At the peak of the COVID-19 pandemic, Axie Infinity, a blockchain-based gaming platform, attracted a large number of players who earned cryptocurrency tokens while playing. However, following a significant downturn in the crypto market in 2022 and a major hacking incident that depleted players’ earnings, many users abandoned the game. A recent study conducted by researchers at Cornell University explored the reasons behind the decision of some players to remain engaged with the platform despite these setbacks.
### Study Insights on Player Behavior
Jordan Ali, a doctoral candidate in information science, and Gili Vidan, an assistant professor in the same field at Cornell’s Ann S. Bowers College of Computing and Information Science, analyzed social media activity on the Axie Infinity subreddit and posts on Medium to trace the game’s trajectory. Their findings indicate that many players were not merely victims of the game’s failures, but rather proactive participants who devised strategies to navigate obstacles and safeguard their investments. “Axie Infinity emerged as one of the most prominent NFT-based play-to-earn games during the pandemic,” Ali noted, adding that the game still operates today, albeit in a significantly altered state. Their research paper, titled “Playing, Earning, Crashing, and Grinding: Axie Infinity and Growth Crises in the Web3 Economy,” has been published in the journal Big Data & Society.
### Mechanics of Axie Infinity
In order to engage with Axie Infinity, players must acquire NFTs—distinct digital tokens that are recorded on a blockchain—called “axies,” which are charming digital creatures inspired by axolotls. Players can breed, trade, and battle their axies, earning in-game tokens that are linked to Ethereum, a widely used cryptocurrency, which can be cashed out periodically. During the pandemic, the user base of the game expanded dramatically as people sought new ways to earn income from home, coinciding with a surge in the broader cryptocurrency market that allowed players to quickly recuperate their initial investments. The game gained particular popularity in the Philippines, where around 30,000 players participated, with many relying on it as their primary source of income.
### Criticism and the Web3 Vision
Despite its success, Axie Infinity has faced criticism from some academics, who label it a Ponzi scheme because its economic model relies on attracting new players to sustain the value of its tokens. However, the game’s developer, Sky Mavis, aimed to contribute to the evolution of Web3—an envisioned future internet that utilizes blockchain technology to empower users with control over their data and assets within a decentralized ecosystem. Proponents of Web3 argue that it addresses the shortcomings of the current Web 2.0, where users mainly generate content for platforms dominated by major tech companies. Advocates believe that Web3 awaits a “killer app” that will attract a critical mass of users, making it a viable reality. Sky Mavis’s white paper described Axie Infinity as a “revolution” that could introduce the concept of property rights to internet users, starting with gamers.
### Rise and Fall of the Game’s Popularity
As Ethereum’s value increased, the price of initial NFTs for Axie Infinity surged from approximately $5 to $1,000. To maintain a steady influx of new players, existing users initiated scholarship programs, lending their NFTs to newcomers in exchange for a share of their earnings. These “managers” also shared their gaming strategies on platforms like YouTube and Twitch. However, in the summer of 2022, a severe setback occurred when hackers linked to North Korea stole around $620 million in cryptocurrency from the game, marking one of the largest hacks in the crypto sector. Concurrently, the overall crypto market collapsed, rendering players’ tokens virtually worthless, leading to a significant decline in new users. Conversations among players shifted to complaints about the game’s lack of enjoyment, revealing that many were primarily motivated by financial gain.
### The Resilience of Axie Infinity
Despite the challenges, some players chose to remain in hopes that the value of their in-game tokens would eventually recover, allowing them to cash out. Rather than viewing these individuals as mere victims, Ali and Vidan consider them to be players who recognized the financial risks involved and took steps to manage those risks effectively. Today, while Axie Infinity’s user base has decreased by roughly 90% from its peak, it still boasts around 400,000 active users. The game’s influence on the concept of Web3 persists, as numerous projects and games have adopted elements from Sky Mavis’s white paper, with the company rolling out new updates. Ali and Vidan argue that the story of Axie Infinity reflects the broader aspirations for Web3, suggesting that the vision of a decentralized, collective internet remains vibrant. “Decentralization still holds significant rhetorical and political power,” Vidan remarked. “Even with the shortcomings in delivering returns to the average player, the concept is still highly appealing.”
