Crypto's hottest game is about an economic whirlpool

Eight months ago, the management consultant Ansel Gravelle, based in Toronto, stumbled across a video game called axie infinity , which promised to pay the players cryptocurrency for the fight against digital monsters. After paying the $ 1,000 entry fee and playing for over a month, Gravelle realized that he could earn more money in other ways.

Together with a friend, the 24-year-old founded a company in July to finance players who cannot afford to do this, and they take up to be up to half of their income for the game up to half of their income.

"If you have the capital, you can award a scholarship within a few hours," says Gravelle. He hopes to work full -time in this shop called Axiefacts from January.

gravelle is hardly alone-more than any other application, axie and its competitors have become the most popular gates for the introduction of the public in the cryptocurrency markets and lay the building blocks for new online worlds and financial systems that are driven by tokens that are traded in digital ledgers. The game has produced an entire economy, crammed with companies such as Gravelle who rely on it to survive.

axie , the loose is based on the Pokemon franchise, rewarded players with tokens for winning battles and completing quests.

Many players in developing countries rely on wealthier benefactors to pay the entry costs of three monsters or axies, not fungal toilet stones that can be bought and sold freely on stock exchanges. Sponsors usually take 30 to 50 percent of the income of a player.

players can also use tokens to breed new monsters that can be sold to new players who want to get into the game.

But video game analysts recently started the sustainability of axies business, which is largely dependent on the growth of new players in order to remain in balance.

While video games have long contained their own currencies, axie and other cryptocurrency -based titles enable players to convert their assets into real money through officially sanctioned channels. This function carries the risk that the players will have the majority of their profits pay, instead of recirculating them through the game economies.

sky Mavis, the company that has developed axie , has recently tried to contain a free fall of the price of Smooth Love Potion (SLP), a cryptocurrency token that players earn in the game.

The players have increasingly decided to exchange the SLP tokens they win in the game for local currencies instead of investing them again in the breeding of new monsters to sell them to other players, said the game developer. This contributed to a flood of SLP token in the game.

The slump has affected players in developing countries such as the Philippines who joined axie after the first users pretended to give up their jobs to make money with the game.

In the past three months, all apart from the most experienced axie players, according to an analysis by the video game research company Naavik, deserve under the average daily wage in the Philippines. Some minimum players fell under the minimum wage from September after they had taken into account the cuts of the sponsors.

sky mavis said that the wages of the game had served as "a leash for hundreds of thousands of people in the Philippines" during the pandemic, and argued that the Naavik report "the community is too strongly discounted and concentrated on the players that play". axie only to achieve an income ”.

The number of axie The daily users rose by more than four times to 2 billion in October in less than three months, according to the figures published by Sky Mavis. Analysts have now started looking for signs of slowing down growth.

"You could 50 billion, but if the growth line is flat, no income is generated," said Lars Doucet, a video game consultant who wrote the Naavik research paper.

axies The performance could have a major impact on dozens of start-ups that have collected money from risk capital providers to develop games that reward players with potentially lucrative cryptocurrency tokens. The games have forced the games to behave more than traditional titles to behave like central bankers and make optimizations in order to control inflation and other economic variables.

sky mavis confirmed axie , relies on new market participants for growth and promised to publish new functions that will make the game more attractive for people who are not primarily motivated by the payment of their income.

axies The biggest supporters have promoted an optimistic vision for the game and proposed it as an antidote to the economic models of traditional games because it pays people to play. In October, Andreessen Horowitz's cryptocurrency fund made one of his biggest investments in Sky Mavis so far and led a $ 152 million financing, which the company rated $ 3 billion.

"What we will see from here is an incredible growth of the number of people who actually work in the meta persona," said Arianna Simpson, partner at Andessen's cryptocurrency funds, and referred to an burgeoning group of virtual worlds.

sky Mavis plans to sell more than 90,000 virtual properties in the game that can be traded as non -fungal tokens, and will enable external developers to create new games in the game axie universe.

sky Mavis, which restricts 4.5 percent of the transactions within the game,, according to the data provider TOKEN Terminal, almost exclusively generated income of $ 1.2 billion last year. The developer has promised to hand over the keys to the players of the game, although he has not set a precise schedule for the transfer.

In the meantime, a home industry of financial sponsors has made some of the greatest rewards from the increasing popularity of the game.

A token spent by Yield Guild Games, an early sponsor of axie players in the Philippines, has increased to a market value of almost $ 800 million within a few months. YGG, which also collected money from Andessen, had almost $ 850 million in assets that are largely bound by axie and other cryptocurrency games from September.

The potential for future income led Akhil Jindal, an engineer and computer scientist, to set up a doctoral program in the Boston area this month to found a cryptocurrency playing partnership, proof of game.

Proof of Game sponsors more than 700 players in axie and similar games, according to his website, which says that the company wants to promote "positive, sensitive and responsible citizens of the meta verse".

"This is a speculative social experiment," said Jindal. "If it works, it will change the game, and if it doesn't work, there will be many lessons to learn."

Aleksander Larsen, co -founder of Sky Mavis, said axie had not yet experienced the players who left the game.

axie Infinity Shards (AXS), various cryptocurrency tokens in the game, which represent an ownership participation in the game, have increased to an overall market value of $ 8.8 billion, as speculators demand for part of its growth. Sky Mavis has about 20 percent of AXS tokens.

"I think we will continue to shock the world with what is possible with this cute little pet game," said Larsen. "People have never seen anything like this."