Abstract
Axie Infinity is a blockchain-based video game offering players the chance to earn crypto tokens in exchange for their time spent playing the game. During the COVID-19 lockdowns, the game's popularity surged alongside the crypto market and stories of early adopters’ quick returns on investments circulated among online crypto and Web3 communities. As the game's rapidly growing userbase plateaued, the community experienced several growth-related crises, one of which saw the value of the game's tokens crash. But players were not passive victims of these developments. They responded by creating a “scholarship” program to secure the flow of new players to the platform and actively commented on their commitment to the “grind” of playing the game to recoup their investments. This article treats the trajectory of Axie Infinity as both an exemplar case study of broader dynamics in the crypto gaming landscape—a process we call the economization of play—and as a unique site in which players were not simply duped by the promise of the game, but were responding to crises proactively with risk mitigating and rationalizing strategies.
Keywords
Introduction: Onboarding the World to Web3
There is a recurring hope within Web3 circles that the next major application could be the one to jumpstart the mainstream adoption of blockchain technology and its economic principles. At one point, it seemed as though crypto video games were primed to be that “killer app.” Tech companies and venture capital firms took notice as the total value of transactions processed on these games’ blockchains ballooned into the billions. Between 2020 and 2022, investments topped $10 billion USD (DappRadar, 2021; Gherghelas, 2023; Herrera, 2021). Given the limited practical applications of blockchain technology to date, the industry has typically constructed value discursively with an orientation toward some idealized blockchain future. To better understand the dominant crypto game visions that mediated this growth, Egliston and Carter (2024) conducted a discourse analysis of nearly 400 public documents published by the developers and financial backers of 70 different games. They argue that this discourse imagines players and developers as financialized subjects and positions them to view risk and investment as potential solutions to structural problems within the game industry and the wider economy.
In this paper, we build on these insights which characterize the broad landscape of crypto games. We are interested in seeing how such attempts to transform gaming into a digital value-creation and value-management activity translate into game design practices and how players in turn negotiate their own hopes, commitments, and constraints when faced with inherent contradictions in the game designers’ vision. To do so, we focus on the particularities of a single case: Axie Infinity, the most popular crypto game to date. Axie Infinity's basic gameplay consists of players fielding teams of digital creatures called Axies and battling other players to earn the game's tokens. The analysis of this single case allows us to engage with the game designers’ vision more critically and to pay attention to the chronological sequence of crises and controversies that bogged down the game's quick rise in both market value and player growth and its later plateau and crash. Axie Infinity's approach to the transformation of gaming is a process we refer to as the economization of play. 1 Through this process, the game's designers purport to compensate players for their time in cryptocurrency, deliver them platform-agnostic property rights for their digital assets, and enroll them in a broader crypto ecosystem of (deferred) decentralized governance, all in service of “onboard[ing] the world to Web3” (Official Axie Infinity White Paper, n.d.).
The economization of play presented by Axie Infinity synthesizes three longer, parallel arcs in the development of the digital economy. The first arc is the monetization of play, which some have described as gamification and gambling, as well as “playbor”—the hybridization of work and play (Backe, 2023; Kücklich, 2005; Zaucha and Agur, 2023). Such accounts often seek to uncover the labor that has been masked as play, but in our analysis of Axie Infinity, play is promoted as a value-generating activity explicitly by the game designers. The second arc is the financialization of digital assets enabled by blockchain-enforced property rights. Past studies have mostly focused on digital art blockchain projects as a renegotiation of intellectual property (IP) rights (O’Dwyer, 2020; Serada et al., 2021; Zeilinger, 2016) rather than crypto games. The third arc situates Axie Infinity within the broader aspirations of Web3 and blockchain-based projects to decentralize the governing mechanisms of digital exchange. Scholars have pointed to the failed or deferred goal of decentralization through blockchain architecture, highlighting both gaps between vision and practice and competing visions of what kind of decentralization the new architectures of Web3 are meant to facilitate (Dupont, 2017; Schneider, 2019; Swartz, 2018; Vidan and Lehdonvirta, 2019). Although Axie Infinity inherits key technologies from these projects, Sky Mavis, the startup behind the game, seeks to establish fundamentally different relationships with value and scarcity. In examining this specific case study, we track something more comprehensive than monetization, financialization, or decentralization alone. We observe in the economization of play an embedding of value calculation alongside an enrollment of players into this grand vision and project of a new political economy.
