Axie Infinity is a Play-to-Earn game in which players can buy, breed, and pit Pokémon type characters, called Axies, against each other in an effort to win in-game cash, known as smooth love potions (SLP).
These potions can then be exchanged for real money. Play-to-earn is a business model in which players are rewarded with cryptocurrency in exchange for playing a game. Each Axie is a non-fungible token that can be bought or sold. To begin battles, players must have at least three Axies, with the cheapest costing around $200. In 2020, the most valuable monster was sold for 300 ethereum worth over $130,000 at the time.
Before you scoff at the funny sounding names, you should be aware that Axie Infinity NFTs have hit $4 billion in all-time sales, as play-to-earn crypto games continue to grow in popularity. Reddit co-founder Alexis Ohanian, who is an investor in Axie Infinity, believes play-to-earn games will be 90 percent of the gaming market in five years.
Wayne Hu, who previously led YouTube ads monetization and now serves as Partner at Venture Capital Fund, SignalFire, served as my sherpa guiding me through this metaverse. Hu said that the metaverse already has lots of people working jobs within it. He pointed out that in the Philippines, Axie Infinity soared in popularity. Gamers are paid in tokens, then sent to a digital wallet, where it could be later sold for cryptocurrencies.
Players can take the in-game currency, and cash it out in the real world. In the Philippines and other nations that are not as well off as America, young people can earn thousands of dollars a month. For the gamer, and his or her family, this is a life changing amount of money. There are people across the world who have been lifted out of poverty by working jobs within the metaverse, Hu says.
There is a booming ecosystem surrounding Axie Infinity. This includes the players—who treat this as a potentially well paying job—bankers that finance players, community managers that recruit players, coaches and teachers that onboard new players, and landlords that own property.
As the costs of competing rapidly increase, players need to get financially backed through “scholarships,” arranged with deep pocketed managers. The bankers either offer their monsters or simply speculate on games by loaning a squad of Axie monsters in exchange for a cut of their SLP earnings.
Hu estimates that there are around 2.5 million daily active users in Axie Infinity, with 40-50% of them in the Philippines. Axie Infinity and other NFT powered play-to-earn games are their own self-contained ecosystem where people socialize, play games and work.
The economy of Axie Infinity is based on new user growth, because every new user that comes in has to buy three Axies, which is the money coming into the Axie economy. This model could be dangerous. If the game drops in popularity if the stakes become too high, people will leave to find other play-to-earn games that are more affordable.
To date, new user growth has been explosive. The developer behind Axie Infinity, Sky Mavis, has raised $152 million and is valued at $3 billion. The company has already reported over $2 billion in sales. The company is doing between 30 to $40 million of marketplace trading volume every day.
It’s easy to dismiss these digital economies as just games. It’s redefining the meaning of work within the Metaverse, and offering people a way to earn money to support themselves and their families.