What Is Axie Infinity? How Does it work? A Comprehensive Guide

Axie Infinity is a blockchain-based game that combines elements of trading card games, role-playing games, and virtual pet games. Players collect, breed, and trade digital creatures called Axies. Axies can be used to battle other Axies, complete quests, and earn rewards in the form of AXS tokens. AXS tokens can also be used to vote on governance proposals for the Axie Infinity ecosystem. The game is built on the Ethereum blockchain, and it has been one of the most successful blockchain games to date.

Key Takeaways

  • Axie Infinity combines blockchain with online gaming in a Pokémon-style battle game.
  • Axie Infinity is recognized as a leader in play-to-earn (P2E) gaming and, at one point, boasted millions of daily active players.
  • Axie dominated the P2E market during the 2021 bull run but has since seen a sharp decline in active players.

What Is The History of Axie Infinity (AXS)?

Axie Infinity is a decentralized Ethereum-based online game created by Vietnamese software company Sky Mavis1. The game is played on a digital marketplace where players can trade, collect, and raise Axies, creatures that can be used to battle, complete quests, and earn rewards.

In March 2018, Axie Infinity emerged from beta testing and launched its early access program. The game quickly gained traction, attracting a growing community of players who were drawn to its unique gameplay and the opportunity to earn real-world rewards through the Play-to-Earn (P2E) model.

In September 2018, Sky Mavis announced the Axie Infinity token (AXS), the native cryptocurrency of the Axie Infinity ecosystem. The AXS token was designed to serve as a governance token, allowing players to participate in decision-making processes that shape the future of the game.

In August 2020, Axie Infinity conducted an initial coin offering (ICO), raising $18 million2 in capital to further develop the game and its ecosystem. The ICO was a resounding success, attracting many investors eager to participate in the growing cryptocurrency and blockchain gaming sectors.

The year 2021 marked a turning point for Axie Infinity. The game experienced explosive growth, with the number of active users soaring to over 2 million and the AXS token price reaching an all-time high of nearly $1653. However, the number of active players and the value of the token has dropped significantly since the 2022 bear market impacted overall sentiment in crypto.

The value of the AXS token experienced a brutal crash following a massive surge in 2021.
The value of the AXS token experienced a brutal crash following a massive surge in 2021. Source: CoinGecko

What Are The Core Components of the Axie Infinity Ecosystem?

Axie Infinity is an online game universe that centers around collecting and battling virtual creatures called Axies. Players can collect, breed, and battle Axies with other players. Crypto rewards earned by players were so high in 2021 that people in the Philippines quit their day jobs to play Axie Infinity full-time.

The Axie ecosystem is constantly expanding; currently, these are the major components:

Axie NFTs: As of December 2023, Axie Infinity has generated over $3 billion4. Axie Infinity’s success has made it an important player in the NFT market and has helped to legitimize the concept of NFTs as a valuable asset.

Axie Infinity Shards ($AXS): Axie Infinity Shards (AXS) are an ERC-20 governance token used for all smart contracts on the Ethereum blockchain. AXS is considered the native currency of the Axie Universe game, and holders can claim rewards if they stake their tokens, play the game, and participate in key governance votes. The AXS tokens are intentionally designed to decentralize the ownership and governance of Axie Infinity.

Smooth Love Potion (SLP): Smooth Love Potion (SLP) is a reward token in Axie Infinity that players can earn in battle or adventure mode. SLP is an ERC-20 utility token that carries a value like other cryptocurrencies and can be bought and sold on a decentralized exchange.

How To Play Axie Infinity?

This step-by-step guide will equip you with the knowledge and steps necessary to start playing Axie Infinity.

  1. Create a secure crypto wallet to store your game assets. You can use a popular Ethereum wallet like MetaMask or Ronin Wallet. These wallets allow you to connect to the Axie Infinity ecosystem and manage your Axies, SLP tokens, and other in-game assets.
  2. Purchase at least three Axies from the Axie Marketplace. You can use Ethereum and Smooth Love Potion (SLP) tokens to purchase Axies.
  3. Engage in strategic battling against other players in the Adventure mode or Arena mode to earn SLP tokens and Axies Shards (AXS). These tokens serve as essential resources within the Axie Infinity ecosystem and can be used to breed Axies, purchase items, or trade them for other cryptocurrencies.

Remember that your capital is at risk when playing P2E games, as their value can depreciate.

What is the Ronin Side Chain?

