How Axie Infinity Works

Axie Infinity, a blockchain-based game available for Android, iOS, Windows, and macOS, has gameplay and objectives that might be familiar to some gamers. It somewhat resembles Pokemon Go in that it has a team of three Axies with different perks which you use to battle against teams led by other players or a computer algorithm.

But wait, what does “blockchain-based” even mean, and how does it work?

We created this guide to help you understand what blockchain (and related NFTs) are, how they work, and how these technologies can be incorporated into a game. We’ll also explain whether you can earn money from playing Axie Infinity. In the end, we’ll answer other common questions related to the game.

How Axie Infinity Works

To understand what Axie Infinity is, you should first learn what blockchain and NFTs are.

Blockchain is a shared ledger that facilitates transaction recording and asset tracking in a digital network. Simply put, it’s a system that lets users record financial information and protects that information from changes and hacks. The ledger is duplicated across the entire user network, and every time a transaction is performed by one user, it automatically occurs on other participants’ ledgers.

You may have already guessed that blockchain is the technology that enables the existence of cryptocurrencies, such as Bitcoin or Ethereum. Each cryptocurrency transaction performed by other users affects the currency price. This, consequently, affects its equivalent value in real-life money.

Let’s assume you have one Ether, and its price is currently equivalent to $2,960. If more people want to buy Ether, its price will likely go up, for instance, to $3,000. So, even though the amount of Ether you own didn’t change, its equivalent value in real-life money did.

NFT, or non-fungible token, in turn, is a unique digital asset that can be purchased with cryptocurrency (but not exclusively). In fact, it’s similar to cryptocurrency in that it’s also based on blockchain technology. Every NFT is certificated to be a unique digital asset that can’t be copied. This creates a scarcity effect, raising the NFT’s value. Blockchain technology ensures that every NFT can be tracked as a unique, original object.

NFTs started as digital art objects – such as music or digital paintings – and later became more diverse. Today, NFTs can be any type of digital file, with the only requirement being its uniqueness. This also applies to in-game items.

Finally, we’ve come to Axie Infinity. The game incorporates NFTs into its formula. Specifically, every monster in the game is an NFT. How exactly does this work?

You earn tokens for battling and winning in the game. These tokens can then be used to “breed” monsters by creating other NFTs. Thanks to blockchain technology, each monster is recorded as a unique object and can be tracked. This verifies that the monster took real-life time and effort to make, resulting in its higher value.

Can I Earn From Playing Axie Infinity?

In a market full of “pay-to-win” games, Axie Infinity is positioned as a “play-to-earn” game. You can make real money by earning tokens, creating NFTs, and selling them. But to start earning, you first need to invest in three monsters. At the time this article was written, the cheapest monster’s price exceeded $200, so you’d have to spend over $600 to start playing.

FAQs

In this section, we’ll answer more questions related to Axie Infinity and NFTs.

Why Are Axies So Expensive?

People unfamiliar with the NFT world may get astounded by how expensive some yellow digital monsters can be. Indeed, the price may seem unjustified at first, as many of us believe that digital assets don’t cost anything. Most objects on the web are easy to copy and multiply, which undermines their value.

But NFTs are impossible to multiply. Technically, you can copy them, but there will be no certificate verifying it’s the original NFT. As the interest for NFTs grows, and their supply is regulated, the prices soar. It’s a basic supply and demand rule in practice.

I Don’t Have the Money to Buy Axies. Does This Mean I Can’t Play?

Not really. Yield Guild Games, a holding company for Axie Infinity, lends the first three monsters to players who can’t afford them. Of course, each lending comes with an interest rate. When borrowers start making and selling their own Axies, the company receives 30% of the user’s earnings.

What Is Yield Guild Games?

Yield Guild Games has nothing to do with Axie Infinity development. It’s an autonomous organization promoting blockchain-based games by helping users start investing in NFTs. Think of it as a financial institution for gamers.

What Are Axie Infinity In-Game Currencies?

Axie Infinity has two in-game currencies, Small Love Potion (SPL) and Axie Infinity Shard (AXS). SPL is used for trading Axies and can be converted into real-life money. AXS, in turn, is a proposed governance token. When implemented, it will allow players to have a say in game development. Furthermore, both types of tokens can be traded as cryptocurrencies. Just like with Ethereum or Bitcoin, you can purchase it, hold on to it, and hopefully sell for a profit later. Or you can lose all the invested money. Who knows?

How Do Developers Earn From the Game?

Axie Infinity was developed by SkyMavis. The company earns 4.25% of each NFT sold in the game’s marketplace. Additionally, both the developers and owners of AXS, the governance token, get a cut from monster-breeding fees. So, the more players join the game, the more the developers will earn.

Is Axie Infinity the Only Play-to-Earn Game on the Market?

No. While the niche is still fresh, there are other blockchain-based games available to play. As the technology is developing rapidly and its popularity is surging, we can expect to see even more titles appear in the nearest future. So, if your goal is to earn some cash, consider researching all options to find the most beneficial one.

Is Axie Infinity an Easy Way to Earn Cash?

“Easy” is a vague concept. But in general, it isn’t “easy money” as players blinded by opportunity might imagine. Like any game, earning cash in Axie Infinity takes time and effort. Players must have a smart Axie breeding strategy to develop the necessary skills, know how to fight, and complete challenges. Some players who take Axie Infinity seriously reportedly have quit their jobs to dedicate all their time to the game.

Should I Invest in NFTs?

There’s no certain answer to whether investing in NFTs is worth it. The technology is relatively new, and we aren’t yet certain about its future. Will the NFT value go down after the hype ends? Likely yes, but we don’t know when this will happen or whether it will surge again. For now, NFTs are a great way to earn extra cash. But quitting your job because you’re enticed by the immense prices of Axies is risky. As a rule of thumb for any cryptocurrency or NFT, invest as much as you are ready to lose.

The True Start of Digitalization Era?

Hopefully, our guide has answered all your questions related to Axie Infinity and NFTs. No one knows what future awaits the game, but most of us can agree that the concept is fresh and interesting. “Invest or not invest” is a largely personal decision. If you’re keen on new technologies and gaming, why not try it out?

What do you think of Axie Infinity’s future? Share your thoughts in the comments section below.