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Axie Infinity: An update on the first Play-to-Earn blockchain game



Originally created on the Ethereum Blockchain, but currently operating on the bespoke Ronin sidechain, Axie Infinity is a game that rewards users that play and participate in its ecosystem through a Play-to-Earn model. Created by Vietnamese developer Sky Mavis, this NFT-based game features as its protagonists creatures called Axies, which can be used to battle other players (Player versus Player, PvP) or computer controlled opponents (Player versus Environment, PvE) 

The primary crypto asset used by the project is AXS (Axie Infinity Shards), which has an emission cap of 270 million. This token is used to pay a flat fee needed to create new characters and items within the game’s universe, as well as for governance purposes—that is, voting on proposed updates to the game. The game’s other token, SLP (Smooth Love Potion), is also used to create Axies and other items, but with variable price. Unhindered by a supply cap, this token is awarded to players who are victorious in battles and climb in the game’s ranking system.

Similar to traditional games, Axie Infinity requires constant updates to ensure security, playability and overall functionality. Changes made in recent months are of particular relevance, having been implemented in the wake of a security breach that occurred in March through the bridge linking the Ronin sidechain and the Ethereum network, resulting in the theft of over $625 million  in WETH and USDC. 


Key updates and developments made since the Ronin hack

Throughout 2022, the Sky Mavis development team has undertaken a series of transformative initiatives to the game’s ecosystem in order to fulfill its promise to continuously deliver improvements to its user base. The following list highlights these initiatives in chronological order. 


  • March 29 - Ronin network atack: The Ronin network substack publicizes that malicious actors took control of 5 of then 9 validators, gaining access to 173,600 ETH and 25.5 million USDC through the bridge linked to the Ethereum network. 

  • May 05 - 5 new validators were instituted in the Ronin Network: New validators, chosen by Sky Mavis, are added. Target of 21 validators within 3 months is announced. 

  • April 06 - Sky Mavis raises $150 million: Successful funding round led by Binance featuring Animoca Brands, A16z, Dialetic and Paradigm (funds raised, together with Sky Davis’ cash balance, will be used to refund users affected by the hack). 

  • April 07 - Launch of Axie Infinity Origin: Beta version is launched to identify bugs and to garner feedback from the game’s community. 

  • April 14 - FBI identifies hackers: FBI accuses North-Korean based Lazarus hacking group for the attack.

  • April 14 - Charms and runes are unlocked: New resources are unlocked in the Origin edition and bug fixes were implemented.

  • April 25 - Launch of the final season of Axie Infinity Classic: Featuring a prize pool of 130,000 AXS, the final season of Axie Infinity Classic is launched.

  • May 12 - Launch of Axie Infinity Origin for Android: Beta version of the game is made available for android devices (not yet available on the Google Play Store). 

  • June 28 - The Ronin bridge is reopened: The Ronin bridge is reopened after a rigorous audit by Certik and Verichains. User balances lost in the hack are made available for restitution. 

  • July 1 - Land staking is activated: It is now possible for players to stake their land on Axie Infinity in exchange for an AXS reward in accordance to plot size and rarity. Sky Mavis promises additional functionality for lands, including base building and resource production, with further details to be defined in the future. 

  • August 11 - Final preparations for the global launch: SLP rewards are removed from Classic version (and added to Origin) during “season 0”, Phase 3 of Origin. Emission of rune and charm NFTs  are implemented alongside other in-game improvements.

  • August 17 - 3 new validators are introduced to the Ronin network: A pool of validator candidates are nominated by Sky Mavis, from which 3 were elected by the current 17 validators. 70% of the network must agree to approve the governance proposal. Also, the initial goal of activating 21 validators was not achieved by the 3 deadline but remains  a target.

  • September 13 - Global launch of season 1 of Axie Infinity Origin: The new iteration of the game is launched with a $1.5 million (112.000 AXS)  prize pool to be distributed to the 40,000 best performing players.


Improving security 


Currently numbering 17, validators continue to be introduced to the blockchain. Compared to other prominent blockchains—like Polkadot, with 297 validators, and Solana, with 31 validators (with real governance influence)—the Ronin network is more vulnerable to hacks and has a lesser degree of decentralization. Still, plans by developers to double the number of validators present at the time of the hack seems to be a step in the right direction that should promote a greater degree of invulnerability to assets, the platform and the player base.

Despite this positive evolution, questions about the trustworthiness of the game’s developers still linger. According to the youtube channel Asobs , Trung Nguyen, the CEO of Sky Mavis, moved around US$3 million in AXS tokens to an account hosted by Binance hours before publicizing the hack that had occurred on the  network. Tung has since denied the accusations of insider trading, characterizing the transfer of funds to keep “short-sellers, who track official Axie wallets…to front-run the news.”


