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Axie Infinity - Issue #53
In this newsletter, we are profiling Axie Infinity [AXS]. In previous newsletters, we have profiled Bitcoin, Cardano, Stablecoins, Uniswap and many others. Access all our newsletters in our archives at madcapx.substack.com.
The Short of It
Online NFT-based video game Axie Infinity is not only for gamers but also worth a look if you are looking at diversifying your portfolio. But is it running too hot after gaining over 4500% in the last few months, or is there more upside potential?
Axie Infinity was developed in 2018 by the Sky Mavis game development team, which is primarily based in Vietnam. The company was founded by Trung Nguyen and Aleksander Larsen. Axie Infinity is a digital pet universe game (inspired by Pokemon) where players can earn AXS tokens via skilled gameplay and ecosystem contributions. Gameplay consists of collecting, raising, breeding, and battling creatures known as Axies, which are tradable non-fungible token (NFT) assets.
There is a total supply of 270 million AXS, with release schedule estimates showing 100% circulating by 2026. While AXS is an ERC20 token on the Ethereum blockchain, recently, the team released their Ronin sidechain, which now holds all Axies, Land and land items. This was done so that the game could scale reasonably and have faster transactions. The AXS token is used to play games, conduct payments, for staking, and for governance. The amount of tokens a player receives for staking is dependent on a number of things, like how much they have played the game and if they’ve participated in governance voting. All rewards are locked into a smart contract and are not given out until a year later.
Within the game, each Axie has a total of six body parts which each have hundreds of possible variations to allow almost unlimited combinations. Each Axie part also comes with its own battle strengths and moves. Those with better body part combinations will have a more desirable and stronger Axie in battles. Axies can be bred with each other, creating new Axie with similar but different parts and stats. Each Axie can only breed a total of seven times in order to limit the population. Breeding costs 0.005 ETH in addition to Smooth Love Potion (SLP) tokens. You can visit the breeding hub to pair your Axie with other Axies to try and create rare and valuable offspring. The first breeding costs only 100 SLP, and each successive breeding costs a bit more, with the seventh and final one being 2,100 SLP.
Axie owners can take their Axie into the battle arena. This is a turn-based card game where the goal is to eliminate all enemies your team is facing. Winning battles gains you experience points which in turn can be used to upgrade your base stats or body parts.
You are able to purchase land, called “Terra,” for your Axie to live on, although the functionality for land usage is not yet released. Check out the marketplace for pricing on land as well as Axies and items. You can upgrade and customize your plot of land to host shops, grow resources, house NPCs, deploy summoning beacons, and even contain access points to dungeons. You can also rent out space on your land for others to develop on.
With a slew of other crypto-based games and gaming platforms out there, it will be interesting to see which ones come out on top. Axie Infinity certainly has a first-mover advantage, especially its genre. While you can probably see the potential for this game to exponentially explode in popularity, it is increasingly more costly for new players to get into it. Currently, buying a single Axie can cost you in the hundreds, and you are looking at spending over ten thousand if you want your own land. If you enjoy this type of highly competitive NFT trading, breeding and battling game, definitely try to get in sooner rather than later.
AXS/BTC pairing on the daily chart below is showing the start of the bullish momentum that started in July 2021. Though from mid January 2021 to the peak in October AXS had gained almost 25000% against BTC.
On this following chart, we look at AXS paired against USD on a weekly scale. The week starting June 28th, 2021, the lowest price is at $3.59; coming to this week, AXS has hit all-time highs of $168.71 for an increase of 4594% over a 19 week period.
SLP tokens that are for breeding can also be bought on exchanges such as Binance. Back in May 2021, SLP reached $0.42 at the all-time high. More recently, SPL has been trading at about $0.07 - $0.08 per token. The low was hit in September at $0.055. In the last couple of weeks, there was a spike upward of 129% for a good opportunity to take profits.
This past week Axie Infinity rolled out a decentralized exchange (DEX) on the Ronin side change called Katana. The DEX will allow you to swap between AXS, SLP, WETH, USDC without the high fees you would have doing it on the ETH network. In addition, you will be able to create liquidity and farm. This is a great addition for the gamer. An additional RON token will be added to the DEX for liquidity providers. The 15-minute video below explains the DEX and how to use it.
The Other Trend Lines
Price is getting bullish once again and pumping hard also ETH hitting new ATH ( all-time-high ) if bitcoin price breaks this last resistance zone here we can expect new ATH like:
A. 70000$ (70K round number and the second reason is red trendline resistance)
B. 75000$ (-0.27 of Fibonacci)
C. 85000$ (-0.61 of Fibonacci)
notice: the price is near strong resistance of ATH now and if no breakout here happens then again we can expect correction here.
- from Tradingview user MMBTtrader
This portfolio section gives you an idea of what sort of return you can get when investing in crypto assets.
BTC/USD FUND is up 511% since October 1st, 2020. Since this is a long-term holding, it is best kept in cold wallet storage or a safe custody solution. We continue to see a long-term hold position as our best stable alternative. This past week bitcoin has been ranging between $60,050 and $66,538 USD in value.
FUND 3 started on November 16, 2020, with $1000 USD in value and was invested into BTC, LTC, ETH, and ADA. The total amount of BTC value from the four coins has had a gain of 96% since the start. The USD fund value is up 674% since the beginning. We will hold these positions to see how well it does against our BTC-only portfolio. LTC is down -20% against BTC. ETH is up 162% against BTC since the start. ADA has a gain of 411% against BTC and 1901% to USD.
BLWX Fund started on February 22, 2021. They all are assets we have profiled this past year, and we are interested in how they will perform in 2021 against BTC. BAT has a gain of 75% against BTC since the start; LINK is down -8%, WAVES is up 89%, XMR is down -4%. Overall, against BTC, the fund is up 38% and 66% against USD.
Overall, Bitcoin should be your first choice as an investment in crypto, though many digital assets can give you exceptional gains if you manage your risk. As a long-term investor, we see it as our most significant portfolio investment. If you are a day trader, there are many great assets to put on your watch list. Look through our previous newsletters to find some.
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Madbyte does have its own token called MADX on the Ethereum network and Madbyte on the Waves network. The two tokens are interchangeable on Madcapx.com.
Disclaimer: Nothing in this newsletter is intended to serve as financial advice. Therefore, do your own research and due diligence before applying any of the techniques highlighted in this post. Any risks or trades based on this newsletter are committed at your own risk.