Infinite possibilities of Axie Infinity with monthly income exceeding 300 million US dollars

Infinite possibilities of Axie Infinity with monthly income exceeding 300 million US dollars

Axie Infinity is a Pokémon-like game, built on the Ethereum blockchain. People buy digital pet NFTs, breed, fight, and trade.

Axie is known as the king of chain games, first of all because of its super growth rate. The monthly revenue of the game has increased from 100,000 US dollars in January to 194 million US dollars in July. In the past 30 days, the revenue has exceeded 300 million US dollars. “King of Glory” has a high income in July. (It took Roblox 17 years to achieve a monthly income of 100 million US dollars).

The uniqueness of Axie Infinity is that it directly provides players with meaning, income and opportunities through the Play-to-Earn model. Many Vietnamese players subsidize their lives through this game. There is a view that Axie Infinity reshapes work and partially replaces companies like Uber.

In addition to business, it has a bold master plan to reshape economic policy and local governance by showing the possibility of people working in Metaverse. In the White Paper, the developer Sky Mavis clear that ” you can Axie seen as a country with a real economy” .

Catalogue

Why is Axie worthy of attention?

The origin of Axie

A new history of game business models

Play-to-Earn 模式

  • Axie’s game mode
  • Scholarship Program

Enter Ronin

Unlimited income from Axie

Vertical integration in Lego World

The next step is to build your own DEX

Decentralized Axie world

Unlimited possibilities

Why is Axie worthy of attention?

First, Axie Infinity is increasing players and revenue at an almost unprecedented rate.

Infinite possibilities of Axie Infinity with monthly income exceeding 300 million US dollars

Axie monthly income

Sky Mavis CEO Alexander Leonard Larsen (Aleksander Leonard Larsen) said that platform revenue increased from US$100,000 in January 2021 to US$194 million in July. In the past 30 days, revenue reached a new high, reaching 334 million U.S. dollars, even surpassing the 231 million U.S. dollars (Sensor Tower data) revenue of “Honor of Kings” in July.

The revenue source of the Axie protocol is that when players buy and sell Axie NFT on its market, they charge 4.25% of fees , and charge fees for the reproduction of Axies, and create new Axie Infinity Shards (AXS) and Smooth Love Potion ( SLP). AXS and SLP are priced in ETH. Since May, ETH has been cut by more than half; even in the face of falling ETH prices, Axie’s dollar revenue is growing.

Infinite possibilities of Axie Infinity with monthly income exceeding 300 million US dollars

If this is the annual revenue growth of any company, investors will be salivating. A 200-fold increase in revenue in three years is almost unheard of…not to mention a 200-fold increase in three months.

This crazy growth is only the first step in a larger plan that includes vertical integration, aggregation, decentralization, and literally world building.

Infinite possibilities of Axie Infinity with monthly income exceeding 300 million US dollars

This Tesla/SpaceX metaphor seems to be a common topic in the Axie community. Co-founder Jiho made the same comparison when we talked. His reason is that when you are building something truly complex, you need to build everything inside. Tesla built its own batteries, software, and parts. SpaceX built its entire supply chain from scratch, from rocket engines to electronic components. And Sky Mavis is also building everything on its own.

Axie has proven many things that are important to the long-term success of cryptocurrencies.

  • NFTs are alive and well, and their success does not depend on high-priced art sales. Quite the opposite. This is a true commitment to NFTs.
  • Non-cryptocurrency people are joining cryptocurrency through games.
  • Cryptocurrency can create new economic opportunities for all types of people in the world, not just those in the Kryptonium, DeFi and Bitcoin circles. It has achieved the promise of a fairer playing field and also gained economic value.
  • The network effect of cryptocurrency can create moat-based, fast-growing companies.

Infinite possibilities of Axie Infinity with monthly income exceeding 300 million US dollars

Currently, one of the main criticisms of cryptocurrency is that it has no real-world value or application, but Axie lets you reconsider what real-world value is. In Axie’s case, value comes from directly providing meaning, income and opportunities to players. A typical game will spend millions of dollars on marketing and leave most of the profits to itself; Axie does not spend money on marketing, but allows players to retain most of the value created.

And this is only its first action. It wants to reshape work and build the most valuable IP in history, all of which are owned by the players themselves.

The famous investment entrepreneur Chris Dixon once said, “The next big thing initially looks like a toy.” Axie certainly meets this standard.

The origin of Axie

In November 2017, CryptoKitties was born as the first digital asset using the now popular ERC721 standard. Less than a month later, in Vietnam, Trung Thanh Nguyen, founder and CEO of Sky Mavis, put forward the idea of ​​Axie Infinity: What if the gameplay of Pokémon, the ownership of NFTs and the reproduction of CryptoKitties can be combined?