Seeing how these three arcs are synthesized in Axie Infinity's design and vision points to inherent contradictions in the platform's design. A reliance on the continued growth of the player base, a market prone to sharp and quick boom and bust cycles, and a gaming experience narrowly focused on the financial aspects of the platform creates a gap between the game designers’ purported aspirations and the reality of the gameplay as a risky investment. Academic critics have taken Web3 projects to task on such grounds, arguing that they reproduce and prosper from imperial and settler colonial logics (Corballis and Soar, 2022; Jutel, 2021). While these logics might be present in Axie Infinity, we caution against totalizing narratives that risk obscuring players’ agency. These sorts of critiques conceal players’ efforts to deviate from the game's prescribed visions and renegotiate on their own terms their relationship with the game and Web3. Furthermore, neocolonial critiques of Web3 are complicated by geography, among other things. In Axie Infinity's case, the game's designers are based in Vietnam, and the “managers” of a player-initiated “scholarship” program for the game are located all around the world, including low-income countries. 2 For this reason, in the second half of the article, we shift from examining the economization of play as articulated by the game's designers and advocates to analyzing how players responded to two moments of crises in the game's trajectory. We show how players rationalized and mitigated risk within their adopted positions in the global crypto economy, and how they attempted to overcome the limits of the game's economic design (often referred to in the crypto world as a platform's “tokenomics”).
In the following sections, we describe Axie Infinity's tokenomics and highlight its shortcomings through a brief history spanning the game's 2018 release, its rise during the COVID-19 pandemic, and the collapse of its economy throughout 2022. We then elaborate on the game's economization of play through the dynamics of compensation, digital property rights, and decentralization before examining how players responded to the game's inherent economic contradictions. Our analysis centers on two growth-related crises. The first emerged at the height of the game's popularity. As the game's tokens became more valuable, prospective players from low-income countries that made up a majority of the player base could no longer afford to buy the necessary tokens to join the game. In response, the game's community developed the “scholarship” program through which wealthy “managers” covered the costs for new “scholars” to join in exchange for a portion of their income. The program allowed the game to continue to grow, but it disproportionately enriched early entrants and wealthier players at the expense of newcomers. The second crisis emerged as the value of Axie Infinity's tokens plummeted in the midst of a wider crypto market crash. The effects were further exacerbated by a $620 million USD hack that targeted the Axie Infinity blockchain. We examine how even as the player base exited en masse, some continued to play, embracing the “grind” as they speculated on the prospect of making back all that they had played for, earned, and lost. We argue that the case of Axie Infinity resists straightforward narratives of exploitation and unmet promises, instead revealing a more complex story where those enrolled in the new political economy of Web3 are actively working to mitigate and rationalize the risk involved.
Methodological approach
We treat Axie Infinity as both a formative model for other crypto games and a historically situated game that grew rapidly and collapsed during the COVID-19 pandemic. While building on prior work in analyzing the discourse of the broader crypto gaming space, we are interested in analyzing Axie Infinity's developers’ specific vision and following the chronology of in-game developments and player responses that occurred around its growth-related crises. Using methods from cultural studies and the history of technology, we compiled an archive of founding documents and news coverage of the early days of Axie Infinity with the focal point being the Axie Infinity white paper. This genre of document has become standard across Web3 projects and is important to us in its function as a proposal of a “techno-mediated social order” (Faustino et al., 2022). Analyzing this document within the historical and cultural contexts of its production and dissemination and employing conjunctural analysis (Gilbert, 2019) enables us not only to tease out the specific arcs of digital political economy Axie Infinity synthesizes but also note its central position within the broader landscape of crypto games. 3 In analyzing the response from players, we similarly assembled an archive of blog posts, news coverage, and players’ posts to the Axie Infinity community on Reddit around two specific moments of crises within the game, from which we drew our analysis of the emergence of the scholarship program and players’ commitment to the grind.
This kind of analysis introduces ethical concerns for researchers navigating the tension between the historical standard of direct and detailed sourcing and the need to respect online users’ privacy. We did not solicit informed consent given that we did not directly engage with the user community and that requesting participation could cause greater confusion and distress than treating the subreddit as a historical record. However, social media scholars have argued that the publicness of online posts should not be taken as implicit consent to use such material in research (Fiesler and Proferes, 2018; Proferes et al., 2021). Historians of the Internet have similarly argued for more explicit considerations of the ethics of online posts, often precisely because of the temporal distance from the posters’ perspective (Driscoll and Paloque-Berges, 2017). In the context of crypto gaming, players’ and users’ experiences in the game and expressed views are also tied to their future earning potential. “Disguising” such posts by generating alternative pseudonyms and lightly paraphrasing the posts has had questionable efficacy in preventing reidentification (Reagle, 2022). Balancing these competing professional commitments, when referring to reactions on Reddit, we chose to link to the Axie Infinity subreddit and paraphrase, but not directly quote or link to specific posts. Additionally, even public blog posts analyzing developments within the game included comment sections in which hopeful applicants pitched themselves as Axie “scholars,” disclosing personal information about their location, gaming experience, and expected pay. In these cases, we decided to not link directly to the blog post to avoid disclosure of the above “scholarship applications.” We note such omissions and paraphrases for each instance in which we chose to do so.
