Axie Infinity, Play-to-Earn’s Poster Boy, is Nearing Collapse
Axie Infinity, which rode the NFT bubble to soaring heights in 2021 is nearing collapse. AXS, the game’s cryptocurrency token, has fallen from an all-time high of $160.36 down to $20.86, as of the most recent day of trading. This represents a fall of over %80. SLP Tokens, the game’s version of energy many are familiar with from mobile games, have reached a value near $0, with one unit of SLP pricing at $0.004.
If you’re not aware of how Axie Infinity works, it is essentially a tokenized version of Pokemon, sans the polished mechanics. Everything in the game is tokenized into cryptocurrency, from the game itself to the energy (SLP) required to play the game, and all these tokens directly translate to a dollar amount.
Axie is the “pioneer,” or at least the most successful example of the play-to-earn model, which ended up creating games that were designed less like recreational activities, and more like jobs, complete with quotas, performance targets, mid-level managers, and buy-in costs, as we’ve written about previously.
Axie was already treading water after a $600 million dollar heist in late March. Ronin Network announced a hacker was able to utilize an exploit and drain at least $600 million dollars’ worth of tokens from the network. At the time of the hack, Ronin’s network token fell over 25% while the company simultaneously locked withdrawals from their games while they investigate.
Following a general market downturn, Axie is showing signs of collapse. The fundamental economy of the game, SLP tokens, has essentially lost all value, and the internal market of Axie is stuck in an inflationary loop, with all the relevant tokens (AXS, SLP, etc.) cratering in value even as Ronin works furiously to reverse the slide.
Ronin is confident the game can bounce back and is pushing ahead with spin-offs, including a mobile launch and expansions.