NFT-based online video games are nothing new, having been around since at least 2017. They burst onto the scene with the still-popular CryptoKitties, and many of them have been relatively successful. Axie Infinity, however, is arguably different from any of its predecessors. With a market capitalisation of over $2 billion USD and revenues of over $1 billion USD this year, it is safe to say that Axie Infinity has been an astonishing success.

Here is everything you need to know about the most popular blockchain game of 2021.

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What is Axie Infinity (AXS)?

Axie Infinity is a popular blockchain game inspired by the hugely successful Pokemon game series. It offers open, highly flexible gameplay that allows players to collect a variety of digital pets known as Axie. They can breed, battle and trade them in the ever-expanding Axie ecosystem.

Axie Infinity is currently the number one Ethereum-based game on DApp based on weekly on-chain volume. Also, it is one of the top three most popular gaming apps by number of users - with over 100 000 unique weekly users.

The platform aims to provide a fun, accessible and educational way to learn about the potential of blockchain technology. Axie Infinity has already been successful in achieving this vision, as it is playing a prominent role in the blockchain industry in many developing countries.

What is AXS and SLP?

Two main tokens are used in the Axie Infinity ecosystem: Axie Infinity Shards (AXS) and Smooth Love Potions (formerly Small Love Potion) (SLP). As the platform's native management token, AXS holders are part of Axie's decentralised organisation and can help shape the development of the platform. For example, they can decide how financial resources are spent or how ecosystem funds are allocated. SLP can be earned in-game and can be used to breed new Axies.

Both AXS and SLP are ERC-20 tokens that can be traded on the Ethereum network.

Axie Infinity conducted the final phase of token sales on the Binance Launchpad, raising a total of $2.97 million USD. The underlying technology is being developed by the Sky Mavis gaming studio, led by Trung Nguyen- entrepreneur and engineer, Aleksander Larsen- experienced business developer, Aleksander Larsen (COO) and Viet Anh Ho, Sky Mavis' Managing Director and a skilled engineer who has previously worked at Google and PayPal.

AXS use cases

From August 2021, the AXS token will be used primarily for breeding new Axies. However, it is planned to add additional features to the token, including making it available:

Reward staking

AXS holders will soon be able to stake their tokens to earn a pro-rata share of AXS inflation. This feature is scheduled to be launched in the second half of 2021.

Direction

Axie Infinity has been designed to move to a decentralised governance system, whereby AXS stackers take over the decisions related to the development of the platform. The governance functions are expected to start in 2021, while Axie Infinity is planned to be managed by a fully decentralised organisation by the end of 2023. Those with a governance token will have a say on how Treasury funds are spent and the prioritisation of functions in the development roadmap.

Right to buy

Users may need to own an AXS to participate in future sales of Axie, land or items.

How does Axie Infinity work?

Axie Infinity is a fighting game that allows users to fight Axies in real time. Each Axie is unique and is represented by an ERC-721 non-replaceable token (NFT). Each Axie has four different stats: health, morale, skill and speed. Each of these attributes plays a key role in the Axie's combat mechanics, as they determine how much attack the Axie can withstand, who attacks first, how much it can hurt others, etc.

Axies belong to one of six normal classes (Aquatic, Beast, Bird, Bug, Plant, or Reptile) or one of three secret classes (Dawn, Dusk, or Mech). The different classes have strengths and weaknesses that make them more or less effective against certain other classes. For example, Aquatics is strong against Beast, Bug, and Mech Axies, but weak against Reptile, Plant, and Dusk Axies. These also affect Axie stats.

An Axie consists of six body parts: back, ears, eyes, horn, mouth, and tail. Except for the eyes and ears, each of these parts has an ability attached to it and affects the Axie's combat abilities.

In addition to being used to gain SLP by participating in quests, PVP Arena and Adventure Mode, Axies can also be bred to create potentially rare and powerful combinations. Each Axie can be bred up to 7 times to limit the Axie population. This costs 4 AXS, and a variable number of SLPs - the first breeding cycle costs 150 SLPs, rising to 3150 by the seventh (and final) time.

Axie genes affect the abilities of characters
Three genes are linked to each body part of Axie: a dominant (D), a recessive (R1) and a less recessive (R2) gene. The dominant genes have a 37.5% chance of being inherited by any offspring, while for the recessive genes this drops to 9.375% and for the less recessive genes to 3.125%.

A publicly available calculator can be used to calculate the odds that the offspring of any two Axies will have the specific traits.

Among the rarest types of Axies are those with mystical body parts, which are found in only a fraction of the original Axies sold in pre-sales. Of the original series of 4088 Axies, 25% (known as Origin) have mystical body parts. Of these, a total of 19 triple mystics and 3 quad mystics were created. To date, the three most expensive Axies ever sold have been triple mysticals - including #2761, #3224 and #1046 Axies, which previously sold for 200, 200 and 300 ETH respectively.

As of August 2021, one of the last quad mystic Axies (#991) is currently on sale for 5000 ETH. The mystic traits are not transferable.

Many in-game resources are tokenized and exchangeable on P2P marketplaces. This includes plots that users can customize with various items. In total, the world of Lunacia Axie Infinity consists of 90 601 land types of seven types (Savannah, Forest, Arctic, Mystic, Genesis, Lunas Landing and Map).

Axie Infinity is also developing a Lunacia SDK that players and developers can use to create additional game experiences using Axie Infinity art assets.

Since its initial launch in 2018, Axie Infinity has undergone numerous upgrades and updates. The breeder game, battle game and card battle game are now fully functional - while the land-based gameplay is undergoing internal testing. The lands, items and Axies have now been moved to the Ronin sidechain. Some near-term roadmaps include a launch of land-based play in the first half of 2022, followed by an alpha launch of the Lunacia SDK in the second half of 2022.

The game will primarily run on the Ethereum blockchain, but the development team behind the game is also building a high-speed sidechain solution called Ronin. This aims to improve the gaming experience by increasing speed and eliminating gas fees, while maintaining the security of the Ethereum blockchain.

Play-to-earn: How does it work?

Axie Infinity has helped create a new game genre known as play-to-earn, as it allows users to earn revenue in the form of AXS, SLP and other items from the game.

New players must purchase (or borrow) at least three Axies to start playing. The cheapest Axie costs between $70 USD and $250 USD. While Axies with any other unique body parts, abilities or skills are likely to cost significantly more. This can be a significant barrier for new players to entry.

What is the stipend for Axie Infinity?

Axie Infinity is unusual in that it is a self-propagating micro-economy. Thousands of players play for AXS and SLP rewards, breeding and fighting Axies, buying and selling them, land, and many other rare items to generate income.

Axie Infinity's play-to-earn characteristic has also led to the development of a unique Axie Infitny-type scholarship economy. It is in this formation that the best players have been bred, running under the name Manager. They can loan up to 3 Axies to their own workers, who are called Scholars in the game.

These Scholar players then use their team of Axies to acquire more SLPs and other unique products. The items they acquire are then shared with Managers. In return, the Manager players provide their Scholars with new educational resources and mentoring, which they can use to further increase their daily benefits.

It is important to note that multiple profiles are not allowed. If a user is caught having more than one profile, they will be banned immediately and will be stigmatized in the marketplace.

As a result, Managers must ensure that their Scholars do not break this rule. Because if anyone is caught cheating, they can also have their Managers' Axies confiscated and be permanently banned from the gaming platform.