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Axie Infinity’s ‘Underground Storm’

Before the attack that caused $600 million in damage, Axie Infinity was also said to have faced the risk of a collapse of the game’s economy.

If 2021 is the year of great success for the game blockchain do Sky Mavis development, by 2022, this company faces many questions about sustainability.

On March 29, Sky Mavis announced the Ronin bridge of Axie Infininy attacked, causing more than 600 million USD Cryptocurrency stolen by hackers. But according to observers, that is not the biggest challenge for this Vietnam-based game company. Team Axie Infinity is said to be trying to prevent a financial crisis, in the context of the cryptocurrency market’s constant price fluctuations, while the monetization mechanism also poses challenges in terms of economic control. in the game.

Control inflation, in particular, hold value for tokens and NFT that I released, is the problem Sky Mavis needs to solve right now.

“The economy in Axie Infinity So far, it still relies on a constant growth rate to maintain its operations, in which inflation is an available factor in this mechanism. Even if the game gets past the recent hack, Sky Mavis still can’t prove they can make the transition.” The Verge identify.

Axie Infinity faces many economic challenges.

Axie Infinity face many economic challenges.

Economy of Axie Infinity

Axie Infinity is one of the opening games for the world’s play-to-earn gaming trend in the past year. Participants can play games to receive tokens and exchange them for real money, thereby creating a private economy.

The game revolves around three main pillars: the SLP reward token, the AXS governance token, and the NFT which are Axie characters. In which, NFT and SLP are form of infinite resources with continuously increasing quantity. In the game world, the economy is often pinned by “burning” resources, for example using virtual currency in the game to buy items. With Axie Infinity, tokens help create new NFTs and NFTs help create more and more tokens. According to experts, this is likened to printing money in large quantities and will cause all to decrease in value.

“From an economic perspective, they created a loop. Players use Axies to generate SLP. SLP helps to generate more Axies and Axies help generate more SLP sources into the game. This is the weak point. factor that causes inflation,” said Mihai Gheza, CEO of Machination – a consulting firm on the in-game economy.

In fact, the value of SLP tokens has plummeted over time. From a peak of nearly $0.4 in May 2021, the price of this coin is now at $0.02, even falling below $0.01 at times. In the Philippines, where Axie Infinity As many people have full-time jobs, the average income from games is also falling below minimum wage, according to a report from market research firm Naavik.

Token SLP received from the game is discounted dozens of times compared to the mid-2021 period. Photo: Coinmarketcap

The SLP token in the game has dropped in price dozens of times compared to the mid-2021 period. Photo: Coinmarketcap

The challenge of keeping the economy from collapsing

According to experts, there is a common scenario for the economic collapse of games. “Players need to mine resources to sell. Selling resources will cause their prices to drop. When prices fall, players need to dig more, which in turn drives prices lower,” said Alexander King, expert on resources. build an in-game economy, say.

According to King, this is the challenge of games in general. However, the problem of Axie Infinity lies in the fact that the developer Sky Mavis has only limited control over the value of the tokens, while this right is one of the key factors in keeping the economy going.

“Game economies are an extremely difficult system to balance. They can’t be built perfectly in advance, and game designers need to be able to balance them quickly,” King said. speak.

With Axie Infinity, the balance is maintained by attracting more new players. The project’s white paper also describes “the Axie economy will depend on new entrants”. Having more and more players helps to expand the space, create community, competition and increase the attractive factor for the game.

Reality, Axie Infinity is considered to have done a good job of attracting players over the past time, through helping them make money. However, this has led many to consider it a full-time job, with the goal of generating as many SLP tokens for sale. Jon Jordan, blockchain game consultant, thinks that Axie Infinity “may be falling victim to his own success”.

When Sky Mavis was rolling out changes to keep the economy in balance, they were attacked again. The Ronin bridge hack resulted in the loss of more than 600 million USD worth of cryptocurrency. Whether the tokens of Axie Infinity intact, the attack also affected the in-game economy, interrupting users in exchanging tokens for real money.

Any solution for Axie Infinity?

According to the statistics of the research company Naavik, the majority of players consider Axie Infinity It’s a job to make money. Meanwhile, the experience of the interface, the character also met with mixed opinions, most just considered this to be another form of the Pokemon game. “Creating cryptocurrency is the ultimate goal, or at least the thing that helps Axie Infinity different from the countless more exciting games out there,” The Verge comment.

In a poll conducted by the co-founder Axie Infinity As Zirlin did on Twitter, 48% of participants chose “economy” as their favorite factor, not the game itself or the community. The question posed by analysts is: How many players will stay if they no longer make money from this game?

Consultant Jon Jordan reviews Axie Infinity is well-positioned to be a free-to-play alongside crypto games. That is, people can play for free, while a smaller number accept to pay to win tokens as rewards. These tokens can be exchanged for money, but from outside the system. “Most of the money is coming from small players or investors right now. If the game receives indirect money from esports sponsors, I think that won’t be a problem anymore,” Jordan said.

M Goes, Blockchain writer once doubted Axie Infinity As a Ponzi project (paying the latter to the former), evaluating the pay-for-player model could get developers in trouble. According to M Goes“play for money” will eventually only be for a few people, with the majority being “pay to play” or “free to play with pay options”.

Axie Infinity Also recently tested a version is Axie Infinity: Origin, where participants own the original Axies for free. However, these Axies are not NFTs so cannot be traded, and wars are also not rewarded with SLP.

In addition to the current challenges, Axie Infinity evaluated still has many advantages of its own, especially the trust of a part of players. Although assessing the possibility of inflation in the game, a representative of the consulting firm Machination also said that this can be completely overcome thanks to the community.

“One of the strongest points of Axie Infinity is the strength and size of their community. Short to medium-term problems with the economy can be solved by a dedicated community,” a Machination representative said after the hack of more than $600 million occurred.

Luu Quy (according to The Verge)

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