A billion-dollar cryptocurrency gaming startup promised riches but delivered disaster instead.
Last year, Samerson Orias was a line cook in a remote part of the Philippines when a friend informed him, that he could earn far more money by playing a brand-new computer game. Axie Infinity is a startup game powered by cryptocurrencies and NFTs, where players can earn up to $600 per month playing it.
Orias, now 26 years old, was in desperate need of a way out of his financial problems. He then dove into the business and spent hours fighting cartoon creatures till late at night. He quickly started to make cryptocurrencies, which he then exchanged for pesos. Thousands of young people in the Philippines were also diving headfirst into the game at the same time. These young Filipino gamers were realising a long-held hope of the crypto market’s most ardent supporters at the height of the astounding 2021 boom: that “play-to-earn ” blockchain games like Axie might pave the path for a fairer, and opportunity-rich global economy. The majority of Filipino players, like Orias, have left the game fourteen months later still feeling angry and anxious—and in some cases thousands of dollars in debt. Orias claimed in an interview that this game by the startup was monotonous and stressful, that he was constantly exhausted, and that this caused him to become more violent in all areas of his life. The narrative of Orias and Axie Infinity serves as a warning against the crypto market and its hysterical claims to be able to change the world. When responding to criticism regarding the shady parts of the space, several crypto thought leaders mention its influence on underdeveloped nations. However, according to Orias and others, the business strengthened predatory systems and gave people false hope. Innovative metaverse concepts like Axie Infinity hold great promise, but they also carry a real risk for people who feel forced to enter the virtually unknown. Axie Infinity initially reminds one of Pokémon. Players purchase three adorable cartoon monsters called Axies, each of which has advantages and disadvantages, to participate in the game. They engage in combat with other Axies, which increases their strength. Along the process, players can collect Smooth Love Potion (SLP), an in-game currency that can be traded for other cryptocurrencies. Axie can be sold or used to breed new, more expensive monsters. Each Axie monster is a non-fungible token (NFT), a singular, immutable token whose ownership is documented on the blockchain, a safe ledger of transactions. Many have hailed this technology as having the ability to support the growth of the metaverse. Axie Infinity was developed by a startup company named Sky Mavis Inc. in Vietnam as a part of the growing play-to-earn gaming trend. Elite players frequently support themselves in other well-known games, such as League of Legends and Fortnite, through sponsorships and money earned from streaming their matches to internet viewers. The earning potential in Axie Infinity is built straight into the gameplay. Sky Mavis keeps a big hoard of tokens and receives a percentage of all in-game purchases. The business had amassed more than $150 million by last October from backers, including venture capital firm Andreessen Horowitz. The Philippines was where the game first had a significant impact. Players there once accounted for 40% of all users of the game. The 110 million-person Southeast Asian country has a quarter of its population living below the poverty line, and its 2.2 million migrant workers who send money home are a major part of its economy. However, many of these workers were sent home as the pandemic closed borders around the world and eliminated jobs. COVID-19 lockdowns destroyed the local economy, forcing many people to turn to various money-making activities to survive.
The crypto market had reached its lowest point by the spring of 2022, rendering participation in the game essentially useless. In November of last year, Axie Infinity boasted over 2.7 million daily active users; as of now, just 760,000 of those users are still active. SLP reached its peak value of $0.34 in July of last year; it is now only worth a fraction of that. Axie’s “play-to-earn” nature is being downplayed by Sky Mavis, who is also launching a new version of the game called Axie Infinity: Origin that doesn’t use any cryptocurrency. They anticipate that gamers will remain around for both the actual gameplay and the opportunity to earn money from in-game activities and purchases.