Axie Infinity, NFTs, and the New Paradigm of Gaming

How one NFT game enables people to make real, life-saving money

Elle
Elle
Mar 9 · 7 min read

At its simplest, Axie Infinity is a game where you use your pet Axies to battle monsters and other Axies. But at it’s fullest scope, it’s so much more than that: it’s the closest possible thing to a real-life Pokémon. It’s 2021, and you can make money by playing a game.

Play-to-earn is real, and this article is a dive into the systems in Axie that enable that reality. If you want to learn how to play, you should join the Discord or check the FAQ!

Disclaimers: none of this is investment advice. I am also no expert on games, design, etc., and this is just observations of a voracious user.

Axies in Land gameplay!

Part 1: The Different Parts

The Game Economics

To start, you need to purchase a set of 3 Axies before you can start playing.

Small Love Potion logo.

There are two game modes currently available: Player VS Environment (PVE), and Player VS Player (PVP).

  • PVE: You play against AI. Easy enough to win, just gain EXP to level up Axies and progress through the 36 levels
  • PVP: You play against another person, so it requires more skill and understanding of synergies to win.

If you win a match in PVP or PVE, you can earn loot drops of the Small Love Potion token (SLP). And this is the easiest, simplest way to earn — an hour a day can fetch at least 75 SLP!

You don’t have to be a super good player to earn. And any player can immediately redeem their loot from the system, at any time, and then cash out on exchange like Uniswap or Binance.

That’s the basic way that Axie players can earn, but there’s also the competitive layer to the game. Each win allows you to earn points, and if you lose, then vice versa.

If you’re at 1200 points, you are eligible to earn 7 SLP for each win. For every 200 points above 1200, you start earning an extra SLP (8 SLP at 1400, 9 at 1600). Therefore, the better you play, the better you can earn!

This cycle is magnified even further by leaderboard rewards. Each Season usually has prizes for the top finishers.

In the picture above, the prize was the stablecoin DAI, at an exchange rate of 1000 Axie DAI = 1 DAI. Other prizes have included tokens from leading DeFi protocols, such as AAVE and KNC. Paired with the usual SLP drops, there’s a lot of financial incentives to play well in Axie.

The Different Players

There are three tiers of people within the community, which I’ve labeled as Collectors, Top-Tier Players, and Grinders.

While there is a spectrum, notably, all of them do participate in the community — Collectors have to respond to those DMs from people who want their inventory!

The two extreme ends of the time-money spectrum are simple enough. Grinders are usually those new to the space, with just enough funds to buy a set of Axies to earn SLP.

On the other end, there’s the Collectors. They rarely, if ever, use their assets to play. Since they got more money, they can afford to focus on acquiring the rarest assets in the ecosystem.

And then there are the Top-Tier Players. They’re the most diverse group, with a wide range of roles in the community-economy! They may fulfill 1 or more roles from below:

  • Top-ranking PVP players and esports team members
  • Axie breeders
  • Community leaders
  • Content creators and artists

And ultimately, I find this the most interesting group — the reward mechanisms are just so diverse!

Top-Tier Players and the Community-Driven Economy

This is a broad generalization, but if you look at most games, value is only ever defined by the game makers. The game developers design and release some rare item, and then players play to acquire it and then sell it amongst each other. Repeat.

It’s a very linear relationship, and this manifests in limited methods to earn: play competitively, stream, or be a lucky reseller/supplier.

In contrast, Axie has a more circular relationship between the players and the developers. For example, as the game is in alpha, the devs have to balance out the moves every now and then.

Each Season allows for plenty of testing, and the top PVP players themselves usually come in to report on inefficient or overpowered moves. The devs can corroborate with their own data, and then release the appropriate nerfs or buffs.

Amidst a constantly changing meta, it’s fascinating to see the same people who provide incisive feedback rank on the top of the leaderboard anyway. Mastery of the arena is hard-won, but the financial rewards clearly make it worth it.

This circular system also results in value being created by the players — it’s players who find new winning combinations, not the game devs! And to make it ever better, the players can benefit by breeding these new combos into existence.

1 SLP icon = 100 SLP

If you have two Axies and the required amount of SLP, you can breed them together to make a new Axie. Depending on the genes, you can get new combinations that can be sold on the marketplace.

Axies that suit the current PVP meta, of course, are valued more. And since an Axie can only be bred up to 7 times, there is a whole subset of players devoted only to breeding and purifying genes.

As Breeders prefer to buy SLP in bulk, they cause some buy pressure on the price SLP. Grinders, on the other hand, tend to sell only, so the price of SLP is usually a reflection of the demand to create new Axies.

All in all, Axie’s created a functional economy that thrives on the organic value created by its players. I can’t name any other game that’s done the same.

Part 2: How It All Ties Together

The Growth

With the opportunity to play to earn, amidst the ongoing financial difficulties of the COVID pandemic, Axie Infinity’s userbase has just grown and grown.

A lot of the demand has come from people in third-world economies, and its notable how the community had risen to meet that demand. As Axie currently requires an initial investment, a community member came up with the idea of scholarships — they lend out Axies and take a cut of any SLP withdrawals as payment.

It’s actions like this that highlight just how sticky Axie is. It’s easy to acquire players, but it’s harder to keep them. Keeping a community engaged and invested enough to build for you, though, that’s something else.

Axie Ownership

This level of community engagement can be partly attributed to the fact that the game runs on the best of blockchain principles: true ownership.

Axie Infinity Shards logo.

For example, the Axies themselves are NFTs. When you buy an Axie, it is certifiably yours. The game can’t take your precious rare Mystic Axie from you.

That said, it isn’t completely decentralized right now. But Axie Infinity does intend to become a community-owned game though its own governance token, called Axie Infinity Shards (AXS).

From their whitepaper:

We want Axie to become the first game truly owned and operated by the community that plays it. This opens up limitless possibilities but must be approached carefully. In the past, projects have been abandoned and become stagnant using the term “decentralization” as a ruse. The shift to a true Decentralized organization will occur gradually over time.

If you’re going to participate, why not participate in a game that lets you truly own your efforts?

The Name of the Game

There are a lot of blockchain games popping up now, in 2021. They come bearing promises of AAA level-games, far better gameplay, and good play-to-earn mechanics!

And honestly, I’ve listened to some people talk, and some things really feel like thinly-veiled digs at Axie for their primitive gameplay or 2D graphics.

And to be fair: they’re not wrong! The game, at its current status, is honestly very simple and repetitive. There isn’t anything to do but battle, over and over again.

But evaluating Axie on their application alone is simply missing the larger picture. This is Web3, and games aren’t confined to just apps anymore.

Because when you breed your Axies, you’re still participating in the ecosystem! When you finish battling and hop into Axie’s Discord community, have you really left the game?

Maybe the playbook for blockchain games isn’t about technical or graphical innovation. A lot of traditional games on Steam can compete on those fronts!

Rather, if games are going to deliberately choose to publish on the blockchain, I want to see games that embrace the new paradigm of truly empowering players.

And at this point, the bar isn’t even at play-to-earn! No, I want to play to own. There aren’t a lot of games worth owning, but Axie’s one of them.

Hacking Money PH

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