Written by: Packy McCormick
Meet Axie Infinity, a lovely game with huge growth and bigger vision.
The game looks simple because of the cute Axies that look innocent. But when you're playing the game, it feels like chess. It's a strategy game.
--Axie Infinity Gamer Howard
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It's a game, and the pets are cute. The game contains blockchain stuff, which is very interesting! But there's a lot under the lovable exterior.
The whole idea behind Axie Infinity is as Axie co-founder Jeff “Jiho” Zirlin puts it:
The idea is to introduce something new and a little scary (cryptocurrency) through something fun, familiar and nostalgic. Then, add property rights and economic freedom and make this game really special.
Axie has a very bold master plan to reshape economic policy and local governance by showing how it is possible for people to work in the Metaverse. In its white paper, Axie developer Sky Mavis states clearly: "You can think of Axie as a country with a real economy.”
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Above: Axie Infinity's monthly revenue, in which the revenue in the first 18 days of July this year has increased by 548% compared with June. Source: Axie World
In April, Axie generated approximately $670,000 in revenue.
In May, its proceeds were $3 million.
In June, its earnings were $12.2 million.
In just the first 18 days of July this year, its revenue has reached 79 million US dollars。
Delphi Digital, an independent research and advisory firm, expects Axie to bring in $153 million in revenue this month.
The way the Axie Protocol generates revenue is when players buy and sell Axie NFTs on the in-game marketplace,The Axie protocol will charge a 4.25% feeimage description
Above: Delphi Digital's projected revenue for Axie Infinity.
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Delphi Digital expects Axies’ revenue to reach $1.1 billion in December this year, mainly from the fee income of its NFT market and its demand for hundreds of thousands of players to breed Axies every month. at present,Axie Infinity has more than 600,000 players worldwide, 60% of which are from the Philippines。
While those revenue numbers are eye-watering, they aren't the biggest or fastest-growing numbers the gaming space has ever seen. But what makes Axie Infinity unique is that this rampant growth is just the first step in a larger plan that includes vertical integration, aggregation, decentralization, and world-building (which we’ll cover below) ).
Even currently in the earliest stages of its master plan (the product is still in the "alpha" stage), Axie as a blockchain-based game has achieved this kind of growth, while creating a whole new field at the intersection of work and play. Mode: "Play-to-Earn" (earn while playing).
In the Philippines and Vietnam, many people quit their jobs to play Axie for a few hours a day to have a better life. They receive Smooth Love Potion (SLP), a Token earned through Axie games that can be exchanged for fiat currency, which in turn can be used to pay for food, shelter, medical expenses and other survival needs items. Some people who used to make $5 a day are now making $20.
Axie has demonstrated a number of important things for the long-term success of cryptocurrencies:
NFTs are still popular and doing well, and their success does not depend on high-priced art sales. Quite the contrary, a glimpse of the real promise that NFTs bring!
Non-crypto users enter the crypto space through video games.
Cryptocurrencies can create new economic opportunities for all kinds of people around the world, not just whales, DeFi Degens, and Bitcoin maximalists, fulfilling the promise of a more level playing field while capturing economic value. (Note: DeFi Degens refers to gambler-style DeFi traders and builders)
The network effects of cryptocurrencies can create fast-growing businesses with moats.
One of the main criticisms of cryptocurrency so far is that it has no real value or application, but Axie makes you reconsider what real value is. In Axie's case, value comes from providing meaning, income, and opportunity directly to players. A typical game spends millions of dollars on marketing and keeps most of the profits; Axie spends nothing on marketing and lets players keep most of the value created . This will hopefully make the game stickier and have more opportunities for expansion.
This is just the first act of Axie. It wants to reinvent work and build the most valuable intellectual property (IP) in history,All of these are owned by the players themselves. Renowned venture capitalist Chris Dixon once said, "The next great invention will look like a toy at first." Axie certainly fits that bill.
You’ve probably started hearing about Axie Infinity over the past few weeks, perhaps seeing news about it on Twitter, or reading about it in crypto publications like Coindesk, Delphi Digital, and Bankless. Or maybe you haven't heard the word "Axie" until two minutes ago. But no doubt you'll be hearing it everywhere soon. Today, we will take a deep dive into Axie, this article will cover:
Origin of Axie
The Modern History of Game Business Models
Play-to-Earn (earn while playing)
Data Interpretation Axie: Unlimited Benefits
Vertical integration in the Lego world
Decentralization of the Axie Universe
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In November 2017, CryptoKitties (Encryption Kitty) was listed as the first NFTs digital asset using the ERC-721 standard. Less than a month later, in Vietnam, Sky Mavis founder and CEO Trung Thanh Nguyen floated the idea of creating Axie Infinity: What if you could combine the gameplay of Pokémon with the NFT ownership and breeding of CryptoKitties?