This is a universe inspired by Pokémon, anyone can earn tokens through games and contributions to the ecosystem. Players can fight, collect, raise and build a land-based kingdom for their pets.

Infinite possibilities of Axie Infinity with monthly income exceeding 300 million US dollars

Sky Mavis, Axie Infinity White Paper

Trung established the company in December 2017. By January 2018, when ETH reached its historical high of more than $1,300, he had recruited Masamune as the art director and game designer. At the same time, Trung has been playing CryptoKitties, where he met the two co-founders: in March, Jiho, head of product growth, joined, and in May, Aleksander Leonard Larse served as COO. In July, CTO Andy Ho joined and finally confirmed the five-member joint founding team.

The team launched the Origin Axie pre-sale in February 2018-selling the first batch of Axie characters as NFTs, raising 900 ETH, when the price of ETH was beginning to collapse from historical highs.

  • In March, they launched their own NFT market where Axie collectors can trade.
  • In May, they released “breeding”, allowing players to breed new Axies.
  • In October, players can use Axies to play against each other.
  • In January 2019, they raised 3,200 ETH by selling land in Lunacia, an open world owned, operated and controlled by players. 

Infinite possibilities of Axie Infinity with monthly income exceeding 300 million US dollars

An idea that started at the peak of the bull market encountered a “cryptocurrency winter” when it was built.

The seemingly cursed timing actually becomes an advantage. It allows the Axie team to carefully build and improve the product in relative obscurity, while attracting a small group of true believers at the core. One of the common challenges faced by games and new cryptocurrency projects is that they will attract a lot of hype and publicity, quickly generate a lot of revenue, and then quickly die out.

“The community must first be small in order to be effective when it really gets bigger. This is why it is difficult for Axie to be copied-if you build a competitor now, you will attract those who want to find the next Axie, not those People who are really interested in promoting the development of games.”-Co-founder Jiho

Now Axie has become very big. Last Friday, it surpassed 600,000 daily active players. Its Discord server is the core of the community, with more than 540,000 members. When I jumped into Discord yesterday, a new member joined every five seconds.

The growth of Axie is impressive, especially considering that its barriers to entry are not low. At present, many players are not blockchain users, and even now they don’t understand what a blockchain is.

Infinite possibilities of Axie Infinity with monthly income exceeding 300 million US dollars

The introductory guide for the game is: first have ETH, register MetaMask wallet, transfer ETH, download another wallet (Axie’s own Ronin wallet), transfer ETH again, get NFT on Axie’s own NFT market, log in with MetaMask, and finally Download the application itself on the desktop or mobile. 85% of Axie players use Android.

Then there is the cost. To start playing, you need three Axies. You can get Axies on the market. Among the 99,323 available Axies, the cheapest is 0.1 ETH, or $195. 

Infinite possibilities of Axie Infinity with monthly income exceeding 300 million US dollars

Despite many obstacles, Axie is still growing wildly.

In Invest like the best podcast, gaming company Machine Zone (a serious game developers, focusing SLG category, was the largest US mobile games company, after AppLovin acquisition) of CEO Gabriel Leydon put forward a counter-intuitive point of view, investment People should look for opportunities where things are broken but still growing.

The importance of NFTs is the same as that of the App Store. In the early days of the App Store, everything was terrible. It takes three months to get an application approved. It was a nightmare. But it is growing wildly. This is what you want. You want a completely broken environment. There are several spaces that are still in the innovation stage, and cryptocurrency is clearly one of them.

If something is growing wildly in terms of design and user experience, it must be providing real innovation and satisfying previously unmet needs.

In the case of Axie, this innovation is the Play-to-Earn model and the opportunity to make a living in Metaverse by playing games. In order to understand why it is innovative, we need to understand how games generally make money.

A new history of game business models

Axie Infinity is not the fastest growing game in history, nor is it the highest paid game. To understand what is special about Axie’s growth, we need to first look at several other game business models.

Infinite possibilities of Axie Infinity with monthly income exceeding 300 million US dollars

In June, the Japanese mobile game “Ninkuni: Interlaced World” set a speed record. Although it was only launched in five markets, it reached $100 million in revenue in 11 days.

Like the previous game Pokémon Go, which reached US$100 million, the highest-paid mobile game “Honor of Kings” ($9.97 billion), Epic’s explosive “Fortnite” and most of today’s most popular games, “Ni no Kuni” is a free game.

Most free games make money by selling virtual game items such as skins and emoticons. This model is very successful.

