'A Billion-Dollar Crypto Gaming Startup Promised Riches and Delivered Disaster'

"Even many Axie regulars say it's not much fun, but that hasn't stopped people from dedicating hours to researching strategies, haunting Axie-themed Discord channels and Reddit forums, and paying for specialized software that helps them build stronger teams..."

When you could triple your money in a week, a 39-year-old player spent $40,000 at the NFT-based game AxieInfinity. He was hoping that it would become his full-time job. It seems like it was possible for a few weird months last year, but Axie is tied to thecryptocurrencies. The Smooth Love Potion (SLP) token can be earned by winning a game in a larger tournament. The characters, themselves known as Axies, are non-fungible token, or NFTs, which can be traded like acryptocurrencies. The "play-to-earn" video game is a new type of economic phenomenon, according to Sky Mavis Inc. It said on its website that it believes in a world where work and play become one. We want to give our players economic opportunities. Our revolution is welcome. The company, founded in Ho Chi Minh City, Vietnam, four years ago by a group of Asian, European, and American entrepreneurs, had raised more than $150 million from investors by last October. Sky Mavis reported that AxieInfinity had 2 million daily users. An example of what this looked like in practice was provided by Axie. According to Ohanian, the majority of the gaming market will be play-to-earn in five years. Axie is described by the head of Yield Guild Games as a way to create an investor mindset among new populations who would go on to participate in other ways. Andrew Yang, a former Democratic presidential candidate, called web3 "an extraordinary opportunity to improve the human condition" in a discussion on March 2. The Axie economy was in crisis by the time he made his statements. SLP, which had traded as high as 40 cents, was at 1.8 cents, while AXS, which had once been worth $165, was at $56. Sky Mavis had $620 million in Cryptocurrencies stolen on March 23. The bottom fell out of the market. AXS and SLP settled in at half a penny. Instead of illustrating web3's utopian potential, Axie looked like validation for those who believe web3 is a vision that investors and early adopters sell people to get them to pour money into shady financial instruments while hackers prey on everyone involved

The article does credit the company for building its own blockchain (Ronin) to provide cheaper and faster NFT transactions. "Purists might have taken issue with the decision to abandon the core blockchain precept of decentralization, but on the other hand, the game actually worked."

The article chronicles a series of highs and lows.

• "In Axie's biggest market, the Philippines, the average daily earnings from May to October 2021 for all but the lowest-ranked players were above minimum wage, according to the gaming research and consulting firm Naavik."

• Axie raised $150 million to reimburse victims of the breach and repair its infrastructure. "But nearly two months later the systems compromised during the hack still weren't up and running, and the executives were vague about when everything would be repaired. (A company spokesperson said on June 3 that this could happen by midmonth, pending the results of an external audit....):

• Days after the breach it launched Axie: Origin, a new alternate version with better graphics/gameplay — and without a cryptocurrency element.

• About 75% of the 39-year-old gamer's co-players have "largely" stopped playing the game. "But at least one was sufficiently seduced by Axie's potential to take a significant loan to buy AXS tokens, which he saw as a way to hedge against inflation of the Argentine peso. The local currency has indeed lost value since he took out the loan, but not nearly as much as AXS."

The article was shared by long-time Slashdot readerParker Lewis.