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Axie Infinity

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Axie Infinity
Developer(s)Sky Mavis
Engine
Platform(s)Windows
Android
macOS
iOS
ReleaseMarch 2018
Genre(s)NFT
Online game
Strategy game
Mode(s)Single player, PvP

Axie Infinity is an non-fungible token-based online video game developed by Vietnamese studio Sky Mavis,[1] known for its in-game economy[2] which uses Ethereum-based cryptocurrencies.[3]

Players of Axie Infinity collect and mint NFTs which represent axolotl-inspired digital pets known as Axies.[4] These creatures can be bred and battled with each other within the game. Sky Mavis charges a 4.25% fee to players when they trade Axies on its marketplace.[4][5]

As of September 2021, most Axie Infinity players are from the Philippines.[6]

Axie Infinity is built on the Ronin Network, an Ethereum-linked sidechain developed by Sky Mavis. In March 2022, hackers compromised the Ronin Network, stealing approximately US$620 million worth of cryptocurrency from the project.[7][8][9]

Gameplay

According to the company's website, Axie Infinity is a competitive game with an "idle battle" system derived from games like Final Fantasy Tactics and Idle Heroes.[10] The game's setting is filled with creatures called Axies that players can collect as pets. Players aim to battle, breed, collect, raise, and build kingdoms for their Axies. The game has an in-game economy where players can buy, sell, and trade resources they earn in the game.[11] The main path to progression in the game is by expanding the size of one's collection.[12][third-party source needed]

The game uses a "pay-to-earn" model (also called "pay-to-play-to-earn" model) where after participants pay the starting costs, they can earn an Ethereum-based in-game cryptocurrency by playing. Axie Infinity allows users to cash-out their tokens every fourteen days.[6] This model has been described as a form of gambling,[13][14] and one with an unstable market that is overly reliant on the inflow of new players.[2]

In February 2020, Sky Mavis estimated that the average player had to spend around US$400 to meet this starting requirement.[1] By August 2020, the cheapest Axie cost approximately US$307, although reports as of March 2022 suggest the floor price of an Axie has dipped to around US$20.[15]

In the Philippines, the prohibitive cost of entry led to the formation of gaming guilds which rented out assets to allow new players meet the minimum requirements.[15] As of June 2021, some people in the Philippines had begun to treat the game as their main source of income,[16] although earning rates from playing Axie Infinity fell below the national minimum wage by September 2021. The Philippine Department of Finance also clarified that income from playing Axie Infinity is taxable, and suggested that the SEC and BSP may classify its cryptocurrency as a currency or a security.[17]

Players of Axie Infinity can also purchase virtual land and other in-game assets as NFTs. The record sale of a plot of virtual land was priced at US$2.3 million, as of 25 November 2021.[18] Gameplay related to purchased virtual land was intended to be introduced by 2020, but this has been pushed back twice as of April 2022. The delays have prompted complaints from users coinciding with a sharp decline in the profitability of the in-game economy.[19][20]

Development and history

Development of Axie Infinity commenced in 2017, led by its co-founder and CEO, Nguyen Thanh Trung, alongside Tu Doan, Aleksander Larsen, Jeffrey Zirlin, and Andy Ho.[citation needed] Nguyen had previously spent money on the game CryptoKitties before he began work on his own blockchain-based game, combining elements of CryptoKitties with gameplay from the Pokémon series or Neopets.[21]

In October 2018, the development team released Axie Infinity's first battle system. Development of the real-time card battle system and application commenced in March 2019, and an alpha was released in December 2019.[22]

On 23 March 2022, hackers compromised the Ronin Network, stealing approximately US$620 million in Ether and USDC.[7][8][9] The hack currently sits as the largest-ever breach in the cryptocurrency sector by dollar value.[23] A month prior to the incident, the game had become the first NFT series to exceed US$4 billion in sales.[24]

On 8 April 2022, Sky Mavis said it expected it would be able to recover some of the funds, but it would take several years.[25] On 14 April 2022, the FBI issued a statement that the Lazarus Group and APT38, which are North Korean state-sponsored hacker groups, were responsible for the theft.[26][27] Accordingly, the US Treasury has sanctioned the cryptocurrency address. Some of the cryptocurrency has been laundered through a cryptocurrency tumbler known as "Tornado Cash".[27][20]

