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{"id":3288,"date":"2022-04-08T15:14:00","date_gmt":"2022-04-08T15:14:00","guid":{"rendered":"https:\/\/scienceandnerds.com\/2022\/04\/08\/axie-infinitys-financial-mess-started-long-before-its-600-million-hack\/"},"modified":"2022-04-08T15:14:01","modified_gmt":"2022-04-08T15:14:01","slug":"axie-infinitys-financial-mess-started-long-before-its-600-million-hack","status":"publish","type":"post","link":"https:\/\/scienceandnerds.com\/2022\/04\/08\/axie-infinitys-financial-mess-started-long-before-its-600-million-hack\/","title":{"rendered":"Axie Infinity\u2019s financial mess started long before its $600 million hack"},"content":{"rendered":"

Source: https:\/\/www.theverge.com\/2022\/4\/8\/23015468\/axie-infinity-blockchain-nft-play-to-earn-game-economics-hack<\/a>
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Last year, Axie Infinity<\/em> was touted as one of the best candidates<\/a> for a mainstream blockchain app. The game, launched in 2018 by Vietnamese developer Sky Mavis, was a massive hit in the cryptocurrency world. It offered full-time job prospects to some players<\/a> and commanded an entry price of over $1,000 at its peak, while Sky Mavis itself was valued at $3 billion after a $152 million funding round led by Andreessen Horowitz. Even more impressively, Axie Infinity<\/em> was supposed to herald a new era of \u201cplay-to-earn\u201d gaming built around crypto tech.<\/p>\n

A year later, Axie\u2019s<\/em> future looks rockier. <\/p>\n

Sky Mavis\u2019 Ronin blockchain suffered a catastrophic hack<\/a> last week, losing over $600 million to unidentified hackers and putting players\u2019 funds in limbo as Sky Mavis froze Ronin transactions. But even before that, Sky Mavis was facing bigger questions about its long-term sustainability. Combining the freewheeling hype market of crypto with the complicated economic workings of a massively multiplayer game, Axie Infinity\u2019s in-game world has spent months trying to avert a financial crisis. And, as it attempts to reinvent itself with a new free-to-play game<\/a>, the situation offers a glimpse at what can happen when the hype hits its limits.<\/p>\n

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Axie Infinity<\/em> \u2014 whose creators refer to it as both a \u201cnation\u201d and \u201ca bleeding-edge game that\u2019s incorporating unfinished, risky, and highly experimental technology\u201d \u2014 is sort of like hyper-financialized Pok\u00e9mon<\/em>. Players buy or rent three non-fungible tokens (or NFTs) linked to cartoon axolotls called \u201caxies,\u201d each of which has a set of associated stats and battle cards. Winning battles grants players a token called a \u201csmooth love potion\u201d or SLP, and axies can be \u201cbred\u201d with SLP and a third token called AXS to produce new NFTs.<\/p>\n

Axie\u2019s<\/em> biggest selling point is the chance to turn these tokens into real money. Axies and SLP can be sold for cryptocurrency, and people can earn SLP by either playing the game directly or participating in the \u201cscholarship\u201d system, where they lend their axies to other players and receive a share of those players\u2019 earnings. The result is a kind of tremendously popular in-game capital market<\/a>, where axie-holders can earn currency through investment without necessarily playing the game.<\/p>\n

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