Combined it looks like Axie Infinity, "a Pokémon-inspired universe where players can fight, collect, raise pets, and build a land kingdom for them." When Trung combined the ideas behind Pokémon and CryptoKitties and mechanism, his idea yielded several key differences:
Instead of owning Pokémon cards, players buy Axies in the form of NFTs.
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Source: Axie Infinity White Paper
Trung started game building in December 2017. In January 2018, when the price of ETH broke through $1300, he hired Masamune as art director and game designer. Meanwhile, Trung continued to play the CryptoKitties game, where he met two other co-founders (also CryptoKitties enthusiasts): in March, Jiho joined and was responsible for the growth of Axie; in May, Aleksander Leonard Larsen took over as COO official. In July, Andy Ho joined the company as Chief Technology Officer. Finally, a joint founding team consisting of these five principals was determined.
The team pre-sold Origin Axies in February 2018 (Note: Origin Axies are digital pets created during the two-month pre-sale event of Axis Infinity in 2018, so they are very rare and collectible), and will A batch of Axies characters were sold as NFTs, raising 900 ETH at a time when the price of ETH was starting to drop from its all-time high. Just as ETH fell, they developed rapidly:
In March, they launched their own NFT marketplace where Axie collectors can trade.
In May, they released the Breeding feature, which allows players to breed Axies to create new pets.
In October, players can use their Axies to fight.
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Above: Axie Infinity was born during the crypto boom of 2017 and continued to build during the crypto winter that followed.
What started as an idea at the height of the crypto bull market in 2017 turned into a job they'd love to do during the downturn bear market known as "Crypto Winter." When I spoke to Jiho and asked him what contributed to Axie's recent rise, he said it all started with "Construction Continues During Bear Market。”
This seemingly cursed time actually turned into an advantage. It allowed the Axie team to carefully build and improve the product in relative obscurity, while attracting a small but loyal core of believers. This is very important. A challenge that games and new crypto projects share is that they can attract a lot of hype and publicity, generate a lot of revenue quickly, and then die out very quickly. Jiho points out the paradox of building large-scale communities:
Before a community becomes very large, it first needs to function as a small community. That's why Axie is so hard to replicate -- if you build an Axie competitor right now, you're going to attract a class of people who are looking for the next Axie, not people who really want to move the game forward.
From small communities, Axie has grown to be quite large. It surpassed 600,000 daily active players on Friday; its Discord server is the heart of the community, with more than 540,000 members. When I joined their Discord yesterday,A new member joins every five seconds。
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Screenshot source: https://axie.substack.com/p/axie-community-alpha-getting-started
As shown in the figure above, at the beginning, players need to obtain ETH, register MetaMask wallet, transfer ETH to MetaMask wallet, then download another Axie own wallet Ronin, deposit ETH into Robin wallet through Ronin bridge, and then use ETH to trade in the Axie market Purchase 3 Axies on the Internet (this is the quantity required to play this game), log in with MetaMask, and finally download the game application on the computer desktop or mobile terminal. 85% of Axie players are Android users.
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Above: Axies pets and their selling prices listed on Axie's NFT marketplace.
The introduction here is relatively simple, I may be missing something. Jiho has publicly stated that playing Axie Infinity was really difficult at first. Yet despite these hurdles, Axie has grown like crazy. Beyond these initiation steps, there must be something magical pulling people in.
On the Invest Like the Best podcast, Gabriel Leydon, CEO of gaming company Machine Zone, laid out a counter-intuitive idea that investors should be looking for opportunities that are disruptive but still growing:If something is growing like crazy regardless of its design and UX, it must be offering something truly innovative and catering to a previously unmet need。
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02. The modern history of game business models
Axie Infinity isn't the fastest growing game of all time, nor is it the highest grossing game. To understand why Axie's development is so special, we need to look at some other game business models.
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Above: Screenshot of the Japanese mobile game "Ni No Kuni: Cross Worlds"
Like Pokémon Go, the fastest game ever to reach $100 million in revenue, Honor of Kings, the highest-grossing mobile game ever ($9.97 billion), Epic's hit Fortnite, and most of the most popular games right now. Like other games, "Ni No Kuni" is also a "Free-to-Play" (free game).
