Axie Crypto: A Worthwhile Investment Or Risky Gamble?

Axie Infinity is a play-to-earn cryptocurrency game where players can earn tokens within the game, which can be traded on decentralised exchanges for cash. The game revolves around Pokémon-esque creatures known as Axies, which are non-fungible tokens (NFTs). Players can breed and battle Axies, as well as complete quests and farm resources. The game uses a play-to-earn model where players buy monsters and play to earn non-fungible tokens, in-game currency, and Axie Infinity Shards (AXS). AXS can be used for purchases within the game and can also be traded on several exchanges. While Axie Infinity has seen dramatic price growth in recent months, it is hard to tell if it is a good investment.

Axie Infinity's past and future price predictions

Axie Infinity is an online game that uses blockchain and cryptocurrency concepts to incentivize gameplay. It is one of the most prominent play-to-earn cryptos to emerge during the metaverse boom. Players can buy, sell, and trade non-fungible tokens (NFTs) in the form of cute creatures called Axies. They can also breed and battle Axies, as well as complete quests and farm resources.

In terms of past price predictions, AXS first came onto the open market in November 2020 at a price of $0.18. It then experienced a rapid increase during the crypto boom of early 2021, reaching a high of $10.85 on 28 April 2021. The price fluctuated throughout the rest of the year, ending 2021 at $93.30. In 2022, AXS initially peaked at $97.78 on 3 January but then declined to $42.11 as Russia invaded Ukraine on 24 February. The price continued to drop throughout the year, with the Ronin hack and market crashes causing a further decrease. On 9 November 2022, AXS dropped to a low of $5.84 before making a small recovery to $9.54 on 6 December. However, it fell again, and on 19 December 2022, it was worth about $6.95.

As of 19 December 2022, there were various AXS price predictions for the upcoming years. CoinCodex predicted a short-term decline, with the token potentially falling to $6.42 by 18 January 2023. DigitalCoinPrice predicted more positive price action, with AXS potentially reaching $16.50 in 2023, $24.44 in 2024, and continuing to increase in the following years. CoinsKid's prediction was similar, with AXS possibly reaching $10.61 in December 2023 and $13.60 in December 2024. On the other hand, Wallet Investor was bearish, forecasting that AXS would fall to $0.687 by the middle of December 2023.

It is important to note that cryptocurrency markets are extremely volatile, and price predictions often turn out to be wrong. Therefore, it is crucial to do your own research and carefully consider your risk tolerance and investment goals before investing in cryptocurrencies like AXS.

The pros and cons of the play-to-earn model

The play-to-earn model is a business model that allows gamers to earn real-world money by playing video games. While this model has become popular in the crypto gaming industry, it has its own pros and cons.

Pros of the Play-to-Earn Model

The play-to-earn model has several advantages for gamers and developers:

• Earning potential: Gamers can earn real-world money by collecting and selling in-game assets, such as cryptocurrencies and non-fungible tokens (NFTs), on external marketplaces. This provides an opportunity for gamers to monetise their skills and time spent playing.
• Community building: Games with play-to-earn models tend to foster loyal and robust communities. Players are not only united by their enjoyment of the game but also by the shared goal of generating value.
• Adoption and revenue: Play-to-earn models can accelerate the adoption of emerging technologies, such as blockchain. As more players are drawn to these games, the revenue generated can fund further development, benefiting the entire crypto ecosystem.
• Value creation: Players in play-to-earn games create value not only for themselves but also for the game developers. This two-way value creation can lead to a thriving virtual economy.

Cons of the Play-to-Earn Model

Despite its advantages, the play-to-earn model also has some significant drawbacks:

• Reduced enjoyment: The focus on earning money from play-to-earn games can detract from the enjoyment of playing. What was once a fun activity can start to feel like a chore, especially if players are not earning enough to cover their expenses.
• High entry cost: Play-to-earn games often require players to purchase expensive assets, such as NFTs, before they can even start playing. These upfront costs can be a significant barrier for many potential players.
• Skill and performance limitations: Players may not be skilled enough to earn enough in the game to recoup their initial investment. Additionally, some games impose limitations on how much a player can earn within a certain period.
• Immature infrastructure: Blockchain technology, which is the foundation of play-to-earn games, is still in its early stages. The lack of scale and infrastructure can lead to high upfront costs, fees, and technical issues for players.
• Volatility and risk: The value of in-game assets, such as NFTs and cryptocurrencies, can be highly volatile and subject to market changes. This makes them risky assets to hold, and there is a possibility of an economic bubble forming and eventually bursting.

The Axie Infinity community and its impact on the game's success

The Axie Infinity community has played a significant role in the game's success. As a blockchain-based game, Axie Infinity leverages the power of its community to drive engagement and create a vibrant in-game economy. Here's a closer look at the impact of the Axie Infinity community:

Community Engagement and Player Investment

Axie Infinity has attracted a dedicated community of players and developers who are invested in the game. The game encourages community engagement by allowing players to own their Axies and other in-game assets through blockchain technology and non-fungible tokens (NFTs). This sense of ownership motivates players to actively participate in the game and its ecosystem.

The community has created various tools and resources to enhance the gaming experience and maximise revenue potential. For example, online markets have been established to facilitate the trading of Axies and other in-game items, providing a platform for players to interact and exchange their digital assets.

