Overview of Axie Infinity
Axie Infinity, a decentralized play-to-earn (P2E) game influenced by popular franchises like Pokémon and Tamagotchi, ranks among the largest games on the Ethereum blockchain. Launched in March 2018 by the Vietnamese studio Sky Mavis, it features virtual creatures known as Axies, which players can collect, breed, and battle. These Axies, alongside other in-game assets such as land and abilities, function as non-fungible tokens (NFTs), allowing players to trade them freely on the market. Gamers engage in real-time battles with these unique creatures, each represented as an ERC-721 token, and utilize distinct “ability cards” to execute various attacks. Players can also challenge non-player characters called Chimeras to earn tokens and rewards, which can be used for upgrading their Axies.
Token Economy in Axie Infinity
In Axie Infinity, players have the opportunity to earn two types of tokens: Axie Infinity Shards (AXS) and Smooth Love Potion (SLP). AXS serves multiple purposes, such as purchasing in-game assets like Axies and land plots, and it can be staked to earn additional rewards. Staking not only grants users more AXS tokens but also enables them to participate in governance decisions via a decentralized autonomous organization (DAO) named Axie DAO. On the other hand, SLP is primarily utilized for breeding Axies and can be traded on various cryptocurrency exchanges. The Axie Infinity Marketplace acts as a digital storefront where users can buy and sell Axies using AXS or Ether (ETH).
Development of the Ronin Network
Initially, Axie Infinity operated on the Ethereum blockchain; however, due to scalability challenges, the developers launched their own sidechain called Ronin Network. This sidechain is fully compatible with Ethereum, allowing players to easily transfer assets between the two networks. On March 29, 2022, a significant security breach occurred within the Ronin Network, resulting in the theft of approximately $625 million in cryptocurrency assets. The attack exploited a vulnerability in the bridge connecting Ronin to Ethereum, leading to the loss of 173,600 ETH and 25.5 million USDC. The notorious Lazarus Group was later identified as the perpetrator. Following the incident, the Ronin Network was restored three months later, with user funds that were lost being reimbursed. The network also underwent thorough audits by security firms Verichains and Certik, and new security measures were implemented to mitigate future risks.
Community Engagement and Funding
In June 2022, Axie Infinity committed $216.5 million to compensate victims of the Ronin bridge hack. Additionally, the company secured $150 million in funding from Binance to support these reimbursements. Axie Infinity enjoys a vibrant community across various social media platforms, boasting over 400,000 followers on Facebook, nearly a million on Twitter, and more than a million members on its numerous Discord servers.
AXS Tokenomics and Governance
AXS primarily facilitates governance within the Axie Infinity ecosystem. The total supply of AXS is capped at 270 million tokens, all of which were minted at the token’s launch. The allocation of AXS is as follows: 20% for rewarding players, 29% for staking rewards, 8% for the ecosystem fund, 21% for the developers Sky Mavis, 7% for advisors, 11% for public sales, and 4% for private sales. AXS tokens follow a scheduled release plan over 65 months starting from the public sale that concluded on November 4, 2020. Detailed information regarding the release and unlocking schedules can be found in the token’s whitepaper.
Founders and Vision
Sky Mavis, the company behind AXS, was founded by Trung Nguyen and his team, which includes Tu Doan, Aleksander Larsen, Jeffrey Zarlin, and Andy Ho. The creators aimed to introduce blockchain technology to a broader audience through engaging and enjoyable gameplay. Inspired by the success of Cryptokitties, Nguyen began developing Axie Infinity in 2017, with the beta version launching in 2018. In October 2021, Axie Infinity garnered significant attention, raising $152 million in a Series B funding round led by venture capital firm Andreessen Horowitz, which valued the game at $3 billion. This funding came after the game reached 2 million daily active users and achieved nearly $2.3 billion in total sales volume.
Axie Infinity: A Leader in P2E Gaming
While numerous NFT-based P2E games exist, few have matched the remarkable success of Axie Infinity. According to the game’s official website, it boasts 2.8 million daily active players and has facilitated over $3.5 billion in asset trading within its marketplace. With approximately $800 million worth of assets tied up in its smart contracts, Axie Infinity has established itself as a primary choice for players seeking to generate a consistent passive income.
