Axie Infinity (AXS)

Basics

• Based in: Vietnam
• Launched in 2018
• Mainnet release:
• NFTs
• Axie is evolving from its “play-to-earn” to a “play-and-earn” model (22-7-2022).
• From Zima Red (1-10-2020):

"The most popular crypto game. It features “fierce, fantasy pets that you can battle & collect while earning crypto.”"

History

• From The Tie (21-7-2021):

"Axie Infinity initially launched in 2018 as a traditional online game but gained notoriety with the addition of the AXS token into the Axie ecosystem in November of 2020."

Audits & Exploits

• Bug bounty program can be found [insert here].
• Got audited by Quantstamp (24-10-2020).

Bugs/Exploits

• About 10% of the crypto funds ($30M) snatched from Axie’s Ronin network have now been seized by law enforcement, according to Chainalysis (9-9-2022).
• From Decrypt (29-7-2022):

"Sky Mavis CEO Trung Nguyen transferred $3 million worth of tokens just before the hack was disclosed, but he says today that claims of insider trading "are baseless and false." Nguyen’s token transfer occurred just three hours before Sky Mavis disclosed the Ronin network hack, nearly a full week after the attack occurred, and closed off access to the network until late June."

• The hack on the bridge is linked to the Lazarus Group. Hackers duped a senior engineer at Axie Infinity into applying for a job at a fictitious company.
• From Decrypt (29-3-2022):

"Ronin has been targeted in a hack that saw an estimated $625 million worth of cryptocurrency drained from its bridge. Developer Sky Mavis announced the news today, writing that the exploit took place on March 23 but only discovered earlier today. The attacker used “hacked private keys” to execute the exploit, per the team’s report, and thus was able to forge transactions to claim the funds. According to the report, the attacker was able to sign transactions from five of the nine current validator nodes on the Ronin network, which is the threshold needed to approve signatures. Ultimately, the attacker gained access to Sky Mavis’ own four validators, along with one operated by Axie DAO. Sky Mavis discovered the breach after someone attempted to withdraw 5,000 ETH of their own funds from Ronin and found that they were unavailable via the bridge."

• On July 13, 2021 Axie Inifinity NFT marketplace was DDoS-ed.

Governance

Treasury

• Will have a community treasury which gets part of the fees (19-11-2020). Still being built (20-7-2021):

"In early 2021, the Community Treasury will go live and begin to receive revenues generated by Axie Infinity as well as a portion of staking rewards. This treasury will be governed by AXS stakers once the network has become sufficiently decentralized."

Token

Token allocation

• 270,000,000 total amount of tokens. From Binance Research (26-10-2020):

Binance Launchpad Sale	11.00% of the total token supply
Private Sale	4.00% of the total token supply
Play to Earn	20.00% of the total token supply
Staking Rewards	29.00% of the total token supply
Team	21.00% of the total token supply
Advisors	7.00% of the total token supply
Ecosystem Fund	8.00% of the total token supply

Utility

• From CoinDesk (19-11-2020):

"The tokens will not only have governance functions but also fee-sharing features where proceeds will go into a Community Treasury."

• From their website (20-7-2021):

"AXS holders will be able to claim rewards if they stake their tokens, play the game, and participate in key governance votes. Players will also be able to earn $AXS when they play various games within the Axie Infinity Universe and through user generated content initiatives."

Token Details

• From The Tie (21-7-2021):

"Axie Infinity Shards (AXS) are the governance tokens behind the Axie Infinity platform, while Smooth Love Potions (SLP) are the utility token."

Coin Distribution

• From Etherscan (6-10-2021):

"AXS is by far the most concentrated token per bridged chain out of the top tokens, with AXS locked in Ronin making up 56% of its circulating supply!"

Technology

• Whitepaper can be found here.
• Code can be viewed here.
• Built on: Ethereum, but announced (24-12-2020) its own layer two blockchain called Ronin (RON) to avoid Ethereum’s low throughput.

How it works

• From The Defiant (21-7-2022):

"Game players buy NFTs of monsters and then have them fight one another. Players can grow, breed and battle their digital pets called Axies. Under the play-to-earn model, gamers own their Axies and trade their in-game assets in the marketplace as NFTs. The Axie Land is tokenized and acts as homes and bases of operation for Axies."

• Bankless' Axie 101 can be read here (10-2021).
• From The Tie (21-7-2021):

"AXS is released through the ecosystem fund, play-to-earn as a reward for winning tournaments, and in the future through staking. Smooth Love Potions, on the other hand, are uncapped and are distributed based on user engagement. A few ways to generate SLP on the Axie Infinity platform include winning matches in the Arena and Adventure Mode, winning tournaments with prize rewards, and having other users interact with your land.  Smooth Love Potions, on the other hand, are uncapped and are distributed based on user engagement.

