Axie Infinity (founded in 2018) is a play-to-earn Non-Fungible Token (NFT) game developed by Sky Mavis. It was built on the Ethereum blockchain but currently runs on Ronin, an Ethereum sidechain, designed specifically for the Axie Infinity community to support scaling and a smoother gameplay experience for a large number of users.^[1][2]
The game allows players to build up a collection of Axies and use them across an ever-expanding universe of games, players also battle with one another to earn SLP tokens during gameplay and trade them for money.

On April 28, 2021, Axie Infinity completed its migration to Ronin, a custom-built sidechain on Ethereum that was originally announced in June of 2020. Users were asked to migrate NFT tokens, including Axies, Land, and other in-game item tokens, ETH/AXS/SLP to Ronin to continue engaging with the protocol. Ronin was designed by the Axie team to support almost instant transaction confirmations, reduced gas fees, and help scale the game further. The successful migration followed a 1,000% rally in the price of SLP and 83% in AXS.^[7][8][9]

On the 23rd March 2022, Sky Mavis’ Ronin validator nodes and Axie DAO validator nodes were compromised resulting in 173,600 Ethereum and 25.5 million USDC drained from the Ronin bridge. It was considered to be the largest crypto heist to date, totaling a stolen amount of $625 million at the current market value then.

In April 2022 Axie Infinity announced a 150 million USD funding round led by Binance with participation from Animoca Brands, a16z, Dialectic, and Paradigm. The funds were meant to help reimburse the victims of the $625 million hack on the Ronin chain.^[37][38]

Sky Mavis

Sky Mavis is a technology-focused game studio. It was created in 2018 by Aleksander Leonard Larsen, Jeffrey Zirlin (Jiho), and Trung Nguyen. They developed Axie Infinity, an online play-to-earn Non-Fungible Token (NFT) game, with a vision to create a sustainable digital ecosystem that is fun, inclusive, and allows players to take part in a P2E game.^[4]

The video game developer is based in Ho Chi Minh City, Vietnam.

Sky Mavis’ leaders include CEO Trung Thanh Nguyen, chief operating officer Aleksander Leonard Larsen, art director and game designer Tu Doan, chief technology officer Andy Ho, and growth lead Zirlin.^[5]

From 2019 to 2022, Sky Mavis has received millions of dollars in funding through several events and has been endorsed by giants such as Samsung, Ubisoft, Kyber Network, and Binance. Their last fundraising was on April 6th, 2022, when the Sky Mavis team raised $150M led by Binance and big participants such as Animoca Brands, a16z, Dialectic, and Paradigm.

As of August 2022, Sky Mavis has a total of 100 employees working hard on the Axie Infinity Game.^[6]

Overview

Inspired by popular games like Pokémon and Tamagotchi, Axie Infinity is a play-to-earn Non-Fungible Token (NFT) game built on the Ethereum blockchain but currently runs on the Ronin sidechain. The game allows players to battle, breed, collect, raise, and build kingdoms for their Axies and also go on adventures, battling opponents to earn rewards in the native token.

The game was launched in 2018 by Aleksander Leonard Larsen, Jeffrey Zirlin (Jiho), and Trung Nguyen. It started as a passion project as the team learned about the 'ownership structures that are possible through the combination of Blockchain and Decentralized games. While discussing their early days, Nguyen explains:

Aave and Axie's NFT collaboration.

We've always been frustrated by the lack of true ownership made possible by centralized gaming and thought that the Ethereum network in particular has offered us a playground in which to build our dream game.

The game, which is a dApp built on the Ethereum blockchain, enables users to play rules to collect, raise, breed, and battle other creatures known as Axies. Their physical features are matched to that of real-life animals. However, every single Axie has its distinct features that set its appearance and traits apart from all other axies.^[3]
Players can gather a countless number of different Axies with various body parts and appearances. Axies will be able to use body parts to acquire powers that change between games; they will have entirely different values, advantages, and capabilities from one game to the next. Players can also collect cards with special artwork depicting various body parts.

