The collapse of the game that stormed Axie Infinity

Throughout her life, Alejo Lopez de Armentia played video games for many reasons. There’s a thrill, there’s a desire to win, and it’s basically a good way to pass the time. At the age of 20, feeling isolated in a solar panel manufacturing company in Florida, Armentia often spends evenings playing games as a way to socialize with her countrymen in Argentina.

Then nearly a year ago, he discovered a new game labeled “play to earn” – play to earn money. Compared to other casual games, Axie Infinity is quite simple.

It is a trading and fighting game that allows the player to collect, raise, fight and trade beasts known as “Axies”. A special feature is that these creatures have all been digitized in the form of NFT.

With each match, players will control teams of 3 beasts to fight against each other. If all 3 animals on the team die, the team loses. A match usually lasts less than 5 minutes.

The collapse of the game that stormed Axie Infinity | Blockchain

Graphics in the game Axie Infinity

The gameplay is extremely simple, but gamers still spend hours researching strategy, obsessed with Axie-themed Discord channels and Reddit forums, even pouring money into specialized software to be able to build. Build a mighty army of beasts. Armentia is also among them, having spent about $40,000 on Axie since last August. However, the purpose of playing games is not to kill time like before. He hopes it can become “his full-time job”.


According to Bloomberg, Axie Infinity has a close relationship with the cryptocurrency market. Players will earn Small Love Potion (SLP) tokens for playing the game or Axie Infinity Shards (AXS) coins. AXS is used to breed animals, while SLP is the currency that players get for doing quests. This is a way to help owners contribute to the management and development of the game in the future.

There are different ways to make money from Axie, such as Armentia raising animals for profit. The player will then breed a parent animal and a parent, wait for them to become pregnant and collect the offspring. This process will be charged in SLP and AXS.

New players all need AXS to get started and this pushes the coin’s price up. According to Coinmarketcap data, as of the morning of August 11, 2021, there was a time when each AXS coin was priced at 74.45 USD. With 60.9 million AXS in circulation, the coin’s market capitalization hits $4.5 billion.

The collapse of the game that stormed Axie Infinity | Blockchain

Axie is expected to become a “new revolution”

The creators of Axie, a startup called Sky Mavis, have declared the “play to earn” game to be a new economic phenomenon.

“We believe in a future where work and play become one,” Axie said. “Welcome to our revolution”.

Last October, Sky Mavis successfully raised more than $160 million from investors, including venture capital firm Andreessen Horowitz and cryptocurrency company Paradigm. That same month, Axie Infinity also became a game with 2 million daily players, according to Sky Mavis.

Alexis Ohanian, Reddit co-founder and investor Axie predicts that within five years, 90% of the global gaming market will be “play to earn” games. Gabby Dizon, head of crypto game startup Yield Guild Games, also said Axie is a way to help create an “investor mindset” in a new digital economy – where Web 3.0 is considered ” extraordinary opportunity”, is “the greatest weapon” against poverty.


However, not long after that, Axie plunged into a deep crisis. The number of daily users dropped 40%, while SLP and AXS plummeted. Worse, on March 23, Axie also lost up to $ 620 million because the Sky Mavis system was hacked by hackers. By May, AXS almost bottomed out after breaking the $20 mark. This event is like a confirmation of all previous skepticism aimed at the cryptocurrency market, which has not really been “pure” about security.

The collapse of the game that stormed Axie Infinity | Blockchain

Sky Mavis then quietly changed its “mission”, turning the game “play to earn” into “play and earn”. The company also launched Axie: Origin, a new version upgraded with beautiful graphics and engaging gameplay. Importantly, Axie: Origin is completely unrelated to cryptocurrencies, because Sky Mavis admits, many people only participate in games if they have nothing to do with cryptocurrencies. The goal is for Origin to replace the original game with a non-crypto version that attracts a large number of players.

Although the CEOs are trying to distract the public through the new game, a sense of tension has clearly been present since the AXS coin plummeted. A Bloomberg reporter had the opportunity to talk to Sky Mavis co-founder Jeffrey Zirlin at the end of January. Zirlin said he was living in the US, but did not disclose his specific address.

“I could live anywhere, but not leave my room,” he said.

