[Op-Ed] Play to Earn — The Future of Gaming & Axie Infinity Case Study
Blockchain Technology is opening numerous new digital economic opportunities. Play to Earn games are just one of the many in this instance.
Play to Earn games for sure provides more freedom and control to the gamers over their favorite games because they can now own their in-game items as NFTs, can trade them at will through DEFI and can influence how the game works by owning a stake of the game through Governance Tokens.
Axie Infinity is the most successful among the existing crypto play to earn games at this moment which makes it the perfect candidate for our case study on this topic.
Case Study: Axie Infinity
Axie Infinity is a game universe filled with creatures called “Axies”, that players can collect, battle, breed and raise. The game runs on a player-owned economy where players can own and trade resources they buy or earn in the game.
Main Components of Axie Infinity
What is an Axie?
Axie’s are pokemon like fantasy creatures which can be collected and then used for battle, raise and breeding.
Every Axie has 4 stats:
HP- The amount of damage an Axie can absorb.
Morale- increases critical strike chance.
Skill- Skill adds damage when an Axie stacks cards together
Speed- Speed determines turn order. Faster Axies attack first.
Your Axie’s stats are dependent on two main variables:
Body parts: Axies has 6 body parts: eyes, ears, horn, mouth, back, and tail. Each body part adds stats depending on the class of the body part.
Class: Every Axie has a class and they are weak or strong against other classes depending on their own class.
Battles in Axie infinity are like a turn-based card game where the goal to knock out the 3 Axies of your enemy team while protecting yours. You must strategically play cards that maximize their chance of victory.
The battle system was structured as an “idle battle” system with inspiration from games like “Final Fantasy Tactics” and “Idle Heroes”.
Axies can be bred to create new offspring just like our real world pets. Breeding an Axie costs AXS (Axie Infinity’s native token) and SLP (In game currency). It takes the Axies 5 days to reach maturity.
Each Axie has 6 body parts as well as a body shape. For each part, an Axie possesses 3 genes: dominant (D), recessive (R1), and minor recessive gene (R2).
The dominant gene determines physically present body parts of the Axie. Each gene has a chance that the offspring will inherit it from its parents.
Dominant (D): 37.5% chance that the offspring will have this trait.
Recessive (R1): 9.375% that the offspring will have this trait.
Minor Recessive (R2): 3.125% that the offspring will have this trait.
ERC-20 Tokens of Axie Infinity
Axie Infinity Shards(AXS)
Axie Infinity Shards (AXS) are an ERC 20 governance token, limited to a maximal supply of 27 million. Since the value of AXS depends on the success of the game itself and its ecosystem, it allows normal people who believes in the project to invest without needing to hold Axies or play the game directly.
It is also possible to stake the AXS tokens. AXS holders can stake their tokens to earn yield within the governance platform and also improve the capital asset properties of AXS. Staking also rewards active participation and gradually dilutes passive holders.
Smooth Love Portion (SLP)
In order to breed a new Axie, ‘Small Love Potion’ (SLP) is a must, alongside with a breeding fee that is paid partially in AXS. When players win battles, they are rewarded with the in-game currency SLP.
SLP powers of Axie Infinity’s internal economy since it is used within the game to breed new Axies, and can be earned by playing the game, especially by winning battles. SLP is an uncapped utility token, meaning the supply has a direct correlation to the growing number of players. The token is necessary to breed Axies, a major cash flowing asset of the game. The cost in SLP per breed is a function of the breed count of the parent Axie’s — the higher each breed count, the more SLP is needed to breed.
How Do Players Make money
Players make money in two ways from Axie Infinity:
Axie NFTs: Axies are ERC721 based NFT tokens. breeding Axies produces diverse yet random Axies. A player might like some classes of Axies but not other ones depending on his playing style and team composition. So, the player can sell their axies in the market place if they wish to.
Smooth Love Potion (SLP): New SLP tokens can be only acquired through winning battles, which makes the existing supply scarce and valuable if lots of players wish to breed. In that case, during the time of high demand, if a player doesn’t use SLP to breed, they can also sell the SLP tokens on the crypto exchanges since it is an ERC20 token.
Gaming can be the first entry point for a lot of new users who never used crypto before. It can also allow new innovations to take place for both crypto UX and scalability. Understanding how Axie Infinity’s economy works can help us understand how combining core concepts of Governance Tokens, DEFI and NFTs can form a perfect synergy to shift the tone of an industry, such as gaming and can radically change the perception of it in general. As these kinds of games increase over time, it can overrule the cultural perception of gaming, from being an absolute waste of time to a scalable financing opportunity to invest your time and effort on.
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