Most "Free-to-Play" games provide players with full game content for free and make money by selling virtual game items such as skins and emotes. Chris Dixon (well-known venture capitalist) noted how successful this model has been in the video game industry:
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Above: Game characters in Fortnite
This "Free-to-Play" is a great model. In 2020, "Fortnite" will generate $5.1 billion in revenue. Importantly, in Fortnite, everything a user buys is cosmetic: buying a specific skin doesn't make you more likely to win a battle, just like buying a new shirt doesn't in real life. It will make you stronger as well. You buy just to show off, or you have a style, or for some other reason why people buy expensive stuff. "Fortnite" is a game, but it is also a "metaverse" prototype and community. Its Discord server has 805,000 members. It's a mini-economy that is centrally managed by Epic Games and makes huge profits from players.
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Source: Reddit
In the "Pay-to-Win" mode of the game,Players can spend money to buy items or skills to gain an advantage in the game. The Reddit critique of Ni No Kuni quoted above highlights the problems with this model: "It's a massively multiplayer online game where you get stuck in a level and can't progress because the experience points , gear, and pets gacha looks like a giant Pay-to-Win, and you can hardly get coins.” (Note: gacha refers to the virtual machine that sells items in the game). Basically, pay or get stuck. Many reddit users also questioned the claim that the game generated $100 million in revenue due to weak download numbers, arguing that either the revenue figures reported by SensorTower were inaccurate or that the game was spending above average from whales. benefit from.
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Above: Candy Crush game screenshot
Another well-known game "Robloximage description
Source: Roblox
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Source: Roblox
Games/worlds like Roblox and Minecraft are a big step forward. Users can not only pay game developers, but also earn money by developing games for this ecosystem. It really isn't Bill Gates' definition of a "platform," though (Gates once said: "If everything built on top of the platform earns more than the platform itself, then it's a platform." ”), because the gaming platform itself gets as much money as the developers. In Roblox, ordinary users can make a living by playing games. This is a win. In the past, people could only make money by winning e-sports competitions (only a few elite players can participate) or "gold farming" (note: game gold refers to making money by exploiting games).
As described in a 2007 New York Times article, some Chinese employees spent 12 hours a day collecting gold coins and other digital assets in World of Warcraft, earning them $0.30 an hour. And their boss makes $3 by selling the coins to an online retailer who then makes $20 by selling them to US or European players who don't want to spend all their time collecting them currency."Dajin" is considered a form of exploitation and banned by major games. If only players everywhere had a way to earn money for themselves……
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03. Play-to-Earn (earn while playing)
With the help of blockchain, Axis operates a brand new game: "Play-to-Earn" (earn while playing). Unlike the traditional "Free-to-Pay" game model (where developers earn money by selling game items to players) or models like "Roblox" (where other developers can also make money by publishing games on the platform), " Axie Infinity is a player-to-player game.
"Play-to-Earn" is a new mode that "rewards players for their time and effort in playing the game and growing the game's ecosystem." According to Axie's documentation:
Axis has a real money economy that is 100% player owned. Rather than selling game items or copies, game developers focus more on developing an economy among players and charging a small fee to make a profit. Axies are created by players using in-game resources (SLP & AXS tokens) and sold to new/other players. Holders of AXS tokens are like governments receiving tax revenues. Game resources and items are tokenized, which means that these tokens can be sold to anyone on an open p2p market.
Axie is clearly not a "Free-to-Play" (free game) model. To start playing Axie Infinity, you need to convert your fiat currency to ETH to buy 3 Axies, the cheapest of which is $195 at the time of writing, as mentioned above. But instead of paying a developer to rent avatars (or land, props or packs), you own your Axies. By playing this game, you own the game and can decide the future of the game or earn real money by completing quests. If you want to stop playing this game, you can sell your Axies, AXS and SLP tokens.
When new players enter the game, they don't buy Axies from Sky Mavis (the startup behind Axie Infinity) or Axis Infinity,Instead buy Axies from other players, these players either sell their Axies, or breed new Axies and sell them. As Jiho puts it, it’s like “players selling their tickets to this universe.” The Axis protocol takes a 4.25% commission on every trade on its marketplace and charges a fee (in AXS ) when players breed new Axies and SLP tokens).
