Axie Infinity changes economics
Axie Infinity, a pioneering play-to-earn (P2E) blockchain game, has undertaken significant changes to its economic model following a substantial decline in its native token’s price, NFT valuations, and trading activity. This marks a notable shift from its previously skyrocketing success. In the previous year, the game, built on the Ethereum blockchain, garnered immense popularity, amassing nearly $4 billion in NFT trading transactions.
However, recent times have seen Axie Infinity’s token and NFT values experience a sharp decline. This downturn has raised questions about the sustainability of the play-to-earn concept. In response to the struggling in-game economy, the developers behind Axie Infinity have formulated modifications aimed at revitalizing the game’s financial framework.
A pivotal alteration centers around the in-game Small Love Potions (SLP) tokens, with the game opting to distribute fewer of them as rewards. Additionally, the game will place a greater emphasis on rewards earned through online arena battles. These adjustments are set to be implemented in conjunction with the game’s 20th season, accessible on both mobile and PC platforms.
Presently, engaging with Axie Infinity necessitates players to acquire non-fungible token (NFT) assets referred to as Axies. Players typically begin by purchasing a minimum of three Axies, enabling them to partake in activities such as breeding and battling creatures, yielding token-based rewards.
The play-to-earn structure of Axie Infinity also gave rise to community-driven scholarship programs. These initiatives predominantly operated in less affluent nations, where holders of NFT assets leased out Axies to gamers, consequently receiving a portion of the token rewards. Notably, these scholarship programs significantly contributed to Axie Infinity’s resounding success in the previous year.
Nonetheless, the game’s once-thriving momentum underwent a stark reversal, leading to the game’s token, Small Love Potions (SLP), plummeting below $0.10 in value. This decrease significantly strained the scholarship guilds, impacting their operations.
Moreover, the game’s native token, AXS, witnessed a staggering decline of nearly 70% from its peak value. Correspondingly, the trading volume of its NFTs dwindled, dropping from $754 million in November to $301 million in December.
Compounding these challenges, data from Sky Mavis, the company behind Axie Infinity, reveals a notable reduction in concurrent players – declining from a peak of 2.7 million players in November to 2.2 million by the close of January.
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