Whilst a common rallying cry of cryptocurrency evangelists is that people who invest are early, the rapid developments and cultural changes surrounding crypto belie the fact that crypto is only 15 years old at its very oldest.
Bitcoin was started in 2009, and Ethereum in 2015, which means that a lot of technological and cultural elements of crypto are still being developed and evolving, which means that a crypto card provides an easy window into the future of finance.
A side effect of the rapid development of cryptocurrency specifically and the blockchain more generally is that there have been several trends that have risen and fallen over the years.
One of the most interesting of these was play-to-earn gaming, a way to harness the blockchain to create tangible assets with real value attached to them, either in the form of fungible crypto tokens or non-fungible tokens that could be sold on markets such as OpenSea.
At one point it was seen as the future of an entire medium, where people could play a game, earn assets and then sell them on when they were done with the game, creating a product with residual value as well as offering a speculative asset for people less interested in the game itself to sell later on.
However, the very game that showcased the most promise was also the game that ultimately killed the concept.
The Aria Of Axie Infinity
Whilst Axie Infinity was not the first game to be seen as a potential avenue for making money, with CryptoKitties beating it in this regard by several years, the game by Sky Mavis Studios was nevertheless the benchmark of the concept and broke through into the mainstream.
The concept of Axie Infinity was a card-based monster collection and breeding game, where the main difference was that the critters (Axies) were NFTs and the currency you earned and spent was on the blockchain, accessible via a compatible wallet.
It became a major phenomenon in cryptocurrency spaces as the game that proved the concept could be potentially viable beyond speculation, and for a very brief period of time managed to ostensibly live up to the ambition that some players could earn a viable living just from playing the game.
This was largely caused by a series of articles that highlighted how people in the Philippines were able to earn a living wage through playing the game, something seen as vital when a global health emergency meant that many were unable to work their existing jobs.
The way the economy worked in the game is that players used Ethereum to buy a set of three Axies (at the time costing up to £1000 to form a minimum team of three), which were used to play ranked matches to earn a set amount of the game’s cryptocurrency token Smooth Love Potion (SLP).
This token was used in-game to breed Axies, which could be sold on the open market, but as the currency was on Ronin, an Ethereum side-chain designed to make transactions quicker and avoid the network slowdown that blighted the peak of CryptoKitties, SLP could also be bought and sold like any other crypto token.
People who treated Axie Infinity like a job would earn as much SLP as they could before they cashed out. However, the cost of Axies during the game’s peak meant that it was difficult for anyone outside of already wealthy people to afford a team.
The solution to this was the Scholar Programme, a rental system where companies would loan an account (but not the underlying wallet), to a player and use a profit-split system to take an often substantial cut of earnings.
It worked for a time, but there was a concern about sustainability; like a lot of virtual economies, it was dependent on a constant and growing surge of new players, and no play-to-earn game before or since has managed to create an effective, sustainable circular economy.
There was a small crash in 2021 that greatly reduced the ability of players to earn the same revenue and wages they used to, which caused players to decline and the ones remaining to have to work harder and longer to make the same amount of money.
However, by 2022, the crypto market as a whole was facing a downturn, one that caused a precipitous crash that wiped out billions of dollars from the market, ultimately leading to several companies going bankrupt and people going to prison.
In the case of Axie, SLP lost over 99 per cent of its value and Axies started to plummet in price, causing an exodus of players from 2.7m to 250,000.
In March 2022, the largest crypto hack took place on the Ronin chain, with over $600m (173,000 Ether, 25.5m USDC) stolen from the chain, making the situation worse.
The game still exists, but it no longer advertises “play-to-earn”, has a tokenless free mode and runs on a much smaller scale.