Infinite possibilities of Axie Infinity with monthly income exceeding 300 million US dollars

In “Fortnite”, you can play games with normal characters for free, but if you want to upgrade to Wolverine, you can use “Fortnite”‘s own game currency V-Bucks to purchase Wolverine skins.

Infinite possibilities of Axie Infinity with monthly income exceeding 300 million US dollars

In 2020, “Fortnite” generated $5.1 billion in revenue. The important thing is that in Fortnite, buying a certain skin will not give you a chance in battle, just like buying a new shirt will not make you stronger. You do this just to show off your ability, or you have your own style, or for something fancy. “Fortress Night” is a primitive cyberspace and community. Its Discord server has 805,000 members. It is a small economy, centrally managed by Epic Games, and it earns huge profits from players.

Compared with “Fortnite”, Ninokuni and Pokémon Go are also free games, but their critics believe that they are a dirty subset of free games, that is, Krypton Gold becomes stronger. Players will get stuck in a certain level if they don’t pay.

Infinite possibilities of Axie Infinity with monthly income exceeding 300 million US dollars

Source: Reddit

Many Redditors questioned the US$100 million revenue claim of “Fujikoku” based on weak download numbers. Either the revenue data of SensorTower is problematic, or the game benefits from the above-average consumption of whale users (ie, a small group of players who invest a lot of money in free games). 

Even seemingly innocent games like “Candy Legend” will allow players to spend a lot of cash to buy more lives. When this game first started, the Internet was full of horror stories-parents checked their credit card bills and found that their children had purchased thousands of dollars worth of candy shredders with their credit cards. In 2014, Apple refunded $32 million to parents for unauthorized in-game purchases in various free games.

Roblox was founded in 2012 and is mainly played by children. It is also a free game, but it is innovative in some aspects. First of all, parents can buy a certain amount of Robux, the game currency, for their children to spend, instead of plugging in a credit card and letting the children act recklessly. Secondly, Roblox does not build everything on its own, but builds a platform on which developers and designers create games and items, which they can sell to users in exchange for Robux. In the first quarter of 2021, Roblox had revenue of US$387 million and paid a developer exchange fee of US$118 million (31% of revenue).

Infinite possibilities of Axie Infinity with monthly income exceeding 300 million US dollars

Source: Reddit

According to the company, 27% of every dollar spent through Roblox goes to developers, 25% goes to app stores, 12% goes to investment and support platforms, and 27% goes to Roblox itself.

Infinite possibilities of Axie Infinity with monthly income exceeding 300 million US dollars

Source: Reddit

Roblox, and games like Minecraft are a huge improvement. Users are no longer just paying money to game developers, but can really make money by developing for the ecosystem. But as far as the platform is concerned, it is indeed slightly lower than Bill Gates’ standards (if everything built on the platform earns more than the platform itself, then it is a platform), because it and the income as a developer are The same. But in Roblox, ordinary users can make a living through games, which is a victory. In the past, people mainly made money by winning e-sports competitions (only a few elite players could participate) or by panning for gold. 

In 2007, the “New York Times” reported that Chinese workers spent 12 hours a day, at 0.3 cents an hour, collecting gold coins and other digital assets in World of Warcraft. The boss sells these gold coins to online retailers and earns $3, and the retailer sells these gold coins to European and American players who don’t want to spend their time, earning as much as $20. Cultivation of gold coins is considered exploitation and is banned by the game. It would be great if there was a way for players all over the world to make money for themselves…

All this brings us back to Axie Infinity.

Play-to-Earn 模式

Axie operates a brand new model-the Play-to-Earn model supported by blockchain. This model “rewards players for the time and effort spent playing games and developing the ecosystem.”

In ordinary games, players can also trade game assets, but only within the game ecosystem. Using NFT as the basic asset allows players to earn rewards and then trade or sell them on the open market to earn real money. There are even many players earning money in Axie to support their families.

Axie has a real money economy that is 100% owned by players. Game developers do not sell game items or copies, but focus on developing the player-to-player economy and take small fees to achieve monetization. Axies are created by players using resources in the game (SLP and AXS) and sold to new/other players. The holder of AXS tokens is the government that receives taxes. Game resources and items are tokenized, which means they can be sold to anyone, anywhere in an open peer-to-peer market.

(Remarks: SLP, love potion, is a token that can help Axie to reproduce; AXS is the governance token of Axie Infinity)

Axie is not a free game, you need to buy three Axies to enter the game. But instead of paying the developer for the right to rent, you own it. By playing the game, you own the game and can make decisions about its future development or complete tasks to earn real income. If you want to stop the game, you can sell your Axies, AXS and SLP tokens directly.

