Play-to-earn games have increasingly captured the attention of the crypto and even non-crypto community. In the games, players can earn tokens/coins via battling quests, tournaments or selling items on the marketplace. Those tokens/coins then can be traded on DEX or CEX for real cash.

One of the brightest names belonging to this trend is Axie Infinity, which is taking the crypto and gaming world by storm at the moment. According to data on Token Terminal, Axie Infinity’s cumulative revenue since launch is $354.4 million (as of Aug 12 2021), making it the project with the highest incremental revenue among other daaps and blockchains.

To decipher the success of Axie Infinity, let’s dwell on this article.

I. Market context

The emergence of play-to-earn games in the blockchain industry has perhaps changed the way people interact with both gaming and cryptocurrency. The concept ensures those who participate in the games and contribute to increasing gaming values can eventually be rewarded financially. Playing games is no longer “just for fun”; however, it has become a source of income.

At the time of writing, the market cap of the play-to-earn games segment is $7.8 million. Meanwhile, the global gaming market is forecasted to generate $175.8 billion in 2021 and reach over $200 billion in 2024, according to the 2021 Global Gaming Market Report from Newzoo. It is no doubt that on-chain gaming has so much more room to develop in the foreseen future.

In terms of Axie Infinity, its market cap is approximately $4.4 million as of August 12 2021, accounting for around 56% play-to-earn market cap. It is the pioneer in the play-to-earn trend and a factor that makes the crypto market flourish again.

II. Project overview

Axie Infinity is a play-to-earn on-chain game that was initially built on the Ethereum blockchain in 2018. However, the team found that it was inefficient to make blockchain games solely on Ethereum because of the scalability problem. As a result, the team is currently developing the Ronin network, an Ethereum-linked side chain explicitly designed for Axie Infinity.

Axies are creatures in the game that was designed based on Pokemon inspiration. Players can choose to participate in-game battles, collect, raise and build a kingdom for their pets to earn rewards which can be traded in exchange for cash.

III. How to participate in the game and earn rewards

To take part in the Axie Infinity game, players need to buy three Axies. The price of each Axie is dependent on its strength characteristics and rarity. At the time of writing, the weakest Axies cost around $232/Axie, and the strongest and rarest costs more than a million dollars.

Below are the main activities that players can participate in to earn rewards.

1. Battling

Battling is considered as the main activity that players can earn tokens in Axie Infinity. Users can choose to participate in various types of battles and receive rewards daily or weekly. Moreover, there will be battling quests or tournaments where users can earn SLP or AXS tokens.

Battling is centred around Arena and Adventure Mode. While Arena (PVP) is where users combat against each other, Adventure (PVE) is where users fight against monsters to gain experience and level up. When players win one of these two matches, they will be rewarded with SLP (Smooth Love Potions) tokens, which can eventually breed new Axies or sell on exchanges such as Binance.

For more competitive play, users can consider participating in Tournaments and Esports. The champions of these battles can earn AXS tokens or tokens from third parties. For example, the prize pool for the community tournaments Axie Esports Grants Program is worth 5000 AXS, around $350000 (as of Aug 12 2021).

To receive more rewards, users have to complete daily battles or win community tournaments. Of course, players need to upgrade their Axies to increase their chances of winning. Moreover, ungraded Axies with high rarity and ability can be sold higher in the Axie Infinity marketplace.

2. Breeding