See also

References

  1. ^ a b Thu Huong Le (21 February 2020). "Meet the Vietnamese developer behind blockchain game Axie Infinity". Tech in Asia. Retrieved 11 August 2021.
  2. ^ a b Kruppa, Miles; Bradshaw, Tim (26 November 2021). "Crypto's hottest game is facing an economic maelstrom". Financial Times. Retrieved 11 December 2021.
  3. ^ Gonzales, Gelo (23 August 2021). "What is 'Axie Infinity' and how is it different from traditional video games?". Rappler. Retrieved 11 December 2021.
  4. ^ a b "What does Axie Infinity's meteoric rise tell us about the play-to-earn game industry?". KrASIA. 10 August 2021. Retrieved 30 March 2022.
  5. ^ Takahashi, Dean (11 May 2021). "Sky Mavis raises $7.5 million for NFT-based Axie Infinity game with backers like Mark Cuban". VentureBeat. Retrieved 30 March 2022.
  6. ^ a b Pankratyeva, Alexandra (9 September 2021). "Crypto games: play-to-earn phenomenon". Capital.com. Retrieved 1 October 2021.
  7. ^ a b Sigalos, MacKenzie (29 March 2022). "Crypto hackers steal over $615 million from network that runs popular game Axie Infinity". CNBC. Retrieved 30 March 2022.
  8. ^ a b Takahashi, Dean (29 March 2022). "Hackers steal $620M in Ethereum and dollars from Axie Infinity maker Sky Mavis' Ronin network". VentureBeat. Retrieved 30 March 2022.
  9. ^ a b Hollerith, David (30 March 2022). "Hackers steal $615 million in crypto from Axie Infinity's Ronin Network". Yahoo Finance. Retrieved 30 March 2022.
  10. ^ "Battling - Axie Infinity". Axie Infinity. Retrieved 14 March 2022.
  11. ^ "Axie Infinity - Axie Infinity". Axie Infinity. Retrieved 14 March 2022.
  12. ^ "Axie Economy & Long-term Sustainability - Axie Infinity". Axie Infinity. Retrieved 14 March 2022.
  13. ^ Laurent, Lionel (3 September 2021). "Anxiety About Gaming Should Be Over Money, Not Morals". Bloomberg.com. Retrieved 1 October 2021.
  14. ^ Harris, Ainsley (24 September 2021). "The danger of the internet turning money into a game". Fast Company. Retrieved 2 October 2021.
  15. ^ a b "Axie Infinity and Yield Guild Games took the Philippines by storm but users are starting to question long-term viability". KrASIA. 13 March 2022. Retrieved 14 March 2022.
  16. ^ Nunley, Christian (14 May 2021). "People in the Philippines are earning cryptocurrency during the pandemic by playing a video game". CNBC. Retrieved 8 October 2021.
  17. ^ de Vera, Ben O. (23 August 2021). "DOF: Axie Infinity players must pay income tax from trading "pets"". Philippine Daily Inquirer. Retrieved 14 October 2021.
  18. ^ Shumba, Camomile (25 November 2021). "A plot of digital land just sold for $2.3 million on Axie Infinity, as the real-estate race heats up across the metaverse". Business Insider. Retrieved 11 December 2021.
  19. ^ Sri, Deepti (12 April 2022). "Axie Infinity disappoints users with latest Land update". www.techinasia.com. Retrieved 17 April 2022.
  20. ^ a b Gach, Ethan (16 April 2022). "Crypto Gaming 'Landlords' Upset They Can't Keep Exploiting All The Players Quitting". Kotaku. Retrieved 17 April 2022.
  21. ^ "This Vietnamese developer is behind one of the world's most popular blockchain games: Profiles in Tech". KrASIA. 20 February 2020. Retrieved 30 March 2022.
  22. ^ "Roadmap and completed milestones - Axie Infinity". Axie Infinity. Retrieved 14 March 2022.
  23. ^ Tsihitas, Theo (29 March 2022). "Worldwide cryptocurrency heists tracker (updated daily)". Comparitech.com. Comparitech Limited. Retrieved 31 March 2022.
  24. ^ Pratama, Aditya Hadi (22 February 2022). "Axie Infinity becomes first NFT series to hit $4b in sales". Tech in Asia. Retrieved 4 March 2022.
  25. ^ Servando, Kristine (8 April 2022). "Axie Owner Says Recovering Stolen Crypto Could Take Two Years". Bloomberg.com. Retrieved 17 April 2022.
  26. ^ "North Korean hackers target gamers in $615m crypto heist - US". BBC News. 15 April 2022. Retrieved 15 April 2022.
  27. ^ a b Novak, Matt (15 April 2022). "FBI Says North Korea Behind Biggest Crypto Theft in History Against Axie Infinity". Gizmodo. Retrieved 17 April 2022.

Further reading

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