Jeff Bezos famously said “your margin is my opportunity,” referring to the way Amazon grew market share by lowering prices and eating into competitor margins. In the transition from web2 to web3, a similar trend is taking shape, but this time the opportunity for entrepreneurs is the exorbitant take rates imposed by the platforms that dominate web2. In web3, ownership and control is decentralized thanks to new innovations like non-fungible tokens (NFTs). This means that a new generation of internet services and products can be built so that the value of what is being created can be shared by the builders, creators, and users of the services directly with each other, rather than going to the platform middleman. This is rapidly changing the web as we know it, and nowhere is this more obvious and exciting than in gaming.
Crypto gaming has been for years considered a niche experience designed for a very small group of early adopters. In theory, applying the values and ethos of the web3 space—reclaiming power and wealth from some of the platforms that have been historically extractive and distributing back to the people participating in these ecosystems—made a lot of sense for gaming. In practice, scalability challenges of the technology that impacted speed and costs, not to mention several difficult crypto cycles, made it nearly impossible to build a new kind of decentralized game that more people could participate in.
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The ability to build a fun, engaging consumer experience, while also scaling infrastructure in a way that can support extraordinary growth, is extremely rare, and that’s what is so exceptional about the team at Sky Mavis. Their brainchild, Axie Infinity, has experienced breathtaking growth this year. Like so many who are building in crypto, the Sky Mavis team remained dedicated to their vision of bringing economic freedom to the world by making crypto fun, accessible, and empowering for everyday people, even through periods in which crypto was deeply unpopular. They also realized that in order to bring the game to millions of people they would need to develop technological solutions to support massive growth, and successfully developed the Ronin sidechain. Historically, crypto has favored technical people, and onboarding experiences for non-technical people have often felt very intimidating. Axie Infinity introduced a new way for anyone to turn their time into money through Play-to-Earn (P2E), a mechanic that allows gamers to transform their skills and time into earnings and distribution rights for tokenized in-game items.
Axie Infinity is a digital pet universe and player-owned economy consisting of a breeding game, a battle game, and a land-based Clash of Clans style game. The game’s consistent, unifying thread is the Axie, an NFT character that is used across games and can be traded on secondary marketplaces. Players earn SLP tokens by winning battles in the Axie Infinity game, and they use a combination of SLP and the AXS governance token to breed new Axies. Thanks to the team’s persistence, hard work, innovation, and an unwavering commitment to their mission, Axie Infinity is now the fastest growing game in the world. As a result, Sky Mavis and Axie Infinity have catapulted P2E into the mainstream, and are completely redefining the gaming category in the process.
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The Axie growth story is a phenomenal testament to the power of the P2E revolution that is resonating with so many people all around the world, beyond crypto native circles. Axie has grown to be the largest NFT gaming ecosystem and has amassed players around the world with more than 1.8 million daily active users logging into the platform in August. Axie Infinity has already achieved $33 million in daily transactions, for a total volume of over $2 billion. These numbers are even more impressive given Axie is not yet in the Apple or Google App Stores.
During the web2 era of the internet, the financial upside of successful games did not go to the gamer, despite the fact that you could spend hours of your life building up your in-game persona, acquiring assets, creating worlds—at the end of the day you would have nothing to show for it other than the fact that you had a great time. What Axie Infinity has unlocked is the ability to play the games you love, have fun, but also participate in the financial upside of the community. This is an incredibly powerful idea: it means that games are no longer pure entertainment, but cross over into the realm of work. Axie Infinity is transforming communities around the world and replacing traditional forms of employment, changing people’s lives as players of the game help each other succeed.
Axie embodies a new generation of games, where game creators are not operating from a place of fear but rather as an open, free market economy that allows players to move freely in and out of. The new model allows gamers to actually own aspects of the game and benefit from their contributions, as the game becomes more successful and more popular. Giving players freedom and ownership in a gaming experience drives immense loyalty, as Axie has proven. What this means for the future of games, and really the web as we know it, is as big as your imagination will allow. We can’t wait to see where this pioneering team takes their community next.