Axie Infinity is one of the most popular games out there. But, now, fictional inflation, combined with a historic crypto heist that was allegedly committed by North Korea, has plunged the Axie economy into chaos, causing its high rollers to freak out.
Developed by Sky Mavis, the game revolves around collecting, breeding, and battling cartoon characters called Axies, which are NFTs that exist on the Ethereum blockchain. Players can use their Axies to farm a currency called Smooth Love Potion (SLP) which can be used to breed and create more Axies. Both the Axies and SLP can be sold on the open market for real money.
The result is a highly financialized community fueled by the promise of future riches and predicated on a constant influx of new players. Many of those new players can’t afford to buy Axies directly, so existing owners loan them out for a cut of future earnings. The Axie community charitably calls the bosses “managers,” the workers “scholars,” and the overall arrangement a “guild.” Because many of the low-level players are poor workers from the Philippines and elsewhere, others call this arrangement digital colonialism.
It’s been very profitable for Sky Mavis but relies on keeping the dream of future growth alive since there’s little intrinsic worth in the game itself. That dream recently began to unravel thanks to gameplay changes and SLP inflation. Then, last month the game got hacked for more than $600 million in one of the biggest crypto heists ever. Axie Infinity’s fragile capitalist caste system has been spiraling out ever since.
“I had a fish farm and a plant farm,” wrote one player. “And 10 scholars. They have almost all quit. My Axies are worth 10% of what they cost me to breed. I learned a lot in Axie.”
The proliferation of Axies led to the farming of more SLP. As a result, the value of SLP started to tank.
Currently, the only thing that removes SLP from the game is breeding Axies. To address this, Sky Mavis removed SLP farming from the game’s Adventure mode in February. However, instead of the supply of SLP contracting, it continued to go up. Now, players are calling for new ways to “burn” SLP to stop this runaway inflation.
Players are now debating whether to get out or hold on to see if Axie Infinity’s economy bounces back.
In the meantime, Sky Mavis is trying to patch the $600 million hole in its pocket left by hackers. Bloomberg reports the funds could take years to recover if they’re recovered at all. It’s okay though, a bunch of crypto and VC firms just announced they would give Sky Mavis another $150 million to help reimburse players and keep them from leaving the game altogether.
(All information was provided by Kotaku)