Crypto games as a pathway out of poverty
Axie Infinity debuted in February 2018, just as CryptoKitties and other collectible Non-Fungible Token (NFT) cryptogames were surging in popularity. The notoriously volatile crypto market crashed soon after and stagnated throughout the year. Despite unfavorable market conditions, the player base grew steadily, nearly doubling the price of the cheapest Axie NFTs from $0.56 to $1.04 USD. At the end of the year, Sky Mavis, Axie Infinity's developer, expanded upon the collectible NFT format to include a tactical card battling mode resembling Pokémon, Yu-Gi-Oh!, and Magic: The Gathering. In addition to collecting, trading, and breeding Axie NFTs, players could now lead their Axies in battle against each other, using cards corresponding to actions to deplete their opponent's health points.
It was not until May 2020 that Sky Mavis would implement its “play and earn” reward system. By winning battles, players improved their competitive ranking relative to others and received cryptocurrency in an amount corresponding to their rank. The tokens doled out to players, Smooth Love Potions (SLP), are a necessary component for breeding new Axie NFTs, but they can also be transferred outside of the game to be sold on independent exchanges for other crypto- and state-backed currencies. Sky Mavis saw broad appeal in an earning platform organized around a familiar game format and were confident that in addition to being a viable business venture, Axie Infinity had the potential to realize much grander Web3 ambitions by “deliver[ing] property rights to all users of the internet, starting with gamers” (Official Axie Infinity White Paper, n.d.: Mission).
In early 2020, COVID-19 radically disrupted the global economy and people sought alternative sources of income unaffected by lockdowns. That summer, crypto news outlet CoinDesk reported that members of a rural community in the Philippines had been making over $200 USD per week playing Axie Infinity (Callon-Butler, 2020). The article proclaimed that the game was “providing pathways out of poverty and helping spread the word about novel technology” (Callon-Butler, 2020). Over the next year, almost 30,000 Filipinos joined, making the Philippines the game's “largest source of traffic” (Callon-Butler, 2021). Some of the Filipino players posted on Twitter, claiming to have purchased homes with their earnings. CoinDesk explained that “for some… play-to-earn… is pure fun and a bit of pocket money. For others… it has become a legitimate income-earning opportunity” (Callon-Butler, 2021).
During that time, both the crypto and traditional financial markets experienced significant gains. The Ethereum blockchain upon which Axie Infinity was built saw its cryptocurrency (ETH) soar in value from $385.92 USD to $4177.78 USD. Due in part to these infrastructural ties, the value of all Axie Infinity tokens also began to rise, increasing players’ earnings and making the game more attractive to prospective players. This had a compounding effect as the arrival of new players’ injected capital into the game economy and increased demand for tokens, further driving up token values and by extension, players’ earnings. At one point, Axie NFTs became so expensive that the cost to field a basic team of three, the minimum number required for “play and earn” battles, had gone from less than $5 USD for very early entrants to approximately $1000 USD. This boom did not last very long.
In summer 2022, Axie Infinity's blockchain had been hacked, resulting in the loss of $620 million USD and the rest of the crypto market was in decline. The player base dwindled as the value of SLP fell below a cent and earnings sank. Although external factors contributed to the fall, it was accelerated by the game's myopic tokenomics. Under the “play and earn” model, playing the game has the inflationary effect of minting new SLP, adding to the token's total supply without necessarily increasing its value. To avoid inflation, this model relies on a constant stream of new players injecting capital into the game's economy through the purchase of Axie NFTs and other game tokens. As the crypto market crashed and Sky Mavis scrambled to address the hack, there were not enough new players coming in to prop up the value of SLP. Early critics who had called the game a Ponzi scheme 4 were vindicated by the negative press as the game collapsed (Baschez, 2021). Many of the game's players, especially those in the Philippines, were left holding tokens worth almost nothing while others owed thousands of dollars to friends and family for funds borrowed to “play and earn” (Chow and de Guzman, 2022; Gottsegen, 2022; Robertson, 2022).
The economization of play
Disclaimer: Please note that anything written in this white paper should not be taken as financial advice. Axie is a bleeding-edge game that's incorporating unfinished, risky, and highly experimental technology. Development priorities, roadmaps, and features are subject to radical overhaul based on research, traction, feedback from the community, and a myriad of other factors. (Official Axie Infinity White Paper, n.d.: Mission)
Beyond mere monetization or financialization, this process leverages the video game industry's increasingly wide reach to create new Web3 users and integrate them into the global crypto economy at scale. It operates through three dynamics: (1) compensation in crypto tokens for value generated within and for the game; (2) establishing and enforcing property rights over these digital assets; and (3) decentralizing the game's ownership and governance through blockchain architecture. We analyze each dynamic below, primarily through the Axie Infinity white paper, but also drawing on the game's website, the developers’ blog posts, and related news media. As a proposal of a “techno-mediated social order” (Faustino et al., 2022), we take up the white paper's framings of the game and its players to examine how the economization of play is articulated and offer a critique of the limitations of such a project.
