Axie Infinity plans to be even more aggressive with crypto tokens earned by its players according to a report from Bloomberg. The biggest blockchain-based video game in the world has suggested that the play-to-earn model is here to stay after a difficult year.
Last March, more than $600 million of tokens were stolen from the platform after it underwent a hack and players weren’t able to access their tokens for months.
Aleksander Leonard Larsen, the co-founder of Axie’s Vietnam-based developer Sky Mavis Inc., said that “We need more tokens, we need more crazy stuff in terms of experiments,” Larsen believes that Apple’s move to restrict NFTs in video games have further fueled the competition for crypto developers and traditional studios.
Following the concerns that game economics can be exploitable, Sky Mavis pivoted to a new version of Axie Infinity, shifting from the previous “play-to-earn ” model to a “play-and-earn” model. Axie Infinity became an apparent “way of employment” for people in Vietnam and Philippines during the pandemic.
But since players couldn’t access their earnings for several months, there were questions around ethics, when, according to the Bloomberg report “wealthier crypto investors established guilds that would front the cost of Axie NFTs in exchange for a portion of players’ earnings.”
“High transaction fees and restrictive guidelines in app stores are challenging for games based in the blockchain version of the internet, known as web3.”, Larsen further said that “The pendulum has swung to the other side where play-to-earn is now this super, super bad thing,”
“The directive that we’re getting from them is ‘Oh, you need to do XYZ, you need to fit in your game into this new box’. And inside that box, there is literally none of the benefits that we want people to see in a web3 game,” Larsen said. “So we end up having to compete with web2 games without showing the web3 benefits, which is pretty ridiculous,” he added.
What is Axie Infinity?
Axie Infinity is a blockchain-based monster-battling game where teams of monsters fight each other in battles and are called Axies. The game runs on the Ethereum blockchain along with a sidechain that helps minimize the transaction cost and fees on the game.
Players can play a battle against the computer, against other players or with live opponents on the internet. Items inside the game are represented as NFTs, and every land plot and Axies is represented by an NFT. This way, the player will be in complete ownership of an Axie and can also trade these NFTs on a marketplace.
Axie Infinity is a game that revolves around the use of NFTs. Players have the option to breed Axies, which can result in more powerful teams and more NFTs to sell on the game’s marketplace. Some of these NFTs have been sold for prices exceeding 300 ETH, which is currently valued at over $500,000.
It’s important to note that to start playing Axie Infinity, players must purchase three specific Axie NFTs to create their team.
AXS is the native token of Axie Infinity that follows the ERC-20 standard. It was launched on the Ethereum blockchain in 2020 and protected by Ethereum’s Proof-of-Work consensus, while functioning as the central mechanism for Axie Infinity games.
Axie Infinity shifted its NFT tokens from the Ethereum blockchain to the Ronin sidechain, which enabled the game to support faster transactions and help the game achieve more scalability. The total supply of AXS tokens is 270 million, of which 111 million tokens are in circulation. These tokens are currently trading at $10.13, with a 24-hour trading volume of over $65 million.
Axie Infinity’s P2E Game Didn’t Fare Well Last Week
Axie Infinity has suffered some decrease in important growth indicators over the past week. The number of active wallets on the platform has only increased by 0.43% while the total number of transactions by these wallets has only been 8%. Axie Infinity suffered a massive blow last year, and this decline is particularly concerning for the company this time.
Although there has been significant growth in the cryptocurrency market, Axie hasn’t been consistent with the market trends, with a decrease in the number of players joining the platform. In Feb 2023, the number of accounts created on the platform was 49% less than those created in December 2022.
In addition to this, the number of daily transactions on the platform has been on a decline ever since the start of the year, with a corresponding decline in the value of these transactions. This decline, however, didn’t hurt the company’s financials, as it saw an increase of 69% in profit last month.
This isn’t, however, any close to the revenue jump seen by Decentral Games, who saw an increase of 3900% during the same period. This is quite impressive considering that there has been a decline in the number of active gamers in the last 30 days.
The decline in AXS’s value and key momentum indicators suggest a lack of liquidity in the AXS market, as traders are cashing out of their investments for a profit. While there are some healthy indicators for the platform, Axie needs to address some serious challenges for the platform to continue to thrive.
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