Phil's Views: Axie Infinity Economy and Reasons to Play
A transparent look into my views around the economy and reasons to play
I’ll be sharing here my current thoughts and views around the economy for the Axie Infinity ecosystem as it is obviously very important to the community. I’m still ramping up on learning about everything so definitely open to being wrong, having constructive conversations, and learning more from everyone!
Let’s start with the fundamentals - for a given economy to sustain itself, there needs to be a net inflow of capital. It’s simply not possible for everyone to put in $5 and take $6 out. I would love it if a magical economy could be created where everyone can always take more money out than they put in but it’s simply impossible as money cannot be created out of thin air, it has to come from somewhere.
How is this accomplished? By providing non-monetary value… you participate in this everyday anytime you pay for something that doesn’t give you a financial return. For example with traditional games: put in $5 and get intrinsic value, such as fun / satisfaction / bragging rights etc.
The only difference between sustainable blockchain games and traditional games is that players can put in $5 and get the intrinsic value, while also owning the assets they earn along the way, with the option to sell them. There will be some people who put in $5 and can get $6 out, and some people who put in $5 and can get $2 out. In both cases players can be happy with the result, as what they take out is just a bonus on top of the intrinsic value they’ve received (e.g. fun, new friends, assets to brag about). Ultimately, for a sustainable economy the overall average inflow needs to be greater than the outflow.
My goal with Axie Infinity is not to create an impossible world where we can give everyone $6 if they put in $5. The goal is to provide intrinsic value through the game, while sharing the $5 that players might put in back with them, in contrast to traditional games where the developer takes the entire $5 for themselves.
“Play-to-Earn” has become a very loaded term that many have interpreted to mean everyone can make money from playing. As outlined above, this is simply not possible, and we are actively looking to shift the narrative to “Play-and-Earn” to be more clear - you can have fun playing a game and maybe earn some things along the way that you can own, but the primary motivation should still be the “Play”! “Earning” here also does not mean extracting from the ecosystem necessarily, it could be that you “Earn” an asset that you just hold onto and value as a collectible.
Although many players do love and enjoy our current gameplay, we know the game still has a lot of room to grow in providing more fun. We have been clear about this from the start that this is just the beginning. The gameplay and underlying infrastructure has pivoted multiple times throughout the years and will continue to transform significantly. Development of a good game takes a lot of time and effort, and we definitely appreciate the patience from the community. The team only recently scaled up in the past months and it takes time to build momentum. I can dive deeper into what goes into the development process in a future post.
With that said, being part of an economy earlier provides more opportunities to benefit as the economy grows. Although at any given time the inflow of capital needs to be greater than the outflow to maintain it, as the economy grows over the long term, those who have assets earlier could potentially prosper more from that growth. Also, just as in any game, putting in more valuable time, effort, skill, contributions, and spend into the game ecosystem should generally yield more rewards.
Everyone working on Axie Infinity empathizes and cares deeply for all of our players who have found Axie Infinity to be a real source of earning. However, if there are too many players that are purely extractive, this is not sustainable in the long-term, as we need players who both contribute and derive value from the system. Thus, our focus will always primarily be around creating long-term value for those who play and make purchases for the fun of it. The earning factor will always be an aspect we’re thoughtful about, but we will not be optimizing our game or experiences to drive short-term returns as it’s simply not sustainable.
However, what we will focus on is creating a balanced game economy with proper sources and sinks, just like non-blockchain games have done for years. This is something that we need to and will continue to improve on. It’s one of the big areas I’m personally focused on at Sky Mavis.
Some good reasons you should purchase Axies and play Axie Infinity is if you:
Admire the art and find Axies cute, cool, quirky, derpy etc!
Are excited about being able to help grow and build a virtual nation
Find the games fun and appreciate being able to own/buy/sell/trade in-game assets
Like that there is the possibility to earn assets that have real value while playing a game and having fun
Enjoy hanging out and interacting with a positive, fun, and constructive community
Value being part of and actively contributing to the development of a game
Want to collect and own tons of rare and unique Axies
Don’t think in days or months, but years and decades
Love to create content, experiences, and tools for a passionate community
Believe in the team, vision, and what we can build in the years to come
Currently, the primary reason you should hold SLP is if you want to breed specific and unique Axies for the community or yourself. This will change in the future of course as SLP gains more utility, such as being used to craft Runes and Charms. Outside of the core game loop, the entire Axie ecosystem sits on top of an infrastructure that provides fundamental value too. You should take part in owning a stake in those components if you want to be involved with co-ownership and governance of the ecosystem (AXS), or plan to have significant transaction volume on the Ronin blockchain (RON). I encourage people to spend on what has value and utility to you. I’m thrilled that there are so many incredible and unique opportunities ahead of us to create more experiences that will motivate everyone to own more assets that provide increasingly more fundamental utility and value to them.
However, this is going to be an incredibly difficult journey. It's not for those seeking a comfortable and easy path. If we're successful, we will have ignited a revolution that creates a new world for gamers. If this sounds like something you'd like to help build, join us and let's work together to make it happen each day, one step at a time.
"If you want to go fast, go alone. If you want to go far, go together."