Compensating play
“Play and earn” has undoubtedly been one of the most enticing aspects of Axie Infinity. It was implemented as a marketing tool to attract players to the game and as an incentive mechanism, aligning the game's community with the direction of the game's development, as token-holding stakeholders. It is justified plainly: “Games need players. By simply playing the game, community members are adding value to the network and should be rewarded. It's simple, but revolutionary. We’re looking for missionaries to align incentives with as we change the gaming world forever” (Official Axie Infinity White Paper, n.d.: Play and Earn). Closer scrutiny of the game design reveals that the value added by “simply playing the game” is actually value extracted directly from players’ blockchain activities in the form of fees paid to the game's treasury when new game transactions are registered, such as breeding new Axies or interacting with other game modes. The white paper's call for “missionaries” is less playful hyperbole than a genuine reliance on network effects to expand this system. As players recruit friends and family, both the number of fee-paying players and the market for the game's tokens grow. Sky Mavis can then leverage the increased activity on the game's blockchain to fundraise external investments.
These attempts to capture value, both through and around play, call into question the very nature of play and its relationship to labor within Axie Infinity. Zaucha and Agur (2023: 6) consider Axie Infinity a form of “playbor,” a term they borrow from Kücklich (2005) who developed it to highlight how blurred distinctions between work and play simultaneously create and obscure precarious working conditions and relationships. However, Backe (2023: 86) points out that playbor originally described the exploited work of video game modders working outside of the regular game to “create products in an act of productive leisure.” Value in crypto games, he argues, is created as “players act in the game itself” (Backe, 2023: 6). The gameplay design and its tokenomics are one in the same. Like Backe, we resist applying “playbor” to “play and earn.” First, the concept's analytical explanatory power in unmasking accounts does not fully capture the explicit nature of “play and earn” as it operates in Axie Infinity. The white paper makes work and play functionally equivalent through its vision of play as a value-generating activity worthy of compensation. Second, as an actors’ category, Axie Infinity's developers resort to reinforcing the distinction between play as fun and labor as value-generation in moments of crisis, when the earning potential of gameplay is undermined.
Axie Infinity's vision of “play and earn” argues that the video industry has always benefited from extracting the value that players create. But the novel technology of the blockchain, the white paper claims, is what makes, at last, this fair reward system possible. In Sky Mavis’ own words, “Blockchain economic design unlocks… complex player-owned economies… [where] players are able to have fun… while simultaneously earning potential resources that will have real monetary value due to an open economic system and demand from other players” (Official Axie Infinity White Paper, n.d.: Community&Economy). But a quick gloss of the history of video games makes clear the fact that gamers have monetized their play and navigated sophisticated game economies with real monetary value for decades.
For elite gamers, there have been professional leagues, cash-prize tournaments, and entire supporting media ecosystems (Taylor, 2012). For everyone else, there have been unsanctioned opportunities on external platforms for “real money trading” (RMT) where players can sell items, accounts, or services like “account leveling” (Consalvo, 2007; G2G, n.d.; Nakamura, 2009; Ombler, 2020). For as long as these options have been available to players, game economies have been organized around digital assets with real monetary value. This can be seen in games like EVE Online where a spaceship war wiped out over $700,000 USD in items (Knoop, 2021). Still, players, developers, and media personalities have argued that money undermines the integrity and spirit of gaming and have expressed concern that the encroachment of blockchain technology into traditional video games could exacerbate ongoing issues around monetization. These critics perceive “play and earn” as yet another example of money's corrupting force on gaming (Curious Addys, 2022; Let me explain Blockchain gaming and Play-to-Earn., 2022). 5 In this sense, the innovation Axie Infinity offers players through “earn and play” is not so much the technical means for monetizing their in-game activities, but the legitimization of this monetization as the goal of play.
Securing digital property rights
Central to the Axie Infinity mission is the delivery of property rights to “all users of the internet, starting with gamers” (Official Axie Infinity White Paper, n.d.: Mission). For Sky Mavis, gamers are a significant but hardly unique segment of internet users who generate value for platforms—video games in this instance—for which they will never be compensated. The white paper suggests that while this sort of exploitation is unjust and something that Axie Infinity seeks to remedy through “play and earn,” it is a symptom of a much deeper problem: Internet users have no real property rights because they do not actually own their digital assets. The RMT restrictions of video games that put “violators” at risk of losing access to their accounts are illustrative of this point.
The white paper presents Axie Infinity's “play and earn” in a different light entirely. Rather than an improvised compensation scheme that breaks the rules, it is a core feature available and promoted to all players, regardless of skill level. The foundation of this reward system is the game's blockchain property rights regime. In blockchain's capacity to reliably record, validate, and verify the ownership of digital assets, the white paper positions it as the technology best suited to enabling true ownership and full property rights over digital assets.
