Non-Fungible Tokens exploded alongside DeFi applications during this cryptocurrency cycle. While most serve as simple digital collectibles, others have leveraged the technology to create truly unique experiences – including play-to-earn games based entirely on the blockchain. Sharing many common features with traditional trading card games, these NFT-based games have brought an important new factor to the system. Where traditional digital collectibles rely entirely on the issuing entity, NFTs exist free from potential rollbacks or devaluing of issued collectibles.
Recently, Axie Infinity bucked the overall market trend – seeing double-digit gains despite an overall market downturn. This is in part due to their business model, where users buy, trade, and breed digital creatures called “Axies,” with each representing a unique NFT within their ecosystem. While each NFT undoubtedly represents a clear price amount, the overall game does not depend on market conditions – users will continue to play, regardless.
What is Axie Infinity?
Axie Infinity is a blockchain-based game in which users train digital creatures to compete against one another. To begin playing, users must first purchase three axies from other players. Breeding axies requires a secondary token within the ecosystem, Small Love Potion (SLP) – which also saw a major price increase.
In effect, Axie Infinity is Pokemon with NFTs. Users may also farm SLP, powering the play-to-earn mechanics of gameplay. Similar games have been remarkably successful in the past on traditional gaming platforms, suggesting that the added financial incentive may continue to boost Axie despite market conditions. This is in stark contrast to previous NFT projects, including the infamous CryptoKitties.
A History of NFTs
Non-fungible tokens are not a new technology, with financial use cases outside of gaming. However, their proliferation began with the advent of the CryptoKitties platform. Considerably less feature-heavy than Axie Infinity, CryptoKitties only allowed for breeding and trading their namesake. The previous boom cycle in 2017/2018 saw an explosion in trading for CryptoKitties – which may have contributed to a painful Ethereum traffic slowdown.
While CryptoKitties is no longer the dominant force in the sector, their parent company does represent NBA TopShots– one of the clearest integrations of traditional business with blockchain innovation. Several major players have announced NFT-based collectibles since, including Marvel and The Walking Dead.