Different from the traditional model, in Axis' "Play-to-Earn" (earn while playing) model, 95% of the transaction revenue belongs to the player. According to Jiho, "Axie's first principle is: in the attention economy, users who follow us should be rewarded." A special economic model for maximizing future business interests). why?
Playing this game is a lot of work. You need a lot of people playing at the same time for the game to be fun. Part of the fun of PvP (Player Versus Player) games is that players play against other players of the same skill level as themselves, and in order for this to work, you (the developer) need to quickly match players against other players who match them to match. The "Play-to-Earn" model makes Aaxis more interesting by adding player liquidity; it's worth investing most of your money to make it happen.
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Above: Growth and composition of funds in the Axie community treasury (purple areas represent fees from the platform’s marketplace, yellow areas represent fees charged for breeding Axies). Source: AxieWorld
Axis is creating more than just a game; it's building a virtual nation with its own economy. But it all starts with the game. Here's how Axie Infinity works (should be familiar to Pokémon players, may be new to others):
In Axie Infinity, players collect Axies, adorable digital pets, which they eventually use to battle other Axies.Combat is at the heart of the game: either Player Versus Player (PvP) or Player Versus Environment (PvE)。
Each Axie has 4 attributes: Health, Morale, Skill and Speed, giving them advantages and disadvantages in battle.
Additionally, each Axie's attributes depend on its class (beast, reptile, aquatic animal, insect, plant, bird, moon, nut, and star) and body part (eyes, ears, horns, mouth, back, and tail). Some types of Axies are better at attacking and some are better at taking damage; Mix forms, optimally assembled to fight against other groups of Axies' configurations.
During combat, the two sides take turns attacking each other with cards from their Axies. Cards can have different effects depending on the type of Axie you're using it against. For example, using a "Bird" card to attack a "Beast" Axie will cause an additional 15% damage. The relationship between each set of categories is as follows:
As the player Howard mentioned at the beginning of the article said, this is a"Strategy Game". Playing the game depends more on skill than luck. If you want to dig deeper into the Axie game itself, here's where to start:
https://axie.substack.com/p/axie-infinity-community-alpha-guide
For the player's purpose, the most interesting thing is that by winning PvP and PvE battles and completing Dailies, players can earn Smooth Love Potion (SLP) tokens, so named because players need SLP to breed new Axies. This is where "Play-to-Earn" comes in.
Top PvP players can earn up to 600 SLP per day; but average players can earn up to 200 SLP, which equates to $52 at the time of writing at $0.26 SLP. That's not a lot of money in the US, but over $1,500 a month is a meaningful, potentially life-changing amount of money in many developing countries. With these SLP tokens, players can do a few things:
Breed new Axies. Axie Infinity does not forge new Axies pets out of thin air. To meet the needs of new players (each new player needs to use ETH to buy 3 Axies to start playing), existing Axies holders can breed new Axies with a pair of existing Axies. Each Axie can breed up to 7 times, and the cost of each time is 4 AXS plus a certain amount of SLP (the more times a specific Axie breeds, the more SLP it needs to spend, see the figure below). The breeding cost of a "Virgin Axie" (Axie bred for the first time) is 4 AXS + 150 SLP (about $108.92 at the time of writing). Given that the minimum price per Axie is $195, breeding new Axies is a lucrative deal.
speculate. SLP token holders may want to hold SLP for price speculation. In the past year, the price of SLP has increased by 21.8 times, from $0.0122 to $0.2664, as shown in the figure below.
Convert to fiat currency. Both AXS and SLP are currently tradable on major DEXs (decentralized exchanges) such as Uniswap. In the near future, they may be tradable on Axie's own DEX 👀. Many players earn SLP, which they then convert into local fiat currency to pay real-world bills.
It was the third use case that captured the public's imagination and drove the explosion of Axie usage. During COVID-19, many people in the developing world have lost their jobs and are living hand to mouth, turning to Axie Infinity to make ends meet. There's even a documentary called Play-to-Earn about the phenomenon:
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Screenshot Source: Documentary "Play-to-Earn"
You might ask: "How can Lolo and Lola afford the 3 Axies needed to start the game? Doesn't the cheapest Axie cost $195?"
I'm glad you're asking. That's one of the most intriguing things about the Axie economy: related scholarship programs have sprung up all over the world to give aspiring gamers the Axies they need. The scholarship essentially rents Axies to players and is rewarded through a revenue share of SLP token proceeds.
