How to Invest in Axie Infinity

Here’s What You Need To Know

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The rise of blockchain technology hasn’t just revolutionized the world of investing — it has also created exciting opportunities for online gamers. Online gaming platforms like Axie Infinity are built on blockchain technology and operate using cryptocurrencies.

The fun gaming platform is also an opportunity for investors. Keep reading to learn how Axie Infinity works, how to invest in Axie Infinity, and the factors you should consider to decide whether it’s a good investment for you.

The Short Version

  • Axie Infinity is an online gaming platform that uses blockchain technology to help users play games and connect with others.
  • Users buy NFTs to own land, creatures, resources, and abilities within the platform.
  • AXS is the Axie Infinity native currency. It allows users to vote on the platform's future, buy resources and participate in gaming.
  • AXS has seen impressive growth since its creation. However, it’s a speculative investment, so it may not be suitable for all investors.

What Is Axie Infinity?

Axie Infinity is a blockchain-based gaming platform that allows players to collect, battle, and breed whimsical pets and build kingdoms. The Axie Infinity platform is player-owned, meaning each user has ownership of their resources in the game.

The Axie Infinity platform uses non-fungible tokens (NFTs) built on the Ethereum blockchain to represent the game's resources, including creatures, plots of land, abilities, and more.

Community members can build their own tools and experiences within the universe and enjoy creating a community with other users.

In 2018, the technology-based game developer Sky Mavis created Axie Infinity. The company has grown since then. It now has a full-time team of employees headquartered in Ho Chi Minh City, Vietnam. It's now valued at $3 billion after only four years in business.

How Axie Infinity Works

Axie Infinity's developers focus on four primary focus areas within the gaming platform: battling, breeding, economy and long-term sustainability, and land.

Battling

Axie Infinity's battle gameplay resembles battling with Pokemon cards — in fact, that was one of the creator’s influences. More than 1.5 million people use this feature each day. And through tournaments, users can earn cryptocurrencies from other players and tournament sponsors.

Breeding

In addition to battling the Axie Infinity creatures, users can also breed them. The platform has several rules around this, including a limit on the number of times a creature can be bred to avoid hyperinflation. To breed Axies, users need Smooth Love Potion (SLP), which we will cover in more detail below.

Economy & Sustainability

The Axie platform is entirely player-owned, and users are rewarded for the time they spend on the platform growing the Axie economy. The creators hope to create a sustainable economy within the game by improving the gameplay, controlling the supply and demand of Axies and rewards, and making the game accessible to newcomers.

Land

All the gameplay happens in a place called Lunacia, which is divided into individual tokenized plots called Terra. Users can own, sell and develop this important resource. Just like in real life, the Axie platform land can grow resources that belong to the landowner. As the platform grows, so will the different functions that come with owning land, according to Axie’s white paper.

What Is AXS?

Like some other blockchain-based gaming platforms, Axie Infinity has its own native currency, AXS. This coin serves as the governance token for the Axie platform, meaning anyone who owns the digital currency has voting rights in the gaming platform. AXS ownership also allows players to buy resources within the game and stake their tokens.

The Axie Infinity platform launched in 2018, but the AXS coin wasn’t added until late 2020. It launched at roughly $0.15 per coin and, after less than a year of remaining relatively stagnant, saw a significant surge in mid-to-late-2020.

AXS reached its peak at $160.36 on November 7, 2021. It has since seen its price drop considerably. As of July 18, 2022, the coin was trading for $15.60. There are about 82.3 million AXS in circulation, which is about 30% of the maximum supply. The coin’s market capitalization is roughly $1.279 billion.

How To Invest in Axie Infinity

Whether you’re an Axie Infinity platform user or not, you can add AXS to your portfolio. It doesn’t just have value on the gaming platform. It works like any other asset: If you buy it and it rises in value, you can sell it for a profit.

Here are the three basic steps that you'll take to buy Axie Infinity.

1. Open a Crypto Exchange Account.

Like with most cryptocurrencies, you’ll need an account with a crypto exchange to buy it. AXS is available on most popular exchanges, including:

2. Choose a Wallet to Store Your AXS.

Most of the exchanges above will store your cryptocurrency assets on their own servers. However, as we've seen recently with the bankruptcies of companies like Voyager and Celsius, your safes best is to store your crypto on your own hardware crypto wallet like Ledger or Trezor.

3. Make Your Purchase.

If using an exchange, your purchase could be completed in as little as a few seconds.

You can also buy AXS through the Axie Infinity platform. You'll have to set up a digital Ethereum-based wallet (called a Ronin wallet), buy your pets and create an Axie Infinity account before you can download and play the game.

AXS vs. SLP

AXS is the primary cryptocurrency for the Axie Infinity platform, but it’s not the only one. SLP is a utility token within the Axie ecosystem. Users on the Axie Infinity network can earn SLP as a reward for winning battles or going on adventures, but they are limited to a certain amount they can earn daily.

They can then use this token for breeding new digital pets, but once they use it, it's gone. Each pet can only be bred a limit of seven times, and each new generation costs more SLP than the last. All these measures are meant to keep Axie inflation at a minimum.

Like AXS, SLP is available on cryptocurrency exchanges, or users can purchase it from other players.

Pros and Cons of Investing in Axie Infinity

Are you considering investing in Axie Infinity? If so, there are a few pros and cons to consider.

First, Axie Infinity has some advantages that could make it a good investment. Unlike many cryptocurrencies, AXS has several actual functions. Not only can you use it within the Axie Infinity platform, but owning it gives you voting rights. And as the gaming platform evolves, the value of the cryptocurrency could increase.

Another advantage of Axie Infinity is its relatively large growth during its short lifetime. It was only created in late 2020, yet it already ranks in the top 50 cryptocurrencies based on market capitalization. It ranks higher than many coins that have been around longer.

Finally, even though AXS isn’t trading anywhere near its highest price, it still has seen impressive growth. If you bought the coin when it was first released, you would have seen a more than 14,586% return on investment.

That being said, AXS has some downsides. Cryptocurrency is inherently volatile, and AXS is no exception. It has seen significant price fluctuations during its short lifetime. There’s no way to know for sure whether it will bounce back from its recent price declines, making it a risky investment.

Additionally, Axie Infinity isn’t the only popular gaming platform on the market. If another similar platform becomes more popular than Axie Infinity, the value of AXS could decline.

Should You Invest in Axie Infinity?

Axie Infinity is one of the market's most popular blockchain-based gaming platforms. Not only is it fun for online gamers, but it also presents an interesting opportunity for investors. The platform’s native coin — AXS — is a digital currency with value on and off the gaming platform.

Whether Axie Infinity is a good investment depends on your risk tolerance. It has the potential to provide a return but is also volatile, which many investors may not be comfortable with.

Further reading:

Erin Gobler

Erin Gobler is a freelance personal finance based in Madison, Wisconsin. After seven years working in state politics, she left to pursue writing full-time. Now she writes about financial topics including mortgages, investing, and more for major publications like Fox Business and NextAdvisor. In addition to finance writing, Erin also provides financial coaching services where she works with individuals to help them reach their money goals.

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