto game. This is a new business model that creates an open economy within the game that can deliver financial benefits to players who perform certain actions.
In the game, players own Axies — cute digital monsters — and take turns battling them against each other. Each Axie has abilities based on its type. There are bird, bug, plant, and other types of Axies.
Where the game differs from Pokemon or Tamagotchi is that players can earn digital currency by winning battles or breeding their Axies and selling the new characters to other players.
The in-game economy includes Axies, which are NFTs, and two digital currencies: Smooth Love Potion (SLP) and Axie Infinity Shards (AXS). All of these have potential market value and can be sold outside of the game.
How Players Generate Income
To play, gamers need to purchase three Axies, which can cost around $350 each (as the game’s popularity has increased, the cost of Axies has risen). Players can earn about $10-50 worth of digital assets per day by playing the game. Players can also earn by selling SLPs or Axies.
SLPs can be earned by completing challenges or winning battles. SLP is an ERC-20 token on Ethereum that can be sold on different decentralized exchanges. If the price of SLP rises, users can earn more by selling their SLP tokens.
Or, users can spend their SLP in the game to breed additional Axies from two existing Axies. Each time Axies are bred, the SLP cost to breed the next generation rises. An Axie can be bred a maximum of seven times and can be sold at any time. The characters exist as NFTs and can be sold on NFT marketplaces.
How the Business Generates Revenue
If Axie Infinity players are making money with crypto through the game, it begs the question: how does the business itself make money? There are actually three ways that the Axie Infinity company generates revenue:
• By taking a 4.25% fee on every NFT sale
• By charging a small fee for every new Axie that users breed
• Through fundraising rounds
In July 2021, revenues exceeded $23 million, which represented a doubling of growth from the previous month. In January of that same year, revenue was only about $100,000.
One way the business has generated revenue is by attracting the interest of big investors. Sky Mavis, the company behind Axie Infinity, is now valued at $3 billion after raising $7.5 million in a Series A funding round and another $152 million in a Series B.
Is Playing Axie Infinity Really Profitable?
Axie Infinity has become a big way for people to earn some extra income in developing countries like Vietnam and the Philippines. The game serves as a better revenue-generator for people in countries like these due in part to the fact that their local fiat currencies are weaker, making the crypto they earn more valuable by comparison.
For example, the average daily minimum wage in the Philippines is the equivalent of about $5-10 dollars. This means that some workers may be able to make more money by playing Axie Infinity than they would by working their regular jobs.
For the average person in a first-world country, the income generated by playing the game is likely to be small, although some players have allegedly made as much as $2,500 a month playing the game. Getting lucky by breeding a few rare Axies and selling them could theoretically lead to higher-than-average profits, for example. As of now, that is not the norm.
Those asking the question “is Axie Infinity legit?” can rest assured that there’s potential for profit to be made in games like this, although the actual amount will vary and there is never a guarantee of any profit at all.
How the Game Works
In Axie Infinity, players can raise, collect, breed and battle token-based creatures called Axies. The digital creatures take on different combinations of characteristics and more than 500 available body parts which are categorized according to their rarity. Categories include:
• Common
• Rare
• Ultra-rare
• Legendary
An Axie is an NFT and has its own unique attributes. Players can upgrade their Axies and trade them for one of the two types of cryptocurrency in Axie Infinity: the Special Love Potion (SLP), and Axie Infinity Shards (AXS), the native token of the Axie network. Users can stake their AXS to earn income or use it to participate in the game’s governance.
How AXIE Infinity Is Growing
Aixe Infinity grew more than 30x over the course of the last year, with about 350,000 daily active players as of mid-2021. The game’s Discord server, where players can meet and chat, has also grown exponentially, making it one of the most popular Discord servers in the world.
A lot of the growth is thought to be coming from people in developing countries seeking economic opportunity. Given that anyone can access the Axie economy without even needing a bank account, this seems to be ideal for those with few other options and a lack of access to traditional financial tools.
As word spreads about the ability to make money playing a game, growth can continue coming from just about anywhere.
The Takeaway
Axie Infinity is a play-to-earn game in which players enter their Axies in battle with others, and can earn crypto tokens for certain game moves. In addition to the novelty and fun of the game, and the ability to own NFTs (the Axies themselves), players might be drawn to the game in hopes of earning real-world money.
FAQs
Is Axie Infinity a game?
Yes. Axie Infinity is a video game that uses a play-to-earn business model, where users can earn one or more types of digital currencies by performing certain actions within the game. The tokens can then be sold on marketplaces outside of the game.
How much money can you make using AXIE Infinity?
This is always changing, but on average, right now users might be able to make anywhere from $10-50 per day playing the game. Various factors influence this, such as the current market price of the tokens involved, demand for Axies, and how much time someone spends playing.
How can you buy an AXIE?
Axies can be bought and sold on various NFT marketplaces. Doing so requires the MetaMask Ethereum wallet and some ETH tokens. A minimum of three Axies is required to have a big enough team to start battling.
Photo credit: iStock/Edwin Tan
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