Axie Infinity is one of the most popular Play-to-earn NFT games out there. In this video, we discuss how it works (including smooth love potion and Axie shards) and why it has gained a ton of popularity recently.
My childhood is filled with pleasant memories of playing Pokemon on my Gameboy, and I’ve tried downloading an emulator to reminisce about the same fun. However, it’s just not the same. What if there was a new version of Pokemon, but that all the data was stored on the blockchain instead?
First off, Axie Infinity was developed by SkyMavis in early 2018. Basically, they wanted to create a game on the blockchain and developed these little axolotl-like creatures that are quite similar to pokemon. They actually saw how Cryptokitties—which was another NFT game where you could breed digital kittens—lacked in their long-term economics. Once you owned a few kittens, and bred them, there wasn’t much more to the game than collecting more. Axie Infinity changed this, by making the game much more addictive and adding economic incentives that made players want to play longer. Interestingly, most of the early users actually came from Cryptokitties.
What are Axies?
Each Axie is born into a category, and there are 8 total categories. Each category has benefits and drawbacks. For example, fire will have an advantage to grass, but a weakness to water, exactly like Pokemon. Unlike Pokemon though, each Axie has 6 possible body parts, out of a total of over 500 different body parts. Even more so, each body part has a dominant, recessive and minor recessive ability or stat. This means there are many, many possibilities of Axies, and the breeding mechanism slightly randomizes the abilities and stats, similar to our genetics work.
Play to Earn
Before I continue, I want to share more about how Axie Infinity is a “Play to Earn” game, where you use your Axie NFTs to trade, battle, and breed. Trading is pretty simple, you trade one Axie for another Axie. Why would you do this? So that you can breed one Axie you have with another Axie you have, creating an offspring that has a semi-random collection of it’s parents’ traits. By doing this, you can start to win matches, which is possibly the most fun part of Axie Infinity. You can battle NPCs in adventure mode to rank up and win SLP, which we will talk about later, or you can battle other real world players to earn SLP. Either way, the more you play, the more you earn.
With adventure mode, it is easier and you lose less, so there is a cap on how much SLP you can win. However, in the PVP arena, you can play as much as you want.
Smooth Love Potion token
At this point, you may be wondering what SLP is. SLP stands for Smooth Love Potion and is a cryptocurrency token that you earn for winning battles in Axie Infinity. You can trade it to other cryptocurrency tokens to then actually sell it for real world money. SLP is also used for breeding. Each Axie can only be bred 7 times, and each time you breed it, it takes more and more SLP. Breeding also requires 1 AXS, which is another token you must buy, unless you’re really good at PVP, then you can actually earn AXS by ending up in the top ranks of the PVP leaderboard each season. AXS stands for Axie Shards. Axie Shards and Smooth Love Potion are the two main tokens used in Axie Infinity and powers the play-to-earn game. AXS is a governance token and the fees from breeding go to the Axie Infinity Treasury.
SLP also allows you to buy in-game digital items. Whenever you breed a new Axie or buy items from the marketplace, it is burned, meaning that SLP is removed forever. However, since it’s also produced when you win games, it’s technically inflationary. This doesn’t stop people from playing for hours on end, earning hundreds of dollars in crypto each month.
Both AXS and SLP were originally on the Ethereum network, as ERC-20 tokens, but since April of 2021, now are mostly on the Ronin blockchain, which is a sidechain to Ethereum. This was done to lower the fees, and is centralized.
“Where does money come from?”
There are quite a few accusations that Axie Infinity is a ponzi scheme, but gamified. This definitely intrigued me to make a video over it. First off, you must invest to buy three Axies to play, which are quite expensive already. Better Axies obviously cost more money, with the best ones being tens of thousands of dollars. There will be lots of people who buy Axies and do not earn their money back. Even with the best Axie, there is only a limited amount of SLP you can earn, so the ponzi scheme theory kinds dives off there, however I wouldn’t say buying Axies and earning SLP with them is an investment, I’d definitely think of it more as a game long-term because nothing like this has been attempted before.
Axie Scholarship in Philippines
During the recent pandemic, Axies got really big in the Philippines because you could earn a decent wage just by playing the game for a period of a few months. There is this idea of an Axie Scholarship that started popping up there, where people lend out their Axies to those who can’t afford them, and they split the winnings. Managers get to earn passive income, and scholars get to save up money. All of this is usually peer to peer and may not be completely safe, though. It is relatively safe for the owner of the Axies as he only shares what is necessary to play the game but not the private keys of the Axies, meaning the scholar cannot sell the Axies or claim the SLP himself, he needs the account owner to do that. The risks for the owner is getting his account banned because the scholar is playing in multiple accounts, which is a bannable offense that permanently tags the Axies in that account as unusable (effectively making their price go to 0). The risks for the scholar is him not getting paid after his work, and since there is no regulation he just has to move on and accept his lost of time. A solution for this however would be the addition of smart contracts that oversee this, but there is, from my understanding, no plans about it yet.
Thanks for reading, we hope you enjoyed this article, we really hope you learned something, and most of all, we hope to see you in our next article!