Divided into different Modes, players fight against one another to achieve the highest rankings or win coveted resources. Others will require them to finish missions, take down bosses, and uncover in-depth plots.^[31]

Around early November 2020, it was announced that an Axie had been sold for 300 ether (about $130,000). Named Angel, the in-game non-fungible token (NFT) is one of the nineteen "triple mystic" Axies that are known to exist. Angel was sold on November 6th, and almost immediately re-listed for 666 ether, which comes out to about $250,000.^[32][33]

Game-Play

Axie Infinity is a turn-based card game where players and their Axies battle against fierce foes and other players.

Adventure Mode and Arena Mode are two different game modes in Axie Infinity. Even though a player's opponents vary depending on which gaming mode they are using, both modes share the same fundamental battle principles.

Initially, each player is given a deck of 18 cards. They draw 5 Cards every turn, adding them to their hand. Each player has three Energy at the beginning of their turn, and this energy will decrease as they play the Cards.

Players must tap End Turn whenever they have used all of their Energy or finished playing their cards. At the end of every turn, unused Cards and Energy will be disposed of. A player's remaining health is indicated by the bars that float above their Axies' heads. The goal is to reduce the health of an opponent's 3 Axies to 0 before they can do the same to them.

The winner wins prizes after each gameplay, such as crafting supplies and power-ups. A player can open up new plot chapters in Adventure Mode, while in Ranked Arena Mode, they can gather Victory Stars and advance to new ranks.^[19]

Adventure Mode:

Adventure Mode is the player vs. environment (PvE) gameplay mode in Axie Infinity. In this mode, players fight waves of Chimera, level up their Axies, and gather goodies as the plot develops.
There are numerous Chapters in the Adventure Mode plot. There are 7 Big Stages and 12 Small Stages in each Chapter. Complete the precise Challenges that are listed at the start of Big Stages to get stars.

The Foraging Box, which Axies may access from the Adventure Mode map, contains goods that Axies occasionally gather while on their journeys.^[20]

Arena Mode:

Arena Mode is the player vs. player (PvP) gameplay mode in Axie Infinity. They will be faced against other players and their Axies instead of bosses.

A player's abilities as an Axie trainer will be tested in the arena. To prevail, this player will need to be familiar with the rules of battle as well as the ideal mixture of Axies, Cards, Runes, and Charms.^[39]

Axies

Axies are fascinating, fierce, and adorable creatures that players can collect, battle, and breed.
Each Axie has 6 body parts: eyes, ears, horn, mouth, back, and tail. The body components of an Axie determine which Cards it possesses. Axies have special skills that range from simple assaults to curses and summons thanks to cards.
There are over 200 different body parts and nearly an infinite number of ways a player can combine them to build their next favorite Axie. Using unique objects called Runes and Charms, players can modify and improve the skills of their Axie.^[40]

Axies can be bred to produce potentially rare and potent mixtures, in addition to being used to gain SLP through participation in tasks, PVP Arena, and Adventure Mode. To control the Axie population, each Axie can only be bred a maximum of seven times. Each body part of an Axie has three genes associated with it, one dominant (D), one recessive (R1), and the other minor recessive (R2) gene. Dominant genes have a 37.5% chance of being passed down to any offspring, whereas this drops to 9.375% for recessive genes, and 3.125% for minor recessive genes.^[16]

Types of Axies

There are two different types of Axies a player can collect:

Starter Axies:

Starter Axies are lovable in-game characters that make it easy to start playing Axie Infinity for free. When a player first enters Lunacia, they are given three Starter Axies. As they advance through Adventure Mode, they can unlock additional Starter Axies.

New players are given 3 starter Axies when they join the game, this 3 Axies are Buba, Olek, and Puffy out of five. As they progress in Adventure, they can collect even more starter Axies (Ena and Tripp) to add to their team.

Players are to note that these starter Axies aren't NFTs. They can't be used to earn SLP and also cannot breed or be traded.^[13]

Personal Axies:

Personal Axies are non-fungible tokens (NFTs) that live on the blockchain. They can be bought, sold, and traded with other players on the Marketplace, in addition to having all of the functionality of Starter Axies. These Axies can breed among themselves to produce more of them.

