How Does Axie Infinity Work And Make Money? The Axie Infinity Play-To-Earn Business Model In A Nutshell

Axie Infinity is an NFT-based online video game developed by Sky Mavis, a Vietnamese game studio founded by Trung Nguyen in 2018. Nguyen combined his interest in blockchain accountability and the CryptoKitties craze to launch the game in August 2018. Sky Mavis generates the bulk of its revenue via the 4.25% fee it charges on all in-game purchases. This includes land purchases, monster NFT trading, and monster breeding. Axie Infinity requires that all new players purchase three monsters to get started. Since the cost can run into hundreds of dollars, Sky Mavis will lend players the monsters and collect a 30% interest fee once the player starts earning currency.

Business Model ElementAnalysisImplicationsExamples
Value PropositionAxie Infinity’s value proposition includes: – Play-to-Earn: Allowing players to earn cryptocurrency (AXS and SLP tokens) by playing the game. – Ownership of NFTs: Enabling players to own, trade, and sell NFT-based Axies. – Blockchain-based: Ensuring transparency and security of in-game assets. – Community and Governance: Allowing players to participate in the game’s development and governance. Axie Infinity appeals to players seeking opportunities to earn, trade, and participate in a blockchain-based gaming community.Attracts gamers interested in earning cryptocurrency while playing. Offers ownership and trading of NFT assets, providing a unique gaming experience. Builds trust through blockchain technology for asset ownership and transparency. Engages the community in the game’s development and governance, fostering loyalty.– Earning cryptocurrency (AXS and SLP) while playing the game. – Ownership and trading of NFT-based Axies. – Utilizing blockchain for asset security and transparency. – Involving the community in game development and governance.
Customer SegmentsAxie Infinity serves the following customer segments: 1. Players: Gamers interested in playing and earning cryptocurrency through Axie Infinity. 2. Collectors and Traders: Individuals who buy, collect, trade, and sell Axie NFTs. 3. Blockchain Enthusiasts: People interested in blockchain technology and decentralized gaming. 4. Developers and Contributors: Participants in the game’s development and governance. Axie Infinity caters to a diverse set of users with different motivations.Appeals to gamers seeking play-to-earn opportunities and a unique gaming experience. Attracts collectors and traders looking to invest in and trade NFT-based assets. Engages blockchain enthusiasts interested in blockchain gaming. Involves developers and contributors in shaping the game’s future. Addresses the needs of various customer segments.– Gamers interested in play-to-earn opportunities. – Collectors and traders of Axie NFTs. – Blockchain enthusiasts looking for blockchain-based gaming. – Developers and contributors participating in game development and governance.
Distribution StrategyAxie Infinity’s distribution strategy includes: – Blockchain Technology: Leveraging blockchain for asset ownership and security. – NFT Marketplaces: Listing Axie NFTs on NFT marketplaces for trading. – Gaming Community: Building and engaging a strong gaming community. – Social Media and Influencers: Utilizing social media and influencers to reach a wider audience. Axie Infinity ensures asset security through blockchain, leverages NFT marketplaces for trading, fosters community engagement, and uses social media to reach potential players.Provides users with secure asset ownership through blockchain technology. Enables trading of Axie NFTs on popular NFT marketplaces. Cultivates a strong and engaged gaming community. Expands its reach through social media and influencer partnerships. Implements a multi-pronged distribution approach.– Leveraging blockchain for secure asset ownership. – Listing Axie NFTs on NFT marketplaces for trading. – Building and engaging a strong gaming community. – Using social media and influencers for wider outreach.
Revenue StreamsAxie Infinity generates revenue through several streams: 1. Marketplace Fees: Charging fees for NFT transactions on the marketplace. 2. Axie Breeding: Earning fees from breeding Axies to create new ones. 3. Game Asset Sales: Selling in-game assets and cosmetics. 4. Governance Token: Holding a governance token (AXS) with potential value appreciation. 5. Play-to-Earn Model: Generating income from user activities, including battles and quests. Axie Infinity diversifies its income sources through marketplace fees, breeding, in-game asset sales, governance tokens, and the play-to-earn model.Earns revenue from transaction fees on NFT marketplaces. Benefits from breeding fees when players create new Axies. Generates income from in-game asset sales and cosmetics. Holds a governance token (AXS) that may appreciate in value. Capitalizes on the play-to-earn model for income generation. Diversifies revenue streams for financial sustainability.– Charging fees for NFT transactions on the marketplace. – Earning fees from breeding Axies. – Selling in-game assets and cosmetics. – Holding a governance token (AXS) with potential value appreciation. – Generating income from user activities, including battles and quests.
Marketing StrategyAxie Infinity’s marketing strategy involves: – Social Media Promotion: Leveraging platforms like Twitter and Discord to engage with the community. – Influencer Partnerships: Collaborating with influencers to reach a wider audience. – Play-to-Earn Narrative: Emphasizing the play-to-earn aspect of the game in marketing. – User Engagement: Fostering community engagement through competitions and events. Axie Infinity focuses on community engagement, influencer partnerships, and the play-to-earn narrative to attract and retain players.Engages with the community through active social media presence. Reaches a wider audience through influencer collaborations. Highlights the play-to-earn feature in marketing materials. Encourages user participation through competitions and events. Implements a community-centric marketing approach.– Leveraging social media for community engagement. – Collaborating with influencers to expand the user base. – Emphasizing the play-to-earn aspect in marketing. – Fostering user engagement through competitions and events.
Organization StructureAxie Infinity’s organizational structure includes: – Development Team: Responsible for game development and updates. – Marketplace Team: Manages the NFT marketplace and transactions. – Community Managers: Engage with and support the gaming community. – Governance Team: Oversees the governance aspect of the platform. – Marketing and Growth: Focuses on user acquisition and engagement. – Finance and Operations: Manages financial aspects and platform operations. Axie Infinity maintains a structure that supports game development, marketplace management, community engagement, governance, marketing, and financial operations.Led by a team responsible for game development and updates. Manages the NFT marketplace and transactions. Engages with and supports the gaming community. Oversees the governance aspect of the platform. Focuses on user acquisition and engagement through marketing. Manages financial aspects and ensures smooth platform operations. Maintains a structure aligned with core functions and business goals.– Led by a team responsible for game development and updates. – Manages the NFT marketplace and transactions. – Engages with and supports the gaming community. – Oversees the governance aspect of the platform. – Focuses on user acquisition and engagement through marketing. – Manages financial aspects and ensures smooth platform operations. – Aligns with core functions and business goals.
Competitive AdvantageAxie Infinity’s competitive advantage stems from: – Play-to-Earn Innovation: Pioneering the play-to-earn model in blockchain gaming. – Asset Ownership: Offering true ownership of NFT-based in-game assets. – NFT Ecosystem: Creating a vibrant NFT ecosystem with Axies and land. – Community Engagement: Fostering an engaged and loyal gaming community. – Governance Participation: Allowing players to participate in platform governance. Axie Infinity’s strengths in play-to-earn innovation, asset ownership, NFT ecosystem, community engagement, and governance participation position it as a leader in blockchain gaming.Distinguishes itself as a pioneer in the play-to-earn blockchain gaming model. Offers genuine ownership of NFT-based in-game assets. Creates a vibrant NFT ecosystem, enhancing player engagement. Fosters a strong and loyal gaming community. Involves players in platform governance, increasing loyalty and participation. Enjoys a competitive edge in the blockchain gaming industry.– Pioneering the play-to-earn blockchain gaming model. – Offering true ownership of NFT-based in-game assets. – Creating a vibrant NFT ecosystem with Axies and land. – Fostering an engaged and loyal gaming community. – Allowing players to participate in platform governance. – Maintaining a competitive edge in the blockchain gaming industry.



