Source | FuenteLegend has it that back in 2021 there was a game that generated $350 million dollars per month, with almost 3 million active users. Its name was Axie Infinity and it was riding the wave of NFT and Play to Earn games, becoming one of the most recognized names in this field, but a year after that it barely generated 90 thousand dollars a month, a plunge of more than 99%, but what happened with this game, how it managed to be in that high position and how it suddenly fell. That's the story I'm going to tell you today, it involves pyramid schemes, hackers, destroyed lives and the leader of Korea, Kim Jong-un. Yes, this story is going to be weird.
Source | FuenteAxie Infinity had its burst in the NFT bubble. By October 2021, the game was estimated to be worth over $3 billion, but this success didn't happen overnight. Its development dates back to 2017, when Alexander Larson, a Norwegian developer, was at home due to a shoulder injury, for which he had a disability and a lot of time on his hands. Larson had become a fan of CryptoKitties, a crypto game where you can buy, sell and breed cats. And with his taste for video games and a substantial amount of time on his hands, he decided to change careers and try to get into the video game industry. During this time he became a moderator for the CryptoKitties community. One of his tasks was to look after the Discord server, where one player was very active, to the point of being annoying with spam. So Larson threatened to ban him. To his surprise, instead of receiving a bad comment or a bad answer, the user Nguyen Trung contacted the moderator and told him that he was developing a game, that if he wanted to join and asked him to move to Vietnam to work with him. Which he did not do, at least not at the time, but he helped him with advice on how to handle the community, administration and game development.
Source | FuenteTrung continued development with support from other developers in Vietnam, founding his studio Sky Mavis. The game they created would be called Axie Infinity, a hybrid between CryptoKitties, Pokémon and the Nickelodeon game, Neopets. Soon the presale of Axies, small pets as digital cards that were to be unique pieces, began. The difference with other games at the time was that these cards could be used to play the game. Basically the Axies were the characters of the title. This presale was successful. A friend of Alexander Larson bought an Axie and was super excited. So Larson, seeing this excitement, recommended it to Trung, CEO of Sky Mavis, who would end up hiring him to manage the community.
If we analyze it in a crude way, with each new player they gained a salesperson. The first version of Axie Infinity was released in October 2018. Axie holders started having battles against each other. The game started to evolve and a card combat system was integrated, somewhat similar to Slade's Pire. This led to the release of another version with changes to the gameplay and axies collection system, which was released in late 2019. This version was the key to Axie Infinity's success, as axies could now help players earn a currency called Smooth Love Potion (SLP), which was based on the Ethereum crypto network. This currency was earned through combat against other players or simply by playing the single player portion of the title. SLPs allowed players to generate new axies, setting them up to generate even more axies. Sky Mavis gave them the ability to lend their axies to other players, and they chose to do so and keep a portion of the profits, which made it easier to attract new players. Instead of banning this behavior that could potentially destroy the game's economy, the developers decided to see what happened. New players arrived in huge droves. Many of them had never touched a crypto game or had any knowledge even about blockchain.
Source | FuenteAbout 50% of the Axie Infinity player community had never owned a cryptocurrency before. Now, at this point, many are probably asking how a game like this generates money, and the answer is extensive, but it can be summed up in two simple things. Speculation. The more the game token is worth, the more users invest in it, sell, trade and so on, and the more the value of this currency goes up. In the end they are based on Ethereum, so their value is tied directly to a cryptocurrency. It's all speculation and trading. Also, the second thing is that Axie Infinity required the player to make an initial investment if he wanted to enter this hamster wheel, which the game had become. The player needs to buy three Axies in order to get in to play. Then, the game receives funds with each new player. Therefore, players decided that they could rent their Axies. Because of this ecosystem, if too many players suddenly decide to leave such a game, the value of the token quickly collapses, and a game like Axie Infinity depends on the constant influx of new players to maintain itself.
And to add to the mountain of waste that was Axie Infinity, not only was it Play2Earn, it was also Pay2Win, it was extremely predatory. With this market being basically moderated by the players, guilds began to be created, which basically what they did was recruit new players. The growth of the value of the currency depended on the constant flow of these players, and that they would eventually bring in others. The guilds lent their Axies to new players. They kept 10% of their earnings, another 20% was kept by the guild managers, who were the tutors of the new players they called scholars, which encouraged the creation of more and more guilds or the growth of the existing ones. And yes, if you're thinking of a pyramid scheme, you're not far off, eventually they were going to run out of people to recruit, but the outlook looked very distant and there were more and more of them. There seemed to be no end in sight and for Sky Mavis it was an incredible influx of money. This got to the point that Sky Mavis created a side chain as a sub blockchain based on Ethereum which they called Ronin, with the goal of making transactions faster and less expensive for the studio, as they had run into the problem that at one point they saturated the Ethereum network.
Source | FuenteRonin was launched in February 2021 and this drove up the value of their token even further thanks to the speed of transactions, the more transactions you could see within the game the more the value of your token went up. Players around the world discovered that with AXIE Infinity they could generate more money than in their traditional job. Many left that job, others created the same as the game, the guilds, but in real life, with countries like Venezuela having offices where they went to play AXIE Infinity (or that was what they showed in social networks). Yes, people in cubicles generating SLP. It was all business and many ventured headlong into it, that it could go wrong. This was supported by articles from various gaming and news outlets cataloging AXI Infinity as an earnings showcase for those who didn't have jobs or as an alternative for those who didn't like theirs. Sky Mavis took advantage of this and offered AXIE Infinity not just as a game, but as a way to change your life. And boy did it do that for many.
