Axie Economy & Long-term Sustainability
- Axie is a new type of game that rewards players for the time and effort they spend both playing the game and growing the ecosystem.
- Axie has a 100% player-owned, real money economy. Rather than selling game items or copies, the developers of the game focus on growing the player to player economy. Marketplace fees go into a Community Treasury whose usage will be guided by AXS holders. The developers monetize through their ownership of AXS tokens. Axies are created by players using in-game resources (SLP & AXS) and sold to new/other players. You can think of Axie as a nation with a real economy. The holders of the AXS token are the government that receives tax revenues. The inventors/builders of the game, Sky Mavis, hold ~20% of all AXS tokens.
- Game resources and items are tokenized, meaning they can be sold to anyone, anywhere on open peer-to-peer markets.
Axie population growth is a major factor within the Axie ecosystem. At any given moment, there exists some ideal inflation rate that allows us to grow to our maximum potential. Too slow and Axie prices are too high for everyday people to join; especially competitive Axies. Too fast and you get unhealthy inflation. AXS / SLP tokens face similar economic forces that need to be managed.
Long-term the economy will be sustained by adding:
- Additional valuable utility to Axies. New and improved experiences such as Land, Mini-games, and Battle updates will be introduced over time. New experiences outside of Battle will also add utility to Axies beyond their effectiveness in fleeting metas. Players will constantly have new goals to reach within the Axie universe. Ultimately, the demand for Axies will come from the intrinsic value they can provide to players in the form of competitive, social, and progression based fun and achievements.
- Vertical, rather than purely horizontal progression. Currently in order to progress the main path to progress in Battle is by expanding the size of one’s collection. This dynamic is not optimal long term. In the long run there will be upgrades to Axies, Land, and other assets that will require crafting ingredients. Axies themselves may be “released” to obtain these crafting ingredients or unlock upgrades. This creates a long term supply sink to the Axie population. Axie progression is coming in the future; and it promises to create a much stronger bond between trainers and the Axies they choose to upgrade.
- Accessibility improvements that help unlock sustainable value. There are various points of friction currently for players to be able to dive into Axie Infinity to compete, have fun, and socialize with the community. Improving onboarding and allowing players to enjoy the game with free Starter Axies for example would enable more players to fall in love with the Axie universe and want to engage in the economy long-term. The more sustained demand for Axies and associated assets, the more healthy the long-term economy will be.
In the beginning to maximize growth, by design the Axie economy will be dependent on new entrants. New players require Axies to get started and it is important to ensure there are enough Axies being bred to make obtaining them accessible. There needs to be careful consideration for exactly when additional Axie sinks are introduced as it could limit growth by causing prices to go too high. Over time, the outlined additions above will be rolled out to transition the economy towards growth and sustainability via demand from existing players, and reduce dependence on new entrants coming into the ecosystem.
As the game becomes more established and scales, many additional opportunities will present themselves to introduce additional capital into the economy as a bonus on top of the core player-to-player economic activities:
- Advertising and sponsorships. Many projects are already eager to distribute rewards and tokens to the Axie economy. So far MakerDAO, AAVE, and Kyber Network have done experimental token drops to Axie players. Axie is already the largest community of people who understand how to use Blockchain technology in the world; there is immense value in advertising to a community like this.
- Physical / digital merchandise. This is already a frequent request from dedicated players who would like more physical and/or digital merchandise to be able to express and show-off their attachment to the game. Merchandise could range from exclusive official Axie Art NFTs to T-shirts to Plushies. Profits would go back into the game to be distributed to players.
- Offline events. The global Axie community has built extremely strong bonds with each other and meeting other Lunacians in real life is a valuable part of the Axie experience. Profits from major community events would go back into the game to be distributed to players.
Although many Axie players have earned significant returns on their efforts and purchases, many have also played just for the fun and social community. They are excited to devise unique Axie battle strategies to climb the leaderboard or just hangout with new friends in the community. They value these experiences more than any potential earnings. These players make the economy stronger in the long run and Sky Mavis strives to help more players gain this value in the long-term.