The Axie protocol charges a 4.25% commission for each transaction in the market, and charges a fee (in the form of AXS and SLP tokens) when cultivating new Axies. Different from the traditional model, in Axie’s game earning model, 95% of the revenue goes to players. “The first principle is: In the attention economy, users who give us attention should be rewarded.”

To make PvP games (player-versus-player games) fun, you need to quickly match players with people with similar skills. By increasing the mobility of players, Play-to-Earn makes Axie more interesting; in order to achieve this, It is worth giving people most of the money.

Approximately 5% of the funds in the Axie agreement go to the Ministry of Community Finance, currently 46k ETH or 95 million U.S. dollars. The treasury is controlled by token holders, including but not limited to the developer Sky Mavis, who holds the state governance token AXS. 20%.

Infinite possibilities of Axie Infinity with monthly income exceeding 300 million US dollars

Source: AxieWorld

Axie’s game mode

Axie is not only building games, it is building a virtual country with its own economy. But it all starts with the game, here is how it works (this should be familiar to Pokémon players):

Players collect, raise and eventually fight against Axies (digital pets). The core of the game is battle, player versus player (PvP) or player versus environment (PvE).

Each Axie has different attributes-health, morale, skills and speed, which give them advantages and disadvantages in combat.

Infinite possibilities of Axie Infinity with monthly income exceeding 300 million US dollars

The state of each Axie depends on its category-beasts, reptiles, aquatic animals, bugs, plants, birds, moons, nuts, stars, and body parts-eyes, ears, horns, mouth, back and tail. Some categories are better at attacking, and some are better at taking damage; Axies operate in groups of three, and players have to use the best structure to fight other teams.

In the battle, the two sides take turns using Axies cards to attack each other. For example, a bird card used to attack the beast Axie will cause an additional 15% damage. Each pair of levels has such a relationship.

Infinite possibilities of Axie Infinity with monthly income exceeding 300 million US dollars

This is a strategy game. It depends more on skill than luck in the lottery.

By winning PvP and PvE battles and completing daily missions, players can earn SLP tokens. Top players can earn 600 SLPs per day, and the average worker can earn up to about 200. According to the current SLP price of US$0.26, which is equivalent to US$52, it is considered a very high income in many developing countries.

Players can do several things with SLP:

  • Cultivate new Axies. Axie Infinity does not cast Axies out of thin air. Each Axie is multiplied up to seven times, and the cost is the same as the base of 4AXS. The more an Axie is multiplied, the more SLPs there are. The reproduction cost of an “initial Axie” is 4AXS + 150 SLP ($108.92 at today’s price). Given that each Axie has a reserve price of $195, this is a profitable transaction.

Infinite possibilities of Axie Infinity with monthly income exceeding 300 million US dollars

  • Speculation. In the past year, the price of an SLP has increased by 21.8 times, from $0.0122 to $0.2664.

Infinite possibilities of Axie Infinity with monthly income exceeding 300 million US dollars

  • Exchange Fiat (an encrypted conversion currency). Both AXS and SLP can currently be traded on major decentralized exchanges (DEX), such as Uniswap . In the near future, they may be in Axie’s own DEX
  • Many players earn SLP and then convert it into money to pay their real-world bills.

It was the last use that attracted the imagination of the public and caused the use of Axie to explode. During the epidemic, many people in developing countries lost their jobs, and they turned to Axie Infinity to make ends meet. There is even a short documentary about this phenomenon, Play to Earn.

The documentary shows a small Filipino town named Cabanatu’an, where many people play Axie, including a 75-year-old couple named Lolo and Lola Silvio, their own small shop every day Only earn 5-6 dollars, so I supplement my income through Axie and pay for medical expenses.

Infinite possibilities of Axie Infinity with monthly income exceeding 300 million US dollars

Source: Paid Game

However, how can such a relatively poor player pay the initial three Axies fees?

Scholarship Program

This is one of the most fascinating things in the Axie economy. Scholarship programs are emerging worldwide to provide Axies to aspiring players. Essentially, it is rented to the player Axies, and is rewarded by the income share of the SLP income. 

The documentary focuses on a scholarship program in Kabanatu’an, which provides Axies and training for local players.

The film also introduces Yield Guild Games, an influential DAO (Autonomous Organization), which mainly invests in NFT based on virtual worlds and blockchain games. The project is a global scale for Axie Infinity and emerging games such as “Sandbox”. “And “The Kingdom Alliance” established scholarships. Every day, dozens of people send real, well-formed resumes to Yield Guild and other scholarship programs, showing not only professional certificates, but also gaming experience.

