Author name: @nobumei (https://twitter.com/nobu_mei)
<aside> 💡 This page describes the specific GameFi token economy zone.
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In the previous sections, I explained the dApps game and its history. In this section, I will explain the specific token economy with Axie Infinity as the subject.
Axie Infinity ("Axie") is a dApps game that allows players to earn money by playing games.
Players can collect NFT characters, perform battles and tasks, and breed them to increase the number of Axies of different values and rarities to earn money while playing.
This structure, known as Play to Earn, gave rise to GameFi, a term coined by combining the words "game" and "finance. Sky Mavis, the company that developed Axie, is now valued at about $3 billion.
Axie Infinity：https://axieinfinity.com/
In the summer of 2021, Axie rode the wave of the NFT excitement and rose to the position of the world's 5th largest gaming company with revenues of $200M in July and $360M in August. Although its momentum has faded recently, it is in the process of improving its game, having raised $17B in October 2021 from a16z and other world-renowned VC firms.
Axie Infinity Sales Volume Data | Source
Now that you know that Axie's sales are tremendous, let's take a look at how it actually works.
The game is played with an NFT character that looks like a tadpole with legs.　You can earn Smooth Love Potion (SLP), the in-game currency, by putting them into battles.
Axie Characters
Axie battle screen
Since SLP is issued as a cryptocurrency, it can be taken out of the game and exchanged for other cryptocurrencies in a DEX like Uniswap, which can then be sent to a cryptocurrency exchange and converted to dollars. Naturally, you can earn a lot of SLP by winning battles, so owning a strong character will work to your advantage.
To get a strong character, you could either buy a new one from the in-game marketplace or breed two Axie to get a new character. At the time, players were able to earn several hundred dollars a day by playing the game every day with strong characters that could win battles, thus "play to earn" was achieved.
Axie's operations are monetized by taking transaction fees from the marketplace and commissions on breed. The more active the in-game transactions are, the more revenue is generated, thus providing an incentive to provide interesting games to players.
How Axie Works | Source