After suffering from a hack topping $600 million in stolen cryptocurrency (opens in a new tab)NFT game Axie Infinity is now dealing with the loss of “play-to-earn” workers which has essentially left the digital equivalent of landlords short of tenants.
The situation was nicely summarized in a recent chirping (opens in a new tab) from Dan Olson, owner of YouTube channel Folding Ideas. “Axie Infinity dev reviews are full of digital landlords pissed off that their ‘scholars’ are all quitting the game and not showing their weekly allowances,” Olson explained.
While many players just see it as an economy to be played, Axie Infinity is nominally a creature-collecting RPG where players can trade their axes, as well as the Smooth Love Potions (SLP) used to breed them, for cryptocurrencies worth real money. It’s like a for-profit Pokémon breeder with a Farmville-style backdrop. The game’s “scholarship” program was presented as a way to lend Axies to other players while collecting a portion of the resources borrowers generate, but because it is tied to the value of SLP, its popularity has coincided with the game’s core currency.
If this sounds like how some people make a living farming gold in games like Old School Runescape or World of Warcraft, often as an alternative to decimated local economies (Runescape, for example, became a home for Venezuelan gold farmers), that’s because It is just that it has been spliced with feudalism this time. The difference is that instead of land granted by royalty, the wheels of the system are greased by NFTs.
Status of the Axie Infinity Scholarships subreddit (opens in a new tab) suggests that there are generally more people applying for scholarships than looking for scholarships, and as Olson pointed out, the game’s Twitter community tells a similar story. Initially, someone bought a bunch of NFT creatures hoping to profit from them while renting them out, but with more creatures than borrowers, they start to collect dust. One user complained (opens in a new tab) that one scholar ended them “without proper notice,” in a striking mirror of the real gambling economy.
A recent report from The Verge (opens in a new tab) offers a good overview of Axie Infinity’s unique financial problems, which have arguably been as impactful as the recent hack of the underlying blockchain. A recurring problem is inflation – as the value of SLP declines, it becomes less attractive to farm as a scholar. Inflation is a problem that develops Sky Mavis recognized (opens in a new tab) in a February blog post outlining drastic changes to Axie Infinity’s single-player adventure mode, which had become a popular SLP farm.
Explaining her decision to cut SLP rewards from Adventure mode and some other activities, Sky Mavis said at the time, “The Axie economy requires drastic and decisive action now or we risk total and permanent economic collapse.”
Valve has banned all NFT games from Steambut the Epic Games Store still accepts blockchain technology.