Even before crypto games, digital art blockchain projects motivated to secure fair compensation for artists had been focusing their efforts on ownership and property rights. Some of these projects claim that the “immaterial” nature of digital art resists commodification and commercialization in ways that its non-digital counterparts do not: it is intangible, perfectly and infinitely replicable, and cannot be owned or traded in the conventional sense (Zeilinger, 2016: 21). In other words, blockchain proponents have argued that digital art escapes the economic logic of IP rights. 6 Under this logic, exclusive ownership and control over IP creates artificial scarcity from which value can be derived. Blockchain solutions have sought to prove ownership in order to reproduce this valuation method. O’Dwyer (2020: 887) argues that more than anything else, the aim of these projects has been to create new kinds of tradable digital assets.
Some of the most popular crypto games to date, including Axie Infinity, have been designed around the circulation of such assets—NFTs. One of the major selling points touted by crypto game proponents has been the ability for these assets to be moved from platform to platform while also retaining their value in the broader economy. In practice, crypto game cross-platform interoperability for NFTs has remained limited, leaving their function as an object for speculative value as their most salient feature. Financial speculation is nothing new for art, but the financialization of digital art through these blockchain projects has had a significant impact on the political economy of cultural goods. O’Dwyer (2020), Zeilinger (2016), and Serada et al. (2021) have all documented profound changes in IP rights, the relationship between scarcity and value, and distinctions between commodities and corresponding financial instruments.
Crypto games have uncritically adopted the NFT model for digital property rights, inheriting these aspects of financialization that have also developed in digital art blockchain projects. This inheritance is clear in the Axie Infinity white paper, where even sections describing gameplay mechanics, such as battling and breeding new Axies, or discussing long-term goals around community-building, are framed explicitly in financial terms. Egliston and Carter (2024) have made similar observations regarding financialization in their analysis of crypto game “booster” discourses while Zaucha and Agur (2023) have found financialization to play a key point of discussion in Axie Infinity players’ discourses on Discord.
In the context of crypto games, financialization has set up game economies to fail. Serada et al. (2021: 474–476) argue that token values are already constrained by the limits of blockchains as sociotechnical infrastructures, the materiality of tokens, and issues of pseudo true ownership. Crypto games introduce another set of problems with the addition of NFTs and mechanics that augment the supply of a game's tokens. Examples of these mechanics in Axie Infinity include “play and earn” and Axie breeding. The result of these design choices has been an unsustainable game economy in which the value of NFTs and other game tokens is tied directly to an ever-expanding token supply and continued growth of the player base. There has yet to be a crypto game that has been able to consistently draw in the necessary waves of new players. Serada et al. (2021) show that rather than anchoring value in artificial scarcity, crypto games have had a stronger tendency toward overabundance and valuelessness. This tension came into relief within the Axie Infinity economy in the two growth crises we discuss below.
Decentralization and the economization of play
According to crypto game enthusiasts, the advantage of blockchain design is in their function as decentralized networks (Egliston and Carter, 2024: 6760). Any update to a blockchain requires consensus among network participants, ensuring that the network is not controlled by any single actor. In addition to SLP, Axie Infinity circulates a token called Axie Infinity Shards (AXS). Token holders are granted participation in governance votes regarding the future of the game. It is through the distribution of AXS that Axie Infinity attempts to decentralize the game's governance and ownership. This supposedly cuts out “co-optive middlemen (such as publishers and online game stores) that limit access via their distribution channels” and makes possible a “new kind of social contract between participants within a gaming ecosystem” (Official Axie Infinity White Paper, n.d.: Decentralized Organization). The assumption is that by giving developers, players, and all other AXS holders a stake in the game's governance and ownership, they will all be aligned in seeing to the game's success.
But even as the white paper highlights the benefits of blockchain decentralization, Sky Mavis warns that “projects have been abandoned and become stagnant using the term “decentralization” as a ruse” (Official Axie Infinity White Paper, n.d.: Axie Infinity Shards-$AXS). To avoid this fate, they opt for “progressive decentralization.” Rather than release the total supply of AXS at launch, AXS is released incrementally into circulation upon the completion of certain milestones (Official Axie Infinity White Paper, n.d.: The Progressive Decentralization Continuum). They justify this approach as a counter to concerns raised by Ethereum co-founder Vitalik Buterin. Buterin (2021) argues that Web3 governance allows small, coordinated blocks of wealthy individuals to dominate governance votes, silences important segments of the community, and complicates the management of conflicts of interest. Additionally, Sky Mavis claims that there is a competency issue that necessitates progressive decentralization. Before decentralization, they argue, they “need to unlock everyone's collective potential, as meaningful contributions are only possible when those participants have the knowledge, experience, and supportive infrastructure needed to convert good intention into something valuable” (Official Axie Infinity White Paper, n.d.: The Progressive Decentralization Continuum).