Axie Infinity Origin - A new beginning 

Existing in parallel with Axie Infinity Classic, Axie Infinity Origin is the definitive version of Sky Mavis’ flagship game. The new game is the product of efforts to bring player experience improvements to the classic version of the monster battling game through better, more balanced algorithms for PvP matches, limiting rewards, introducing new SLP functionalities and bringing rune and charm functionalities closer to current ERC tokens standards. Beta launched in April of 2022, game development has reached completion. Future changes to the game should be limited to small adjustments to improve  game stability.

The primary focal points of development efforts for the new iteration of the game was to create a healthier in-game economy and to expand its user base into new platforms like iOS mobile. Initially, Axie Classic included a very generous SLP reward mechanism that attracted many players. However, the lack of balance in this mechanism eventually led to the collapse of the in-game economy.

In the new iteration of the game, SLP tokens have greater utility—such as the ability to be burned to create runes and charms—and limited reward distributions in PvP matches. The impact of these changes can be seen in the graph below, which shows a plateauing of the cumulative net emission of SLP. Additionally, Origin will be made available on the Apple Store, introducing the game to an entirely new user base of players.  


Figure 1: Total circulating SLP in 12 month period.  All together, the total SLP burned represents 19.2% of the total SLP created.


Final considerations


Axie infinity introduced Play-to-Earn mechanics to blockchains. In 2021, it achieved an impressive degree of popularity that led to an evaluation that exceeded that of established game developers like Ubisoft. Just as Super Mario, Doom, GTA, Pokemon Go, Warcraft, PUBG and others revolutionized the game industry in their respective eras and niches, Axie Infinity revolutionized the blockchain gaming sector by introducing the concept of blockchain-backed ownership.

Despite this transformative innovation, the game’s ability to retain and attract new players has waned in recent months. The prices of its primary token, AXS, is currently down 92% since its all-time-high due to the current macro context, the aforementioned hacks and other doubts surrounding the game. The new iteration of the game, Origin, has been criticized by long-time players frustrated by the fact that their experience has little to no value in the new version of the game. Despite these ongoing challenges, Hashdex views recent security upgrades—such as the increase to 21 validators and, eventually, 100 validators—as positive developments.

We also believe the proposed changes to in-game dynamics in the definitive version will be benefited by updates, bug fixes, an improved token economy and less predictable, more balanced and complex gameplay (similar to other e-sports). Sky Mavis has learned from their past mistakes and is now better equipped to face future challenges.


Figure 2: Axie Infinity monthly active player count. All together, the game lost 75.5% of its active player base.


About Hashdex


Founded in 2018, Hashdex is a global pioneer in crypto asset management. Hashdex Group is building pathways to prosperity by opening the crypto ecosystem to the world. Trusted with over R$2B (16 sept 4, 2022) in client assets, our simple and secure funds help innovative investors to join the emerging crypto economy.

Dedicated to bringing crypto opportunities to the mainstream, Hashdex Group co-created the Nasdaq Crypto Index (NCI) to provide global investors a reliable benchmark for this dynamic asset class. In 2021, Hashdex Group introduced the world's first crypto index ETFs, enabling many investors to allocate to crypto for the first time.

Hashdex Group believes open blockchains are unlocking global growth and making economic opportunity more abundant and accessible. Hashdex Group is committed to accelerating the development of the crypto ecosystem by empowering everyone to participate in this transformational opportunity for the world.


[1]  Non-Fungible-Token.

[2]  Ronin’s Newsletter, Community Alert: Ronin Validators Compromised, accessed 08/23/2022.  

[3]  Ronin’s Newsletter, accessed 08/23/2022.

[4]  Axie Substack, The Lunancian, acessed em 08/23/2022.

[5]  Charms and Runes are NFTs are created through burning SLP, Moon Shard (a collectible item) and $3 tax of AXS. Runes are special items that grant an axie a special power and charms are accessories that increase the power of specific axie body parts

[6]  Polkadot Staking, accessed August 19, 2022.

[7]  Solana Beach, accessed August 19, 2022.

[8] Bloomberg, Axie Infinity CEO Moved Crypto Tokens Before the Company Revealed Hack, accessed August 19, 2022

[9] The Lunacian, Axie Infinity: Origin is Coming! And Axie Infinity: Origin Is Live In Early Access!, accessed September 2, 2022

[10] Coindesk, Axie Infinity Reduces SLP Emissions to Prevent 'Collapse', accessed August 19, 2022.

[11] PlayCore, Axie Infinity, accessed August 19t, 2022.

[12] Amb crypto, Here’s why Axie Infinity’s market cap milestone matters in GameFi, acessado em 2 - set, 2022.

[13] Cointelegraph, 'Origin dividiu a comunidade, mas futuro do Axie Infinity passa pelo sucesso da nova versão', afirma especialista, acessado em 2-set, 2022.

[14] Crypto News, Sky Mavis plans to become a 'zero-trust organization' after $600 million Ronin hack,  accessed September 2, 2022.

[15] Activer Player, Axie Infinity Live Player Count and Statistics, acessado em 2-set, 2022.




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