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Game Economy Review – Axie Infinity

October 27, 2022
8 min read


Axie ♾️ is the game that started the Play-to-Earn revolution and is still the most well-known web3 game in the market right now. Inspired partly by the anime series Pokémon, players in the game battle out their ‘Axies’. The winner of the battle is rewarded with SLP tokens, which they can trade for fiat money on crypto exchanges.

It’s been a difficult year for Axie Infinity so far, but the game is apparently getting a second wind. Don’t believe us?  hear it from a player then...

Being at the frontlines of a brand new market is not easy. Axie, like every other trailblazer, has found itself in uncharted territory. After almost a year of unparalleled growth, its meteoric rise has come to a halt. The game has been struggling with a declining user base and plummeting token value for several months now.

 While factors such as a market-wide crypto crash and a $600 million exploit of its native chain Ronin did intensify the game's ongoing difficulties.Its underlying structure was not suitable for continued growth in the first place.

 Industry insiders have been calling for the unfolding of Axie’s economy before it even began. Game developer Lars Doucet wrote this in November 2021.

  • Axie Infinity’s business model, for the moment, depends on continued growth in its user base and continued fresh money entering the system to prop up the value of Axies, $AXS, and $SLP. The pace of that new user growth is also critical, because any slowdown in the breeding and selling of axies to new players will lead to a decline in revenue. We think this outcome is likely over the coming months, barring any unforeseen spike in new users. In Sky Mavis’ own words, "this is unsustainable." (Axie Infinity: Redemption or Ruin - Deconstructor of Fun)

“Wait, didn't you say the game was making a comeback just now?”

Indeed, after acknowledging the drawbacks of the existing game, Axie has released a new free-to-play version of its core game called "Origins". According to Sky Mavis, "Origin is the new battle version of Axie Infinity that introduces a brand new interface, all new game mechanics, art, special effects, storylines, and an expansive onboarding experience."(Axie Infinity: Origin FAQ)

(Source: PlaytoEarn.com)

This new version allows players to experience the world of Axie for free. The idea here is to let the players get attached to the characters and enjoy the gameplay without making any financial commitments.

Another big change Sky Mavis is making as part of their sustainability initiative is to replace the play-to-earn economic model of the game with a play-and-earn system. But, how is this new model different?

The Play and Earn model is a revamp of the reward mechanism of the game. Now, instead of rewarding everybody for playing, Axie will only issue rewards to the most competitive and skilled players. If you want to earn money while battling Axies, prove your skill by climbing up the leaderboard.

As humble farmer Nash told us above, this approach has been working so far. Players are finally playing the game for enjoyment and competition, instead of treating it as yet another grind.

Axie Infinity Origin officially began its Season 0 on August 12, 2022. In this piece, we will give you a high-level overview of the game and the state of its current economy. Note that the stats we are sharing below do not reflect the performance of the Origin update but that of its predecessor, Axie Classic (V2).

Alright then, let’s jump right into the economy of Axie.


There are four asset types that make up the economy of Axie Infinity:

Axie Infinity Shards (AXS)

 AXS is the governance token of the Axie economy. Holding AXS gives you voting rights within the digital nation of Axie. Apart from that, it’s also the most direct way to invest in the game and its future prospects. Players can either buy AXS in the open market or earn it by reaching the highest echelons of the leaderboard. Sky Mavis says they designed AXS to fulfil two objectives.

  • To reward players for interacting with Axie Infinity while simultaneously incentivizing them to hold on to their tokens so they can claim additional rewards.
  • To decentralize the ownership and governance of Axie Infinity. (Sky Mavis)

Smooth Love Potion (SLP)

(Source: Binance)

SLP is the primary utility currency of the Axie economy. That is, players must use the token to perform every significant action in the game, such as breeding new axies or upgrading existing ones. Additionally, it’s also used to reward players for winning games. Since SLP is an inflationary currency, its supply is not capped. Doesn't that mean that SLP will lose its market value as more tokens are minted? Yes and no. While it’s true that more tokens will result in the devaluation of SLP, Sky Mavis has designed their game so that it requires players to burn their SLP tokens to breed new axies.

Axies (NFTs)

Axies are tokenized, Pokémon-like creatures that players collect, breed, and use in battles within the game. Axies are also your tickets to the Axie Universe; In Axie Classic  players were required to buy 3 Axie NFTs to start playing the game. However, the new Origin update gives players 3 non-NFT axies for free, enabling them to experience the game without making any investments.