The documentary highlights the local scholarship program in Cabanatuan, which provides Axies and training to local players, as well as the blockchain union organization Yield Guild Games, which works globally for Axie Infinity and titles such as The Snadbox and League of Kingdoms. " and other emerging games provide the same service. Every day, dozens of people apply to the Yield Guild and other scholarship programs with authentic, well-typed resumes, showcasing not only their professional credentials, but their gaming experience as well.
Because the needs of players outstripped what the Yield Guild could meet, the organization launched a "Sponsor-a-Scholar" program in which donors provide players with their starting capital. Li Jin recently announced the "Leaping Corgi Scholarship" project, which used the proceeds from an NFT sale to fund a total of 87 scholarships. Proceeds from this NFT auction are used to fund those in the developing world who want to make a living playing NFT-based games in the Metaverse. It's pretty wild.
CoinGecko recently compiled a list of 10 Axie scholarship providers (see image below). Most of these providers are based in the Philippines. It can be said that this is not developed countries exploiting developing countries, but people in developing countries helping each other and continuously building bigger businesses on Axie's platform.
In a world rapidly moving online,With a market fit for blockchain-based businesses and economies, Axie Infinity is more likely to be a glimpse into the future of work, rather than a flash in the pan. No matter where people live, they are building businesses in the Metaverse.
The "Metaverse" Has Arrived, And It's Evenly Distributed。
In addition to these scholarships, some sponsors are already supporting players with their own "Play-to-Earn" quests. For example, the DeFi protocol is the first batch of larger sponsors, rewarding the native tokens of the DeFi protocol to Axie players who complete tasks: for example, Maker rewards players with the stable currency DAI, Aave rewards players with AAVE tokens, and Digix rewards players with real gold. In other words, these sponsors are directly rewarding players for following them.
The opportunity to make a living playing games was enough to send hundreds of thousands of people, about 60% of them in the Philippines, through Axie's more complicated start-up process. Axie's current roughly 600,000 players represent a tiny fraction of the Philippines' 111 million population, let alone Play-to-Earn players worldwide.
Even before the craze of the past three months, the appeal of the Axie model had created an influx of demand into the Ethereum network, whileEthereum’s high gas fees in turn dampen Axie’s growthsecondary title
04. Introduce Ronin
In June last year, when the DeFi summer was just getting started, Ethereum woke up from a two-year slumber due to the huge demand for block space. At the time, Axis Infinity was deploying its most-used Axie NFTs and SLP tokens on the Ethereum blockchain, while placing less-used Land NFTs and Item NFTs on the Loom sidechain, before releasing its governance token. Coin AXS.
The activity of Axis NFTs and SLP tokens contributed to the congestion of the Ethereum network and was affected when the price of Ethereum Gas spiked. In a June blog post, the Axie team also wrote,Ethereum Network Congestion Is "Our Perpetual Barrier". For this reason, in this article,They announced that they are building their own sidechain：Ronin。
Axis needed a long-term solution that would enable fast, cheap and seamless participation in the Axis game and economy. We needed this scheme to be fun and easy! That's why we're announcing Ronin today - an Ethereum sidechain designed specifically for Axis Infinity. The original meaning of Ronin refers to the samurai who had no master in the feudal period of Japan. The Ronin sidechain represents our desire to hold the fate of the product in our own hands.
Many dApps (decentralized applications) built on Ethereum are feeling the pain of network congestion. But few applications build their own sidechains, instead choosing to use other L2 scaling solutions (such as Polygon and Optimism). Even Uniswap, which consumes the most Gas on Ethereum, has decided to use the Ethereum mainnet andOptimismInstead of building your own solution.
Not so with Axie. Axie builds a sidechain with its own wallet. Judging by the current huge transaction volume, this is an ambitious plan. Given that in June 2020, Axie's revenue was only $2,044.09, the ambition is quite large. But they moved on, and after a year-long build, Axie Infinity migrated to Ronin in early May of this year.
After the migration, everything in the Axie universe happens on the Ronin sidechain, bridged to Ethereum when needed. current,Mainly SLP tokens and AXS tokens are bridged to Ethereum; ERC-721 assets in Axie (including Axie NFTs, Land NFTs, and Items NFTs) cannot yet be transferred through the bridgesecondary title
05. Interpretation of Axie from the perspective of data: unlimited benefits
We're talking games today, so let's play a game: find out in the image below where Axie releases Ronin.
As shown, Axie has experienced explosive growth since solving the congestion problem caused by Ethereum in May, which you can see in the above chart. If this revenue growth rate is maintained, Axie's revenue will...
