What is Axie Infinity (AXS)?
- Author
- CRYPTO PORT Editorial
- Published
- Updated
- Reading time
- 6 min
In short
Axie Infinity is a blockchain game developed by Sky Mavis in Vietnam. Players own characters called Axies as NFTs and earn tokens by battling and breeding them; in 2021 it became the best-known example of a play-to-earn game. AXS is its governance and staking token.
Key points
- Built an in-game economy where characters are tradable, breedable NFTs
- Uses two tokens: AXS for governance and SLP as the in-game reward
- Built its own sidechain, Ronin, to keep transaction costs down
- In 2022 the Ronin bridge was attacked, causing a major loss of funds
Definition
A game in which characters are owned as NFTs and tokens are earned through battling and breeding, along with AXS, the token tied to its governance.
Axie Infinity was, in effect, an experiment in what happens when in-game items can be traded on outside markets. Characters are NFTs with clear ownership and can be sold outside the game, and tokens earned through play can be exchanged for other assets.
Its economy ran on two tokens. SLP, handed out as battle rewards, was consumed when breeding new characters. AXS served governance and staking and was also required for breeding. Because breeding expanded supply, keeping that economy in balance became the central operational problem.
Ethereum fees were a barrier, so Sky Mavis built a dedicated sidechain called Ronin. Running it with a small validator set cut costs and latency sharply but left decentralisation limited. In March 2022 an attacker gained control of the keys to the bridge between Ronin and Ethereum, causing one of the largest losses seen up to that point.
Following that breach and the collapse of the reward economy under oversupply, the team reworked game and reward design and expanded the validator set. The project is now cited as a reference case in both the economic and the security design of blockchain games.
Watch out for
- · The reward token's supply grew continuously, so changes to the economic design directly affected holders
- · Sidechains and bridges run by a few validators can suffer huge losses if key management is compromised
- · The game's continuation depends on the company's business decisions, and so does the utility of its NFTs
Frequently asked questions
Does holding AXS give an advantage in the game?
No. AXS is used for governance votes, staking and certain in-game actions; it does not itself confer battle strength. Playing requires the character NFTs.