Consider Marginal Cost When You Breed Axies

In my last article I discussed four ways to earn money by playing Axie Infinity. But there’s also a fifth way. You can create new axies by breeding them and then you can sell the new axies on the marketplace. But there are a few things you have to know before you try this. Most importantly, axies that are in demand for breeding are expensive. So the first thing to consider is how much it will cost to obtain the axies that you need for breeding.

The Cost of Buying the Axies

I just looked at the marketplace listings for aqua axies that have not been bred before and that have all aqua parts. I found many listings for 0.32 WETH, or $1,461, each.You need at least two axies to breed them, and might need more depending on the breeding strategy you use. And the marketplace charges a 4.5 percent commission on axie sales. So you’d be paying $2,922 for in-demand axies plus a 4.5 percent commission. That’s $3,053 with the commission included.

Using the same criteria, I looked up plant axies. I found plant axies selling for a lower price of 0.239 WETH, or $1,094, each. Aqua axies are currently popular. Some teams even use two aquas to deal damage and one plant axie as the tank, so there may be more demand for aqua axies right now. Then I looked up beast axies, which are also damage dealers. I found purebred beast axies that hadn’t been bred before for 0.275 ETH, or $1,260.

Axie Infinity does not allow incest, so you can’t breed axies together if they have the same parents. That means that you need to start with at least 4 axies to set up a farm to breed axies without purchasing new ones from the marketplace. Other websites explain how that strategy works. But this article is about what it costs to set up an axie farm. And my rough estimate would be that it would cost around $5,000 to $6,000 to buy 4 quality axies from the marketplace.

The Cost of Breeding the Axies

Each axie can be bred 7 times but the breeding cost rises exponentially. So calculating whether it’s worth it to continue breeding axies depends on marginal cost. Breeding an axie for the fifth time costs 3900 SLP ($273) plus 1 AXS ($143) for a total of $419. If you sell it in the marketplace that costs $438 with the fee included. So if you can sell the axie for more than that, it would be worthwhile to breed it five times.

A floor axie with bad cards might be worth $300 or less. But if you’re breeding two quality axies that you bought for $1,400 each, it’s less likely that you’d get a bad result from breeding. I would guess that you’d end up with an axie worth at least $450 most of the time.

Returns on Investment

If you spent $3,000 to buy the axies and $1768 to breed them five times you’d have a total cost of $4768. There are beast axies that have been bred five times that are selling for $400 each right now, so if you resold the breeder axies afterward you could get about $800 back. Of course, you could also give the breeder axies to your scholars. But if you didn’t do that and sold the breeder axies back, you’d have a total cost in the $4000 range.

So you’d earn a profit if you sold the other axies for more than $800 each after the marketplace fee. And I think that’s the main factor for breeders to consider. I don’t know if the average axie you get from breeding is worth $800. If it is worth that much, then it would actually be worthwhile to breed axies six times. The cost of a sixth breeding round right now is $587 so you’d earn about $200 profit on average.

If your $1400 axies didn’t produce offspring worth an average of $800 each, then breeding isn’t profitable at all. And you would need to sell the offspring for even higher prices to earn a profit if you stopped at 3 or 4 rounds of breeding. With a total cost of $3600 and 4 rounds of breeding, you’d need to sell the offspring for an average price of $900 to earn a profit.

As long as the marginal cost of breeding axies is higher than the marginal revenue from selling them, it’s worthwhile to continue breeding them and you’d need a lower average sale price per axie to earn an overall profit. And if the offspring of a breeding pair are worth more than $900 each on average, it would even be profitable to breed them 7 times because the current cost of the 7th breeding round is $854.

You could still give these axies to your scholars afterward or resell them to players who plan to use them for fighting and not breeding, so using them for a few more rounds of breeding wouldn’t reduce their resale or use value much more.

Conclusion

It’s still unclear how much the average offspring of a pair of axies is worth. But I still think this article has an important takeaway. Because of marginal cost, if breeding axies is profitable at all it may be worthwhile to breed them five times and possibly six or seven times right now.

Many of the axie breeding guides were created when the price of SLP was much higher and the price of ether was lower. I’m writing this while the price of SLP is $0.07 and the price of ETH is $4,500. With a higher SLP price and a lower ETH price, additional rounds of breeding wouldn’t be worthwhile, but at current prices they may be worthwhile.

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