What you need to know about Axie Infinity Shards (AXS)
To date, Axie Infinity remains the household name when it comes to play-to-earn games, arguably setting the blueprint for how a blockchain network can establish its own in-app economy sustained by a community of gamers.
Developed by Sky Mavis and launched in 2019, Axie Infinity built on the idea pioneered by a previous project, CryptoKitties. One of the first ever blockchain-based games, CryptoKitties was launched on Ethereum by Dapper Labs to test the idea of a pet-raising game using non-fungible tokens (NFTs).
But whereas CryptoKitties was originally designed for players to merely collect and breed digital pets, Axie Infinity set itself apart by allowing players to have their pets or “Axies” compete in Pokemon-style battles. This gave players more incentive to continue breeding their pets and keep the entire ecosystem going.
The Axie Infinity ecosystem runs on a dual token system, with Smooth Love Potion (SLP) as the main reward token for winning battles, while Axie Infinity Shards (AXS) as the governance token for powering many of the platform functions.
What is AXS used for?
There are three main utilities that AXS tokens are used for: staking, payment, and community proposals.
By staking their AXS tokens, players are incentivized to hold their tokens longer instead of trading them, encouraging long-term growth for the entire community. Players who stake AXS are then entitled to receive passive income in the form of additional AXS.
Aside from that, AXS token owners can use their tokens to purchase digital assets within the Axie NFT marketplace. The NFTs that are typically sold here can be used as power-ups or cosmetic enhancements within the Axie Infinity game.
AXS tokens also represent one’s governance rights in Axie's decentralized network. AXS token owners can vote on decisions concerning the future direction and policies of the Axie network, with their voting power corresponding to the amount of AXS they have.
Axie Infinity trivia
Axie Infinity broke into the mainstream in 2021 with over 2.7 million players around the world, and around 40 percent of network traffic coming from the Philippines. At its height, players were earning the equivalent of hundreds of dollars a month on average, with one player even claiming to have bought residential properties with the earnings he amassed.
In March of 2022, Axie Infinity also broke headlines when North Korean hackers managed to steal $650 million of player funds. However, it is important to note that the theft was not an actual "hack" in the true sense of the term. Instead, the cybercriminals exploited an overlooked network backdoor via the Ronin bridge, without needing to tamper with any of the blockchain code. Since then, most of the stolen funds have been recovered, and Sky Mavis has enhanced their security measures and improved their auditing practices to prevent similar incidents in the future.
AXS has a maximum supply of 270 million with 115 million (42 percent) already in circulation as of February of 2023. All 270 million AXS are expected to be in circulation by 2026.
Token allocation is as follows: 29% was dedicated to staking rewards, 21% went to Sky Mavis, while another 20% went to the game’s play-to-earn functionality. Additionally, 11% was allocated for public sale, 8% for the ecosystem fund, 7% for advisors, and 4% for private sales.
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