Axie Infinity is overhauling its ailing play-to-earn NFT economy

Token and NFT values have crashed in the most popular play-to-earn game. It is now implementing reforms in order to turn things around.

Last year, Axie Infinity was extremely popular, but recently, the token price, NFT valuations, and trading volume have all decreased.
Axie Infinity, an Ethereum NFT game, will implement a lot of economic adjustments.

Axie Infinity, an Ethereum game, has been a huge success, popularising the play-to-earn gaming paradigm and generating approximately $4 billion in NFT trading activity.

However, since last summer’s spike, token and NFT prices have been falling, casting doubt on the entire play-to-earn paradigm. Axie’s makers have now proposed adjustments aimed at reviving the game’s ailing economy.

Sky Mavis revealed a series of economic improvements on Thursday, which will go into effect with Axie’s forthcoming 20th in-game season. Essentially, the PC and mobile versions of the game will provide considerably fewer SLP reward tokens and place a greater emphasis on rewarding online arena combat.

Axie Infinity is a monster-fighting game with NFT assets. In Axie, NFTs are blockchain-based receipts that show ownership of a digital item—in this case, colourful monsters that you may breed and battle. Each Axie NFT is expensive, and you’ll need three merely to play the game, but you’ll get token prizes for doing so.

When Axie Infinity first started in 2018, that unique “play-to-earn” paradigm was developed, but the Ethereum-based game soared in popularity this summer after introducing its Ronin sidechain, which made transactions faster and cheaper.

The community-led “scholarship” schemes sprang out of the play-to-earn model, in which NFT holders rent Axies to players—particularly those in impoverished countries—in exchange for a percentage of the reward token revenues. The game’s popularity and demand grew as a result of this increase, resulting in an Axie Infinity hype explosion last summer.

With the SLP reward token hitting a high of about $0.40 in August and the AXS governance token reaching an all-time high of roughly $165 in November, Axie Infinity was quickly generating well over half a billion dollars in monthly NFT trading activity. Axie Infinity is the most successful NFT project of all time, with approximately $4 billion in total NFT trading volume.

Late last year, though, the impetus began to fade quickly.

SLP dropped below $0.10 in September and has since fallen to around a penny or less. This put a lot of pressure on the different community-based scholarship programmes, as well as the guilds that run them. AXS is also about 70% down than its high, with a current price of under $50.

In addition, NFT trade volume has dropped precipitously in recent months, from about $754 million in November to $301 million in December and $126 million in January. This is despite the fact that the NFT market as a whole is on the rise. Meanwhile, entry-level Axie NFTs are selling for around $30 on Axie Infinity’s marketplace, compared to $200 or more last summer.

Sky Mavis’ own statistics shows a decrease in daily gamers in recent weeks, but it isn’t as significant as the other figures suggest. According to Sky Mavis, Axie Infinity had just under 2.2 million daily active users as of January 31, down from a high of over 2.7 million in November. (Axie Infinity CEO Jeff Zirlin emphasised to Bitcoinsupports that the internal player figures are based on the average number of players who access the game each day and are pulled from the Unity game engine.)

On Friday, Zirlin suggested that the greatly increased development team hasn’t been flexible enough to address such concerns recently in a Twitter Spaces debate. He tweeted on Thursday, “This modification should have been done far sooner.”

Last year, the game’s rapid expansion and “good momentum” proved to be too much, too soon, according to Brycent, a prominent play-to-earn Twitch streamer and founder of the Loot Squad guild. “Its undoing was due to that momentum,” Brycent explained. “Axie wasn’t ready for this kind of mass acceptance, both in terms of gameplay and economy.”

Axie Infinity is a game with a lot of emotion, and while that’s common in gaming communities, the monetary stake just seems to exacerbate things with crypto games. Others may have relied on the play-to-earn approach to make a living after investing money in NFT assets that swiftly depreciated in value.

Brycent is optimistic that the adjustments will help turn around Axie’s economic collapse, but he also believes that it’s critical to think about the game and its increasing ecology in the long run.

“Axie revolutionised the play-to-earn movement, and I trust the team will do what is best for the economy’s long-term sustainability, the players’ long-term sustainability, and the broader community’s long-term sustainability,” he said. “Short-term price swings don’t affect what we’re doing at Loot since I’m a long-term thinker and builder.”

 

 

Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.

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