Update 9/12/21: SEC of the Philippines issues advisory against dealing with non-registered foreign entities, organizations, and corporations. Click here.
Axie Infinity is a story you probably have heard about.
It’s so popular that a lot of people are talking about how to make money playing that game on the internet.
Adding to the hype is a report that a player from the Philippines claims to have bought two houses using in-game profits from playing Axie Infinity. Source.
Also, another player from the same country is said to have bought appliances, a gaming computer, and a car just by playing the game. Source.
All you have to do is play the game to get all of those things. How cool, right?
If Axie Infinity has caught your attention and wants to invest in it, you need to read this review first.
What is Axie Infinity? How do you earn money playing the game? Is Axie Infinity legit or a scam? Is it not a Pyramid or Ponzi Scheme?
Let’s start with the basics. Use the Table of Contents to navigate faster.
Table of Contents
What is Axie Infinity Game?
Axie Infinity is a blockchain-powered online game where players battle cute pet monsters called Axies to earn a cryptocurrency called Smooth Love Potion (SLP), which can be sold for cash or used to breed more Axies.
It’s a play-to-earn game on the NFT running on the Ethereum blockchain. NFT stands for Non-Fungible Token, a blockchain data unit. Each axie in the game has its own NFT to differentiate it from the others.
Axies come in different body parts, including aquatic, beast, bird, bug, plant, and reptile parts. Axies can have any combination of body parts from any type of class, making them highly variable and often rare and unique.
The game can be played on phones and PC.
Based on Token Terminal data, the game’s revenue in the last 30 days was an eye-watering $348.6 million. It is currently the top-earning crypto app, hands down.
Who Created the Axie Infinity Game?
Sky Mavis is the developer of the Axie Infinity game. It’s a game studio founded in early 2018 that specializes in technological advances. It has its headquarters in Ho Chi Minh City, Vietnam, and employs around 40 full-time employees.
Trung Nguyen and Aleksander Larsen co-founded it.
What is Axie Infinity Shards (AXS)?
Axie Infinity Shard (AXS) is the governance token in Axie Infinity. AXS holders can earn rewards by staking their tokens, playing the game, and voting in key governance votes. You can also earn AXS by participating in Axie Infinity Universe games and creating user-generated content.
AXS (together with SLP) token is also used in breeding your axies. Currently, the AXS token is trading at $70.78. Figures from CoinMarketcap say the crypto token is valued at $4 billion with a fully diluted valuation of around $19.2 billion.
Those numbers are more than enough to make it to the top 50 cryptocurrencies in the market.
What is a Smooth Love Potion (SLP) Token?
Small Love Potion (SLP) tokens are earned by playing the Axie Infinity game. It is an ERC-20 token that can be traded for another cryptocurrency and then converted to cash. It is also used to breed new axies.
SLP rewards for adventure and daily quest are maxed at 75; down 50% from a month ago. Based on CoinMarketcap, there are 1,494,073,022 SLP’s in circulation. SLP token is priced at $0.1562 as of this writing.
Why Axie Infinity is so popular?
Combining cute pictures with fun gameplay; Axie Infinity developers have discovered the perfect formula to create the most buzz. However, it’s fair to say that the game’s economy is largely responsible for the game’s widespread popularity.
Playing in the adventures and arena will earn you SLP tokens. Also, you can also breed new axies to sell in the marketplace. If you play full-time, you can earn $700-1000 per month.
For a developing country like the Philippines, it’s more than enough, especially during a pandemic. Currently, over 40% of players are based here.
Featuring real Axie Infinity players, such as those who made money solely from playing the game, only further increased the game’s popularity, thanks to the mainstream media.
How to Start
Axie Infinity requires you to have 3 axies to play the game. The lowest price of an axie doesn’t fall below $200 in the marketplace. So you’ll need around $700 as an initial investment for this game.
Take note. What you are getting from this low investment range are axies with low stats and abilities. Low stats and abilities mean a slow return of your capital.
