If you saw my last post about signing up for Coinbase, this is why I signed up for the cryptocurrency brokerage. Axie Infinity is an online game where you can earn cryptocurrency. It’s similar to Pokemon. The game is free-to-play, but there’s a catch. You win in-game currency by defeating teams of monsters controlled by other players in online battles. But you can’t play the game without purchasing the monsters that fight in these battles first.
And these monsters aren’t cheap. Low-end monsters, or floor axies, are the cheapest ones you can buy at around $150 in in-game currency each. More competitive axies cost more like $250 to $300, and you need at least three of them to play. You also gain more energy, which allows you to take more in-game actions and earn more money, if you have more axies. So you’ll be competing against players with teams worth thousands of dollars. But there are several ways to earn money in this game so I decided that it was worth the investment. Here are four of them.
Earning Money Through Regular Gameplay
There are two main ways to earn the in-game currency smooth love potions or SLP. You can participate in PVE adventures or fight in PVP battles against other teams. Calculating how much you could earn from these activities is complex and other articles, such as this Gamewith article, explain how the SLP system works in more detail.
So I decided to calculate what I’d expect to earn with a brand-new account with three axies. You’d earn 50 SLP from PVE adventures and 25 SLP from completing the daily quest. And you’d have enough energy for your team to fight a total of 10 battles in the arena. At an average MMR of 1200 you will earn 6 SLP per win. With a 50 percent win rate, the reward would be 30 SLP for winning five battles.
That’s a total of 105 SLP per day. Each SLP is worth about $0.07 right now. So an average Axie Infinity player would earn about $7 per day or about $200 per month by playing this game for a few hours a day. That’s not a good wage in the US, but it would provide a source of beer money. But in developing countries, $200 a month is enough to buy food and pay bills. And that ties into the second way to make money in Axie Infinity.
Earning Money Through Scholarships
To play this game you need to pay about $1000 upfront to buy ether so you can exchange it for the cryptocurrency (wrapped ether or WETH) that you need to buy three axies. That’s a lot of money to spend on an online game and it would probably get you classified as a whale in most freemium games. But you need to spend that much money just to begin playing Axie Infinity. The game was not originally designed to require such a large investment but the non-fungible tokens (NFTs) that represent axies have risen in price because of the game’s popularity.
Most Americans don’t have $1000 in their savings accounts, let alone players in developing countries where the minimum wage is $200 a month. And it’s unlikely that a bank would offer you a loan for something like this. So Axie players developed a unique type of partnership called scholarships. You can loan three of your axies to another player and receive 50 percent of the money they earn by playing the game.
That means you can recruit a scholar, lend them your axies, and if they earn $200 a month with the axies you would receive $100 a month. If you spent $1000 on axies, that’s a 120 percent return on investment after a year. And the axies don’t expire afterward. If you loan them out for a second year, you get a 240 percent return on the original investment. And if the value of each axie rises in the marketplace, that’s an additional return on investment.
Earning Money Through Staking
Now that the Ronin decentralized exchange has launched, you can also earn money by staking the Axie Infinity cryptocurrencies. As an incentive for providing liquidity to players who want to trade these cryptocurrencies on Ronin, the liquidity providers receive 0.25 percent of each transaction. It’s still less expensive for traders to use this exchange than it is to pay gas fees to exchange ether, though. And that’s another bullish sign for Axie Infinity itself. Many players were looking forward to this exchange because they didn’t like paying high gas fees.
Axie Infinity has a website that displays the staking returns. The projected annual return for Axie Shards (AXS), the main game currency, is currently 123 percent. It’s likely that this return will rapidly decrease in the near future though. Originally the staking rewards were as high as 500 percent. Staking does require less effort than recruiting scholars and managing them, though, so it might still be worthwhile even if the return on investment continues to drop.
Earning Money by Trading Axies
You can also trade axies in the in-game marketplace. The marketplace is very active, but there’s a 4.25 percent fee on each trade. So you would need to find underpriced axies and relist them for significantly higher prices to earn money from trading. There’s one marketplace feature that could result in axies listed at prices below their real value. Vendors can set the price of an axie to drop automatically if nobody buys it. But it appears that the marketplace doesn’t always update listings correctly so there are a lot of axies listed at very low prices that were sold long ago.
The real listings appear to start at a price range of around $150. It may be possible to purchase floor axies for $150 and flip them for $200 or more, and it might even be possible for bots to automate this process. With an active marketplace, this type of strategy would earn money. I haven’t tried trading axies myself though.
Note that Axie Infinity no longer pays out in-game currency to players with a MMR below 800. This is an anti-bot measure. But it also affects the price of low-end axies in the marketplace. If an axie can’t win fights in the arena, then it loses most of its value. So low-priced axies are low-priced for a reason, and flipping them may be less effective than it was in the past.
The Benefits of the Scholarship Concept
That’s it for the four main ways to earn money in Axie Infinity. But before I end this article I wanted to say a few things about the Axie Infinity scholarships.
I like the concept of scholarships because it’s a better way to help people in developing countries than other initiatives I’ve seen from NGOs, philanthropists, and financial institutions. These initiatives frequently involve providing low-interest loans. But with Axie Infinity scholarships, you’re not making a $1000 loan to the scholar. You’re letting them use your axies temporarily until they earn enough to buy their own axies. So scholarships don’t trap the scholar in debt and they set the scholar up to earn money with their own assets in the future.
These scholarships are more moral than loaning money to individuals in my opinion. Even low-interest loans can trap borrowers in debt. But if a scholar loses interest in this game and stops playing, they just return the axies. They don’t owe you $1000 and you don’t have to worry about collecting the loan or writing it off. At the same time, you earn a higher return on investment than what you would receive if you bought a bond or other debt security.
In theory, you’re also teaching the scholar how to play the game, but a scholar is likely to know more about the game than an American who’s never heard of it before. Scholarships are highly competitive and on many websites related to Axie Infinity there are a large number of Axie players from the Philippines requesting scholarships. The game’s really popular there because it allowed players to earn money online while local businesses were shut down during the pandemic.
If you have a lot of capital to deploy, staking may be the best option. If you have some money but not a lot of it, you can probably achieve higher returns through scholarships, but it would be difficult to manage a large number of scholars. If you don’t have any capital, you can still earn about $200 a month and possibly more by playing this game yourself if you can find someone to loan you their axies.