While most cryptocurrency markets traded lower, tokens from the Ethereum-based blockchain game Axie Infinity skyrocketed to record levels. On July 13, 2021, the governance token AXS hit an all-time high of $21.55, marking a 86.72% gain over the past week and a staggering 410.11% increase over the trailing 30 days. Meanwhile, the in-game reward token Smooth Love Potion (SLP) also reached a fresh all-time high of $0.39 on Binance.
AXS and SLP Market Data: Explosive Growth
According to CoinGecko and Nomics, AXS's market capitalization stood at approximately $1.3 billion with a 24-hour trading volume of $1.2 billion. Against Bitcoin (BTC), AXS rose 18.11% to 0.00062 BTC per token. Among thousands of cryptocurrencies, AXS ranked 74th by market cap on July 13.
SLP, which players earn by battling in adventure mode or through PVP matches, saw strong buying pressure across multiple exchanges including Uniswap, Binance, Bkex, Digifinex and Huobi. The token's ATH of $0.39 marked a significant milestone for the Axie Infinity ecosystem.
Play-to-Earn Mechanics and Growing Controversy
Axie Infinity was developed by Sky Mavis, a game studio founded in 2018. The game employs a “play-to-earn” structure where users collect, breed, and battle NFT creatures called Axies. To start playing, users need at least three Axies purchased from the marketplace, along with the Ronin wallet, Ronin bridge, and MetaMask integration. Resources like SLP are used for breeding rare Axies and can be traded for ETH or fiat currency.
Despite the project's popularity, critics have labeled it a “borderline Ponzi scheme.” A tweet from July 9, 2021, noted: “NFT Games will be a GAME CHANGER... The border to gamified Ponzi schemes will also blur, though.” Another user on July 13 questioned: “Is it just me or Axie Infinity feel like a Ponzi/pyramid scheme?” Many similar comments have surfaced on Twitter, pointing out that new entrants must invest significant ETH upfront, and returns depend heavily on continued recruitment of new players.
Nevertheless, Axie Infinity's success has inspired a wave of GameFi projects combining NFTs, DeFi, and gaming. Whether the model can sustain long-term growth while addressing the criticism of being a pyramid scheme remains to be seen.