Think again before investing in this game. The price isn’t cheap. I’m not recommending you join this yet. I’m just showing you the process of how to get started with Axie Infinity.
So, for everyone’s convenience, here are the quick steps to start playing this game:
- Download a digital wallet like MetaMask and load it with some ETH. You can acquire ETH from Coinbase, Binance, or depending on your country.
- Download Ronin wallet.
- Deposit ETH to Ronin using the Ronin bridge.
- Acquire at least 3 Axies from the Axie market.
- Login with MetaMask here and setup an email/password
- Download the application here. Click “Play Now” in the top right.
- Learn how to play from guides like this and fan sites like Axieworld.
Watch the video below and follow his tutorial.
Axie Infinity Scholarship: What is it and How it Works
So, you don’t have enough money to buy 3 axies? Worry no more. Just look for Axie Infinity Scholarship.
In Axie Infinity, a scholarship is a free Axie team given to a scholar by a manager or breeder. To earn money, the scholar will use these Axies to play the game and take a percentage of the earnings.
Please be aware. This is not an official in-game feature and is done outside of the game client or dashboard.
In the Axie community, scholarship programs are popular because some players or breeders have a lot of Axies but cannot use them to earn SLP (use of multiple accounts isn’t allowed). Also, some aspiring players want to play but cannot afford a starter team.
How Axie Infinity Economy Works
According to this research, people play video games for relaxation, opportunities to exert control, enjoyment, creativity, socialization, prevent boredom, challenge, and achievement.
However, this is not the case for Axie Infinity.
Axie Infinity’s economy revolves around this lone motivation; play to earn money. The game’s executive didn’t deny this.
It seems everybody is joining in with the ultimate goal of becoming a seller. In other words, everyone joins hoping to make a profit.
To put it simply, the game economy works like this; buy axie from the current players, play to gain SLP and breed, and sell axie to the new players. In a period of more or less 2 months, new buyers of axies are expected to be sellers.
What’s wrong with Axie Infinity’s game economy?
The economy is so wrong that it is financed solely from the investments of new players. If you are a new player, you will buy axies in the marketplace from the people ahead of you. Then, you will start playing with your axies so you can earn SLP coins. You may convert your SLP tokens to cash or use them to breed more axies.
After breeding, you can sell your axies to the new players in the marketplace.
If you examine closely how Axie Infinity’s game economy works, you’ll notice that the incentives of the current players rely on the incoming players.
Let me explain this to you.
The value of the Smooth Love Potion token is dependent on the number of breeding in the game. The more the current players are breeding, the higher the demand for SLP.
Don’t confuse yourself. Traders (those who buy and sell SLP in exchanges) have no effect on the economy of the game. Those are speculators of the coin.
They buy and sell SLP because they believe it has value (used in the game they don’t play). If SLP has no use, it will just be a shitcoin. No one will trade it. SLP has no use when no new players are coming in.
No market for axies means no need to breed. Hence, no demand for SLP. Its value will be close to zero.
Below is a detailed explanation of SLP’s price that your favorite Axie Infinity endorser failed to explain to you.
Smooth Love Potion Value Explained
For the benefit of all, especially those who are new to cryptocurrency, the SLP issuer should back its token with another cryptocurrency. Holders can then exchange their coins for other coins or fiat. This is called liquidity.
The Axie Infinity game uses ETH (ETHER) to convert SLPs to real money. Sky Mavis must provide ETH to convert SLP to fiat.
So in reality, the price of SLP is dependent on the number of ETH put in the liquidity pool. The lower the ETH, the lower the value of the SLP. The increase in the number of SLPs produced should always be offset with the exact amount of ETH to maintain its value.
However, this isn’t always the case. The number of SLPs in circulation and the ETH in liquidity vary.
For example, the price of SLP is falling due to an increase in the number of SLPs and a decrease in the supply of ETH flowing to the liquidity. This occurs because more SLPs are produced while fewer ETHs are received.
But where do these ETHs come from?
The Ether (ETH) comes from new players buying Axies on the market. Sky Mavis gets a cut of the payments. The company can use the ETH for anything, including the P2E incentive.
