What is Axie Infinity and Why is Its Token Up 600% in Two Weeks?
The past couple weeks have been uneventful for most cryptocurrencies due to sideways price action, but one coin has managed to rise over 600% in that timeframe: AXS, the native token of Axie Infinity, which is a Ethereum-based NFT game similar to CryptoKitties. It has risen due to a number of reasons, but mainly due to growing interest in the game and its ecosystem.
Axie Infinity was created in 2018 by the startup company Sky Mavis. It is like a combination of CryptoKitties and Pokemon, which immediately makes it an enticing game for millions of collectors around the world. Users can buy Axies, which are NFT pets with unique stats and characteristics, and level them up through a series of games and challenges. Players can battle, raise, and even breed their Axies, which helps to create an ecosystem surrounding the game. There is also a land element, so players can own tokenized plots of land and build their own digital kingdom.
By completing quests, fighting monsters, and growing their kingdom, players can earn Small Love Potions (SLP), which is the native token of the platform. It can be used to breed Axies, which inherit the traits of their parents and can be sold on NFT marketplaces. This is an incredibly unique design, and has been compared to coins in a Mario game having real-world value and tradability.
Unlike other NFT pets, Axies require care and nurturing, and there are protections in place to ensure that too much breeding does not destroy their value.
One of the biggest investors involved in the project is billionaire investor Mark Cuban, who many know for his role on the popular TV show Shark Tank. He helped lead a fundraising round for the platform in May 2021, which has led to greater interest in the game from mainstream media and investors.
In early 2021, the AXS token was created, and it acts as a governance token for the Axie Infinity platform. More importantly, the token also gives the holder a right to a share of the platform’s fees, which makes it a direct bet on the future success of the platform. The token can be both bought on regular exchanges and earned through in-game challenges and quests. The fact that it can be earned through the game is incredibly interesting and unique, as it creates a system in which players can earn a piece of the game that they are playing, similar to if winning Fortnite games gave the player a share of their parent company’s stock.
In the near future, AXS will be able to be staked on the platform, and the higher a user’s score in the games, the greater the yield. This will incentivize investors to play the game instead of simply speculating on its success.
In the future, the team behind the game plans to create a mobile app, implement governance, and finish some of the other game features that are still a work in progress.
In the past month, interest in the game has hit new highs, and there are a record number of players buying and selling Axies on their NFT marketplace. In fact, the Axie Infinity marketplace is the largest marketplace by monthly volume, and is up over 400% from the previous month’s volume. There are now over 250,000 daily active players.
In the past two weeks, the price of the AXS and SLP tokens have skyrocketed in value, mirroring the increase in NFT trading volume. AXS is up 600% in the past two weeks, and SLP is up nearly 1000% in the past two months, and both are significantly outperforming the cryptocurrency market.
The reasoning behind the increase in volume and price is hard to definitively determine. A probable reason is that cryptocurrency enthusiasts got bored with the sideways movement of the market and began turning to Axie as an entertaining way to spend some of their crypto. This is not a new concept, as gambling and money-based games increased in popularity during the Great Depression, when the stock market tumbled in value.
As more users find the game and find it to be a fun pastime, the demand for SLP and AXS will increase, which will lead to higher prices for the tokens. Whether or not this heightened demand will continue is up for debate, but it is clear that Axie Infinity is currently the largest cryptocurrency-based game, and that they are significantly ahead of their competitors in terms of adoption and valuation.
By Lincoln Murr