...but even this chart doesn't do a good job of explaining its ins and outs.
This is almost unprecedented growth in scale for any company. In its 17th year of operation, Roblox, a public company with a market capitalization of $43 billion, made $144 million in April of this year.
It's one of the best-performing titles ever in the gaming space, and Axie's performance is all the more impressive considering it broke the "Free-to-Play" model that has dominated the past decade.
From the 4.25% cut alone, Axis is on track to generate more than $150 million in revenue this month. Its total transaction volume reached $32 million last Tuesday alone, which is very close to the best revenue for a "Free-to-Play" game.
When you compare it to other blockchain-based applications, and to blockchain as a whole, it's really crazy.
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Source: Token Terminal
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Source: Token Terminal
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Source: DappRadar
However, as the graph above shows, over the past 24 hours, 7 days, and 30 days, Axis Infinity has seen more transactions than any other NFT marketplace, including open marketplaces like OpenSea, Foundation, and Rarible, as well as CryptoPunks, NBA TopShot, and SoRare, among others Specific NFT asset market. Axie now ranks third in terms of total historical volume, and surprisingly,Axie's trading volume over the past 30 days alone is enough to put it in third place all-time！
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Source: EtherScan
Finally, let's talk about the token itself. Launched in early November 2020, AXS, the governance token of Axie Games, has since grown by 10,964% to a market cap of $1.1 billion. See below:
According to Delphi Digital data, despite the rapid growth of AXS, its price-earnings ratio is still only 7.7 times (Delphi is an investor in Axie, which is one of the best web3 research companies, helped design the AXS token, so they are very important to the game understanding is second to none). In contrast, "Roblox" remains unprofitable, and "Grand Theft Auto" developer TakeTwo trades at 33.5 times earnings. If Axie can sustain its current levels, those levels will look pretty cheap.
But it's not just about money. Axis surveyed players about their main motivation for playing Axis Infinity, 48% said they played for financial gain, forming a solid basis for making a living on the platform, but 37% said their main motivation was the community. The community primarily exists on Axie's 549,000-member Discord server. It is one of the few Discord servers in the world with over half a million users. Until recently, Discord didn't support communities of more than 500,000 people. For comparison, Fortnite's Discord community has about 800,000 members.
Data may be falsified, but users' love for the community and products cannot be falsified。
Over the past week, Axie has seen such volume of transactions that its servers have been down. The company posted on its Discord that:
Linking games to blockchain data is a new creation; nothing has been done before in front of so many players. Everything was going great until the first few weeks, but when we passed 500,000 daily active players, the servers started crashing.
This is a big question. Many Axie users cannot play games. After experiencing consistent revenue growth, Axie's revenue numbers appeared to have stalled for a few hours yesterday due to a server failure. However, people are still trying to get into the game. They can't stop playing Axie Infinity. When things return to normal, they come back quickly and furiously.
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06. Vertical integration in the Lego world
If we can build a community of millions of blockchain-educated users by bringing in new people, then we can build a behemoth that swallows other products.
--Jiho, co-founder of Axie
Remember that quote I quoted at the beginning of the article? Axies' cute, innocent image belies the fact that this is a strategy game. The same goes for the overall strategy of Sky Mavis, the startup behind the game, combining unprecedentedVertical Integration and Decentralization。
We know that part of the beauty of web3 is that you can fit existing protocols, smart contracts, blockchains, L2s, and dApps together like Lego bricks. This is called composability. This means companies can move faster and develop increasingly complex and exciting products with fewer resources.
Not so the Sky Mavis team's strategy for Axie Infinity.
In the Axie community, it seems common to compare Axie to Tesla/SpaceX. In a conversation with me, Jiho made a similar comparison, saying that when you're building something really complex, you need to build everything internally. Tesla makes its own batteries, software, and components; SpaceX's entire supply chain, from rocket engines to electronic components, is built from scratch. Sky Mavis is also building everything itself.
next is
next isA game developed and drawn by Sky Mavis himself。
Next, Axie built its own NFT marketplace in early 2018, although OpenSea had already launched in December 2017. As mentioned earlier, Axie's NFT marketplace has seen more volume than OpenSea over the past 30 days, even though Axie's NFT marketplace only includes its own Axie NFTs.