Zirlin later also shared his whereabouts, but told reporters not to make the information public because he and his colleagues had been threatened with their lives.

“We can’t reveal our whereabouts, just as the President never makes his home address public,” he said. “We are like heads of state.”

Zirlin said he sympathizes with investors who have lost money, even gone “out on the street” for cryptocurrencies, but said these plunges will help clear the market. “Sometimes you have to get rid of people who only join for the money. The system is just adjusting itself.”

The collapse of the game that stormed Axie Infinity | Blockchain

Philip La, department head (left) and Zirlin (right) in Vietnam


The past history of the video game industry has also seen the birth of many “real money” games, such as Cryptokitties. CryptoKitties is a virtual pet-style game. You need a certain amount of ETH to own a cat through an online marketplace at, then buy, sell, exchange and breed them. These NFT items were enough to ignite the enthusiasm of speculators, which in turn caused Cryptokitties to peak and some cats even sold for 6 figures (in USD).

Sky Mavis co-founders met on forums devoted to Cryptokitties, according to Zirlin. He said he was passionate about digital collections while living in the Lower East Side, New York, then in 2018 moved to Ho Chi Minh City. Here, Zirlin met Nguyen Thanh Trung and the two began to venture into the vast game universe.

Nguyen Thanh Trung previously founded a social network exclusively for food bloggers, then spent three years working for a financial software company co-founded by American venture capitalist Joe Lonsdale. The “conception” of Axie Infinity was started by him in earnest, right when the cryptocurrency market was about to explode.

The collapse of the game that stormed Axie Infinity | Blockchain

On March 23, Axie lost up to 620 million USD due to a hacker attack on Sky Mavis system

Sky Mavis’ initial success came from clever innovation in technical designs. At that time, anyone building an NFT game had to rely on the Ethereum blockchain to process transactions. Sky Mavis is different. It built its own blockchain called Ronin – a system that greatly reduces costs and improves the speed of transactions.

The Philippines is probably Axie’s biggest market. The average daily earnings from May to October 2021 for all players, excluding those in the lower ranks, are above minimum wage, according to game research and consulting firm Naavik. Of course, this income must be withdrawn from the e-wallet before it can be used in real life.

In May, CNBC published an article titled “Filipinos play games for money during the epidemic,” describing how people in the city of Cabanatuan north of Manila overcame the COVID-19 pandemic by playing Axie.

“We had money to buy food, pay off debt and cover our daily living expenses. Axie Infinity helps me pay my bills and debts. I’m so grateful to Axie,” a mother of three told CNBC.

Some players, including John Aaron Ramos, 22 years old, even bought 2 houses thanks to the huge income from Axie. This game has grown in popularity and is considered a “pioneer” for many game development companies.

“I started playing Axie to make money,” said Filip, a 30-year-old young man, and asserted that he joined the game 100% for money and 0% for entertainment. “If I want to have fun, then I’ll play a real game, not a virtual game like Axie.”

The collapse of the game that stormed Axie Infinity | Blockchain

However, this monetization mechanism causes challenges knowledge in controlling the in-game economy. Controlling inflation, specifically keeping the value of tokens and NFTs, is a problem that Sky Mavis is still struggling to find a solution to.

“Every time the value of SLP starts to increase, investors who have been waiting to make money from SLP will immediately sell. SLP prices will turn down again,” said Lars Doucet, co-author of the book on Axie.

Before that, Sky Mavis also struggled to resolve internal issues. Once the game starts to look less profitable, the ability to attract new players decreases and even causes the animals to lose value. A vicious cycle that repeats itself over and over again.

On May 18, Zirlin and Larsen held a talk with the Axie community on Twitch about the hacker breach. The company says it has raised $150 million to reimburse victims and rebuild the system. However, nearly two months later, nothing has changed, according to Bloomberg.

Recently, Mr. Jonathan Teplitsky, a blockchain expert at Horizen Labs, has warned about “play to earn” games that have emerged thanks to hype and speculation. “Axie Infinity, if you want to win the next market crash, you have to build a world that doesn’t depend on the mood of the market,” he said. This is of course very difficult, especially with a game that attracts speculators like Axie.

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