Behind the white paper's vision of Axie Infinity as “the first game truly owned and operated by the community that plays it” (Official Axie Infinity White Paper, n.d.: Axie Infinity Shards-$AXS) lies a very different reality: the game's governance and ownership remain centralized. Axie Infinity is not necessarily unique in this regard. Past studies showed how decentralization rhetorically obscures the economic and structural reordering which nonetheless produces centralized systems (Schneider, 2019: 266; Vidan and Lehdonvirta, 2019). Centralization might appear to be an inexcusable failure for a blockchain project, but Swartz shows that many projects, including Bitcoin, suffer similarly but are not typically undone by such contradictions. They instead persist, “perform[ing]… seemingly complementary but ultimately incompatible techno-economic imaginaries” (Swartz, 2018: 641). This is the case for Sky Mavis which maintains that while players value decentralization, they care more about “play and earn” and platform interoperability for their assets (Official Axie Infinity White Paper, n.d.: Technology). They argue that retaining control over Axie Infinity's development has allowed them to focus on refining aspects of the game, like “play and earn,” that do the work of drawing players into Web3 and educating them on blockchain technology.
From the beginning, the game's development was guided by questions like, how do you “onboard the world to Web3” and “ensure the future of the internet is open and owned by its users?” (Official Axie Infinity White Paper, n.d.: Conclusion). The game has been designed such that playing constitutes both an economic and a political act. Economically, play generates income denominated in cryptocurrency. Politically, the player's crypto assets signify an investment in the project of Web3 and the adoption of blockchain technology. The process we described above as the economization of play links players to one another and enrolls them in the Axie “digital nation.” But players are not passive objects in this enrollment. When the game designers’ vision is interrupted by crisis, players become active subjects developing risk mitigation and rationalization strategies.
Confronting slowing growth: From hiring a farmer to managing a scholar
As the initial rush of new players slowed in response to high startup costs, existing players on the platform, too, became concerned with ensuring the game's sustainability. In September 2020, an Axie Infinity player and NFT enthusiast announced on their Twitter account the launch of a new experiment that would allow aspiring players with no crypto assets to start playing the game with a sponsored account of an earlier entrant into the game economy. The tweet linked to a Medium post which articulated the rationale for scholarships: players with under-utilized accounts or even just excess Axies, would lend these to new players who cannot afford the startup costs of purchasing their own initial Axie team in exchange for a cut of the earnings the “scholars” would make off these Axies. 7
Following that initial post, several other Axie-rich players followed suit in recruiting new “scholars” as players who could take their first steps into the Axie Infinity ecosystem. By spring 2021, a subreddit was established for postings from “managers” who wanted to recruit “scholars,” and would-be “scholars” sharing all kinds of gaming credentials in the hopes of being recruited. How agreements and payments were arranged in the scholarship program depended on the scale and operations of the “manager.” Those who recruited “scholars” online often required an application form submission and setting up an Ethereum wallet to receive payments. Others recruited scholars from within their own community, turning to family members or local gig workers with the promise of higher profits. A manager's profit share can range anywhere between 25% and 75%, with some imposing additional conditions for payment withdrawal and in-game performance minimums. 8
One might expect that the emergence of scholarships in the Axie Infinity universe would follow the path of other games which developed what Consalvo (2007) has described a clash between professional players and players who see the accumulation of in-game capital not as a reflection of out-of-game resources but rather as a reflection of their skill and time investment. The managerial dynamic of the Axie Infinity scholarships is most reminiscent of the practice of “gold farming” associated with the massive, multi-player online game, World of Warcraft. Digital culture scholars have observed how gold farmers, for-hire players, who spent time on World of Warcraft accumulating in-game capital for employers who then sold those in-game goods for a profit in exchange for a fraction of that value in out-of-game payments, have blurred the lines between grinding for the sake of earning out-of-game capital and grinding as part of gameplay (Dibbell, 2016). Beyond a critique of this exploitative labor practice, Lisa Nakamura (2009) further observed the racialization of gold-farming players, who were often perceived by other players, regardless of any specific in-game cultural markers, as all being Asian, and derided these players for manipulating the game's internal economy.
The Axie Infinity scholarship scheme, however, developed a much more symbiotic relationship with the game's internal logics and community ethos than these earlier experiences of employed players and their relationship to a managerial class. The discourse of cheating or subversion of the in-game economy is moot. In fact, the scholarship program is seen as addressing a need for the sustainability of the game's economy. There is no “gray market” concern here. While not part of the original games’ tokenomics or otherwise acknowledged in later versions of the White Paper, scholarship programs are nonetheless celebrated as a community and market solution to the game's deflationary woes. 9 The development of an extra-game market such as the scholarship program is thus a part of the economization of play that we have described above. It is a crypto solution to a crypto problem that further folds newcomers into the promise of turning their service-economy gig labor into part of the digital economy, and the promise of future ownership of digital capital, not just a wage. But that promise of a future where a scholar has earned enough from playing using a manager's lent Axies to purchase a team of their own and enter the game as a self-backed player quickly faded. Following other shocks in crypto markets, the value of SLP began to nosedive in the summer of 2022 (Ongweso Jr., 2022). Players who were previously enthusiastic about the sustainable growth solution offered by Axie Infinity, contrasted with other crypto asset bubbles, started throwing around the dreaded “P word,” referring to the game as a Ponzi scheme. Managers, scholars, and self-backed players, left holding NFTs worth a fraction of their initial costs in state-backed currencies, were all left in limbo to wonder whether Axie Infinity could bounce back.