Personal Axies can be used in Adventure and Arena combat much like Starter Axies, but this time players can earn special rewards, including crypto tokens such as Smooth Love Potion (SLP). These Personal Axies can be bought and sold by players on the Marketplace.^[14][15]

Classes

Axies are divided according to their body type into 9 distinct Classes. Different classes have their strengths and weaknesses that make them more or less effective against certain other classes.

• Beast
• Aquatic
• Plant
• Bug
• Bird
• Reptile
• Mech
• Dawn
• Dusk

Power-Ups

• Charms are special wearable items that provide bonus effects to Axie abilities. Charms come in 10 different classes, 1 for each Axie Class, plus a Neutral Class.
• Runes are special wearable items that provide passive effects that automatically activate in battle. Runes come in 10 different classes, 1 for each Axie Class, plus a Neutral Class. It comes in 4 different rarities: Common, Rare, Epic, and Mystic.^[27]

Lunacia

There are plots of land which users can customize with various items. The Axie homeland, Lunacia, is broken up into tokenized land pieces that serve as both residences and bases of operations for their Axies. Various resources and crafting materials that can be acquired while playing the game can be used to upgrade plots over time.

Landowners may also discover AXS tokens on their plots of land, or they may explore resource nodes on the map with the Axies that live there. Axies can discover AXS and perhaps other resources by interacting with resource nodes. Axie Infinity world of Lunacia consists of 90,601 plots of land, spread across seven types (Savannah, Forest, Arctic, Mystic, Genesis, Lunas Landing, and Map)^[17]

Land gameplay is still being actively developed and will be released in phases.^[18]

Community Treasure

In early 2021, a community treasury was launched and began to receive distributions from the game's products and staking rewards.

Once it went live, 100% of all fees and primary sales from the Axie universe are deposited in the Treasury. There is a 4.25% marketplace fee as well as a.005 ETH fee for breeding Axies. A portion of staking issuance will also be directed towards the Community Treasury. This percentage starts high at 35% and gradually tapers off over time. Over the 5 years, the team suggested sending staking issuance to the Community Treasury starting at 35% in year 1 and scaling down to 30%, 25%, 20%, and finally 15% in year 5. With these values, AXS stakers still earn an attractive base yield in the early years and an attractive Treasury yield in the latter years.

Axie Infinity Tokens

There are two main tokens used in the Axie Infinity ecosystem: Axie Infinity Shards (AXS) and Smooth Love Potions (SLP).

$AXS (Axie Infinity Shards)

In November 2020, Axie Infinity launched Axie Infinity Shards (AXS), a governance token of the Axie Ecosystem. It is an ERC-20 token launched on the Ethereum blockchain. 
AXS holders can claim rewards if they stake their tokens, play the game, and participate in governance votes.

Players will be able to earn AXS by completing activities through both the Axie Infinity Universe and user-generated content. Activities include completing quest and dungeon missions, winning tournaments, interacting with player land plots, using the native marketplace, and creating content for the universe. ^[24]

AXS has a total supply of  270 million tokens with a circulating supply of 59,985,000 tokens. In total, 11% of the total supply was allocated to participants in the Binance Launchpad IEO sale (for $0.10) and 4% was sold in a private sale. In addition to this, 29% is allocated for staking rewards, 20% to the play-to-earn pool, 21% to the team, 7% to advisors, and 8% to the ecosystem fund.^[23]

AXS Use Cases:

1. Staking: AXS can also be staked to earn rewards. Staking AXS offers a financial incentive to hold AXS and support the ecosystem. Stakers receive newly issued AXS and have the opportunity to express their support for different ideas to enhance Axie Infinity. The Community Treasury will eventually be managed by AXS stakeholders.
2. Governance: AXS can also be used to participate in key governance votes and will give holders a say in how funds in the Axie Community Treasury are spent.
3. Payment: In the Axie NFT market, AXS will be accepted as payment. The Axie team may also use AXS to determine a participant's eligibility for some sales and auctions.^[25][26]

$SLP (Smooth Love Potions)

SLP is also the native token of Axie Ecosystem. It can be earned when playing Axie Infinity in Player versus environment (PvP) and Player versus player (PVP) mode. It is an ERC-20 token on the Ethereum Blockchain. SLP is used for breeding and not serving as a governance token.

