Axie Infinity Review

Axie Infinity was the game that defined play-to-earn. At its peak in late 2021, it had 2.7 million monthly active users, generated billions in NFT trading volume, and created a real economy where players in the Philippines and other developing countries earned meaningful income by playing a game about cute digital creatures.

Then it all came apart.

Axie Infinity is a blockchain-based game developed by Sky Mavis, where players collect, breed, and battle fantasy creatures called Axies. Launched in 2018, it became the poster child of the play-to-earn movement.

The game operates on the Ronin sidechain, an Ethereum-linked chain built specifically for Axie to reduce gas fees and improve transaction speed. Players earn Smooth Love Potions (SLP) through gameplay and Axie Infinity Shards (AXS) through staking and governance.

Axie Infinity features turn-based card battles where players assemble teams of three Axies. Each Axie has unique stats, abilities, and body parts that determine its combat cards:

• Origins (PvP) is the reimagined free-to-play version with updated mechanics, seasonal rankings, and no upfront NFT purchase required. This is where the competitive scene lives.
• Classic Adventure (PvE) lets you battle through AI-controlled levels to earn experience and SLP rewards.
• Homeland is a land-based gameplay experience where players build, harvest, and craft on virtual plots.

The Origins update was a significant improvement where card abilities feel more balanced, matches are faster, and the energy system prevents burnout grinding. Origins is genuinely a better game than Classic ever was.

On March 23, 2022, hackers from North Korea's Lazarus Group exploited the Ronin bridge, the connection between Ethereum and Axie's dedicated Ronin sidechain, stealing approximately 173,600 ETH and 25.5 million USDC, valued at roughly $625 million. It was one of the largest cryptocurrency hacks in history.

The hack wasn't even discovered until March 29, six days later, revealing serious security shortcomings. Sky Mavis had reduced the number of validators to just nine, with a threshold of only five needed to approve transactions.

Sky Mavis raised $150 million in an emergency round led by Binance to reimburse all affected users. The Ronin bridge eventually reopened in June 2022. Full reimbursement was completed, a move that, despite the security failure, demonstrated real accountability.

The hack accelerated problems that were already building:

SLP Death Spiral

Smooth Love Potion suffered from hyperinflation. The game was minting far more SLP than was being burned through breeding. SLP crashed from a peak of ~$0.36 to under $0.005, a 98%+ decline that destroyed the earning potential that was the game's primary appeal.

The Scholarship Collapse

Axie's most celebrated innovation, investors lending Axie teams to players in developing countries, proved unsustainable. When SLP earnings dropped below minimum wage levels, scholars left. The economics were dependent on constant new entrants buying tokens.

At its peak, the Philippines saw Axie income taxed by the Bureau of Internal Revenue. By 2023, most scholarship programs had wound down completely.

AXS Token Decline

AXS peaked at approximately $165 in November 2021. The subsequent 95%+ decline burned investors, even accounting for broader market conditions.

Player Exodus

Monthly active users fell from 2.7 million at peak to under 400,000 by mid-2022, and continued declining to tens of thousands by 2023-2024.

Several structural problems made Axie's economy unsustainable:

1. Inflationary reward tokens meant SLP had no effective supply cap, and breeding burns couldn't keep up with gameplay emissions
2. Value extraction vs. creation was a core issue since most players were extracting value (selling SLP) rather than creating it
3. The game wasn't fun enough because Classic was repetitive and shallow for hours of daily play
4. Geographic concentration was a risk since heavy dependence on Philippines-based players created systemic vulnerability
5. High entry cost of requiring $600+ to start playing filtered for investors rather than gamers

Recognizing that Axie alone couldn't sustain the ecosystem, Sky Mavis pivoted toward building Ronin into a multi-game blockchain. This proved to be the smarter strategy:

• Pixels, a farming/social MMO, became one of the most active web3 games after migrating to Ronin
• Several other studios began building on Ronin, attracted by its gaming-optimized infrastructure
• The Ronin chain developed its own identity beyond just "the Axie chain"

This pivot is arguably Sky Mavis's most important contribution to the space because the infrastructure matters more than any single game.

AXS (Axie Infinity Shards)

• Total Supply: 270M tokens
• Utility: Governance voting, staking, breeding fees
• ATH: ~$165 (November 2021)

SLP (Smooth Love Potion)

• Supply: Uncapped (inflationary, burned through breeding)
• Utility: Required for breeding Axies
• Status: Essentially worthless, down 99%+ from ATH

Sky Mavis is the Vietnamese game studio behind Axie, founded by Trung Nguyen (CEO) and Aleksander Larsen (COO). 200+ employees.

Investors include Andreessen Horowitz (a16z) ($152M Series B lead), Paradigm, Animoca Brands, Binance, and Samsung Next.

Axie proved that blockchain technology can create real economic value through games, but also proved that pure play-to-earn economics are unsustainable. The industry has since shifted toward:

• Free-to-play with optional NFT ownership (no mandatory purchase)
• "Play and earn" rather than "play to earn" (modest, sustainable rewards)
• Gameplay-first design (the game must be fun independent of earning)
• Conservative token emission (avoiding SLP-style hyperinflation)