Rationalizing risk and committing to the grind
The growth of the player base required to prop up token values became untenable when the crypto market crashed. As earnings plummeted, play's functional reality as labor came into relief. Yet there were players that continued to grind for SLP even as the exiting player base hastened the game's economic collapse. The white paper's discussions on economic sustainability grappled with the question of how to retain players in a down market. Sky Mavis pre-emptively tried to manage this issue by contextualizing “play and earn” strategically, claiming that it is “only by having an immersive gaming experience… [that] the ecosystem [can] attract enough participants to accrue value to the network” (Official Axie Infinity White Paper, n.d.: Gameplay).
The tying together of the gameplay experience and its social aspects to the health of “play and earn” attempts to suspend players’ perceptions of the value they have invested in Axie Infinity. This move highlights a unique contradiction. Crisis moments require Sky Mavis to overcome, even if only temporarily, the economization of play that the game otherwise relies on. Tokenization is another dimension of the game that affects perceptions of value. In the context of gambling, Dow Schüll (2014: 198) demonstrates how converting money into gambling credits is “a means for suspending collective forms of value.” 10 In Axie Infinity, tokens make it difficult to assess gains and losses because playing the game only ever increases SLP holdings, and the money value of the game's tokens are not fixed but determined through volatile crypto markets. Distancing players from the value of their investments in these ways increases the likelihood that they will remain even as earnings diminish.
The problem for Sky Mavis was that players remained acutely aware of the financial reality concerning their stake in Axie Infinity. In Zaucha and Agur's (2023: 16) analysis of the Axie Infinity Discord server, they found that while “gaming… [is] likely to inform repeat play, the overwhelming discursive interest in financial strategies and agreements, as well as user efforts to acquire gameplay and marketplace knowledge, undermine the effects of these contextualizing features.” Posts on the Axie Infinity subreddits reflect these findings, but they also help to explain what prevented players from taking anything other than a money-first approach to the game. Players argued that chance-based mechanics unfairly impacted the outcome of battles. Skill was not nearly as important as receiving good starting cards or consistently landing “critical hits” to deal increased damage at random. Furthermore, players were not pleased with the speed at which Sky Mavis addressed balance issues regarding the strength of certain Axies relative to others. These issues compounded into a gaming experience that, while social, was simply not fun.
The inability to undo the economization of play is not entirely unexpected, especially when considering how much of the game's identity is tied to “play and earn.” Players of traditional video games grind through long, grueling sessions to improve their character's skills, obtain special items, and gain access to other parts of a game. The accumulation of this “avatarial capital” signals to other players a certain level of skill and dedication (Nakamura, 2009). Those who monetize their play by grinding solely for avatarial capital to sell are often met with hostility from those who argue that this practice devalues everyone else's avatarial capital and undermines the integrity of the game. In contrast, Axie Infinity players celebrate “play and earn” and have created programs like the “scholarship” to encourage and facilitate these practices. Even Axie NFTs, the closest things to avatarial capital in the game, impact earning potential. Unique Axies tend to have higher resale values while stronger ones help players compete at higher ranks where they receive more SLP per win.
As players motivated by the expected returns of “play and earn,” it is not obvious that any Axie Infinity player would have embraced the grind after the crypto economy derailed. Responding to a 2022 r/AxieInfinity thread asking those who remained what about the game was still fun after all that had transpired, one player said that nothing about it had ever been fun, that earning money had always been their focus. A second commenter described the game as having transitioned from a fun-neutral obligatory daily task to a source of self-inflicted mental torment, leaving them to contemplate whether they should quit if earnings failed to improve in the months ahead. A third respondent explained that they wanted to play other games but felt they had no other choice but to try and earn back their investment in Axie Infinity.
It was not as though the game had only become a grind to these players once earnings tanked. This had always been their perception. This suggests that there was more to the decision to stay on and continue to grind than just players being duped into believing in the promises of Axie Infinity. Furthermore, the speculative rationale of these players was not entirely different from the choice players made earlier when rising token values became a barrier to the game's growth. Rather than quitting and taking profits when the market was reaching all-time highs, players staked their future profits on the success of the “scholarship” program. The “scholarship” program and the grind have their own particularities, but they are both instances of players accepting and attempting to manage risk, just at opposite ends of Axie Infinity's growth pressures.
These players’ decisions can be explained further by examining them through the lens of Neff's (2012) analysis of workers in the technology industry before and after the dotcom bubble had burst. Referring to what she calls “venture labor,” she shows that workers adopted cultural attitudes that “framed economic and financial risks as inevitable, necessary, and beneficial for one's career” (Neff, 2012: 3). She attributes their heightened risk tolerance to three broader economic forces: increasing financialization of the American economy; rapidly changing valuations of work, products, and services within the new economy; and widespread diffusion of flexible work practices (Neff, 2012: 7). Neff (2012: 161) contends that even though the 2000 stock market crash left workers feeling betrayed by the “great business revolution” that turned out to be “business as usual,” narratives of “self-exploitation and false consciousness do not adequately explain the dynamics of the choices people made.” Such an analysis would miss how workers made rational economic sense and social–cultural sense of their choices through these framings of risk and conceal the pressures preventing workers from perceiving “how their individual choices played into and were shaped by larger social dynamics” (Neff, 2012: 162).