Axie Infinity origin story

Axie Infinity is an NFT-based online video game developed by Sky Mavis, a Vietnamese game studio founded by Trung Nguyen in 2018.

Before founding Sky Mavis, Nguyen had worked for the Silicon Valley-based Anduin Transactions, a platform that made investment deals faster, more efficient, and more transparent.

Nguyen had a particular interest in the accountability facilitated by the Anduin platform, which he linked with the burgeoning interest in blockchain in Vietnam.

While others focused on Bitcoin and other cryptocurrencies, Nguyen recognized that blockchain technology could be used to build video games. He was particularly in the game CryptoKitties, where users could buy, sell, and breed unique virtual cats validated by the Ethereum blockchain.

Over the next few months, Nguyen developed his own blockchain-based game, combining the true ownership element of CryptoKitties with the competitive gameplay of the Pokémon series.

The game, which he called Axie Infinity, featured fantasy creatures based on the axolotl, a Mexican salamander with the ability to regenerate limbs, gills, and parts of the eyes and brains. It was released in August 2018 and was an instant success.

In October 2021, total sales volume in the three years since launching amounted to $2.3 billion.

The company also secured a further $152 million in Series B funding to build a distribution platform to help developers create blockchain-based games.

How does Axie Infinity work?

In Axie Infinity, every monster is a non-fungible token (NFT). 

Players earn tokens by engaging in turn-based battles with other players or computer-controlled teams. These tokens are then used to “breed” new monsters by creating more NFTs. 

Since the game is based on the Ethereum blockchain, each monster is recorded as a unique object and be tracked.