As the demand exceeds the scope that Yield Guild can meet, it has launched a “Sponsor-a-Scholar” program (Sponsor-a-Scholar) to allow philanthropists to help players. For example, Li Jin, the former partner of A16Z, recently announced the award of the “Jumping Corgi” scholarship. The scholarship is derived from NFT sales and a total of 87 scholarships have been awarded.

Infinite possibilities of Axie Infinity with monthly income exceeding 300 million US dollars

Infinite possibilities of Axie Infinity with monthly income exceeding 300 million US dollars

This sounds crazy-the proceeds from NFT will be used for scholarships to support people in developing countries who want to make a living playing NFT games in Metaverse. But this is true.

CoinGecko recently compiled a list of ten Axie scholarship providers. Most of them are in the Philippines. This is not about the exploitation of developing countries by developed countries, but people in developing countries helping each other.

Infinite possibilities of Axie Infinity with monthly income exceeding 300 million US dollars

Axie Infinity may herald a certain way of working in the future, where people all over the world build businesses in Metaverse.

In addition to scholarships, sponsors are also supporting players. The DeFi agreement has become the number one sponsor, providing asset rewards for Axie players who complete tasks . Maker gave the player the stable coin DAI, Aave gave the player its AAVE token, and Digix gave the player real gold.

Axie’s current 600,000 players are only a small part of the 111 million population of the Philippines, not to mention the reach of the world’s “play and earn” players.

Enter Ronin

In June last year, when DeFi Summer just started, the loud noise of demand for block space awakened Ethereum from its two-year slumber. At that time, Axie Infinity built the most commonly used Axie NFT and SLP tokens directly on Ethereum. Save the less commonly used Land NFTs and Item NFTs in the Loom sidechain, and has not yet released its AXS governance token.

Infinite possibilities of Axie Infinity with monthly income exceeding 300 million US dollars

Axie NFT and SLP activities have contributed to the increasing congestion of the Ethereum network and were also affected when the price of Ethereum gas soared. In a blog post in June, the team called Ethereum network congestion an “eternal thorn around us” and announced that it was building its own sidechain Ronin.

In order for Axie Infinity to reach our second, third and fourth level of relationships (our friends and family friends and family), Axie needs a long-term solution to make participating in Axie games economical, fast, cheap and seamless.

Ronin is a samurai without a master in Japanese feudal society. Ronin represents our desire to take the fate of our products in our own hands.

Many decentralized applications (dApps) built on Ethereum have felt the pain of congestion. Few people build their own sidechains, but choose to use other second-layer extension solutions, such as Polygon and Optimism. Even Uniswap, Ethereum’s largest gas consumer, decided to launch v3 on the Ethereum Mainnet and Optimism instead of building its own.

Axie wants to build its own side chain, Ronin, with its own wallet. Given that in June 2020, Axie’s revenue was only $2,044.09, which was particularly ambitious at the time. But they did it for a year, and in early May, Axie Infinity moved to Ronin.

Infinite possibilities of Axie Infinity with monthly income exceeding 300 million US dollars

After the migration, everything in the Axie universe happened on the Ronin sidechain and bridged to Ethereum when needed. Today, SLP and AXS are the main bridged projects. ERC-721 assets-Axies, land and goods cannot be transferred on the bridge yet, but Jiho told me that people have not yet requested this feature. These assets are more valuable in the Axie universe than elsewhere, and because of Ronin, there is more activity happening in the Axie universe than in other places in web3.

Unlimited income from Axie

We’re talking about games today, so let’s play a game: find out where Axie released Ronin on this chart.

Infinite possibilities of Axie Infinity with monthly income exceeding 300 million US dollars

Since the congestion problem was cleared in May, Axie has been on fire. You can see it in the picture above. If it continues to develop at this rate, its revenue will move towards…

Infinite possibilities of Axie Infinity with monthly income exceeding 300 million US dollars

For any company, this is almost unprecedented scale growth. Roblox is a listed company with a market capitalization of US$43 billion. In its 17th year of operation, its April revenue was US$144 million.

This is one of the best performances in the history of the gaming industry, and it is even more impressive given that Axie has broken the free-to-play game model dominated over the past decade. When you compare it with other blockchain-based applications…and the entire blockchain, it looks very crazy.

Where to start?

Let’s compare Axie with all other dApps and blockchains based on revenue.

Infinite possibilities of Axie Infinity with monthly income exceeding 300 million US dollars

Source: Token Terminal

In the past 7 days, Axie Infinity has generated more total revenue than any dApp or blockchain, and only Ethereum barely surpassed it. Interestingly, if you take away the approximately $2.2 million gas fee paid by Axie to Ethereum in the past week, Axie will be the number one.

