According to common belief, video play to earn gaming are about power fantasies: defeating enough dragons to reach level 99, selling enough wolf skins to get a dazzling gold cape, and becoming rich, powerful, or successful in the game’s world—even if you aren’t in real life. Catdicax, a 30-year-old Finnish woman, regarded Runescape as a place where she could work hard and acquire more in-game items. It was also profitable: she had amassed a collection of high-end artifacts over the course of 10 years of play to earn gaming.
Catdicax, on the other hand, became agitated with time. It felt like a waste of time and effort to strive so hard for Runescape’s digital axes and cloaks. In 2019, Catdicax came upon play to earn gaming-Axie Infinity, a blockchain-based video game in which players collect and level up collectible Pokémon-style virtual animals called Axies. Axies, which are represented by NFTs, fight for cryptocurrency tokens that may be used to produce more animals.
The game, however, is about the economics, not the normal play to gain game excitement. Rarer Axies attract expensive premiums, similar to holographic Charizards on steroids: In the year 2020, someone paid $130,000 in bitcoin for the rights to Axie, a stocky, winged angel. Smooth Love Potion, or SLP, tokens earned by beating opponents in Axie-fights may be exchanged for cryptocurrencies and then converted to legal currency.
Catdicax describes herself as having lived “her entire existence in poverty.”
(Catdicax hides her identify behind a screen name because she is terrified of being “targeted” because of her affluence and fears of sexist trolling.) She is currently watching as the value of her digital pets rises from a few dollars to as much as $500 each Axie. Catdicax had ceased to be a bystander. She was a real estate investor. When Axie Infinity became popular in late 2020, she saw that many potential play to earn gaming players who couldn’t afford their own Axies would rush at the opportunity to benefit from hers.
Catdicax started outsourcing her video play to earn gaming to people she met online, the bulk of them were from the Philippines. As part of an Axie loan program—or, in Axie jargon, a scholarship—these players may earn a piece of her profits. Catdicax became engrossed in a new video game power fantasy: being a manager.
“Wow, this is great, I thought. People in the Philippines are making twice as much as they would in a traditional job just by playing this game “She clarifies. “I’d want to achieve the same goal. I also wanted to help others.” (In reality, according to an investigation by analytics firm Naavik, only the most skilled gamers earn more than the Philippines’ average daily wage of $41.49, with the majority earning less than the $7.03 daily minimum wage.) That’s before the costs for scholarship managers are removed.)
A new phrase has emerged in the bitcoin industry: play to earn gaming. The term refers to a popular genre of play to earn gaming that use blockchain technology to reward players with digital items that have real-world—or, at the very least, crypto-world—monetary value. Also featured are Alien Worlds, Splinterlands, and Uplands. The most well-known of the three is Axie Infinity, which was created by Sky Mavis from Vietnam.
The business is booming: According to DappRadar, a cryptocurrency analytics firm, gamers spent more than $2.32 billion on blockchain-based unique gaming goods in the third quarter of 2021. Andreessen Horowitz’s venture capital grantees have poured millions of dollars into the field, including a $152 million round in Sky Mavis in October. Hundreds of thousands of individuals play at any one moment, which is possibly the most important feature: As of August 2021, it had 1.8 million daily users, according to Axie Infinity.
When Axie Infinity was launched in 2018, the sole cryptocurrency component was a connection between Axies and NFTs, which are one-of-a-kind units of money created on the Ethereum blockchain. The SLP tokens were then released in late 2019 by Sky Mavis, who chose to allow players to harvest them in-game rather than sell them to users. Sky Mavis cofounder and COO Aleksander Leonard Larsen believes his company is seeking to upend the economic paradigm of online gaming by using bitcoin technology. “Other play to earn game firms are always aiming to extract as much money as possible from players,” Larsen continues, alluding to play to earn gaming with business models focused on consumers buying unique things or features. Axie Infinity and other play to earn gaming, on the other hand, he claims, reward talented players with valuable digital products.
Even better, these assets are saved in the player’s bitcoin wallet, not merely as numbers on an MMORPG server. SLPs and Axie Infinity’s other currency, AXS, are ERC20 tokens, hence owning an Axie requires owning an NFT. Sky Mavis has been steadily building a monetary policy that seems to be aimed towards avoiding token oversupply, almost like a private central banker. The company has cracked down on those who establish multiple accounts, reduced the number of tokens accessible in non-fight mode, and made it more difficult to get tokens in general.
Analysts talk about “Axie overpopulation” causing inflation in non-ironic terms. (The main problem, it turns out, is that the scumbags are eternal.) In November, Sky Mavis launched Katana, an automated cryptocurrency market maker that allows Axie Infinity tokens to be swapped for ether, creating a low-cost, direct connection between the game and the growing realm of cryptocurrency-fueled decentralized finance, or DeFi.
Few players would highlight the game’s playability when asked what keeps them coming back to Axie Infinity. In a May survey, Sky Mavis founder Jeff Zirlin asked his Twitter followers what they were most excited about, and 48 percent replied “the economy.” Axie Infinity’s job market is flourishing, as is the case in any economy.