In addition, ETHs are taken from the issuance of AXS tokens to the investors of the project as discussed in this subsection.
If there is no ETH in the liquidity, you can’t convert your SLP to cash (SLP-ETH-Stable Coin-Fiat). Its value is zero.
Demand for Axies, Gameplay, and Ponzi-Style Economy
As long as new players are joining the game, current players will breed axies and use the SLP tokens. There is no other market for these new NFT pets except the incoming players.
In other words, the only demand for axies in this game comes from the new players. The supply and demand of SLP are dependent on them. Those people join due to the reward associated with playing these axies.
Besides, why would the current players buy new axies in the marketplace, when they can breed them by themselves? Do you think the incoming players will buy axies NFTs because they are so cute, adorable, and entertaining?
Of course not. The gameplay is boring. The graphics are bad. Axies are expensive. Cut the play-to-earn incentives and this game is dead.
Sure. There are people who bought NFTs for satisfaction, achievement, pride, or whatsoever. But, in the case of Axie Infinity, NFTs were bought because these are requirements to participate in the money-making scheme.
Did you notice that the game is similar to a Ponzi Scheme? A Ponzi scheme is an investment fraud that pays earlier investors with money from later investors.
Based on how the game economy works, it is clear, Axie Infinity is a Ponzi Scheme. Monies coming from new players are used to finance the rewards of the game.
Blockchain and Economy of the Game
The majority of people miss the game’s structure because they mix up the technology with the game’s economics.
Don’t confuse blockchain technology with the game’s economy. These are two completely different things.
The NFTs, as well as AXS, and SLP tokens, are all real. In reality, the game is running in a legitimate technology but operating in a Ponzi-style economy.
Can You Make Money with Axie Infinity?
Yes, you can make money from Axie Infinity. As long as the number of players coming in is larger than the current players, you can get your money back in 2 months. That’s how Ponzi Scheme works.
If you are a scholar, you can grind all day long to get as much SLP as possible.
But, let’s get straight to the point.
Axie Infinity’s business model isn’t sustainable. There will always be a time where new investments are no longer coming in. When that time comes, the scheme will collapse leaving new investors with worthless tokens (fungible and non-fungible).
So think long and hard before investing in this game.
Is Axie Infinity Legit or Scam
Axie Infinity is a Ponzi scheme. It is a scam. It may appear legit but it’s certainly not. The current game’s mechanics reward its current players with money coming from the investments of new players.
People are only interested to spend around $700-$1000 to play the game because they thought they can make a lot of money from it. Sure, you can earn a profit but at the expense of the incoming players. You are indirectly robbing other’s people’s wallets because of your greed.
Straight from the executive’s mouth, Axie Infinity is a Ponzi Scheme. Jeffrey Zirlin, a.k.a Jihoz, Axie Infinity’s Growth lead, said:
As long as as long as there are more players in the world who want to get in right like we can sustain our economy like quite easily.”
Watch the video below for few minutes and you’ll hear a piece of evidence that all the monies flowing to the game are from new players.
How does the Axie Infinity scam work?
Just buy axies from current players, play to gain SLP and breed, and sell axies to new players. Rinse and repeat.
The Axie Infinity game economy is not sustainable. While no one can predict when it will collapse, there will always be a point where cash outflows exceed inflows.
Recently, SLP rewards in daily quests and adventure were reduced by 50%. That means the game has a problem due to the increasing supply of SLPs in the market.
This happens because the money coming in from new investors may not be sufficient to pay the incentives of the current players.
Unless they can convince more people to buy an axie without the intention of making money from it, this Axie Infinity scam game won’t last long.
Moreover, Axie Infinity is also an investment scam.
According to a report from Manila Bulletin, the SEC said Axie Infinity or Sky Mavis is not authorized to operate as a branch, regional area/operating headquarters, or representative office in the Philippines. It also lacks any secondary license to conduct any regulated activity in the said country.
It’s crystal clear. The SEC is looking into Axie Infinity and its parent company. From the initial report, Sky Mavis is promising players a return just for playing the game.
