Axie Infinity combined creature NFTs, a breeding system, two tokens and its own sidechain into the first play-to-earn game with mainstream reach. Its marketplace was the engine of that economy. It also became the textbook case of a reward token inflating out of control and a bridge being drained, so it is as useful for what to avoid as for what to copy.
How Axie Infinity's economy worked
Axie Infinity, built by Sky Mavis, launched in 2018. Players needed three Axies (creature NFTs) to play. Each Axie had a class, body parts and stats that determined its abilities in turn-based card battles.
- Axies were ERC-721 tokens. Body parts carried visible traits plus hidden genes that could pass to offspring.
- Smooth Love Potion (SLP) was earned by playing and was consumed in breeding.
- AXS was the governance and staking token, also required as a breeding fee.
- Breeding combined two Axies to mint a new one. Each Axie could breed a limited number of times, and costs rose with each breed.
- Land plots in the game world of Lunacia were sold as separate NFTs.
The marketplace connected all of it. New players bought starter teams from existing players, breeders sold offspring, and earners sold SLP. As long as new players kept arriving, everyone in the chain had a buyer.
Ronin: a chain for one game
Ethereum gas costs made small in-game transactions impractical, so Sky Mavis launched Ronin, an EVM-compatible sidechain dedicated to Axie. Moving to Ronin made trading and breeding cheap and fast, and it gave Sky Mavis control over the user experience end to end. It later opened Ronin to other games.
Scholarships
Because starting teams became expensive, "scholarship" programs emerged: owners lent Axies to players, often in Southeast Asia, and split the SLP earned. Guilds formed to run this at scale. It was a creative solution to the entry cost, and it also showed that much of the playing was labor for income rather than for fun.
What broke
- Token inflation. SLP was minted for play faster than breeding burned it. When new-player growth slowed, demand for new Axies (and therefore SLP for breeding) fell, and SLP's price collapsed. Earnings for scholars collapsed with it.
- The Ronin bridge hack. In March 2022 attackers compromised enough validator keys on the Ronin bridge to withdraw over 600 million dollars in ETH and USDC. US authorities attributed the attack to North Korea's Lazarus Group. A small validator set with keys concentrated in few hands was the root cause.
- Fun was secondary. When rewards fell, many players left, because they had come to earn.
Sky Mavis responded by reducing SLP emissions, reworking rewards, expanding the validator set, reimbursing users, and shifting toward a more gameplay-first design with Axie Infinity: Origins.
What a builder should copy
- Composable creature NFTs. Traits that affect gameplay give assets real utility beyond collecting.
- Breeding limits. Per-asset breed counts and rising costs are the right instinct; they just need to be strong enough.
- A low-fee chain from day one. Whether an L2, an app-chain or an existing gaming chain, players should not pay mainnet gas to breed or trade.
- An in-game marketplace. Keeping trading inside the game lets you show gameplay-relevant filters (parts, class, breed count) that general marketplaces will not.
What to avoid
- Rewards with no external revenue. If earnings come only from new players buying in, the economy will contract when growth slows.
- A weak bridge. If you use a bridge, it is your highest-value attack surface. Use a large, independent validator set or a well-audited canonical bridge, and set withdrawal limits.
- "Earn" as the pitch. Lead with the game. Treat earning as a side effect of skill or ownership, not the reason to play.
| Design choice | Axie's version | Safer variant |
|---|---|---|
| Reward token | Uncapped SLP for play | Capped or season-based rewards; no reward token at all |
| Breeding sink | SLP and AXS fees | Fees partly burned, plus consumable items that leave circulation |
| Chain | Own sidechain with small validator set | Established L2 or app-chain with strong bridge security |
| Entry cost | Buy three NFTs | Free starter assets; NFTs for upgrades and cosmetics |
For the broader game-build side, see metaverse NFT game development and Web3 game development. If you plan a token sale to fund the game, the IGO launchpad guide covers how those launches work.
Frequently asked questions
Can I copy Axie's two-token model?
You can, but understand why it failed: the reward token had weak sinks relative to its emissions. If you use two tokens, model supply and demand under slow growth, not just under the launch hype.
Do I need my own chain like Ronin?
Almost certainly not at launch. Existing L2s and gaming chains give you low fees without running validators or a bridge. An app-chain makes sense only at significant scale.
How should game NFTs be stored?
Keep immutable traits on-chain or in content-addressed storage, and keep fast-changing game state (levels, experience) in your game server, anchored on-chain only when it matters for trading.
Is play-to-earn dead?
The pure version, where income is the main reason to play, largely is. Games that use NFTs for ownership of items in an otherwise fun game are still being built, usually with much smaller or no token rewards.