Does the metaverse era need digital capitalists?

Original title: "Before the hack, Axie Infinity lost players!" Does the metaverse era need digital capitalists? "

Original source: vice

Original arrangement: old yuppie

This article comes from the WeChat public account: Old Yuppie

In the play-to-earn game "Axie Infinity ", the managers hired a large team of "students."

Before blockchain gaming, gamers were also able to earn money from their favorite pastime. Whether through trading accounts or farming in-game resources to sell to other players, or providing bots to automate tasks, the underground market for turning game time into cash has thrived for a long time.

However, it is only in the past year that games have not only started to stuff cryptocurrencies into their reward systems, but have also built around crypto tokens and digital assets such as NFT) is fully established. What has emerged is an ecosystem dubbed "play-to-earn," where players can directly generate income by playing video games, harvesting digital assets, and trading them.

Reddit co-founder Alexis Ohanian said in a podcast earlier this year: "90% of people won't play a game unless they're in the middle of it." Get the proper value in time.”

Axie Infinity can be said to be the industry standard setter of play-to-earn, Axie is developed by the Vietnam-based studio Sky Developed by Mavis, it centers on NFTs of monsters called Axies that form a team and earn Smooth Love Potion (SLP) Tokens for players through battles. The game has its own blockchain, called Ronin, to facilitate faster and cheaper transactions of SLP, Axie’s governance token (AXS), and Ronin’s native token (RON).

However, the transaction price of Axie Infinity's core token, as well as Axie NFTs, has been declining since last year's peak, with a recent hack threatening a larger price increase downward pressure.

play-to-earn spawns a new class of digital workers

To play Axie at the highest level - actually being the boss - you need starting capital.

To start playing Axie Infinity, you need to purchase three Axie NFTs - an investment that costs far more than a thousands of dollars. Today, that cost hovers around $300.

However, not everyone has enough money to be their own boss in the metaverse. That's why some bosses can also lend Axies to players who can't afford the initial bankroll in exchange for a cut of any profits they generate, which can range from 20% to 50%. According to Aleksander Larsen, co-founder and COO of Axie Infinity (also known online as "Psycheout"), the manager's share is even higher, "based on the monthly rewards for each trainee, The share ratio varies from 30% to 75%. These players are called "students," and their bosses—who may employ a few cadets or run large businesses with dozens or hundreds of them—often refer to themselves as "managers."

"The first to invest have more profit than the last to invest."

"I can't specifically call it an owner/employee. It's more of a partnership, or what we call a joint venture. One side puts up the capital and the other puts up the time," said Axie Infinity manager and record cryptocurrency Trading YouTuber Conor Kenny told Motherboard. Share the profits together, everyone is a winner! "

As it stands, Axie Infinity is a Ponzi scheme based on new players entering the world.

This attitude is echoed by other managers interviewed by Motherboard, who believe their profits at Axie depend on a constant influx of new players, many of whom will be students.

"Everything in life is a Ponzi scheme," said Iguano, a Venezuelan manager who mentored five trainees, reflecting a The common idea is that Axie Infinity's buy-in requirements and diminishing returns as its token value declines makes it akin to a Ponzi scheme or pyramid scheme. "The first people to invest in the game have better profits than the last to invest. Axie Infinity's economy needs new people to join to provide benefits to those who came before."

In addition to managing his student staff, Higuano, who plays almost every day himself, sees Axie Infinity as both a money-making opportunity and a game he loves -- and at the same time, he has 25 Axies, which have cost him more than $2,500, recorded a net loss of just over half an ETH, he said.

Higuano is from Maracaibo, the second largest city in Venezuela, and he recruits his students from a nearby town. Like many administrators, whether offline or online, he sees the relationship between administrators and academics as fundamentally benevolent.

In May 2021, after years of hyperinflation in its currency, Venezuela will raise its minimum wage to 10 million bolivars ($22) a month . His mentees sign on 50-50 contracts and make about $20 a fortnight, he said. "I think $40 or $50 a month is better than nothing."

SavageStudiosFBG has over 600 Axies and runs a studio of about 200 students team. The budding YouTuber sees his massive payout as an opportunity for his mentees to make big bucks alongside him, and rejects the "employee" frame.

"I'm not painting them as employees, our agreement at Axie Infinity is mutually beneficial. They use my NFTs to make money and I get a profit from it," FBG told Motherboard, "It's amazing what I get from my students that they use their profits to pay bills, buy washers and dryers, or in some cases new teeth for their grandpas business."

At its peak, FBG's business brought in $20,000 a month, he said.

Whatever managers call their trainees, in many cases they are treated much like ordinary workers. An American expatriate named Rafar has lived in the Philippines for the past nine years and manages about 15 trainees. He plans to add one or two per month, even with the collapse of the SLP market, as he has been able to generate enough returns through strict quotas, onboarding programs, and close management of trainees.

Rafar's Scholarship Program is a comprehensive program. It includes a one-month trial period to maintain a competitive ranking, a daily quota of 75 SLPs, a full onboarding system including Google Docs guides, playtesting, real-time feedback, and a community Discord to ask questions and get further help.

