Axie Infinity: Life-Changing or Scam?

Summary

The video explores the rise of the play-to-earn game Axie Infinity, which gained massive popularity in the Philippines during the pandemic. Players can earn cryptocurrency, Smooth Love Potion (SLP), by winning battles in the game. However, the game's success has raised concerns about its long-term sustainability and the risks associated with investing in virtual assets. Critics warn it resembles a form of digital sharecropping, where players, especially from economically vulnerable countries, do all the work but may never escape poverty. Despite challenges like recent hacks and volatile prices, many Filipinos continue to hope for financial gain from the game.

Takeaways

• 😀 A new video game, Axie Infinity, became extremely popular in the Philippines during the pandemic as it allowed people to earn money by playing.
• 😀 Axie Infinity works by requiring players to buy in-game characters called 'Axis,' which are NFTs (non-fungible tokens) that represent ownership of digital assets.
• 😀 Players earn cryptocurrency called Smooth Love Potion (SLP) by winning battles in the game, which can then be exchanged for real money.
• 😀 At its peak, Axie Infinity allowed players to earn enough money to support themselves, with some players even upgrading their living conditions and investing in businesses.
• 😀 However, the cost to buy a competitive team of Axis has skyrocketed, making it difficult for new players to enter the game without a significant financial investment.
• 😀 Some entrepreneurs have capitalized on this by offering 'Axie rentals' or forming gaming guilds, where players rent Axis characters and split earnings.
• 😀 Players are required to learn and improve their skills to maximize earnings, with guilds offering training and a share of the profits to their members.
• 😀 Axie Infinity gained popularity in developing countries like the Philippines, where a significant portion of the player base lives, providing an income opportunity in areas with weak economies.
• 😀 Critics argue that Axie Infinity and similar 'play-to-earn' games exploit economically vulnerable populations, operating like a form of digital sharecropping or a pyramid scheme.
• 😀 Despite the risk and volatility, including a major hack in 2022 that drained $600 million worth of cryptocurrency, players continue to engage with the game, hoping for future gains.
• 😀 The game's ecosystem is based on speculative investments, with high levels of investment from venture capitalists, but its long-term sustainability remains uncertain.

Q & A

What is *Axie Infinity* and how does it allow players to earn money?

*Axie Infinity* is a play-to-earn video game where players can earn cryptocurrency by battling with in-game characters called 'Axis.' Players need to buy a team of Axis (which are NFTs) to participate in the game, and when they win battles, they earn Smooth Love Potion (SLP), a cryptocurrency that can be exchanged for real money.

What role did *Axie Infinity* play in the Philippines during the COVID-19 pandemic?

During the COVID-19 pandemic, *Axie Infinity* became a popular source of income for many Filipinos who had lost their jobs. As a low-barrier entry game, it allowed people to buy into the game for a relatively low cost and earn money through their gameplay, helping them support their families during difficult times.

What is Smooth Love Potion (SLP) in *Axie Infinity*?

SLP is a cryptocurrency earned by winning battles in *Axie Infinity*. Unlike traditional in-game points, SLP can be exchanged for real-world money or used within the game to buy more Axis or breed new ones. It is a core part of the game's economic system.

How has the cost of a competitive team of Axis changed since *Axie Infinity* became popular?

Initially, a competitive team of Axis was relatively cheap, costing a few hundred dollars. However, as the game's popularity grew, the demand for Axis increased, causing the prices to skyrocket. Today, a competitive team can cost nearly $1,500.

What is the business model behind Axie rentals in the Philippines?

Axie rentals involve players who own Axis renting them out to others in exchange for a share of their earnings. Players can rent a team of Axis from companies like YGG (Yield Guild Games), and the rental company trains them to become better at the game, typically taking 30% of the player's SLP earnings.

How does the system of Axie rentals help players earn money without initially investing?

Through Axie rentals, players who may not have the capital to buy their own team of Axis can still participate in the game. They rent teams from larger guilds or companies, and in return, they earn a share of the cryptocurrency (SLP) from their gameplay, with no upfront investment required.

What are the ethical concerns raised about the *Axie Infinity* system?

Critics argue that *Axie Infinity* could be considered a form of digital sharecropping or crypto colonialism, where economically disadvantaged people in countries like the Philippines are used as laborers to generate wealth for others. Some also criticize the system for lacking wage protection and regulation, potentially leaving players vulnerable to exploitation and financial instability.

What risks do players face when engaging with *Axie Infinity* and its cryptocurrency?

Players face significant financial risks, including the volatility of SLP's exchange rate, which has been consistently dropping. Additionally, there are security risks, as demonstrated by the hack of the Ronin network, which resulted in the theft of $600 million worth of cryptocurrency. This hack highlighted the vulnerability of players' investments and the lack of insurance or guarantees in the game’s economy.

How did the hack of the Ronin network affect *Axie Infinity* players?

The hack of the Ronin network, which is used for exchanging SLP into real money, resulted in the loss of $600 million worth of cryptocurrency. This event severely impacted players who had invested their time and money into the game, leaving many with financial losses. *Axie Infinity* pledged to reimburse those affected, but the hack underscored the risks of participating in such a decentralized and largely unregulated economy.

What is the broader impact of play-to-earn games like *Axie Infinity* on the global economy?

Play-to-earn games like *Axie Infinity* are part of the larger Web 3.0 movement, which aims to decentralize ownership of digital assets and empower players to participate in the digital economy. However, the sustainability and fairness of these games are questionable. While they can offer short-term financial relief, they also contribute to speculative bubbles, and their reliance on NFTs and cryptocurrencies raises concerns about their long-term viability and potential for exploitation.