The transition to a decentralized economy is gradually taking shape with multiple projects coming on board. The gaming industry is one of the segments benefiting from the transition and while some seem to be missing the mark, a new game called Axie Infinity seems to have gotten things right.

What is Axie Infinity?

It is an NFT and blockchain game that was launched in 2018 by Trung Nguyen, a Vietnamese programmer, Aleksander Larsen, and Jeffrey Zirlin. The three founded the project in 2018 after realizing that early attempts at blockchain-based crypto games failed to implement sustainable models that could generate long-term value. The founders sought their inspiration from Crypto Kitties, and this is evident in the mechanics behind the little in-game creatures called Axie.

There are 9 types of Axie and each type has specific traits just like Pokemons, with each trait having an advantage over the other. They can also be bred and traits can be passed down to offspring through a coded probability, which means they might or might not be passed down. Note that some of the traits or attributes can be more attractive than others. They are essential for securing a win during combat and the Axie fight in a team of three. Selecting the right attributes is the difference between a win and a loss.

The tokenomics of the Axie Infinity platform

If a team of Axie wins a battle, they earn Small Love Potion (SLP) tokens which are necessary for breeding. Axie can only be bred 7 times and this is essential for maintaining a balance on the platform. Each reproduction requires more SLP than the previous one. Unlike most video games which take money from the users, Axie Infinity allows users to earn redeemable tokens when they play.

The rewards are issued in the form of SLP, as well as the sale of bred Axie that you do not need to use in the game. One can earn more than $1,000 depending on the quality of the Axie offspring which will likely fetch a higher amount if it has highly desirable traits. The earnings also depend on the price of SLP and the amount of time spent playing the game. Note that the SLP used to breed new Axie will be burned.

To put the potential earnings into perspective, early participants benefited the most, such as a Philipino gamer that managed to buy two houses earlier this year with the gains that he earned from the game.

AXS tokenomics and its role in the game

Although SLP is an essential part of the game, AXS (Axie Infinity Shards) is the native token on Axie Infinity and it is used for governance. Users can earn AXS when they play the game or purchase it in crypto exchanges. It is currently trading at $41.88, having hit its ATH yesterday of $48.16. AXS  has a maximum supply of 270 million tokens, out of which 60.9 million AXS is in circulating supply. 50% of the AXS tokens were allocated for staking and in-game rewards while 8% was set aside for community growth. 15% of the tokens were allocated to public and private sales in 2020, 7% was allocated to advisors and 20% went to the team.

Source:CoinMarketCap

Note that all the AXS sold to investors was unlocked at the start. As far as its performance is concerned, it was one of the top gainers in the last few days and has worked its way into the top 50 cryptocurrencies based on market cap. It traded at $0.51 on January 1 and recently reached new all-time highs above $32. However, its gains were curtained by the prevailing bear market but it still has a lot of upside potential thanks to its highly innovative and promising platform.