Word-of-mouth and Community Growth

The Axie Infinity community has been instrumental in spreading the word about the game, especially in Southeast Asian countries like the Philippines, Indonesia, and Vietnam. The community's enthusiasm and positive word-of-mouth have contributed to the game's rapid growth in these regions.

In August 2021, the number of daily active users surged to over a million, with the majority of players hailing from Southeast Asia. This surge in players led to long wait times for users to enter the game, highlighting the community's impact on Axie Infinity's server load.

Feedback and Game Improvement

A robust community provides valuable feedback to the game developers, allowing them to improve the game continuously. Axie Infinity's community has been vocal about their experiences, and their insights have influenced the game's development and growth.

Additionally, the community has played a role in shaping the game's economy and in-game token values. As players actively engage in trading and utilising the in-game tokens, they contribute to the overall health and stability of the Axie Infinity economy.

Collaboration and Partnerships

The Axie Infinity community has also fostered collaborations and partnerships within the blockchain and gaming sectors. The game has attracted well-known partners such as Binance, Ubisoft, and Samsung, enhancing its credibility and recognition within the industry. These partnerships have the potential to bring in more participants and investors, further contributing to the game's success.

The Axie Infinity community has been a driving force behind the game's success and popularity. Through their engagement, ownership, and advocacy, the community has helped establish Axie Infinity as a leading blockchain-based game. The community's impact extends to various aspects of the game, including player acquisition, feedback loops, and economic stability. As Axie Infinity continues to evolve, the community's role will remain crucial in shaping its future trajectory and long-term success.

Axie Infinity's unique features and how it differs from other online games

Axie Infinity is a blockchain game developed by Vietnamese studio Sky Mavis. It is one of the most prominent play-to-earn crypto games to emerge during the metaverse boom. The game features many card-based components, similar to Pokemon, with the key difference being that it integrates the concept of non-fungible tokens (NFTs). Players collect and mint NFTs, which represent axolotl-inspired digital pets known as Axies. These creatures can be bred and battled with each other within the game.

Axie Infinity is built on the Ronin Network, an Ethereum-linked sidechain developed by Sky Mavis. The game's official cryptocurrency is "Axie Infinity Shards/Token" or AXS, and its secondary token is SLP, which crashed in February 2022, losing over 99% of its peak value. The game features an "idle battle" system derived from games like Final Fantasy Tactics and Idle Heroes. Players aim to battle, breed, collect, raise, and build kingdoms for their Axies.

The game has an in-game economy where players can buy, sell, and trade resources they earn in the game. Sky Mavis marketed the game with a play-to-earn model, where participants pay the starting costs and can then earn an Ethereum-based in-game cryptocurrency by playing. Axie Infinity allows users to cash out their tokens every 14 days. This model has been described as a form of gambling, with a volatile market that is overly reliant on new players joining.

One unique feature of Axie Infinity is the ability for players to purchase virtual land and other in-game assets as NFTs. Owners can customize and monetize their parcels of land, generating passive income. There are 90,601 plots of land in Lunacia, with four levels of rarity and five types of land that can be owned by players.

Another unique aspect of Axie Infinity is its governance system. The platform launched a governance ERC-20 token, AXS, which gives holders decision-making power and allows them to vote on operational changes and future developments. The goal is to eventually hand over the management and governance of Axie Infinity to the players, creating a fully decentralized gaming ecosystem.

In summary, Axie Infinity differs from other online games by combining traditional gameplay elements with blockchain technology, NFTs, and a play-to-earn model. It offers players the ability to own, breed, and battle unique digital creatures, as well as providing opportunities to generate income through its in-game economy and virtual land ownership.

The risks and potential rewards of investing in Axie Infinity

Axie Infinity is a play-to-earn cryptocurrency game that has seen dramatic price growth and high revenue, attracting investors. However, there are risks and potential rewards to consider before investing.

Potential Rewards

Axie Infinity is one of the most prominent play-to-earn games, allowing players to earn cryptocurrency tokens within the game, which can be traded for hard cash. The game has generated significant revenue, with players receiving 95% of this revenue. The game also holds the record for the fourth-highest all-time sales in the realm of NFT projects, generating $4.13 billion in all-time NFT sales as of July 2024.

The game's unique combination of standard online gaming and blockchain technology has attracted millions of players, and it continues to be actively developed. The Axie Infinity Shards (AXS) tokens have utility within the game and can be used for purchases. AXS tokens can also be staked, and holders can claim rewards for playing the game and participating in governance votes.

Risks

One of the main risks of investing in Axie Infinity is the highly volatile nature of the cryptocurrency market. AXS tokens are subject to significant price fluctuations, and there is no guarantee that the price will increase. Additionally, as with any cryptocurrency, there is always the risk that a better alternative will quickly replace it.

Another risk to consider is the cost of participation in the game. Axie Infinity is not geared towards investors but rather encourages token holders to participate. The price of Axies, the in-game creatures that players own, has increased significantly, with the minimum price for an Axie currently around $200. This means that new players need to spend a substantial amount to acquire the required number of Axies to participate in the game.

Furthermore, Axie Infinity has faced security issues, with its blockchain, Ronin (RON), falling victim to the largest crypto hack in history in April 2022, resulting in the loss of more than $600 million worth of crypto.

In conclusion, while Axie Infinity offers potential rewards for investors, it is important to carefully consider the risks involved. The volatile nature of the cryptocurrency market, the high cost of participation, and security concerns are all factors that investors should take into account before making any investment decisions.

Frequently asked questions