Is Axie Infinity Legit? Weighing in the Pros and Cons

Is Axie Infinity Legit? Weighing in the Pros and Cons

Now that we have talked about all the basics you need to know about Axie Infinity and the rather complicated process of cashing in and cashing out your earnings, we tackle one of the bigger questions: is Axie Infinity legit AND a sustainable business model?

Beyond the media coverage on how it has helped a lot of Filipinos during the pandemic, there are those who are skeptical about how Axie works–and we understand where they are coming from.

We weigh in the pros and cons of Axie Infinity and its unique economy in the Philippines to help you determine if this cryptocurrency-based game is for you:

Is Axie Infinity a Ponzi scheme?

That is what you most often hear from those questioning if Axie Infinity is legit. Since it has a rather unusual earning mechanic, people would often dismiss the game as a Ponzi scheme. By definition, a Ponzi scheme is a rotation of money illegally without any real growth, leading to the defrauding of investors as money gets laundered out eventually.

To set things straight, Axie Infinity has peer-to-peer trading (through the selling of Axies and Axie teams) and is based on a fair market price that is dictated by the Axie economy. Add to the fact that Smooth Love Potions (SLP) is convertible to real money via cryptocurrency exchanges, and that there are over 150,000 users in the Philippines alone, the Axie economy is a legitimate one as new money is coming in through various ways.

Despite these factors, people should still exercise caution in investing real money in Axie Infinity, especially since the cryptocurrency market is very volatile–you will never know when it will drop so bad that your Axies or SLP reach a value that is below Php 1.

When converted, this particular Axie is valued at over Php 35 million as of writing this article.

With over 150,000 users (and growing), the next question to the legitimacy of Axie Infinity is this: is the Axie economy sustainable in the long run?

Juan Miguel Lopez, who is a former banker and is knowledgeable about the workings of the finance industry, explained to me that the Axie ecosystem is sustainable–at least for now–because of the stakeholders involved in making the Axie economy work. This is comprised of 1) investors who buy Axies and breeds them, 2) Scholars who pilot the Axies of managers, grinding through for SLP, and 3) The cryptocurrency market in general, which affects the Axie economy indirectly because of how it dictates the demand for SLP and AXS tokens.

However, Buenaventura explains in his post that there is a possibility that Sky Mavis might retire older Axies should the Axie population becomes too high. While it might help in preserving the ecosystem, players might view this as a deterrent towards investing money and growing their Axies–both possibly leading to a loss of interest to the game until the SLPs and Axies will have close to zero monetary value.

At the end of the day, the sustainability of the Axie economy still relies on the interest in the game. This may be a problem in the future especially if people lose interest in the game for a variety of reasons, so the challenge for its sustainability all depends on how Sky Mavis improves the game in its future iterations.

Axie Infinity Banner

Unlike with Bitcoin and Chia where they utilize the resources of your GPU and SSD respectively, Axie rewards its players with SLPs through the sheer grind of playing the game. Think of it as the battle points in Mobile Legends–except that those battle points can actually be converted to real cash. That’s one aspect of how Axie Infinity is a legit game-changer with its unique economic model.

Another aspect of it that makes it unique is the Axies being NFTs. With the many variables that can affect the rarity of a certain Axie, some Axies can fetch really high prices–with some valued at over Php 35 million! Along with a growing player base and a market that is more competitive than ever, the Axie economy in the Philippines is unique as it completely reimagined Pokemon as an actual economy.

However, just like with the general concern for NFTs, there are no definite standards at which Axies are the most valuable. Sky Mavis has yet published a guide on determining the value of Axies based on many factors (skills, appearance, breed, etc)–so there is that chance that a certain Axie being sold for a ridiculous amount of money is simply hyperinflated, with its price dictated by nothing but hype.

And just like with any product that involves the internet, stability and security are two of the biggest concerns about Axie Infinity right now. It is no secret that Sky Mavis has been running into server-related issues these past few days, and my colleagues and friends (including Unbox founder Carlo Ople) have also encountered problems logging in as well.

While that may sound like a cause for concern, Sky Mavis does acknowledge these problems, and publicly stated that they are working hard to improve the overall stability and security of the game. While such a statement may sound reassuring, we still do not know if Sky Mavis will be able to cover all the loopholes to prevent hackers from stealing the hard-earned Axies and SLPs of players.

To be fair with Sky Mavis, they do have a whitepaper detailing their planned roadmap for Axie Infinity. It still remains to be seen, however, IF they can stick through their proposed timeline–take a look at Genshin Impact and how many times they have to delay the Inazuma update due to various issues.

In a nutshell, even if Axie Infinity is backed by big names like Mark Cuban and has a strong economic model, one must weigh in the pros and cons and exercise caution before investing real money into it.

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