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Behind Axie Infinity, crypto’s biggest game

Axie Infinity // Illustration by Kate Walker

Behind Axie Infinity, crypto’s biggest game


Future. Last month, Sky Mavis (the developer behind play-to-earn video game Axie Infinity) suffered one of the biggest crypto hacks, with over $600 million stolen. Even before the heist, however, Axie was already struggling to avert a financial crisis. Now, even after raising $150 million to reimburse stolen funds, the game has a rocky road ahead… and it may be a cautionary tale for web3 builders everywhere.

Ups and downs

Axie Infinity has had a roller coaster of a journey. 

  • Axie Infinity is one of the most popular web3 games around, pioneering play-to-earn video games in the web3 space and attracting millions of players worldwide.
  • Launched in 2018, Axie has reached annual revenues of over $1.3 billion, pulling in a record $17.5 million in a single month in August 2021.
  • But in recent months, Axie’s in-game token, SLP, has plunged 93% in value from all-time highs. 
  • And on March 23, the blockchain-based game had over $600 million worth of cryptocurrency stolen from its network, Ronin. 

Utility, utility, utility

Axie’s financial woes start with its game design — most players are there to earn cash as opposed to finding entertainment value in the game itself. In simple terms: the game really isn’t all that fun. This means that most users are continually cashing out their earnings rather than reinvesting into the game, putting deflationary pressure on SLP, Axie’s in-game token. 

This was sustainable while Axie’s user acquisition rates were skyrocketing…  but once growth plateaued, that meant that more and more people were cashing out, causing mass inflation and the 93% plunge in token value mentioned above. 

Now, with the hack to contend with, Axie’s road ahead looks pretty rocky. It may be a lesson to others building in the web3 space of what to avoid, underlining the importance of building utility into projects from the very start. 

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