Axie is also building its own world, Lunacia, and began auctioning off "land" in 2019, merging Axie and the land market later that year. In the near future, the company plans to release land-based gameplay that will open up new ways to engage the community and, more importantly, provide players with new ways to earn money, as detailed at:
https://axieedge.com/everything-we-know-about-land-gameplay/
Sky Mavis also launched its own in-game currency SLP, which can be exchanged for fiat currency through ETH, and launched its own governance token AXS in November.
As we discussed, Sky Mavis is dissatisfied with Ethereum’s congestion and Gas fees, and is not satisfied with other people’s L2 solutions, so it established and merged its own side chain Ronin and related Ronin wallets, users need to install Ronin wallets to play the game.
Axie has a big appetite. That's what the team has achieved so far. What's next?
Let's think about why vertical integration makes sense, especially given the current availability of good enough modular components.Vertical integration is preferable if it reduces the cost of Axie and creates a better user experience. Currently, players spend transaction fees outside of the Axie universe mainly when they need to exchange SLP into ETH on a DEX (decentralized exchange) like Uniswap, and then into legal currency.
Therefore, the next step in Axie's vertical integration is to build its own DEX.
Currently, the plan is to make it easier for players to exchange Axie-related tokens for real-world spendable currencies, which is crucial for the "Play-to-Earn" model. As this gamer Noah Ralston puts it, that in itself saves a lot of trouble:
This also gives the Axie protocol more incentive to tokenize more things (such as experience points, the Ronin sidechain itself),These are all tradable on Ronin DEX. Jiho told me that he thinks it can become the largest DEX ever by users。
One of the biggest challenges facing cryptocurrencies so far is how to solve the problem of mass adoption and use cases. If Axie can amass the largest user base in the cryptocurrency space, help users make a living, and keep them happy to participate, it can start a prairie fire. That's why they're vertically integrated now -- they have users and they want to take advantage and improve the user experience.
Axie is not just creating games, it is building web3 aggregators and reverse integrating as much of the value chain as possible。
Plus, by creating something interesting and attracting a ton of eyeballs, Axie is attracting capital that doesn't look for anything in return! This is very rare in the encryption field. This reduces its cost of capital and generates revenue in a way that DeFi protocols cannot. To give a few examples:
People who buy Axies as pets. There are 2 billion pet owners worldwide, and 99.99999% of them buy a pet knowing they're going to lose a lot of money. Axie has attracted a lot of people who just bought Axie as a pet with no expectation of anything in return.
just people who love this game. 15% of Axie players believe that its gameplay is their primary motivation for playing the game, rather than financial gain or community.
e-sports competition. Axie is well suited for esports competitions, and with recent events, its viewership on Twitch (the streaming site) is on the rise. These competitions will bring sponsorship money to the ecosystem to gain more attention.
Sponsors who provide external capital. As other aggregators like Facebook and Google have made clear, when you have a large number of users, you have a money printing machine. Sponsors such as Aave are already pouring outside money into the system, and as Axie's daily active users climb into the millions, sponsorship opportunities will continue to emerge. This patronage relationship can be accretive rather than extractive, as revenue goes into the player-controlled community coffers.
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07. Decentralization of the Axie Universe
Axie is being decentralized in a few ways.
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Source: Axie Infinity Whitepaper
So far, the game's "Play-to-Earn" has primarily been about earning SLP tokens, but in the coming months, players will also be able to earn AXS tokens through gameplay. at the same time,AXS holders will be able to stake their AXS for more staking rewards，and vote on the future direction of the game. In the white paper, the team lays out a few things the community should be able to vote on:
Should Axie Infinity use the market created by Sky Mavis?
How should the community treasury be used to reward AXS holders and the wider Axie community?
Should community vault funds be connected to other yield farming/staking services (like Yearn.finance or Rari.Capital)?
As the second part of achieving decentralization, Sky Mavis will open an SDK to allow other developers to build new things. Jiho calls it "Internet Monster Protocol, where people can take that IP and create stuff." The team envisions being able to use Axies in many user-generated games in the Axie universe.
Currently, some members of this community have started creating Axie content, albeit just for fun and without expecting anything in return, as shown in the image below:
besides:
Over the next two years, if all goes according to plan, Axie players will dictate the direction of the community, primarily by voting on the use of community treasury funds, and will be able to expand the Axie universe themselves, while earning tokens. They may even decide to remove Axie's vertical integration, or create new and better marketplaces, sidechains, wallets, and exchanges.
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08. Infinite Possibilities
Under what circumstances do virtual worlds intersect and affect the real world?