It generated 39 million U.S. dollars in revenue, while Bitcoin’s revenue was 4.5 million U.S. dollars,

Even better, Axie Infinity’s Community Finance Department is getting these revenues. This is not paid as gas or other mining expenses. If you just compare the income of the agreement, that is, the amount captured by the agreement itself, Axie will defeat the competitors in one fell swoop.

Infinite possibilities of Axie Infinity with monthly income exceeding 300 million US dollars

Source: Token Terminal

According to Token Terminal data, in the past 30 days, Axie has generated more than 7 times the protocol revenue of its next closest competitor, PancakeSwap, which is the leading Dex on the Binance smart chain. It also defeated DeFi giants such as Compound, Aave, SushiSwap and MakerDAO.

Even crazier is that Axie has generated $81.5 million in protocol revenue in the past 30 days, which is more than any other DApps or blockchain in this group in the past year.

Infinite possibilities of Axie Infinity with monthly income exceeding 300 million US dollars

Source: Token Terminal

Infinite possibilities of Axie Infinity with monthly income exceeding 300 million US dollars

Source: DappRadar

In the past 24 hours, 7 days, and 30 days, Axie Infinity’s trading volume has surpassed any other NFT market, including open markets such as OpenSea , Foundation, and Radible, as well as specific assets such as CryptoPunks, NBA TopShot, and SoRare. In terms of trading volume, it is now the third in history. Surprisingly, its trading volume in the past 30 days can be ranked third in history.

In all these activities, although most of the actions took place on the Ronin sidechain, Axie is still the fourth largest gas consumer on Ethereum (Gas: Gas refers to the amount of computational work required to perform operations. In order to You must pay for gas for transactions or smart contracts on Ethereum. No matter what wallet you use, you always need to pay for gas when performing transactions.)

Infinite possibilities of Axie Infinity with monthly income exceeding 300 million US dollars

Source: EtherScan

Finally, the token itself. AXS, the game’s governance token, fell in early November 2020 and has since grown by 10964%, reaching a market value of $1.1 billion.

Infinite possibilities of Axie Infinity with monthly income exceeding 300 million US dollars

Despite the rapid growth, according to Delphi Digital, AXS’s trading P/E ratio is still only 7.7 times. (Delphi is one of the best network 3 research companies, an investor in Axie, and helped design the AXS token, so their understanding of this protocol is second to none).

Comparing Axie’s 7.7 times P/E ratio with Roblox and Grand Theft Auto maker TakeTwo, the former is still unprofitable and the latter has a P/E ratio of 33.5 times. If Axie can even maintain current levels, these levels will look incredibly cheap.

I can go on, but I just want to say that this game is definitely a monster.

This is not just a question of money. Axie surveyed its players to understand their main motivations for playing Axie Infinity. Forty-eight percent of people said they were for the economy and formed a solid foundation on this platform, but 37% said that their main motivation was the community. This community mainly lives on Axie’s 540,000-member Discord server (Discord’s name for the channel). It is one of the only Discord servers in the world with more than 500,000 people. Until recently, Discord did not even support communities with more than 500,000 people. In contrast, “Fortress Night” has about 800,000 people.

Numbers can be played with, but true community and love for products cannot.

Vertical integration in Lego World 

There is an overall strategy behind the cute Axies, which is an unprecedented combination of vertical integration and decentralization.

Part of the charm of web3 is that you can link existing protocols, smart contracts, blockchain, L2, and dApps together like Lego. This is the so-called composability. This means that the company can grow faster with fewer resources and build more complex and shocking products. 

Infinite possibilities of Axie Infinity with monthly income exceeding 300 million US dollars

In the previous article, we mentioned the Tesla/SpaceX metaphor. Axie Infinity is indeed building everything on its own.

Starting from IP, that is, Axies itself, Sky Mavis created Origin Axies and the mascot, and made his own wallet.

Infinite possibilities of Axie Infinity with monthly income exceeding 300 million US dollars

Next comes the game, which Sky Mavis develops and draws illustrations in-house.

Infinite possibilities of Axie Infinity with monthly income exceeding 300 million US dollars

Next, Axie established its own NFT market in early 2018, even though OpenSea was launched in December 2017. In the past month, Axie’s NFT market has surpassed OpenSea’s trading volume in the past 30 days, even though it only includes Axie’s unique NFT.