Users can expect to receive anywhere from one to eight SLP for each win they get in the Arena against other players or in adventure mode for completing new levels.  In order to win more matches (and thus earn more tokens), users look to enhance their Axies’ skill sets and genetic makeup through breeding. Users on the platform can breed Axies using Smooth Love Potions (SLP) given to them as a reward for winning battles in-game or bought on exchanges. Once a user has bred Axies, they are given an egg which takes five days to mature. Upon maturation, users can use the new Axie in Arena or Adventure Mode to earn more SLP, breed the Axie (as long as it isn’t bred with a direct relative), or sell the Axie on the Axie Marketplace. The ability for Axies to reproduce to yield more desirable traits has led some Axies to be more valuable than others, with the most valuable Axies fetching hundreds of thousands of dollars at auction.

The most valuable Axies are known as the “Origin Axies”, the original 4,088 Axies that were released at the start of the game and are marked with the Origin Axie tag. These Axies serve as a status symbol within the game, similar to holding a piece of limited edition sports memorabilia. 1,375 of the 4,088 Origin Axie supply was dedicated to in-game prizes and future promotions and were stashed for later use. These unreleased Axies were given the title “Axie Origin Coins” (AOC) and can be exchanged 5:1 for Origin Axies. At the time of writing, 1,237 AOC remains in the Axie Deployer to be released over time, according to Bloxy, equivalent to about 247 Origin Axies. Within these Origin Axies, a distinct group of roughly 30% is given the additional tag of “Mystic Axies,” which are the most valuable characters due to their rare genetic makeup and skill set, which can not be inherited. These Mystic traits are the only traits in the game that can be upgraded to ‘Legendary’ skills, making them even more powerful in battle than other Axies. Some Axies can have more than one Mystic trait, making them even rarer and thus more valuable to users. In addition to the ‘Mystic’ trait, Axies can more than one Mystic trait, making them even rarer. "

Upgrades

• Launched the Origin upgrade (22-7-2022).
• Launched the AXS staking system, and unveiled their latest progress on Battles V2 and Ronin DEX (10-2021).

Staking

• Not live yet (20-7-2021). Went live (see above). AXS holders have $2.5B staked in Axie Infinity in the first two weeks.

Scaling

Ronin (RON)

• From The Block (17-8-2022):

"Ronin has added three new validators to the project, and increased its validator set to 17. The new Ronin validators include Efficient Frontier, Community Gaming and Nansen."

• DeFi Safety called Ronin 'the least secure network in DeFi'.
• Got its token launched (27-1-2022). To 'improve its utility' free tx were reduced and users need to own RON for fees (26-4-2022).
• From 98coins (26-11-2021):

"Ronin mainnet uses Proof-of-Authority. PoA is a modified version of PoS and validators on PoA are usually less than 25. In the early stage of the Ronin Network, Sky Mavis will have sole discretion around validators. Therefore, the team has recruited an all-star cast of partners from the traditional gaming, crypto, and NFT space to serve as validators of the network such as Binance, Unisoft, Animoca, Nonfungible.com, Dapp.com"

• Ronin went live on mainnet (1-2-2021). A RON token for Ronin got teased on 13-10-2021, shortly after Sky Mavis raised 152m in private investment, hinting that RON is probably their way of returning money to their investors.

• From Crypto Briefing (24-12-2020):

"French gaming giant Ubisoft is the inaugural validator on the Ethereum sidechain. Besides Ubisoft, the list of validators includes leading cryptocurrency exchange Binance, NFT data provider NonFungible.com, gaming company Animoca Brands, and investment firm Sparq."

• From Our Network #43 (16-10-2020):

"We are hard at work on Ronin, an application-specific Ethereum sidechain for the Axie ecosystem which will be a crucial element in the pursuit of true hyper-growth."

Interoperability

• The Ronin bridge [from Axie to Ethereum] is back online (28-6-2022) more than three months after attackers completed one of the largest DeFi heists to date.

Oracle Method

• From Brave New Coin (16-11-2020):

"Is integrating Chainlink’s decentralized price feeds and verifiable randomness tool."

Their Other Projects

Katana

• Axie Infinity has their own marketplace (4-11-2021):

"Axie Infinity has launched an automated market maker called Katana for its sidechain Ronin, and it had 25,000 people interact with it less than 10 hours into its existence, according to Jiho Zirlin, co-founder of the team that built the game. There is already $115M in assets locked into Katana."

• From The Defiant (8-11-2021):

"Has attracted more than $1.2B in total value locked since launching on Nov. 4, as users load in liquidity in order to farm the sidechain’s new governance token, RON."

• Scored a miserable 5% on DeFi Safety (24-1-2022):

"Addresses are not listed in their documentation. Contracts are active, though this cannot be identified without being able to choose a specific contract. No public software repository could be found. Code testing cannot be measured with a private GitHub repository. Katana is unaudited. No bug bounty is offered on Katana. There is no information on Admin Keys. No pause control information was found. No timelock information was found. No oracle information was found."

Roadmap

• Can be found [Insert link here].

Usage

• From Bitcoin.com (17-9-2023):

"Its luster has dimmed considerably from its January 2022 peak. Then, 2.78 million average monthly players flocked to the game. Yet, today’s count stands at 359,254 average monthly participants, translating to a decline of over 87%. TVL on Ronin has seen a significant decline. On December 3, 2021, Ronin’s TVL peaked at $1.487 billion, but it has since fallen to $61 million."