In March 2022, Axie Infinity launched the Ronin sidechain, a high-performance sidechain specifically designed to support the game’s growing user base. The Ronin sidechain was intended to reduce transaction fees and improve scalability, making Axie Infinity more accessible to a wider audience.

However, on March 29, 2022, the Ronin sidechain suffered a security breach, resulting in the theft of over $625 million worth of cryptocurrency5. The hack was a major setback for Axie Infinity, and it raised concerns about the security of blockchain-based platforms. Axie Infinity is still trying to recover from the hack, as it shook market confidence and resulted in many players leaving the platform for good.

The hack of the Ronin sidechain was a major setback for Axie Infinity, but it has also served as a wake-up call for the blockchain gaming industry. The incident has highlighted the importance of security and transparency in blockchain-based platforms, and it has prompted developers to take steps to improve the security of their systems.

What is AXS? What are the Tokenomics of AXS?

AXS (Axie Infinity Shards) is the native cryptocurrency of the Axie Infinity ecosystem. It is used for a variety of purposes within the game, including:

  • Governance: AXS holders can vote on proposals that shape the future of the Axie Infinity game and ecosystem.
  • Staking: AXS holders can stake their tokens to earn passive rewards. Staking rewards are distributed to AXS holders based on the amount of AXS they stake and the duration of their stake.
  • Trading: AXS can be traded on a variety of cryptocurrency exchanges. This allows players to buy, sell, and exchange AXS for other cryptocurrencies or fiat currencies.

The AXS tokenomics are designed to incentivize player participation and support the development of the Axie Infinity ecosystem. The supply of AXS is capped at 270 million tokens, and 130 million are in circulation6.

AXS allocation is heavily weighted towards staking and play to earn rewards.
AXS allocation is heavily weighted towards staking and play to earn rewards. Source: CoinGecko

How Has Axie Infinity (AXS) Traded In 2023, And What Is The Axie Infinity Price Prediction?

AXS has been trading lower since the 2022 crash. In the last year, it is down 10%, and it’s trading at a 95% discount from its all-time high. Nonetheless, there’s some hope; in the past six months, AXS has rallied by 45%, pushing its price to just under $7, according to data from TradingView7.

Coincodex8 is bullish on AXS and expects the token to begin a solid recovery in 2024 with a high price target of $54. Their minimum price targets fluctuate between $15-20 throughout the decade before reaching $30 as we near 2030. They aren’t forecasting a new all-time high.

Changelly9 expects AXS to post consistent gains in 2024, with an end-of-year target set at $10. Looking further ahead, they’re targeting $20 in 2026 and $100 in 2030.

Remember that crypto prices are extremely volatile, and you should always do your research before risking your capital. None of the information presented here is investment advice.

AXS has struggled to recover from the 2022 crash and the Ronin side chain hack.
AXS has struggled to recover from the 2022 crash and the Ronin side chain hack. Source: TradingView

Final Thoughts on Axie Infinity

Axie Infinity is undoubtedly the most successful and important P2E game to date. This project put blockchain gaming on the map, drew millions of players from all over the world, and arguably had a permanent impact on the gaming industry. However, the last two years have been tough for the project. The bear market has hammered the AXS token, and the Ronin hack added to the negative sentiment.

Frequently Asked Questions

What Is Axie Infinity?

Axie Infinity is a blockchain-based online game that utilizes the Ethereum network to enable player ownership of digital assets and a decentralized economy. Players collect, breed, and raise unique creatures called Axies to engage in turn-based battles against other players. The game’s economy revolves around the Smooth Love Potion (SLP) token, which is earned through battles and quests. Players can use SLP tokens to breed new Axies, purchase items, or sell them for Ethereum.

How do you get started with playing Axie Infinity?

To get started with playing Axie Infinity, players need to create an account on the official website and download the game client. Once they have created an account, they need to purchase three Axies, which are the creatures that players use to battle other players. Players can purchase Axies on the marketplace using cryptocurrencies such as Ethereum.

What Are the Initial Costs Associated with Playing Axie Infinity?

The initial costs associated with playing Axie Infinity include purchasing three Axies on the marketplace using cryptocurrencies such as Ethereum. The cost of Axies can vary depending on their rarity and attributes. Players must also have a stable internet connection and a device that meets the system requirements to play the game.

Peter Barker


Peter Barker

Peter is an experienced crypto content writer and a DeFi enthusiast with more than 3+ years of experience in the space. Previously a journalist and news editor at a leading European news sourcing agency.

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