It has a circulating supply of 43,264,025,024 SLP and is listed on various tier 1 exchanges like binance. Around July 2021, the token saw a staggering increase in value of over 1000% within a few days. This increase saw the token pass 6 cents per potion and peak at $0.234.^[22]

Funding

• In April 2022 Axie Infinity announced a 150 million USD funding round led by Binance with participation from Animoca Brands, a16z, Dialectic, and Paradigm. The funds were meant to help reimburse the victims of the $625 million hack on the Ronin chain.
• In October 2021, Sky Mavis raised a $152 million Series B funding led by a16z alongside other venture firms, including Paradigm and Accel
• In November 2020, Axie Infinity announced an $860,000 AXS governance token sale. Delphi Digital, Arca, Sparq, and others contributed to the sale, the investors purchased AXS at a 20% discount. The funding round is meant to help further gamify yield farming. It also conducted the final phase of its token sale on the Binance Launchpad, raising a total of $2.97 million.^[28][29]

Marketplace

Axie Marketplace is the In-game NFT marketplace for the Axie Ecosystem. It is a platform where players can buy and sell their axies. When a player chooses to sell, a Dutch auction is initiated; meaning, sellers choose a start price, end price, and duration of an auction. This entire process is achieved by entering the transaction into the Ethereum blockchain via a digital wallet. From there, Axie Infinity collects a 4.25% commission fee for each final sale.^[30]

Ronin Mainnet Launch

On April 28, 2021, Axie Infinity completed its migration to Ronin, a custom-built sidechain on Ethereum that was originally announced in June of 2020. Users were asked to migrate NFT tokens, including Axies, Land, and other in-game item tokens, ETH/AXS/SLP to Ronin to continue engaging with the protocol. Ronin was designed by the Axie team to support almost instant transaction confirmations, reduced gas fees, and help scale the game further.

Axie Creators, Sky Mavis developed the sidechain to ease the pressure of Ethereum network congestion and gas fees on players. The first stage of the migration will see land and items transferred to Ronin, and to incentivize this, early adopters will receive a limited land item, the R0N1N-21.^[11]

Ronin is an Ethereum sidechain, it was designed specifically for the Axie Infinity community to support scaling and a smoother gameplay experience for a large number of users.

Players were able to migrate their Axies to Ronin for smooth breeding, token claiming, and marketplace experience and also Deposit ETH/AXS/SLP for use on Ronin. After the migration, users could now breed, buy, and sell Axies, and claim AXS and SLP rewards on Ronin, its Ethereum sidechain.^[10][12]

NFT Sales Record

On February 8, 2021, one of the Axie Infinity platform’s newest community members, Flying Falcon, purchased the digital estate of nine adjacent Genesis blocks for 888.25 ether, roughly $1.5 million at the time. Genesis land is special, supply-capped plots with a unique aesthetic and special positioning within the Axie land system. The transaction marks the largest Non-Fungible Token (NFT) transaction of all time, superseding the previous $800,000 record set by Polyient Games and their purchase of “the Citadel of the Sun” from Gala Games.

Flying Falcon told CoinDesk via email:

" We're witnessing a historic moment; the rise of digital nations with their system of clearly delineated, irrevocable property rights. Axie land has entertainment value, social value, and economic value in the form of future resource flows. As Genesis land plots are the rarest and best-positioned plots in Axie Infinity, they were a natural fit for my thesis."

Hacks

On the 23rd March 2022, Sky Mavis’ Ronin validator nodes and Axie DAO validator nodes were compromised resulting in 173,600 Ethereum and 25.5 million USDC drained from the Ronin bridge. It was gathered that the attacker used hacked private keys to forge fake withdrawals.

Nine validator nodes make up Sky Mavis' Ronin chain at the time. Five out of the nine validator signatures are required to recognize a deposit or withdrawal event. The four Ronin Validators owned by Sky Mavis as well as a separate validator operated by Axie DAO were all under the attacker's control, which led to the hacker stealing almost $625 million.

While racing for mainstream adoption, we made some trade-offs that ended up leaving us vulnerable to this sort of attack. It’s a lesson that we’ve learned the hard way. A lesson that will guide how we build Ronin out moving forward. We’re confident that we will come out stronger and wiser from this.