Today, right now, millions of people make a living playing video games in virtual worlds. They are participants in a virtual economy, using their loot to improve their real-world fortunes. Kids from the Philippines, Vietnam, Brazil, and more apply for Axie Scholarships just as they apply for college or jobs, hoping to move their trajectory up.
In the virtual realm, Axie Infinity will expand and leverage its IP (intellectual property) in foreseeable ways:
content. It's almost impossible that we won't see an Axie-related movie or Netflix show in the next few years. Will NFT ownership of Axies used in the movie generate a royalty stream for their owners? Can Mystic Axies owners negotiate directly with the studio, or create their own characters online, like people are considering Bored Apes (ape-themed NFT avatars) and CryptoPunks (cypherpunk NFT avatars)? (Note: Mystic Axies are Axies that have at least one Mystic Part, and they have a limited supply, which makes them valuable.)
Universe Expansion and UGC (User Generated Content). The Axie team has stated that they cannot create enough content and experience to meet the growing user demand, and they want to ask players for help. Will Axie Infinity become a platform similar to "Roblox" that allows other developers to develop, giving creators more tools to make money?
Crypto expansion. After already having hundreds of thousands and soon millions of new crypto users, will Axie provide these crypto novices with more and more tools to not only make money, but also manage and grow their stack?
That might sound like hyperbole, but Axie Infinity could still be the most valuable IP of all time. It will be interesting to witness, but the real big impact will come when Axie Infinity realizes that it is shaping real-world policy and helping the world adapt to a future where people no longer need traditional jobs to survive.
Before launching Axie, Jiho grew up collecting fossils and insects and studied military and economic history at Yale, where he wrote a paper on Alexander Hamilton's debt restructuring planned dissertation. Axie is the intersection of these two nerdy passions, and an opportunity to use his knowledge and passion to help design the new economy.
When enough Axie players make a living from the game, the team can work with governments to conduct controlled experiments on the effects of Universal Basic Income (UBI). It is difficult to accurately measure the impact of UBI in the chaotic environment of the real world, but governments can conduct experiments to provide UBI to specific Axie players and measure whether they remain active players, builders and community participants.
Editor's Note: Universal Basic Income (UBI) is a redistributive scheme with a simple idea: every citizen (or every adult) receives a regular income supplement from the government, and the money is claimed with no strings attached conditions, people can get rid of the need for work and be free to pursue their dreams.
One of the challenges of UBI is that work is not just about money, it is about meaning, belonging and self-worth. As more and more automation is required and less human labor is required, we will need new ways to deliver these things and checks. In Kurt Vonnegut's first novel, "Player Piano," released in 1992, he described a future world where automation replaced the need for most jobs, and in response the government hired people to dig holes over and over again, and then put Fill the hole back. In the Metaverse, Axie might help usher in a more fulfilling, fun era of work.
Am I talking too soon? really. Many things can go wrong:
The entire crypto space could collapse (I don't believe it, but it could happen).
Even if the crypto space doesn't collapse in the long run, another ongoing crypto winter could reduce the amount of money people get through "Play-to-Earn," stop Axie's momentum, and split the community.
Axie integrates vertically rather than using existing best-in-class products and protocols, which means there is a greater chance of screwing up.
Decentralization and empowering the community can lead to unpredictable results.
Its servers may crash again due to load, causing players to feel that they can no longer rely on Axie for income.
The gaming industry is notoriously fickle, and what's hot one month might be old news the next.
But I get the feeling that something special is going on here. The "Play-to-Earn" (play while earning) model can attract new users who want to make a living, and retain them in a way that is more like a long-term career than a passing gaming fad. Turning Axie Infinity into a user-owned and managed platform creates stickiness through network effects and high switching costs, as is the norm with platforms. The Metaverse needs more than entertainment, it needs to blur the line between entertainment and employment. Axie has demonstrated that this is possible.
The rise of Axie comes at a time when the crypto market is going sideways, the NFT craze has receded, and people are questioning whether the whole web3 will really have any impact on the real world, and Axie's outstanding performance seems to be worthy of attention.
When we look back 10 or 20 years from now, I believe that this period in Axie's life was just the beginning of something big, a dot on a much bigger graph in terms of benefits and impact. In the medium case, it will be a player-owned, Pokémon-scale giant, a classic example of vertical integration; in the best case, it will be a new "country" in the "Metaverse". , improving the lives of millions of people around the world.
Not bad for a cute little game.
