Axie Infinity has emerged as one of the most influential play-to-earn (P2E) blockchain games built on the Ethereum network. Developed by Vietnamese studio Sky Mavis and launched in March 2018, it combines elements of Pokémon and digital pet games, offering players a unique experience where entertainment meets economic opportunity. In this comprehensive overview, we explore the core mechanics of Axie Infinity, the role of its native token AXS, market dynamics, security developments, and its evolving economic model.
What Is Axie Infinity?
Axie Infinity is a blockchain-based online game centered around collectible creatures called Axies. Each Axie is a non-fungible token (NFT) compliant with the ERC-721 standard on Ethereum, making every creature unique and tradable across markets. Players can collect, breed, raise, and battle these digital pets against others in real-time combat.
Beyond gameplay, Axie Infinity enables users to earn cryptocurrency through participation. The ecosystem revolves around two primary tokens: Axie Infinity Shards (AXS) and Smooth Love Potion (SLP).
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Understanding AXS and SLP Tokens
AXS – Governance and Utility
AXS serves as the governance token for the Axie Infinity decentralized autonomous organization (DAO). Holders can stake their tokens to participate in protocol decisions, propose changes, and vote on upgrades. Additionally, staking AXS offers financial incentives through rewards distributed from newly minted tokens.
With over 30 million AXS already staked across platforms, annual percentage returns (APR) have reached approximately 61%, making it an attractive option for passive income seekers within the Web3 space.
SLP – In-Game Currency
SLP is earned by completing daily quests and winning battles. It functions primarily as a breeding cost—players must spend SLP to create new Axies. While not used for governance, SLP remains vital to the in-game economy and is freely tradeable on major cryptocurrency exchanges.
The Ronin Sidechain: Enhancing Scalability
To address Ethereum’s high gas fees and slow transaction speeds, Sky Mavis developed Ronin, an Ethereum sidechain optimized for gaming. Launched in 2020, Ronin allows fast, low-cost transactions essential for smooth gameplay and NFT trading.
All Axie-related activities—including battles, breeding, and marketplace trades—occur on Ronin. Users connect via the Ronin Wallet, ensuring seamless interaction with the ecosystem.
However, in March 2022, Ronin suffered a major security breach when attackers exploited vulnerabilities in its cross-chain bridge. Approximately 173,600 ETH and $25.5 million in USDC** were stolen—totaling over **$625 million, one of the largest hacks in DeFi history.
The attacker was later attributed to the Lazarus Group, a state-sponsored hacking collective. Although only about $30 million has been recovered so far, Sky Mavis acted swiftly:
- Restored all user funds lost in the attack.
- Restarted the network three months post-breach.
- Conducted multiple audits with leading firms like Verichains and Certik.
- Implemented enhanced validator structures and monitoring systems.
To cover losses, Sky Mavis allocated $216.5 million** for victim compensation and raised **$150 million from Binance to support recovery efforts.
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AXS Tokenomics: Supply, Distribution, and Economic Model
The total supply of AXS is capped at 270 million tokens, all minted at genesis. As of now, around 83 million AXS are in circulation. The distribution follows a structured allocation designed to balance team incentives, community rewards, and long-term sustainability:
- 20% – Player rewards (play-to-earn incentives)
- 29% – Staking rewards
- 21% – Sky Mavis (development team)
- 11% – Public sale
- 8% – Ecosystem fund
- 7% – Advisors
- 4% – Private sale
Token releases followed a 65-month vesting schedule ending November 4, 2020, detailed in the project’s whitepaper. This gradual release aimed to prevent market flooding and promote stable growth.
Community and Market Impact
Axie Infinity boasts one of the strongest communities in blockchain gaming:
- Over 400,000 Facebook followers
- Nearly 1 million X (formerly Twitter) followers
- More than 1 million Discord members across regional servers
At its peak in 2021, the game reported 2.8 million daily active users (DAU) and facilitated over $3.5 billion in marketplace transactions. Its success helped popularize the P2E model globally, especially in regions like the Philippines, where players used earnings as supplemental income.
Founding Team and Development Milestones
Sky Mavis was co-founded by Trung Nguyen, Tu Doan, Aleksander Larsen, Jeffrey Zirlin, and Andy Ho. Inspired by the success of CryptoKitties, Nguyen began developing Axie Infinity in 2017. The beta launched in 2018, laying the foundation for what would become a pioneering force in blockchain gaming.
In October 2021, Axie Infinity secured $152 million in Series B funding** led by Andreessen Horowitz, valuing the company at **$3 billion. At that time, daily active users exceeded 2 million, and cumulative sales neared $2.3 billion.
Frequently Asked Questions (FAQ)
What is AXS used for?
AXS is used for staking, earning rewards, and participating in governance decisions within the Axie Infinity DAO. It also allows holders to influence future development through voting.
How can I buy AXS tokens?
You can purchase AXS on major cryptocurrency exchanges such as OKX, Binance, Coinbase, and Kraken using ETH, USDT, or other supported currencies.
Is Axie Infinity still profitable to play?
While profitability varies based on market conditions and entry costs, many players continue to earn through staking, breeding Axies for sale, or participating in special events. Lower entry barriers now make it more accessible than during its 2021 peak.
What happened during the Ronin hack?
In March 2022, hackers exploited a vulnerability in Ronin’s cross-chain bridge, stealing over $625 million in ETH and USDC. All affected users were reimbursed, and security protocols were significantly upgraded.
Can I stake AXS for passive income?
Yes. By staking AXS through official channels or trusted platforms, users earn additional tokens with an estimated APR of up to 61%, depending on network conditions.
Where can I track AXS price and market data?
Real-time AXS price charts, market cap, trading volume, and historical performance can be monitored on platforms like CoinMarketCap, CoinGecko, and directly through crypto exchange dashboards.
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Final Thoughts
Axie Infinity remains a landmark project in the evolution of blockchain gaming. Despite facing significant challenges like the Ronin hack, its resilient community, robust tokenomics, and innovative use of NFTs and DeFi principles underscore its lasting impact.
As interest in digital ownership and player-driven economies grows, Axie Infinity continues to shape how we think about gaming, finance, and decentralized governance—all powered by blockchain technology.
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