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Why the Axie Infinity co-founder thinks play-to-earn games will drive NFT adoption – TechCrunch


The popular game to win (P2E) Crypto game Axie Infinity has reached new heights in 2021, with huge spikes in trading volumes and revenue and gaining millions of community members. But as we’re nearly halfway through 2022, a question arises: Does Axie hold up to its hype?

Axie was launched by its parent company Sky Mavis in May 2018, but only gained momentum in the second half of last year.

Its co-founder Jeff “Jiho” Zirlin told TechCrunch that “2021 has been a year of growing and scaling,” while “2022 is a year of building, shipping products, and delivering… ‘better and more accessible gaming experiences’.

Zirlin said he used to go to conferences and talk about Axie until he lost his voice. Now, it doesn’t need to be touted as one of the biggest and best-known games in the crypto space, he said.

“We had this incredible growth cycle that put us on the map, gave us the resources to turn this into a decades-long journey,” Zirlin said. “Right now, I think we’re developing the products that will take us to the next cycle of growth.”

For the uninitiated, Axie Infinity is a crypto-focused gaming universe and platform featuring creatures, or Axies, that players can buy or collect as pets and then use them to battle, breed, and raise crypto rewards.

At its peak, the fully diluted market capitalization (for Axie’s AXS token) was approximately $16.7 billion and its total revenue from in-game purchases and market fees paid was $364.4 million. dollars in August 2021, according to data from Token Terminal. Since its peak, the market capitalization has fallen 19.76% to $13.4 billion and its total revenue has also fallen about 99% to $2.5 million in April 2022, according to the data. .

“Crypto is very cyclical, and sometimes you’re in a growth cycle and other times you have to build,” Zirlin said. “You can’t have exponential growth all the time; there is a refractory period.

Earlier this year, Axie Infinity’s Ronin network suffered an exploit valued at around $625 million at the time, making it the largest crypto heist to date, according to the REKT database. Shortly after the hack, Sky Mavis raised around $150 million in a round led by crypto exchange Binance to compensate victims.

“We made mistakes because we were moving so fast, rushing for more adoption, and I think the whole saga of the past month will be seen as a badge of honor for those who go through it,” Zirlin said. “It’s hard to think of counterfactuals, but the obvious answer here is to invest more in security for Ronin and prioritize that [going forward].”

Even though its market cap and revenue have fallen significantly from their highs, the company is still flying much higher than a year ago – Axie’s market cap has increased by 228.3% and the number of total business increased by 50,950.8% compared to the same period last year. , the token terminal data is displayed.

The game is also attracting new users. Last month, the company released Axie Infinity: Origin, a free-to-play version of the game in an effort to attract more users who might want to test it out first, Zirlin said.

“I think the free start of Axies is an important time for NFTs because people can fall in love with the IP and the universe and try it out and see if it’s for them before taking any huge economic decisions,” Zirlin said.

Over 700,000 Axies are listed on the in-game market – some are as low as $8, or 0.003 Ether, and others are listed for hundreds of thousands of Ether, to billions of dollars (although that doesn’t does not mean that they are bought at this price). price; someone over there is pushing their luck.)

The community had about 45,000 Axie holders on April 24, 2021, and that number had grown by about 5,567% to 2.55 million as of April 24 this year, Zirlin said. The game’s daily active users (DAUs) also increased by 2,926% to 1.15 million from 38,000 users during the same period, he added.

In general, play-to-earn games require an investment ranging from $1 to hundreds of dollars in cryptocurrency to start playing, although some are free to start. The play-to-earn ecosystem allows players to create more value for their investments through in-game activities and rewards like additional cryptocurrency, NFT, or the value of their initial investment increasing. Unlike traditional games, P2E encourages users to earn rewards and exchange items for value, in addition to having fun.

Over the past year, tons of funds have been launched for the crypto gaming industry, from GameStop and Immutable’s $100 million pooled fund for gaming NFTs in February 2022, to the decentralized blockchain TRON creating a $300 million fund to invest in GameFi in August 2021. Most recently. , Framework Ventures announced a $400 million fund focused on blockchain games in April 2022.

Axie wants to digitize the physical world

As Axie heads into the second half of this year, it plans to build its digital game environment to be similar to the physical world, Zirlin said. People will be able to connect to Axie to make friends, socialize, play, compete, but also work and earn a living, he said.

“There’s more spending from the physical world being shifted to digital environments,” Zirlin said. “It might be hard for some generations to appreciate this, but more time has gone in front of screens, so that’s a major shift that makes more people think of the metaverse as a shift from physical to digital.”

Overall, Zirlin expects a major realignment, with players rewarding their emotions and actions through a purely digital environment. The game offers users experiences similar to popular traditional games like Animal Crossing or Pokémon, where players can travel to complete daily quests or battle other Axies, among other objectives.

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