After suffering a hack topping $600 million in stolen cryptocurrency, NFT game Axie Infinity is now dealing with a loss of "play-to-earn" workers which has essentially left the digital equivalent of landlords with a shortage of renters.
The situation was neatly summed up in a recent tweet from Dan Olson, owner of the YouTube channel Folding Ideas. "The Axie Infinity devs' mentions are full of digital landlords pissed that their 'scholars' are all quitting the game and no-showing their weekly quotas," Olson explained.
While many players only view it as an economy to be gamed, Axie Infinity is nominally a creature-collecting RPG where players can trade their Axies, as well as the Smooth Love Potions (SLP) used to breed them, for cryptocurrencies worth real money. It's like a for-profit Pokemon breeder with a Farmville-style backdrop. The game's "scholarship" program was pitched as a way to loan out Axies to other players while collecting a portion of the resources borrowers generate, but because it's leashed to the value of SLP, its popularity has declined alongside the game's core currency.
If this sounds like the way some people make a living by farming gold in games like Old School Runescape or World of Warcraft, often as an alternative to decimated local economies (Runescape, for example, became a home for Venezuelan gold farmers), that's because it kind of is, only it's been spliced with feudalism this time. The difference is that instead of land allotted by royalty, the wheels of the system are greased by NFTs.
The state of the Axie Infinity Scholarships subreddit suggests that there are generally more people seeking scholars than looking for scholarships, and as Olson pointed out, the game's Twitter community tells a similar story. Basically, some people bought a bunch of NFT creatures hoping to profit off of them while renting them out, but with more creatures than borrowers, they're starting to gather dust. One user complained that a scholar quit on them "without proper notification," in a striking mirror to the real-world gig economy.
A recent report from The Verge offers a good overview of Axie Infinity's unique economic troubles, which have arguably been as impactful as the recent hack to its foundational blockchain. One recurring issue is inflation – as the value of SLP goes down, farming it as a scholar becomes less appealing. Inflation is a problem that developer Sky Mavis acknowledged in a February blog post outlining drastic changes to Axie Infinity's single-player Adventure mode, which had become a go-to SLP farm.
Explaining its decision to cut SLP rewards from Adventure mode and some other activities, Sky Mavis said at the time: "The Axie economy requires drastic and decisive action now or we risk total and permanent economic collapse."
