A Billion-Dollar Crypto Gaming Startup Promised Riches and Delivered Disaster

Axie Infinity’s vision of a “play-to-earn” video game has crumbled. Reading about Alejo Lopez de Armentia’s personal example, you will learn how it happened.

Video games have influenced Alejo Lopez de Armentia’s personal and professional life. The game appealed to the player’s sense of adventure, competitiveness, and, most all, the need to pass the time. In his early 20s, he worked for a solar panel company in Florida. Since he felt isolated, he used video games to stay in touch with his friends back in Argentina where he grew up.

39-year-old Armentia found a new game ten months ago. He had a new motivation to play: to make a livelihood. Unlike the massively multiplayer games, Axie Infinity was remarkably simple. The three-man teams of digital monsters that fight one another, are controlled by players. Figures like Mr. Potato Head have a unique mixture of interchangeable body parts, like a blob.


Armentia at home in Florida.
Photograr: Josh Aronson for Bloomberg Businessweekphe

While waiting for their time to cast spells against their opponents, they dance about the “battle” arena. Characters become ghosts after being defeated, and when all three members of a team are gone, the team loses. It takes less than five minutes to finish a game.

Nothing has stopped gamers from studying techniques, haunting Axie-themed Discord channels and Reddit forums, and spending money on software that helps them build stronger teams. He claims he enjoys the game, but he never meant to play it for pleasure. Armenita has spent about $40,000 on his habit since August of last year. He hoped that it could become his full-time job at the time.

Since Axie is related to the crypto markets, it seemed to be able to do this briefly last year. If you’re competing in a smaller tournament, you’ll get Smooth Love Potion tokens (SLP) and you can earn Axie Infinity Shards (AIS) (AXS) in larger tournaments. They may be exchanged like cryptocurrencies because their ownership is recorded on a blockchain. Axies are nonfungible tokens (NFTs).

There are several methods to make money from Axie. For Armentia, one of the most important goals was reproduction, which involved a reduction in in-game activity and an increase in forward-looking planning. Axies’ owners may create others by selecting two of their own to serve as parents and paying a fee in SLP and AXS for each additional one. The new character comes with qualities from both of the parents.

The price of Axies is continually on the increase as new Axie players need Axies to play. Last August, Armentia began reproducing at a time when conventional economics seemed to have no bearing. Consequently, he promises that “You will be assured to make 300 percent or 400 percent on your money in only five days.” I thought it was a waste of time.

‘Play-to-earn’ video games were pioneered by Sky Mavis Inc., the company behind Axie. “We believe in a world future where work and play become one,” it said in a mission statement on its website. “We believe in empowering our players and giving them economic opportunities. Welcome to our revolution.”

In addition to Andreessen Horowitz and the crypto-focused startup Paradigm, the business formed in Ho Chi Minh City by a group of Asian, European, and American entrepreneurs raised more than $160 million from investors at a peak valuation of about $3 billion. That same month, Axie Infinity, according to Sky Mavis, had 2 million daily users in the same month as its launch.

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