“I also see Axie as an avenue for Filipinos to be educated about cryptocurrencies, which I believe will help propel them forward in the future,” he told Motherboard. "I've given them a crash course in the basics of cryptocurrencies (how to create a wallet, trade, and how to avoid scams) -- basically letting them learn the culture in the world of cryptocurrencies."

Rafar told Motherboard: "Some trainees are having babies and need money to pay the hospital bill, which is about $500. I provide them with an Axie account and hold their SLP until the baby is born They are about to receive about $600 in proceeds.”

Even with Rafar fully operational and FBG’s roster of 200 scholars, with other blurred profits It also pales in comparison to companies that claim to be between the lines of philanthropy.

Yield Guild Games (YGG), a player guild based in the Philippines, launched in April 2021, shared its review in May 2021 It had 1,000 students before and had over 10,000 students by the end of the year. In March, it raised $1.325 million in a seed round with participation from VC firm Delphi Digital, followed by a $4 million Series A round led by VC firm a16z, followed by another $4.6 million round led by VC firm a16z financing. YGG also conducted a public Token sale in July, raising $12.5 million in 31 seconds, and by December 2021, its DAO holds $824 million worth of assets by holding other encrypted Tokens, except for Axie Infinity In addition, there is another 54 million US dollars from "various Tokens that YGG is cultivating, games, DAO, and earning investment".

YGG even has key advisors associated with Axie Infinity such as Anil Lulla, co-founder and COO of Axie Infinity investor Deplhi Digital, and Sky Mavis Co-founder and COO Aleksander Larsen.

“The community has developed its own scholarship model that helps create income-generating opportunities for people around the world,” Larsen told Motherboard. "Not only does the scholarship remove barriers to entry, but it also marks a fundamental shift in the way NFTs are used, not just as JPG files or collectibles, but as productive assets that generate returns based on usage and interaction."

YGG also filmed a documentary about play-to-earn in the Philippines, co-founder Beryl Li wrote an account titled "play-to-earn Better than a bank account" column. Beryl Li has also made appearances in other media, spreading the play-to-earn gospel.

A September 2021 Coinbase blog post stated, "[YGG] founder Gabby Dizon likes to say that Yield Guild Games is part of Burke Hill Hathaway and part of Uber", what does that mean?

“Just like Berkshire Hathaway is a holding company for many businesses, YGG is essentially a holding company for game assets. From 2020 They have been buying yield-generating NFTs, governance tokens, and ownership stakes in promising game projects and protocols since 2019. Similar to how Uber matches people who want to make money with people who need a ride, YGG will want to make money in games of people are paired with the NFTs they need to make money in the game. In many parts of the world, people are choosing to work with YGG over Uber simply because it pays better.”

But every industry has its ups and downs, Axie Infinity is in a down period

Axie Infinity's in-game economy is in free fall It's an open secret, but opinions are divided on whether there will be a backlash. The numbers don't paint an encouraging picture.

"The Axie economy needs drastic and decisive action now, or we risk total and permanent economic collapse. This will be far more painful."

Axie Infinity’s NFTs, for example, have seen a staggering crash in transaction volume. Transaction volume jumped from $4 million in April to $848 million in August, before collapsing before a second peak of $753 million in November before falling like a cement block to $82 million in February. Transaction volumes do not appear to have recovered in March, with transaction volume dropping even further to less than $30 million. The base price of the Axie NFT has dropped 96% from its all-time high of 0.24 ETH and is now around 0.01 ETH.

Since its all-time high of $0.39 last July, SLP has collapsed nearly 100%, sitting at $0.01, until February of this year, when the development team announced a key fundamental change to its economic model in order to save the price of its Token and NFT, as well as its user base. This sparked a rally that took the coin all the way to a recent peak of $0.039, which is still 10 times below its all-time high. That rally has since evaporated, with prices hovering around $0.02 for several weeks.

In a Substack post on February 3rd announcing a series of upcoming reforms, Sky Mavis said that starting February 9th, SLP rewards will change from Completely removed in some game modes, and drastically reduced in others. Its purpose is to slow down the daily output of SLP, put a cap on it, and save the price of Token from its death spiral.

Sky Mavis's Substack post notes that there are four times as many SLPs being minted as there are being burned; pressure to eliminate SLPs in circulation and fight ever-expanding supply The only way (at a huge cost to the Token's value) is to "burn" it, usually by spending it on another function of the game's ecosystem - in this case, that means between breeding new Axies and making this breeding cost More and more SLPs. New burning mechanics will be added in due course, and the developer mentions cosmetics, upgrades for Axie's body parts, in-game emojis, special breeding events, and more. For now, however, those moves are enough.

“We believe that these economic changes will allow us to begin to set things right and move the economy in the right direction. These reductions in issuance will not be enough to restore our economic engine to full power, but they are a necessary step as we build a fully functioning and sustainable economy.”

By email, Larsen expressed optimism about the future of his game and its token economy. "The sustainability of the Axie economy is critical and requires us to find a balance, which is why we introduced an economic adjustment in February," Larsen told Motherboard. "Being on the edge of gaming and blockchain technology makes Axie Infinity particularly vulnerable to fluctuations from internal and external factors."