These NFTs are also the asset class that witnessed the sharpest drop in the Axie Infinity economy. Each Axie NFT sold for upwards of $300 at its peak. As of August 19, 2022, you can purchase most axies for as low as $3. That’s a 99% decline in value.

Land NFTs (Lunacia plots)

(Source: Axie Infinity)

 These are tokenized virtual land plots. Axie was apparently in the virtual land business before Sandbox and Decentraland. Players can purchase these NFT land plots in the fictional town of Lunacia and build shops, harvest resources, and create impressive structures. Luncia hosts 90,001 land plots. It's a lot like Farmville, but instead of Facebook, you truly own your virtual land this time.

Game Modes

(Source: CoinGecko)

Adventure Mode

It's the story mode, also known as the Player vs Environment mode of the core game. There are 36 different levels in adventure mode, each progressively harder to complete. Players battle different monsters at each stage. For completing each step, they are rewarded with XP and some SLP.

Arena Mode

The Arena is the player versus player (PvP) mode of Axie Infinity. You know the drill-players compete against each other with their deck of three Axie NFTs, and the winner of the tussle is rewarded with SLP.

Tokenomics and Utility

Before we discuss the Tokenomics of AXS, let’s get you up to speed with two key terms that we’ll use—sinks and sources.

  • A sink is an outlet in the game where players can return their tokens or burn them in exchange for other rewards.
  • Sources refer to the avenues that give away the tokens. So, to have a sustainable economy, a game would need to effectively manage its sinks and sources.

AXS was launched in November 2020 with a total supply capped at 270,000,000. The governance board of the Axie economy has fixed a 65-month unlock schedule for the token. Therefore, the full supply of AXS will enter the open market by April 2026.

Here’s the token distribution for AXS 


(Source: Sky Mavis)

AXS has three primary use cases in the Axie economy. These use cases also double as the sinks.

  • Holders can stake their earned AXS to gain governance rights.
  • Payments-Using AXS for micro-transactions within the game
  • Staking: Players can stake their AXS to earn yield.


Although the sinks we mentioned above are useful within the game, they are not effective in propping up the value of AXS. The token is down 91% from  its all-time high of $165 to $14(Aug 19, 2022).


Axie Infinity introduced the two-token economy model in Web3 gaming. The developers came up with this model to reduce the selling pressure over the primary governance token (AXS) of the game. Since then, the model has been replicated by many popular games on the market.

For good reason, Axie is widely regarded as a space pioneer. Any updates made by the game are quickly picked up or at least studied by other titles. This appears to be the reason that the game struggles to differentiate itself in terms of economics. However, Axie clearly outperforms the competition in areas such as brand recognition, networks with top investors and guilds, and character design.

Stats Table (as of 19 Aug, 2022)

  • Current Price: $14.62
  • All Time High Price: $165.37 (-91.10%)
  • All Time Low Price: $0.1234 (+11828.81%)
  • Current market capitalization: $1,226,715,058.11 ($1.22 billion).


Once reigning at the top of the DappRadar blockchain games list, Axie Infinity has now slipped back to the sixth spot. Its place has been taken up by games like Alien Worlds, Splinterlands, Farmer’s World, Gameta etc.

 Rankings on DappRadar are largely based on daily active users. Here’s a breakdown of games that surpassed Axie on the list:

  • Alien Words: 185k
  • Splinterlands: 154k
  • Farmer’s World: 92.43k
  • Gameta: 54k
  • Upland: 41k
  • Axie Infinity: 38k

Note that there’s no way of finding out if the number of users recorded by DappRadar are actual humans playing the game or bot farms. However, we can safely say that the user base of Axie Infinity has reduced dramatically in the last six months.


The community is arguably the biggest asset of Axie Infinity. The game has community members from almost every country in the world. These are not idle community members either, but active participants that routinely conduct IRL events to meet their fellow Axie players.

Here’s a breakdown of Axie’s social presence across different media channels.

  1. Twitter: 940k Followers
  2. Discord(Global): 716k members.
  3. Instagram: 113k Followers
  4. Regional Discord Servers

Closing Remarks

We strongly believe that Axie has what it takes to make a perfect comeback. Let us list some of the factors: amazing founding team, network of big investors, committed players, and the drive to keep on building despite difficult circumstances. We also think that most games that are on top of DappRadar’s top blockchain list right now represent the old guard, and the new breed of AAA-style games coming their way will be the real challenge for them all, including Axie.