Axie Infinity (AXS) Boom: Just Hype or Gaming Revolution?

The blockchain game Axie Infinity (AXS) has seen tremendous growth in recent months. Not only has the number of users skyrocketed, but AXS, the game’s native token, has also seen a parabolic increase for some time. Is this all just hype or are we facing a gaming revolution?

The non-fungible token (NFT) industry is still booming. In particular, the blockchain game Axie Infinity is currently breaking all records. Less than a year ago, the market capitalization of the AXS token was just $ 7 million. It now stands at over $ 2.5 billion.

During the same period, AXS rose from $ 0.147 to $ 46.36 at press time.

That represents an incredible price increase of more than 30,000 percent within a single year.

What is Axie Infinity anyway?

Axie Infinity is a decentralized app (dApp) that runs on the Ethereum blockchain. Similar to the gaming evergreen Pokémon, Axie Infinity also focuses on cute monsters that are bred, traded and sent into battles by players. In contrast to conventional classic games such as Pokémon, the little monsters (“Axies”) are immortalized as tokens – more precisely: non-fungible tokens according to the ERC-721 standard – on the Ethereum blockchain. As a result, they are really unique compared to “normal” gaming characters or game objects and cannot be replicated and changed at will.

In addition, players can earn tokens in the game AXS. To do this, they have to take part in PvP battles, breed Axies, farm so-called love potions, which are needed for breeding Axies, or complete other missions. It is also possible to use the AXS token in the governance of the Axie universe, to stake AXS or to use it for payments within the game.

Axie Infinity competes with Fortnite

The growth of Axie Infinity is gigantic. If it stays constant over the next few months, it is even likely that Axie Infinity will replace Fortnite as the largest Discord community in the world. For comparison: Fortnite’s Discord Channel is currently running out 825,000 memberswhile Axie Infinity is already on 702,087 members comes.

Source: https://discord.com/invite/axie

It is true that the number of users of Axie Infinity with almost 350,000 daily active users is still well below that from Fortnite, but it is still remarkable how fast the blockchain game has grown over the past few months.

Axie puts DeFi in the shade

For a long time, Decentralized Finance (DeFi) was the only topic that got the Ethereum community into euphoria. Meanwhile, however, AXS’s log revenue dwarfs all other DeFi applications.


Axie Infinity Token Terminal
Source: https://www.tokenterminal.com/

In the last 30 days alone, the blockchain game has generated more than $ 149 million in log revenue generated. In the same period, the decentralized exchange PancakeSwap (CAKE) only raised around 12 million US dollars.

Most of the revenue from the blockchain game goes straight back to its players. Most of the capital therefore currently remains within the virtual economy and ensures that the AXS economy can continue to grow. Another part of the income flows into a community fund, which is managed by all AXS token holders. Conversely, this means that while the Axie players are making money, the community is amassing a large fortune that can be used to further develop the game.

Why is Axie Infinity only booming now?

Axie Infinity has been around for three years, and yet the hype around the game only started recently. One reason for Axie’s sudden surge in popularity is likely to be the Ronin Ethereum scaling solution launched in May. Ronin made it possible for the first time that normal mortals could also play Axie Infinity. As a result, the number of users, as well as the AXS course, has exploded.

Axie Infinity Users
Source: https://dappradar.com/ethereum/games/axie-infinity

Another factor that has contributed to the enormous growth is certainly the corona pandemic. As a result of the pandemic, important sources of income have collapsed, especially in developing countries. This has led to a large number of people looking for other sources of income and Axie Infinity, among others, was able to benefit from this.

Axie creates the opportunity to make money for anyone in the world with a smartphone or computer. Especially people on the Philippines, but also in other developing countries, are currently making a living playing Axie and managing their money with DeFi applications.

That could be expected in the future

The play-to-earn model of Axie Infinity and other blockchain games has the potential to help 180 billion heavy gaming world to change fundamentally. It is even conceivable that sooner or later play to earn will supplant the pay-to-play gaming model. Mainly due to the steadily growing layer 2 scaling environment and Ethereum 2.0, it is likely that we will see many more blockchain games in the coming months and years that could fundamentally change the crypto sector.

The advent of blockchain gaming, metaverse, and the associated virtual economies has only just begun. In particular, their combination with decentralized finance could be the next big catalyst for another massive bullrun, from which residents of poorer countries and regions in particular could benefit.