Axie Infinity Economics: All You Need to Know


Axie Infinity is a cryptocurrency game that has changed the meaning of gaming. The game allows for ‘play as you earn,’ hence the term GameFi. This brings us to what is Axie Infinity Economics? Sky Mavis, the creators of Axie Infinity, integrates gaming and finances; therefore, users can earn Axie NFTS while playing. 

Key Terms

  • Axie Infinity- It is the game
  • Axie NFTs- Characters used in the match Axie Infinity
  • AXS and SLP- Tokens Axie Infinity used to charge and incentivize users

Axie Infinity Economics

The game’s economy is not as traditional as earlier ones. This is an emergent one, and the breakdown is as follows: loops, the possibility of earning, and the economic life cycle.

Internal Loops

  • Axies -> Player ->AXS/SLP

Axie’s ecosystem is a closed loop that revolves around Axies, the Player, and the Tokens AXS or SLP. There are inner and outer loops, all of which represent the network’s value creation and consumption angles. The loops follow the same cycle; only the processes differ.

Breeding and battling form the foundation of the economic activities of the game. In the battle, the requirement is that a player should hold an Axie team, which consists of 3 Axie NFTs, to play. The game rewards the best player using a ranking mechanism that awards the best players with small chunks of Axie tokens each month. The players receive Smooth Love Potion (SLP) as the reward. Breeding involves generating more NFTs for self as a player.

Outer looping represents the user steps in the ecosystem; these are:

  1. As a user, you can enter the ecosystem by buying Axies using actual dollars.
  2. Then interact with the network to spend SLP and AXS tokens for breeding.
  3. After breeding, stake the tokens for rewards.  You can also battle to earn more tokens.
  4. Sell the tokens to cash out.

Possibility of Earning

Inner looping represents the flow of value in the ecosystem, which determines the possibility of earning. Players sell the NFTs after breeding to get income; sometimes, winning AXS and SLP tokens in battle. Money enters the ecosystem when users buy the tokens using exchanges and leaves when users sell the tokens for fiat.

Life Cycle of the Economy

  • Stages I-II

Occurs during game launch, and there are few users in the internal economy. The price of the assets is low, but there is an initial pick-up as players get ready to start gaming.

  • Stages II-III

Competition starts, and players begin buying more Axie Tokens, raising price and demand.

  • Stages III-IV

The game is live in the mainstream media and journalists are writing about it. It is costly for new players to join in at this point. Players deploy vast amounts of capital for breeding, creating a new floor price. The overflow gradually lowers the NFT prices.

  • Stage IV-I

Gamers exist the game collecting profits, bringing the game back to a start, hence Stage I.

Axie for GameFi

Cryptocurrency keeps surprising everyone, and it is becoming more interesting with time. The limit is your imagination because you can create anything and earn from anything in the crypto space. You can also get into anything and collect profits; Axie Infinity for GameFi!