Infinite possibilities of Axie Infinity with monthly income exceeding 300 million US dollars

Axie is also building its own world, called Lunacia, and will start auctioning the land here in 2019. Later in the same year, it merged its Axie and Land markets into one. In the future, it plans to release land-based games, open up new ways to participate in the community, and importantly, provide players with new ways to make money.

Sky Mavis also launched its own in-game currency, which can be exchanged for legal currency through ETH and SLP, and launched its own governance token AXS in November, established and merged its own side chain Ronin and a related Ronin wallet. People Need to install this wallet to play games.

Infinite possibilities of Axie Infinity with monthly income exceeding 300 million US dollars

Infinite possibilities of Axie Infinity with monthly income exceeding 300 million US dollars

Think about why vertical integration makes sense, especially when there are sufficiently good modular components. If vertical integration can reduce Axie’s costs and create a better user experience, then vertical integration is desirable. At present, players spend the most transaction fees outside of the Axie universe, and the biggest friction is that they need to exchange their SLP for ETH into legal currency on a DEX such as Uniswap.

The next step is to build your own DEX

Infinite possibilities of Axie Infinity with monthly income exceeding 300 million US dollars

At present, making it easier for players to exchange their Axie-related tokens into real-world money is vital to “Play-to-Earn”.

It also gave the Axie protocol more incentives and tokenized more things. Experience points and the Ronin sidechain itself can all be traded on RoninDEX.

One of the biggest challenges of cryptocurrency so far is that it is difficult to identify large-scale adoption and use cases that keep people coming back. If Axie can accumulate the largest user base in the cryptocurrency field, help them make a living, and let them participate happily, it can convert these traffic to other products. This is why they are now vertically integrated-they have users, and they want to seize the upside.

Axie is not just building a game; it is also building a web3 aggregator and integrating upwards to own as many value chains as possible.

In addition, by creating something pleasant in itself and attracting a lot of eyeballs, Axie is attracting capital that does not ask for a return! This is rare in cryptocurrencies. This reduces its capital cost and creates free revenue in a way that DeFi agreements cannot. Just to name a few examples.

  • People buy Axies as pets. There are 2 billion pet owners in the world, and 99.99999% of them keep pets not for making money. Axie has attracted a lot of people. They just buy Axie as a pet and don’t expect to be rewarded.
  • Some people just like this game. 15% of Axie players believe that gameplay is their main motivation for playing Axie, surpassing the economy or the community. Axie redoubled its efforts by investing in better gameplay and animation.
  • E-sports competition. Axie is great for e-sports competitions and has seen its Twitch ratings increase with recent events. These competitions will bring sponsorship funds to the ecosystem.
  • Sponsors provide external capital. As other aggregators such as Facebook and Google know, when you have a large number of users, you have a money printing machine. Sponsors like Aave (a decentralized, open source, non-custodial Ethereum currency market creation protocol.) are already pouring exogenous capital into the system. As Axie’s DAU rises to millions, there will be no shortage of sponsorships. Opportunity.

Decentralized Axie world

Axie is being decentralized in several ways.

First of all, later this year, “the AXS dollar ecosystem begins”. Axie conducted a public sale of AXS governance tokens as early as November 2020, selling 11% of the tokens to the public. In addition to private sales, consulting shares (consulting shares are an incentive provided to companies or entrepreneurial consultants, usually in place of cash or salary.), unconstrained teams and ecosystem funds, at that time 22.2% of AXS max’s 270 million shares began to circulate.

As more AXS tokens are unlocked in 65 months, Sky Mavis will slowly lose its voting rights until sometime at the end of 2023, until it loses most of the votes someday at the end of 2023.

So far, the core of “Play-to-Earn” is to earn SLP tokens, but in the coming months, players will also be able to earn AXS tokens through games. At the same time, AXS holders will be able to invest their AXS in order to get more share rewards (read more information from Delphi here) and vote on the future direction of the game. In the white paper, the team listed several types of things that the community should be able to vote on.

  • Should Axie Infinity Limited continue to pay Sky Mavis for the development of Axie Infinity?
  • Should Axie Infinity use the market created by Sky Mavis?
  • How should community funds be used to reward AXS holders and the wider Axie community?
  • Should the funds of the community treasury be attached to any income farming/mortgage service, such as Yearn.finance (an aggregation service for DeFi investors that uses automation to maximize their profits from yield agriculture.) or Rari.Capital (Rari Capital allows developers anywhere to focus on their products. Let the agreement deal with borrowing and earnings.)

In the second part of decentralization, Sky Mavis will open the SDK to allow other developers to build new things. Jiho calls it “Internet Monster Protocol, where people can access IP and make things.” This idea is similar to an Axies version of Roblox.

