Axie Infinity saw $3.5 billion NFT transactions in 2021, but future prospects remains bleak

Axie Infinity saw $3.5 billion NFT transactions in 2021, but future prospects remains bleak
Representative imageBusiness Insider India
  • Axie Infinity clocked in $3.5 billion in NFT transactions in 2021, accounting for more than two-thirds of the volume within the blockchain gaming space.
  • As of February, that volume has continued to grow to $4 billion.
  • However, there are concerns that the P2E game may be in trouble with the number of daily active players in the red over the last two months.
Axie Infinity dominated the non-fungible tokens (NFTs) market within the blockchain gaming universe in 2021. The play-to-earn game where users have their cute little Pokemon-inspired pets battle each other saw $3.5 billion in NFT transactions over last year — that’s four times more than its closest competitor, NBA Top Shot.

The surge in popularity also led to the value of the AXS token mooning 18,000% over the year.

Top five play-to-earn games by transaction volume in 2021:

Play-to-earn gameTransaction volume
Axie Infinity$3.5 billion
NBA Top Shot$827 million
Loot$242 million
Neo Tokyo$112 million
Wolf Game$86 million
Source: NonFungible Yearly Trends Report 2021

Come 2022, while cryptocurrencies faced a slump, NFTs sales have continued to climb. According to data collected by CryptoSlam, as of February, Axie Infinity’s collection has grown to hit $4 billion in sales.


Will Axie Infinity continue its spree in 2022?

Axie Infinity saw its platform boom in 2021 as play-to-earn (P2E) became a way for users to create an alternative revenue stream amid the uncertainty of the COVID-19 pandemic. The trend was especially popular in Southeast Asia, amid countries like the Philippines.

Developed by Vietnamese startup Sky Mavis, the gameplay consists of NFT characters called Axies. Users can breed their pets, have them battle against each other, or complete other tasks to earn Smooth Love Potion — the game’s P2E token. These tokens, can, in turn, be used to create more Axies.

The catch is that you need to have at least three Axies in hand to participate in the game, and they don’t come cheap. At the time of writing, the cheapest Axie costs around $22, making the cost of entry $66 — around ₹5,000.

Moreover, according to a report by analytics firm Naavik, Axie Infinity is currently facing an inflation problem. Simply put, how much a user can earn is slowly diminishing. Rather than using their gains to buy more Axies, existing players are cashing out. As a result, the report estimates that users are earning less than minimum wage, at least in the Philippines, where more than half of its players are located.

So, not only is the barrier to entry high, the return on investing ₹5,000 isn’t remarkable unless you’re a significantly powerful player. To keep its inflation problem in check, Naavik proposes that Axie Infinity needs to keep growing its player base.

Over the past 30 days, Axie Infinity has had an average of 2.2 million active players, as estimated by gaming statistics company ActivePlayer, and the number of daily active players has been dropping over the past two months.

Ethereum gas fees plummet to six-month low amid waning interest in DeFi and NFTs
LimeWire is going from P2P to NFT as it plans a comeback in May