Axie Infinity is the Pokémon-inspired NFT battler from Vietnamese studio Sky Mavis that turned play-to-earn into a global phenomenon in 2021, and AXS is its governance and staking token.
What Axie Infinity does
Players collect, breed and battle Axies — NFT creatures with distinct traits and stats — earning Smooth Love Potion (SLP), the game's inflationary in-game currency, through play. AXS sits above that layer as the governance token, used to vote in the Axie DAO on treasury decisions and game parameters, to stake for rewards, and to pay breeding fees. The game runs on Ronin, an Ethereum-linked sidechain Sky Mavis built specifically to handle Axie's transaction volume cheaply.
At its 2021 peak, Axie's 'scholarship' system — where asset owners lent Axie squads to players, often in the Philippines and Southeast Asia, in exchange for a cut of earnings — turned the game into a genuine income source for thousands of players during pandemic-era lockdowns. Sky Mavis later relaunched the game as Axie Infinity Origins, reworking the economy to reduce reliance on constant new-player inflows.
Risks worth knowing
The original play-to-earn model proved economically unsustainable: SLP emissions from new Axies vastly outpaced the sinks removing it from circulation, and once player growth slowed in 2022 the token collapsed, dragging AXS down with it. That's a structural weakness common to most P2E games — the model needs relentless new-user growth to keep paying existing players, and growth always slows eventually.
Ronin also suffered one of crypto's largest-ever hacks in March 2022, when attackers compromised validator keys and drained roughly $625 million in ETH and USDC from the bridge. Sky Mavis and partners eventually recovered a portion of the funds and reimbursed users, but the episode was a stark reminder that sidechains built for speed often carry concentrated validator-set security trade-offs. AXS today trades a fraction of its 2021 highs, and its value depends on Sky Mavis successfully rebuilding sustainable, fun-first gameplay rather than an income scheme dressed up as a game.