Axie Infinity players are “entrepreneurial subjects” situated similarly to Neff's (2012: 3) venture laborers. 11 Mediated through the economization of play, the players’ relationships to Web3, blockchain technology, and the crypto economy are shaped by broader tech industry ideologies regarding ownership and digital property rights, but especially risk as a virtue. Furthermore, the forces of financialization, value volatility, and work flexibilities—features Neff highlights—are not merely present in Web3 and the crypto economy, but central to their very operations. As we see in Axie Infinity, Web3 and the crypto economy have used blockchain technology to restructure traditional finance and reimagine various social interactions in financial terms, create and capitalize on volatility, and establish unique work and compensation schemes. Finally, Neff's rejection of self-exploitation and false consciousness as explanations for workers’ choices can also be applied to Axie Infinity players. The “scholarship” program and the grind were certainly risky propositions, but they were instances of players operating through the liberatory promises framed by the game's economization of play, making it reasonable to accept and develop strategies for managing this risk.
Conclusion
In charting the trajectory of Axie Infinity's rise and fall, we have staked out the limitations of Web3's ideological promises as they collided with players’ economic realities. The economization of play—a synthesis of the longer arcs of monetization, financialization, and decentralization in the development of the digital economy—has remained perpetually incomplete, a result of the game's impossible reliance on infinite growth of its player base to sustain the game's economy. We show that when growth crises inevitably emerged, players were not passive victims of these developments. They were also not the Web3 converts nor the Axie Infinity missionaries that the developers sought to cultivate. Rather than being enrolled as Web3 users through their prescribed roles in a “revolutionary” Axie digital nation, players approached the game as an earning opportunity, primarily. They were entrepreneurial agents, developing the scholarship program and committing to the grind to mitigate the risks of their investments in the game. The economic collapse of Axie Infinity was not simply the result of typical crypto market volatility. It was the consequence of tokenomics failing to reconcile inherent contradictions between growth and the practical limits of player enrollment and digital value creation.
Players who invested in the game during its boom year were certainly harmed through their involvement in Axie Infinity, but they were not duped. This was true of those who staked their earnings on the “scholarship” program's ability to grow the player base and token values when entry costs for new players skyrocketed. It was also true of those who turned to the grind to cover their losses when the value of earnings tumbled alongside the crashing crypto market. These are distinct examples of players as entrepreneurial agents, struggling against and attempting to capitalize on Axie Infinity's growth crises. Regardless of whether players fully bought into their positions within the wider Web3 political economy, they understood that this was a risky investment. Their willingness to assume this risk makes sense when we consider that it has been primed doubly. First, by broader social and economic forces that have increased people’s risk tolerance in general. And second, by Axie Infinity's economization of play which frames risk as a virtue. To the extent that they could, players grasped and rationalized the risks they faced and pursued mitigation strategies. The case of Axie Infinity demonstrates that self-exploitation and false consciousness are ultimately insufficient explanations for the actions of people participating in these kinds of Web3 projects. These concepts neglect the meaningful impact of individual and collective interventions and cultural framings of risk that rationalize participation in the first place.
Despite updates, Axie Infinity's average monthly player count, which peaked at approximately 2.8 million players in 2022, has remained well under 400,000, a reduction nearing 90% (Active Player, n.d.). The vanishing of the player base that occurred alongside diminishing returns on play suggests, as we have laid out here, that the majority of players did not come to Axie Infinity to “play and earn,” but to play to earn. While developers like Sky Mavis initially set the terms of engagement, these terms are continually renegotiated by players through their appropriations of these platforms and technologies. As we approach what looks to be a new phase for crypto, it will be crucial to assemble and analyze these user-developer exchanges to better understand users’ choices alongside developers’ visions within Web3's risky political economy. These negotiations never happen on equal footing, but it is important to examine exactly how they happen at all.
Footnotes
Acknowledgments
The authors sincerely appreciate Editor-in-Chief Matthew Zook and the three anonymous reviewers for their thorough review and constructive feedback, as well as Editorial Assistant Natalia Orrego Tapia for assistance throughout the revision process. Jordan Ali is supported in part by funding from the Social Science and Humanities Research Council (SSHRC). The authors also benefited from the support of Cornell's Qualitative and Interpretive Research Institute (QuIRI).
Funding
The author(s) received no financial support for the research, authorship, and/or publication of this article.
Declaration of conflicting interests
The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Data availability
Data sharing not applicable to this article as no datasets were generated or analyzed during the current study.