Axie Infinity：The King of On-Chain P2E Gaming

2022-02-23, 04:20

[TL; DR]

1. It undoubtedly sounds like a scam that one can earn some dollars a day just by playing games at home. However, this is gradually becoming a reality today as many Play-to-Earn games have been developed.
2. Similar to the classic game "Pokémon", Axie Infinity integrates pet collection, competition, business development, and other gameplay.
3. Beyond the groundbreaking Play-to-earn model, Ronin, the project's vital infrastructure, is another element that makes Axie Infinity successful.
4. Players can enjoy the P2E model by selling AXS and SLP on secondary markets such as Gate.io, or trading their NFT pets in the game market.
5. YGG announced the official issuance of tokens on July 28, 2021, in MISO and began to transform into a DAO to achieve community autonomy and empowerment. This spontaneous cooperation among players displays the tip of the iceberg of Web 3.0

A documentary titled PLAY-TO-EARN | NFT Gaming in the Philippines sparked heated discussions on social media in September last year. The documentary introduced how the Play-to-Earn game "Axie Infinity" changed the lives of local people and helped them overcome difficult times when the Philippines was ravaged by COVID-19. It undoubtedly sounds like a scam that one can earn some dollars a day just by playing games at home. However, today this is gradually becoming a reality as many Play to Earn games have been developed.

"Axie Infinity" was created by the Vietnamese game company Sky Mavis in 2018. Similar to the classic game "Pokémon" in gameplay, Axie Infinity integrates pet collection, competition, business development, and other gameplay. Axie Infinity is one of the earliest and most famous blockchain games that has the most active users. Its NFT system was built by drawing on the experience of CryptoKitties. Each pet (Axie) in the game is a unique NFT, with its own exclusive code, and different appearances and abilities.

Moreover, in "Axie Infinity", an economic system composed of two tokens, SLP (Smooth Love Potion) and AXS (Axie Infinity Shard), has also been built. SLP, a task incentive asset in the game, is earned through battles and can be used for pet breeding and trading; AXS, a governance token in the game, can be used for game improvement plan proposals and voting governance. Players can obtain game asset rewards SLP by winning the duel or completing the specified tasks in the game. The AXS is granted as a monthly ranking reward. Players can enjoy the P2E model by selling AXS and SLP on secondary markets such as Gate.io, or trading their own NFT pets in the game market.

Players have to spend SLP and AXS to continuously strengthen their NFT pets in the game, or they have to cultivate more pets to earn more tokens. Specifically, each Axie can only reproduce 7 times, inbreeding is not allowed, and each reproduction requires 4 AXS and a certain amount of SLP. The company will charge a 4.25% fee when a player trades Axie. In this way, Axie Infinity builds a closed loop of the economic system. As a growing number of new players join, the price of related tokens also rises. In the first half of 2021, the number of Axie Infinity's daily active users rapidly soared from 38,000 to 2 million. On August 6, the revenue from Axie Infinity peaked at $17.55 million, far exceeding that of most traditional games, according to the data on Token Terminal.com.

Source: https://www.tokenterminal.com/terminal/projects/axie-infinity

Ronin: Dedicated Ethereum Sidechain

Beyond the groundbreaking Play-to-earn model, Ronin, the project’s vital infrastructure, is another element that makes Axie Infinity successful. Ronin is a high-performance Ethereum sidechain built exclusively for Axie. It adopts a unique consensus model called Proof-of-Authority (POA). With a small number of validators, it is less decentralized but processes the transaction at an extremely high speed. Validators on the Ronin chain have to have high credibility because they need to stake their "credibility" to become validators. And they will lose credibility if they behave inappropriately or threaten network security. Currently, several companies including Ubisoft and Animoca Brands are Ronin validators.

Transactions on Ronin are exceedingly fast and are charged with almost negligible fees, which enables fast and convenient on-chain transactions in Axie Infinity games. NFT pets - Axies, as well as tokens SLP, AXS, and WETH, are all tradable assets in the game. Besides Axies, various types of NFT props such as Land, Items, and Bundles appeared for trading in the game as the game content is updated.

Axie Infinity fully migrated to the Ronin chain in May 2021. If users want to play Axie Infinity, they need to have 3 NFT pets, that is, three Axies. They represent the admission ticket to the game and are purchased in the game store. To buy them, players need to first deposit ETH to the dedicated Ronin Wallet to obtain wETH on the Ronin chain, and then use wETH to buy Axie in the game store. The current Axie in the game is sold at different prices according to their performance and appearance. The floor price is about 0.013ETH, that’s, about $42. In short, new users need to spend about $126 to start their own Axie Infinity journey.

Ronin launched the distribution of the on-chain native token RON, and released the on-chain DEX Katane to open the liquidity staking incentive in November 2021. As the Axie Infinity game is gaining in popularity, the transaction volume on the Ronin chain is also rising. At present, the full-time NFT transaction volume on Ronin ranks second among all NFT main chains, second only to Ethereum.

The unique union culture in game

Axie Infinity also features a unique DAO union culture. During the rage of Covid-19, the Philippines underwent an unemployment rate rising all the way up to about 40%. Against this backdrop, the gaming union YGG stood up to promote Axie Infinity in the Philippines. YGG is short for Yield Guild Games. It was established in October 2020.

YGG initiated a program called "Scholarships" for the local poor and unemployed. Through this program, the union will provide players with Axie accounts. Players who use these accounts to make money will have to hand 10% of the income to YGG, and 20% to the union administrator. And they can retain the remaining 70% for themselves. YGG will use the proceeds from its players to buy more accounts which will be distributed to more players. YGG will also use part of the proceeds to buy food which will be donated to the community and other public welfare organizations. There were only 240 scholarship participants as of March last year, and the number had grown by more than 20 times by the end of the year. Axie Infinity also participated in filming the documentary mentioned at the beginning of the article.

YGG announced the official issuance of tokens on July 28, 2021 in MISO and began to transform into a DAO to achieve community autonomy and empowerment. This spontaneous cooperation among players displays the tip of the iceberg of Web 3.0.

Author: Ashley. H, Gate.io Researcher
*This article only represents the views of observers and does not constitute any investment advice.
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