The event was said to have occurred six days (March 23, 2022) before the team discovered it on the 29th of march 2022 after a user reported he was unable to withdraw 5k ETH from the bridge. Sky Mavis, later on, increased the validator group to 21 validators splitting between various stakeholders including partners, community members, and long-term allies.^[34][35]

Partnerships

MakerDAO

In June 2019, Axie Infinity partnered with MakerDAO to integrate Dai as an in-game currency in the Axie economy. As part of the team-up, Axie offered owners of Maker collateralized debt positions (CDPs) special Axie tokens that could be claimed in the game depending on the size of these CDPs. For example, one of those tokens was a “Mystic” piece for players with CDPs that have drawn more than 15,000 Dai in their positions’ lifespans. The Maker creators were also seeding prize money into Axie, with 1,000 Dai being set aside for the best trainers in the game’s first season and another 1,000 being put up for the game’s first tournament prize pool.

Samsung

In October 2019, Axie partnered with Samsung to add support for Axie Infinity to the Samsung Blockchain Wallet.  It was listed in the ‘Dapp’ section and could be played through a Web3 browser. In addition, players could trade their Axies straight from the Samsung Blockchain Wallet.

Kyber Network

In February 2020, Axie integrated Kyber Network to allow Land NFT purchases with selected ERC20 tokens, such as DAI, MANA, ENJ, KNC, BAT, and ZRX. All transactions are fully on-chain, through a fully transparent and verifiable payment process on the Ethereum network. To celebrate the integration, Kyber and Axie were running an NFT Quest. Axie players who held 50 KNC in their address till the end of the claim period were able to claim an exclusive ‘Kyber Ancient Stone’ Land NFT item.

Binance

In October 2020, Binance Launchpad announced support for Axie Infinity. Axie (AXS) USD 2,97 million token sales on Binance Launchpad, which followed a lottery-format ticket claim, started on October 27 and lasted for 7 days.

Aave

On November 5, 2020, Axie Infinity and Aave, a leading DeFi (Decentralized Finance) application announced a partnership. In this partnership, Aave will be distributing AAVE tokens to those who win Axie Infinity battles.

Discussing the partnership on Medium, Isa Kivlighan of Aave explained, The intersection of DeFi and gaming is an exciting space to watch, opening up both worlds to never-before-seen possibilities in both the financial and gaming ecosystems.

Aave is sponsoring Season 13 of Axie. Starting on Monday, November 9th, over 4,000 USD in $AAVE is on the table for Axie players to battle for. Additionally, Aave users who hold 0.65 AAVE or stkAAVE (staked AAVE), can claim a limited edition Aave-themed NFT. This offer is scheduled to end on December 6, 2020, at 3 pm CET.

Chainlink

On November 16, 2020, Axie Infinity announced that it completed the integration of Chainlink decentralized price feeds. In addition, it will be using Chainlink Verifiable Randomness Function (VRF) to introduce provably fair random elements into the Axie universe, starting first with Axie Origin Coins (AOC).

As the first step in this collaboration, Axie integrated the Chainlink ETH/USD Price Reference Data feed into its marketplace. In addition, Axie Infinity will be using Chainlink VRF for the generation of Origin Axies from Axie Origin Coins (AOC). The number of Origin Axies in the game is capped at 4088. Each time 5 AOC are burned, an Origin Axie is born.

Team

The team consists of 40 full-time employees and has its headquarters in Ho Chi Minh City, Vietnam. The founding team consists of the following individuals:

• Trung Nguyên - CEO; Former Software Engineer at Anduin Transactions,
• Aleksander Leonard Larsen - COO; Secretary Board of Directors at Blockchain Game Alliance, Partnered Streamer at Twitch.tv.
• Viet Anh Ho - CTO; Former Full Stack Engineer at Anduin Transactions, Software Engineer Intern at Google.
• Tu Doan - Art Director and Game Designer; Former Head of Design at Lozi.
• Jeffrey Zirlin - Growth Lead; Fund Manager at MetaCartel Ventures, BA History at Yale University.^[36]