It helped a lot that the world was housebound due to the pandemic that had hit, which incredibly benefited Sky Mavis, AXIE Infinity and the Play to Earn market in general. AXIES reached prices in the hundreds of thousands of dollars. Guilds were generating huge profits, recruitment terms started to become unconscionable. From 30% at the start of the guilds it grew to 60% and they required players to play 8 to 10 hours a day. But as I said just now, eventually they were going to reach their cap of people to recruit. The pandemic started to subside and those who were playing started to get their jobs and daily lives back, seeing that they didn't need AXIE Infinity anymore, they got rid of their tokens en masse. Added to this, faith in the game began to waver, and because it was all based on speculation, the value of the in-game currency began to decline. Those who depended on their gambling winnings to pay off all the loans or mortgages they had taken out began to become insolvent.
Source | FuenteAt its peak, summer 2021, SLPs were worth 40 cents on the dollar, by March 2022, the value was only 2 cents, a 95% drop. But this despite sounding apocalyptic, was nothing compared to what would happen that same month, one that many AXIES players will never forget. On March 29, Sky Mavis posted that they had been the victim of a security breach. the connection bridge between Ronin, their side chain and Ethereum had been breached. The hackers gained control of all transactions and the axies Infinity* cryptocurrency network and thus, $620 million in Ether and USD coin disappeared. Making this, the largest hack in crypto history. And boy, have there been many in this area. Hacking that had taken place on March 23, 6 days before the Sky Mavis team became aware of it. It's amazing how a company lost sight of $620 million and no red flags were raised for almost a week. Several security companies and the FBI itself began to investigate what had happened. In April of that year they connected the attack to two groups, Lazarus and OPT38. Both have been linked to the North Korean government.
Source | FuenteSo that money somehow ended up in the hands of Kim Jong-un. According to the U.S. intelligence agency's investigation, the hacking was carried out via the platform you'd least expect, LinkedIn. Someone tracked down a senior Sky Mavis engineer. He made him a job offer too good to refuse. Interested in this new job, the employee followed up with communications, there were interviews and the whole recruiting process. In the end they made him a juicy offer and with it they sent a PDF. When opened on a company computer, it opened the door to malware hidden in the file. The running network required nine validation nodes for transactions. And with this action the hackers had gained access to all nine. I told them this story was going to be weird. As a result, many players lost everything they had. The economy seemed to start to recover and those who decided to make a hold on the token were hit hard.
Unfortunately, after the losses in early 2022 and after this hack, several reports of people taking their own lives after generating astronomical debts or losing their belongings or even homes began to be revealed. Many began to report that they suffered from anxiety, panic attacks and so on because of what this market had done to their lives. Putting under the microscope, the cost not only monetary, but also human cost of the marketing strategy that Sky Mavis had had with Axie Infinity and the poor financial decisions of those who fell into this downward spiral that was this Play to Earn. **Axie Infinity stands as a case study of how this NFT bubble could have had huge repercussions. And as a lesson to many that if you enter into these types of games you should do so with money you can afford to lose, not with your savings or by putting your quality of life or the future of your life at risk.
Source | Fuente
Thank you very much for reading my post. If you liked it, please leave a comment and consider following me so you don't miss my next posts. I'd love to know your opinion and your thoughts about the topic I discussed in this post, see you in the next one!
Translated by DeepL
Al principio era rentable, es triste como murió
Muchas cosas le jugaron en contra. Tanto el cese de la pandemia como el supuesto hackeo le pusieron un pie en la tumba. Y sí a eso le sumamos los requisitos absurdos de las supuestas academias ya ahí si que la embarraron a fondo.
Yay! 🤗
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Interesante historia. Ya me preguntaba qué había sido de Axien Infinity, que pasó de la noche a la mañana de ser la comidilla a que nadie se acordara de él.
Aunque un poco conspiranoica la parte Kim Jong-un: los grupos de hackers suelen ser muy difíciles de rastrear y muchas veces las autoridades no declaran toda la información de la que disponen por ser clasificada, así que probablemente nos enteremos de la realidad de aquí a unos años cuando se desclasifique.
La parte de los hackers fue mitad real y mitad ficción. Si es siento que fue obra de esos dos grupos o al menos así lo decretó el FBI según SKY MAVIS, lo de que fue obra del presidente de Corea del Norte ya fue un toque humorístico.
Ah, ya. Igual, gracias por el post, estuvo muy interesante 👍
Esta publicación es la traducción exacta de este video y se considera plagio y abuso hacía la comunidad de Hive.
Por favor, evitar utilizar contenido de otra persona y hacerlo pasar como propio. Gracias.
Lo siento mucho pensé que era una historia interesante que debía compartir por acá. Hasta incluso le hice algunos ajustes y resumi el contenido. Mis más sinceras disculpas.
Podes compartir lo que quieras mientras el contenido sea tuyo original, o sea escrito por vos mismo y aportando tu propia opinión. Los ajustes que hiciste no se notan porque el contenido es textual al video.
Me disculpo nuevamente , le aseguro que no se repetirá.