Currently, community members are already generating Axie content, just for fun and don’t expect to be rewarded.

Infinite possibilities of Axie Infinity with monthly income exceeding 300 million US dollars

And here

Infinite possibilities of Axie Infinity with monthly income exceeding 300 million US dollars

In the next two years, if everything goes according to plan, Axie players will manage the direction of the community, decide the use of community financial funds through voting, build the expansion of the universe by themselves, and earn tokens at the same time. They may even decide to withdraw Axie’s vertical integration, or create new and better markets, side chains, wallets, and exchanges.

If they succeed, Axie will have better profits and better incentives like the upgraded Roblox. Axie may become a more important corner of Metaverse, and a beacon for people to build a decentralized world online, integrating work and entertainment.

Unlimited possibilities

When will the virtual world intersect with the physical world and have an impact?

Today, at this time, hundreds of thousands of people are making a living playing video games in a virtual world. They are participants in the virtual economy and use their spoils to improve their destiny in the physical world. Children from the Philippines, Vietnam, Brazil and other countries are applying for Axie scholarships, just like they are applying for college or work, hoping to curve their life trajectory upwards.

In the virtual field, Axie Infinity has some foreseeable future expansion directions

  • Content. In the next few years, there may be Axie IP movies or Netflix shows. Will the NFT ownership of Axies used in the movie bring royalties to its owners? Whether the owners of certain mysterious reels can negotiate directly with film companies or establish their own roles online, as people are considering Bored Apes and CryptoPunks.
  • Universe expansion and UGC. The Axie team has already said that they cannot produce enough content and experience to meet the growing needs of users, and hope to ask players for help. Axie Infinity may become a platform for builders, the next Roblox, a platform that can better adjust incentives and provide creators with more money-making tools.
  • Cryptocurrency expansion. After attracting hundreds of thousands or even millions of new users to join cryptocurrency, Axie will provide these cryptocurrency newbies with more and more tools to not only make money, but also manage and grow their stack.

This sounds exaggerated (at this point, in the months of real revenue growth, this is of course exaggerated), but Axie Infinity has the potential to become the most valuable IP in history.

Infinite possibilities of Axie Infinity with monthly income exceeding 300 million US dollars

It’s fascinating to watch all this happen, but the real huge impact may come from Axie Infinity’s recognition of its ability to shape the policies of the real world and help the world adapt to a person who no longer needs to engage in traditional work to survive in the future.

When enough Axie players make a living through the game, the team can work with the government to conduct controlled experiments on the impact of Universal Basic Income (UBI). In the chaotic environment of the real world, it is difficult to accurately measure the impact of UBI, but the government can conduct experiments to provide UBI to certain Axie players and measure whether they are still active players, builders, and community participants.

A big challenge for UBI is that work is not just a matter of money—it’s about meaning, belonging, and self-worth. As more and more things become automated and require less and less human labor, we will need new ways to provide these things and checks. In Kurt-Vonnegut’s first novel, “The Man Who Plays the Piano” in 1952, he described a future world in which automation replaced the need for most jobs. In response, the government Hire people to dig holes and fill them back, time and time again. Axie may help Metaverse usher in a more fulfilling and interesting work era.

Of course, Axie also faces many risks:

  • The whole cryptocurrency thing may collapse (I don’t believe it, but it may happen).
  • Even if it doesn’t collapse for a long time, another ongoing cryptocurrency winter may reduce the funds to make money through games, stop Axie’s momentum, and divide the community.
  • Vertical integration rather than using first-class existing products and agreements means it’s easier to mess up.
  • Decentralization and the transfer of power to the community may lead to unpredictable results.
  • Servers may continue to be paralyzed under load, and players may feel that they can no longer rely on Axie’s revenue.
  • Games are notoriously fickle—the popular games of last month may become old news next month.

Turning Axie Infinity into a platform, and a platform owned and managed by users, can create stickiness through network effects and high conversion costs. Metaverse needs more than entertainment; it also needs to blur the line between entertainment and employment. Axie has proven that this is possible.

The rise of Axie coincides with the rampant cryptocurrency, NFTs are considered dead, and people question whether the entire web3 event really has an impact on the real world. In a category that is usually synchronized transactions, Axie’s performance seems to be something to watch.

When we look back ten or twenty years later, I bet that this period of Axie is just a huge beginning, a small episode on a larger chart, both in terms of income and influence. In the middle case, it is a Pokémon owned by a player, which is a good example of vertical integration. In a bull market situation, it is a new country, based on Metaverse, improving the lives of millions of people around the world.

For a cute little game, this is not bad.

 

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/54197-2/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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