• From Our Network #43 (16-10-2020):

"With over 6,000 on-chain monthly active users, Axie Infinity is now the most-used game on Ethereum. MAUs have doubled in the past 6 weeks, with growth driven by players from developing economies such as Indonesia, the Philippines, and Venezuela. Axie demonstrates how the nature of work is evolving; work and play are merging in this digital-first playground/economic laboratory. MAUs spiked by 62% during the week of September 24th which coincided with Delphi Digital’s acquisition of rare Mystic Axies.

From September 13th to October 13th, the Axie NFT marketplace processed 3931.64 ETH volume (~$1.5m USD) as compared to 462.36 ETH volume during the prior one month period. This represented an 850% monthly increase in volume, spurred by increased interest in Mystic and Origin Axies. The marketplace contract was interacted with by 3,540 unique addresses, an increase of 185.4% over the prior month. The Axie marketplace has a 4.25% fee, translating into a revenue of 167.09 ETH. In the future, marketplace fees will go to a community pool governed by the yet to be released Axie governance token."

• From CoinDesk (19-11-2020):

"“We’ve overtaken CryptoKitties by quite a lot,” co-founder Jeffrey Zirlin said in an interview. Axie Infinity is currently the only Ethereum-based NFT project with over 10,000 monthly active users, according to a press statement. The data site DappRadar shows about 2,500 users in the last 24 hours, making it currently the most popular game on Ethereum."

• From this thread (17-7-2021):

"With over half a million daily active users (DAU) and ~60% coming from the #Philippines, @AxieInfinity is exploding. To put this into perspective, around the end of July 2020, just before I first wrote about it, Axie’s DAU was below 500."

• From this thread (19-7-2021):

"April: $670k rev May: $3M June: $12.2M July (18 days in): $79.1M. It's also the leading NFT Marketplace by volume over the past 1, 7, and 30 days."

• From this thread (27-9-2021):

"Is on pace to generate ~$1.4B in 2021 revenue, up from ~$80M in 2020. @SkyMavisHQ, studio behind Axie, is 3 years old w/ 61 employees making it arguably the fastest growing & most capital efficient game studio."

• From Unchained (2-1-2022):

"According to journalist Collin Wu, data from Nansen shows that daily active addresses on Axie are down more than 70% from its all-time high in July. (To be fair, the data also shows that Axie Infinity has over 300,000 daily active addresses and ranks as the third most used dapp in crypto on DappRadar.)

Axie Infinity has yet to crack $2 million in daily revenue since December 7th, according to data from Token Terminal. This comes after generating over $2 million in revenue every day between July 4, 2021, and December 7, 2021. In fact, over the past 180 days, Axie Infinity has averaged daily revenue of over $6 million, marking December as a severe outlier."

Competition

• Other Play-to-Earn crypto games, like DeFi Kingdoms, Splinterlands and others.

Pros and Cons

Cons

• Sky Mavis investment from Alameda Research/FTX, which came out (11-11-2022) during the FTX crash. This could mean fall-out risk. It turned out to be $2M in equity.
• Ronin is a PoA sidechain (26-11-2021).

Team, Funding, Partners

Team

• Full team can be found [here].
• From CoinDesk (19-11-2020):

"The Vietnam-based startup behind the game, Sky Mavis, is the most recent Binance Launchpad project."

• Jeffrey Zirlin; co-founder and Head of Growth

Funding

• 3AC was an investor according to Decrypt (2-7-2022).
• Axie Infinity has raised $152 million in a Series B round led by Andreessen Horowitz with participation from Accel and Paradigm (5-10-2021).
• From The Tie (21-7-2021):

"Delphi Digital announced their foray into the Axie Infinity ecosystem in October of 2020 by purchasing roughly $160,000 worth of Axies. All of the Axies purchased by Delphi hold the Mystic title, with four of the Axies having three Mystic traits and one of the Axies having four Mystic attributes."

• Raised $7.5M from (11-5-2021):

"Over a dozen institutions and nearly two dozen individuals participated in the Series A, including but not limited to Libertus Capital, BlockTower Capital, Animoca Brands, MetaCartel Ventures, Coingecko Ventures, Mark Cuban, Alexis Ohanian, Gabby Dizon, Peter Pan, Julian Bouteloup, GmoneyNFT, Leo Cheng, and more."

• From CoinDesk (19-11-2020):

"Has raised $860,000 in a strategic sale of its AXS governance token. The funding round [was] led by Delphi Digital."

Partners 

• Aave and Axie Infinity are teaming up to connect DeFi and NFTs (11-2020).
• Axie Infinity partnered with MakerDAO for in-game DAI reward distribution.
• Axie Infinity partnered with Samsung as a key dApp partner for integrating the Samsung Blockchain Platform SDK. The Axie Infinity game is currently available in the Samsung wallet.
• Axie Infinity integrated with Kyber Network for meta-transaction token swaps during the Land sale in early 2019.

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