NFT game Axie Infinity clocks highest-ever $1 billion in trade with its crypto-based virtual economy
- Axie Infinity, a game based on non-fungible tokens (NFTs), breached $1 billion in all-time sales — an all time high for the platform backed by the Ethereum blockchain.
- It’s a Pokemon-like game where users have to collect ‘Axies’, which are cute characters each with its own unique combination of body parts, shape and abilities.
- The NFT game has a virtual economy of its own via in-game tokens — Smooth Love Potion (SLP) and Axie Infinity Shard (AXS).
- In the last 30 days, the game has generated nearly $780 million in sales across 1.4 million transactions.
AdvertisementAxie Infinity, a game that runs on non-fungibles tokens (NFTs), has hit an all time high in sales of $1 billion — setting a new record for itself and becoming the highest valued NFT project in world.
NFTs have risen radically in popularity over the past couple of years, but especially during the pandemic. Their volume surged to a whopping $2.5 billion in the first half of 2021. While they're supposed to help establish a unique identity, many view them as a genuine investment that'll continue to pay them handsomely in the future.
All-time volume stats for the top 10 NFT projects as of August 9
|Axie Infinity||$1.1 billion||2,555,429|
|NBA Top Shot||$639.23 million||7,644,903|
|Bored Ape Yacht Club||$159.5 million||18,521|
|Art Blocks||$125.1 million||43,691|
|PUNKS Comic||$56.6 million||13,521|
Developed by Sky Mavis, a Vietnamese gaming studio, Axie Infinity isn't a new game. It was launched three years ago.
Axie is a Pokemon-like game that has a virtual economy of its own via in-game tokens — Smooth Love Potion (SLP) and Axie Infinity Shard (AXS). Just like all in-game currencies, these can be used to buy land, farm, or breed Axies.
American billionaire of Shark Tank fame, Mark Cuban, is one of the many investors backing the blockchain gaming company.
What is Axie Infinity and how do you play?
To get started, players need to buy or borrow at least three Axies. Axies are monsters that can be used to battle other players or teams, much like Pokemons.
Players can level up their Axies through the Adventure Mode, where they climb a ladder and go through different levels. Or they can choose the Arena Mode, where players battle with different users on the platform with their Axies.
As with other cryptocurrencies, the prices of Axies are very volatile and fluctuate due to multiple factors. The value of an Axie depends on its capabilities such as body parts, stats, and abilities.
An expensive or potent Axie at the beginning of the game helps in the long run since it allows the player to establish supremacy sooner. These Axies can be bought via crypto exchanges such as Binance, Huobi, and Kraken.
The most costly Axie ever, a triple mystic called Angel, sold for 300 Ether (ETH) in late 2020. The transaction was worth $130,000 back then.
Players can also start out for free by borrowing Axies from lenders, technically called 'managers' in the game. While these managers are willing to lend out their Axies, they are also entitled to take a cut from the player's earnings. This creates a passive source of revenue for them.
The in-game token, AXS, is used to give investors a vote in the governance of the game's ecosystem, while SLP is used for breeding new Axies.
AdvertisementHowever, unlike most games, the in-game cash can be converted into other cryptocurrencies, making them valuable in the outside world for transactions.
It's a unique play-to-earn model that rests entirely on the Ethereum blockchain, and many have leveraged it to generate consistent income. In the last 30 days, the game has generated nearly $780 million in sales across 1.4 million transactions. If that wasn't enough, the developer announced on Twitter that they had reached 1 million daily active users (DAUs) on August 6.
It's official More than 1 M daily active players!Let's keep pushing, together $axs https://t.co/1Z9ssCsFNX— Axie Infinity (@AxieInfinity) 1628245229000
Although, experts warn that the game isn't inherently designed as an investment tool. The recent popularity of the game has surged the value of in-game tokens and collectables. It's viral in some markets such as the Philippines and Vietnam, and top players have reportedly raked in SLP 1,500 ($435) per day from their Axies.
Even though many more such games are available today, and Axie Infinity had the edge over the last three years due to its brewing community.
The play-to-earn genre is just getting started
AdvertisementWhile Axie Infinity has dominated the headlines due to its age, many more games are available to play. Since most are relatively newer, they're still in their nascent stages and growth opportunities are abundant.
CryptoKitties is one such example where players can purchase, breed, and trade digital cats via the Ethereum blockchain. A cat name Dragon sold for an insane price of 600 ETH — equivalent to around $170,000.
Similarly, there's a Minecraft-like game called The Sandbox, wherein users can create new things and trade them with other players. The game is backed by its own currency called SAND, and the game has become a prime spot to share ideas, interact, and engage.
Axie Infinity still has a host of challenges to overcome though
With all the fame and sudden surge of users, cracks in the game's core are now quite frequently visible. Over the past few weeks, Axie's server has seen several shutdowns. As a result of the errors and disconnections, players have been forced to stay away from the game. And this is a serious issue since many players are actively considering the game to be an income source.
AdvertisementSince it's based on a decentralised setup, developer commits are critical for keeping it up and running. Higher developer activity means more engineers are working on fixing network-related activities. The value often dropped to zero for a few days, meaning errors and disconnections will continue to rise if more support isn't available soon. Many are also concerned that the "manager" system of lending could backfire as the lenders get too powerful by piggy-backing on new users, indirectly hampering wealth distribution within the game.
As the popularity of metaverse gaming and NFTs has increased, so has the interest in and growth of blockchain-based gaming projects. Axie Infinity and more are just stepping stones undergoing experimentation at the moment. While a plethora of mainstream companies and sporting teams have adopted NFTs for collectables, the gaming industry is just getting started and shall need its own time to mature and grow organically. Cryptocurrencies are already in a grey area from a regulation point of view, and games like Axie Infinity aren't directly available on US-based crypto exchanges so far.
For a more in-depth discussion, come on over to Business Insider Cryptosphere — a forum where users can deep dive into all things crypto, engage in interesting discussions and stay ahead of the curve.
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