Nevertheless, due to Token's All-time lows, earnings have never been lower. Now, programmatically run more than one account to bypass the SLP cap. Some managers take painfully high cuts -- more than 50 percent -- and pair them with tight quotas to generate above-market returns.

Among managers with large teams—from a dozen to hundreds of trainees, attitudes vary greatly, but one thing in common is that although managers Great rewards can be reaped, but trainees see only a fraction of those benefits, which are now declining.

Towards the peak of the market, Rafar spent $3,000 on his initial team and earned back just over $1,000 a month, he said. Today his monthly income is $300. His mentees make $25-$50.

Shin, a Bulgarian manager, said he bought because he felt FOMO, he had been playing non-stop for weeks, and the management with two students. He currently has 9 Axies, has spent $3500 and made a profit of $1600.

“My motivation in this game is that even if the price of SLP is still falling at the moment, I will still make a profit from it because I believe it [will] Still thriving throughout the years, the price of SLP will eventually rise," he told Motherboard.

All of this may be compounded by the recent major hack that rocked the Axie Infinity ecosystem: 173,600 ETH (approximately 588 billion) and 25.5 million stablecoins called USDC were stolen from the Ronin network, but were only discovered on March 29. Ronin is a so-called "sidechain" designed to allow people to use Axie Infinity without incurring expensive fees on Ethereum for every action. Hackers siphoned off liquidity from the Ronin "bridge," which allowed assets to be transferred between Ethereum and Ronin, resulting in the deactivation of both the bridge and its affiliated Katana decentralized exchange.

When Motherboard asked Larsen if he was concerned about the impact of this hack on Axie Infinity’s Token, and what measures were being taken to bring Axie’s players and investors back When compensated, he said they were "committed to ensuring that all lost funds are recovered or repaid, and we are continuing our dialogue with our stakeholders to determine the best course of action."

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“One problem is most of them are holding SLPs, waiting for [all-time highs], don’t believe in bear markets, but you can’t force someone to tell them how they should manage their finances,” Rafar told Motherboard.

"Axie Infinity's business model, as it stands, depends on the continued growth of its user base and the continued flow of fresh money into the system to support Axies, AXS and the value of SLP," Naavik wrote. "The rate at which new users grow is also critical, as any slowdown in breeding and selling Axies to new players will lead to a decline in revenue. We don’t think this outcome is sustainable without any unforeseen surge of new users in the coming months.”

All about Axie Infinity's future ecosystem, metaverse features, and more applications, doesn't really matter here.

"Cryptocurrencies may be new, but games involving money are not. A few years ago, my friends and I were on the Steam Marketplace and Diablo 3's There's a lot of money being made selling skins in the item shop. For me, it's no different. I know there's a lot of technology behind blockchain and everything, but we're here for the game," Esteban, a Brazilian manager who plays every day, told Motherboard . “I hope that one day, something like what I read in Ready Player One can become a reality. Time will tell if the metaverse is a new way of making a living, or a big bubble that will burst.”

Axie Infinity lost players before record-setting cryptocurrency hack

- Axie Infinity The number of DAUs is down 45% from its November 2021 peak.

- Platform at risk of losing gamers’ trust after $600m stolen

Even before last week’s disclosure of a record-breaking cryptocurrency hack that limited players’ ability to move digital currency out of the virtual world, users of the popular earning game Axie Infinity had been drain.

The number of daily active users, or DAUs, has fallen from a peak in November to 1.48 million, according to data compiled by Axie Infinity owner Sky Mavis. The latest tally is for the week ending March 28, the day before the roughly $600 million hack was discovered. Current figures were not immediately released.

Since an update to the game was announced in December, and hackers stole cryptocurrencies like Ethereum and USDT from Axie's Ronin Bridge on March 23, this Of particular note to the reduction, the Ronin Bridge is a sidechain built to facilitate faster, cheaper transactions for the game.

Lose power

Before the $600 million Ronin hack, Axie was on Lost players

Information source: Sky Mavi

Sky Mavis, the developer behind Axie Infinity and Ronin, said it is committed to compensating players as soon as possible, but has not yet detailed how they plan to do so in case lost funds are not recovered. Meanwhile, on Monday, the hackers began to hide their tracks, transferring around 1,400 ether to cryptocurrency asset mixer service Tornado Cash, Coindesk reported.

Data reporter Martin Lee of blockchain analytics firm Nansen said December’s mass-market sell-off resulted in Axie’s native currency smooth-love pot (SLP) prices are under greater downward pressure.

Lee wrote in an email: Daily earnings are down and interest in the game is down. Those who bought at the top start to feel fear, and naturally, doubts creep in. Players are waiting for the game's "Origin" patch, which aims to revitalize, improve and add depth to the game".

Users are worried that if the developer cannot give a clear compensation schedule, then players will lose trust in the platform and move to other similar games , to further accelerate the reduction of users.

Vietnam-based Sky Mavis investors include Andreessen Horowitz and Reddit co-founder Alexis Ohanian.

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