How Axie Infinity works

Axie Infinity, a blockchain-based game available for Android, iOS, Windows, and macOS, has gameplay and objectives that may be familiar to some players. It’s a bit like Pokémon Go in that it has a team of three Axies with different advantages that you can use to battle teams led by other players or a computer algorithm.

But wait, what does “blockchain-based” mean and how does it work?

We created this guide to help you understand what blockchain (and related NFTs) is, how they work, and how these technologies can be incorporated into a game. We will also explain if you can earn money playing Axie Infinity. At the end, we will answer other common questions related to the game.

How Axie Infinity works

To understand what Axie Infinity is, you must first learn what blockchain and NFT are.

Blockchain is a shared ledger that makes it easy to record transactions and track assets on a digital network. Simply put, it is a system that allows users to record financial information and protect that information from changes and attacks. The ledger is duplicated across the entire network of users and every time a user makes a transaction, it automatically occurs on the ledgers of other participants.

You have probably already guessed that blockchain is the technology that allows the existence of cryptocurrencies, such as Bitcoin or Ethereum. Every cryptocurrency transaction made by other users affects the price of the coin. This, consequently, affects its real-life money equivalent value.

Let’s say you have one Ether and its price is currently equal to $2,960. If more people want to buy Ether, its price will likely rise to, say, $3,000. So while the amount of Ether you own didn’t change, its equivalent value in real-life money did.

NFT, or non-fungible token, in turn, is a unique digital asset that can be purchased with cryptocurrencies (but not exclusively). In fact, it is similar to cryptocurrency in that it is also based on blockchain technology. Each NFT is certified as a unique digital asset that cannot be copied. This creates a scarcity effect, which increases the value of the NFT. Blockchain technology ensures that each NFT can be traced as a unique and original object.

NFTs started out as digital art objects (like music or digital paintings) and then became more perse. Today, NFTs can be any type of digital file, the only requirement being its uniqueness. This also applies to in-game items.

Finally, we come to Axie Infinity. The game incorporates NFTs into its formula. Specifically, every monster in the game is an NFT. How exactly does this work?

You get tokens for fighting and winning in the game. These tokens can then be used to “breed” monsters by creating other NFTs. Thanks to blockchain technology, each monster is registered as a unique object and can be tracked. This verifies that the monster required real-life time and effort to create, resulting in its increased value.

Can I win money playing Axie Infinity?

In a market full of “pay to win” games, Axie Infinity is positioned as a “play to win” game. You can earn real money by earning tokens, creating NFTs and selling them. But to start earning, you must first invest in three monsters. At the time this article was written, the price of the cheapest monster exceeded $200, so you would have to spend over $600 to start playing.

Frequent questions

In this section, we will answer more questions related to Axie Infinity and NFTs.

Why are Axies so expensive?

People unfamiliar with the NFT world may be surprised at how expensive some yellow digital monsters can be. In fact, the price may seem unjustified at first, as many of us believe that digital assets cost nothing. Most objects on the web are easy to copy and multiply, which undermines their value.

But NFTs are impossible to multiply. Technically, you can copy them, but there will be no certificate verifying that it is the original NFT. As interest in NFTs grows and their supply is regulated, prices are skyrocketing. In practice, it is a basic rule of supply and demand.

I don’t have money to buy Axies. Does this mean I can’t play?

Not precisely. Yield Guild Games, an Axie Infinity holding company, is lending the first three monsters to players who cannot afford them. Of course, every loan has an interest rate. When borrowers start making and selling their own Axies, the company receives 30% of the user’s profits.

What are Yield Guild games?

Yield Guild Games has nothing to do with the development of Axie Infinity. It is an autonomous organization that promotes blockchain-based games by helping users start investing in NFTs. Think of it as a financial institution for gamers.

What are Axie Infinity in-game currencies?

Axie Infinity has two in-game currencies, Small Love Potion (SPL) and Axie Infinity Shard (AXS). SPL is used to trade Axies and can be converted into real-life money. AXS, in turn, is a proposed governance token. When implemented, it will allow players to have a say in the development of the game. Furthermore, both types of tokens can be traded as cryptocurrencies. Just like with Ethereum or Bitcoin, you can buy it, hold it, and hopefully sell it for a profit later. Or you can lose all the money invested. Who knows?

How do developers earn from the game?

Axie Infinity was developed by SkyMavis. The company earns 4.25% from every NFT sold on the gaming market. Additionally, both developers and owners of AXS, the governance token, get a cut of the monster breeding fees. So the more players join the game, the more the developers will earn.

Is Axie Infinity the only money-making game on the market?

No. While the niche is still fresh, there are other blockchain-based games available to play. As the technology develops rapidly and its popularity increases, we can expect to see even more titles appear in the near future. So if your goal is to make some money, consider researching all the options to find the most beneficial one.

Is Axie Infinity an easy way to earn cash?

“Easy” is a vague concept. But overall, it’s not “easy money” as players blinded by opportunity might imagine. Like any game, making money in Axie Infinity takes time and effort. Players must have a smart Axie breeding strategy to develop the necessary skills, know how to fight, and complete challenges. Some players who are serious about Axie Infinity have reportedly quit their jobs to devote all their time to the game.

Should you invest in NFTs?

There is no sure answer as to whether NFTs are worth investing in. The technology is relatively new and we are still unsure of its future. Will NFT value drop once the hype ends? Probably yes, but we don’t know when it will happen or if it will increase again. For now, NFTs are a great way to make extra money. But leaving your job because you’re attracted to Axies’ huge prices is risky. As a general rule for any cryptocurrency or NFT, invest as much as you are willing to lose.

The real beginning of the era of digitalization?

Hopefully, our guide has answered all your questions related to Axie Infinity and NFTs. No one knows what the future holds for the game, but most of us can agree that the concept is fresh and interesting. “To invest or not to invest” is a largely personal decision. If you like new technologies and games, why don’t you try it?

What do you think of the future of Axie Infinity? Share your thoughts in the comments section below.