Axie Infinity is one of the largest play-to-earn platforms in the NFT space. The blockchain-built gaming platform became so popular even in the midst of the pandemic. For some crypto investors in countries lagging financially, Axie became their lifeline against the economic downturn as a result of the COVID 19 pandemic. Investors who have zero crypto experience were also enticed to join the bandwagon because of Axie’s popularity which has been dubbed as one of the top NFT projects in the crypto space.
The number of daily active users reached a peak of 2.7 million in November 2021. Users can earn tokens on the platform by playing against other players and breeding Axie monsters later sold to NFT marketplaces. Before the cost of buying an Axie team was between $200 to $500. But the consecutive market crashes made a huge impact on the prices of cryptocurrencies including SLP (Smooth Love Potion) and AXS (Axie Infinity), the platform’s token.
The infinite supply of SLP (Smooth Love Potion) coupled with massive farming considering the number of users on the platform getting the token as a reward became a huge obstacle to increasing its value. Although users are required to burn some SLP (Smooth Love Potion) when breeding, the process is not enough to limit its supply. Scarcity in cryptocurrencies helps increase their values but with a massive supply of SLP (Smooth Love Potion), there is little hope that its price will increase. The price of AXS (Axie Infinity), the platform’s governance token has dwindled as the market succumbs to an extended bear season.
Most of the updates implemented by the developers’ were met with heavy criticisms from the community. The unclear status of the launching of “Land” also known as Project K has become a disappointment for investors. In a previous update, the “Land” was supposed to be made available in Q1 2020 but later moved to Q4 2021. Again on a recent update, the land gameplay is expected to be released in 2022. Some Axie users who have vested on the platform’s land expressed their disappointment to Twitter.
i’ve lived through 4 iterations of the roadmap. time to pay for delays, @skymavishq.
there was zero good news. no reason to present. 2 people were in a room working my life investment. pic.twitter.com/kSecAOj5xa
— cloudwhite☁️ (@cloudwhiteNFT) April 11, 2022
According to reports, the delay has caused Axie to lose some of its biggest players who invested in the platform’s virtual lands. The enraged players reportedly listed their Axie’s and virtual lands at a bargain price in marketplaces. As if the trouble with clashing with the community on what they viewed as anti-user updates were not enough, Ronin, the platform’s network has fallen to the biggest hack on the NFT space and in the entire history of crypto on March 23. The bad actors siphoned $622 million worth of cryptocurrencies from the network as a result of the exploit. On March 28, five days after the reported attack, the platform’s DAU significantly dropped to only 1.5 million. And on May 9, the DAU dwindled below 1 million for the first time. Once touted as a glittering gem of the NFT world where investors used to rake money with their Axie monster is slowly losing its brilliance.
The huge drop in the Axie’s DAU is now being associated with the recent gamefi’s update on the removal of the Adventure Mode where users are rewarded with SLP (Smooth Love Potion). The update was supposed to help to reduce the number of SLP tokens supply which may possibly resolve its plummeting price. Amid the dwindling prices of the platform’s tokens, Jeff Zirlin a.k.a. Jihoz, co-founder and growth lead of Sky Mavis, developer of Axie reassured the community in his tweet on May 10.
We've been here before and know what to do.
The fear is normal. pic.twitter.com/eXPk2mS1H3
— The Jiho.eth 🦇🔊 (@Jihoz_Axie) May 10, 2022
But will Axie be able to withstand the test of time or is it headed for a crash? Despite the decline in the gaming platform’s DAU, users have high hopes that it will bounce back and reclaim its spot in the blockchain gaming industry. Axie Origin Update is one of the most anticipated updates in the platform that will help regain its previous glory. The gaming platform is also fully committed to reimbursing all affected users’ funds. It has also received a total of $150 million in financial backing from Binance Animoca Brands, Dialectic, Paradigm, Accel, and VC firm a16z according to a report by CNN. According to reports, Binance was also able to recover $5.8 million worth of cryptocurrencies from the funds stolen from the platform’s network.
The platform’s looming transition to a DAO may add to investors’ optimism about the blockchain gaming project. The final phase is expected to be released in September 2023 and will allow AXS (Axie Infinity) holders to participate in the governance framework to be implemented. This may help retain loyal Axie users’ trust and confidence in the blockchain game’s developers. It will also contribute to users’ continued patronage of the game which includes the developers’ implemented updates. But will their loyalty soon pay off? This remains to be seen.