Update 9/12/21: SEC of the Philippines issues advisory against dealing with non-registered foreign entities, organizations, and corporations. Click here.
The abovementioned SEC advisory warned the Filipinos to avoid dealing with non-registered entities that include, among others, play-to-earn gaming platforms. For the record, Sky Mavis is not registered in the Philippines. Hence, the company is operating illegally in this country.
Axie Infinity is a Ponzi Since it Started
Don’t you know that that Axie Infinity game was already a Ponzi since it started? It’s on the white paper.
How did Sky Mavis finance the P2E? Simple. From the issuance of AXS token.
“The play to earn issuance represents 20% of the total AXS supply.” Read the white paper here.
SLPs value didn’t just pop out of nowhere. It was initially financed from the proceeds of the issuance of the AXS tokens.
This means that the initial Liquidity Pool (SLP/ETH Pair) put in Uniswap was taken from the investors of AXS.
If you are one of the early investors who bought the AXS token during its launch and played the game, you must know that the money put into SLP’s was taken from you and other people’s investment.
Still not a Ponzi?
Exposing Axie Infinity’s Shady Business Practices
Were the people behind Axie Infinity manipulating the market for their own gain? Probably yes. Watch the video and see how they did it.
Axie Infinity is a scam. It’s a Ponzi Scheme and an investment scam. Profit from the game comes from the investment of new players. When new players are no longer coming, this scheme will fall soon. Avoid it at all costs.
It’s a pay-to-win and play-to-earn blockchain game that costs a lot of money. Current players receive SLP and AXS crypto tokens that can be redeemed for cash. These incentives came from new players’ investments.
The only motivation why people join this game is its play-to-earn feature. Remove that and this Ponzi game is dead. The game’s graphics are so bad while the gameplay is so boring.
According to the SEC, Sky Mavis or Axie Infinity is not a registered corporation with the Securities and Exchange Commission nor does it have a license to sell or trade securities in the Philippines.
Hence, Axie Infinity is an investment scam.
Scam ang Axie Infinity Huwag Kang Mag-Invest Nito
This portion is written in Filipino to speak directly to my kababayan.
Axie Infinity ay isang Ponzi Scheme.
Walang kinalaman ang blockchain sa economy ng game. Tanggalin mo man o hindi ang blockchain same pa rin ang economy diyan.
Basic lang yan law of supply and demand.
Simple cycle lang pauli-ulit: Buy Axies from CURRENT PLAYERS, Play and Breed then sell axies to NEW PLAYERS.
Sinong bumibili ng Axies? Bagong players. Bakit sila bumibili? Kasi may kitaan. Pag walang kitaan may bibili ba ng mga NFT na yan? Wala kasi wala namang silbi yan.
Pag walang bumibili ng Axies meaning walang breeding, wala ring demand ang SLP sa game. Ibig sabihin nagkakaroon lng value ang SLP kasi may bagong sumasali.
Isa pa. Ang mga current players di na kailangang bumili ng new axies kasi nga pwede silang mag breed. Kaya nga ang demand ng Axies ay mga bagong players lang.
Bumibili lang ang bagong players ng NFT na Axies na yan because of making money hindi dahil gusto nila ang cute na monsters na yan.
Nagkakaproblema na ang developers nito dahil sa dami ba naman ng supply ng SLP dahil sa libreng scholars. Remember ang mga scholars walang initial investments.
Hanggat marami ang sumasali nito keysa current players, the game can sustain. Pero darating din araw babagsak din yan.
Unless may gusto maglaro at bumili ng napakamahal na mga Axies para ma entertain siya, good ang game na to.
Pero wala eh. Napaka boring at panget ng graphics nito.
Ikaw gusto mo bang mag invest sa game na to kahit di kumita? Gusto mo ang game na nakapamahal kasi nag enjoy ka?
Kung majority ng players diyan OO ang sagot, the game can sustain.
Pero I’m 100% certain ayaw mong laruin yan pag walang kitaan.