This tells other game players that the creation of the monster took real and verifiable time and effort to create, which increases value.

The NFT-based monsters can also be traded in the game’s marketplace for real money.

Axie Infinity revenue generation

Sky Mavis earns money from the game in two primary ways. 

In-game purchases

Firstly, revenue comes from in-game purchases such as land and NFT monsters. The company takes 4.25% of the total price of each purchase. In February 2021, nine plots of land in Axie Infinity sold for approximately $1.5 million.

The company also earns money from breeding fees, which are collected when a player decides to create a new monster. Fees are payable in either SLP (Smooth Love Potion) or the game governance token AXS.

Note that Sky Mavis must share the breeding fee with the developers and owners of AXS.

User earnings

New players to the game must first invest in three monsters, with the cheapest monsters costing around $200 each. 

The company will lend the monsters for players who cannot afford this upfront expense. When they progress to the point of making and selling their own monsters, Sky Mavis will collect 30% interest. 

Key Highlights

  • Sky Mavis and Axie Infinity: Axie Infinity is an NFT-based online video game developed by Sky Mavis, a Vietnamese game studio established by Trung Nguyen in 2018. The game leverages blockchain technology and NFTs to create a unique gaming experience.
  • Founder’s Background and Vision: Trung Nguyen’s background included working at Anduin Transactions, a Silicon Valley platform that enhanced investment deal efficiency through transparency. Drawing from this, Nguyen identified the potential of blockchain technology beyond cryptocurrencies, leading to his interest in developing blockchain-based video games like Axie Infinity.
  • Inspiration from CryptoKitties: The popularity of blockchain-based games, particularly CryptoKitties, which enabled users to trade and breed virtual cats validated by Ethereum blockchain, fueled Nguyen’s vision. He aimed to blend blockchain’s ownership aspect with engaging gameplay, culminating in Axie Infinity.
  • Axie Infinity’s Launch and Success: Axie Infinity, released in August 2018, introduced fantasy creatures inspired by the axolotl. This Mexican salamander’s regenerative abilities influenced the game’s mechanics. Axie Infinity rapidly gained popularity, with total sales reaching $2.3 billion by October 2021.
  • Series B Funding and Development Platform: Sky Mavis secured a substantial $152 million in Series B funding. This capital infusion is aimed at developing a distribution platform to assist game developers in creating blockchain-based games, reflecting the company’s commitment to advancing the blockchain gaming ecosystem.
  • Game Mechanics and NFT Integration: In Axie Infinity, each monster is represented as an NFT on the Ethereum blockchain. Players engage in turn-based battles and earn tokens, which can be used for “breeding” new monsters. The blockchain ensures unique, verifiable creatures, thus enhancing their value.
  • Revenue Streams: Sky Mavis generates revenue through two primary channels:
    • In-Game Purchases: The company collects a 4.25% fee on all in-game purchases, encompassing land, NFT monsters, and breeding fees.
    • User Earnings: New players must invest in three monsters to start. For players unable to afford this upfront, Sky Mavis lends the monsters, later collecting a 30% interest fee once the player starts earning in-game currency.
  • In-Game Purchases and Breeding:
    • Land and NFTs: Sky Mavis gains revenue from sales of in-game items like land and NFT monsters, charging a 4.25% fee. Notably, a set of nine land plots sold for around $1.5 million in February 2021.
    • Breeding Fees: When players breed new monsters, they pay fees in either SLP (Smooth Love Potion) or the game’s governance token AXS. Sky Mavis shares these fees with the developers and AXS owners.
  • User Earnings and Interest:
    • New players invest in three monsters, and if they can’t afford it, Sky Mavis lends them the monsters. Once these players progress and start generating earnings, the company collects a 30% interest fee.

Connected Business Concepts

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Gaming Industry

The gaming industry, part of the entertainment industry, is comprised of three main types of players. From game engines, which help developers build their games. To publishing gaming houses. And gaming consoles. At the same time, the prevailing business model for decades has been selling the console at cost and making money on games. Digital games changed how games are distributed and sold, and they opened up the way to free-to-play models.

Roblox Business Model

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Epic Games Business Model

Fortnite developed by Epic Games is available in three modes. Save the World follows a premium model, where the game is sold, starting at $14.99- Battle Royale follows a free-to-play model, available for free. Still, gamers can buy things or customize characters with its digital currency (V-Bucks), and Creative Mode. As reported by Variety, Fortnite made $1.8 billion in 2019 and $2.4 billion in 2018.

Tencent Empire

Tencent is a Chinese multinational conglomerate founded in 1998 by Ma Huateng, Zhang Zhidong, and Xu Chenye. Among its various global subsidiaries are companies in the online services, music, and artificial intelligence industries. But it is perhaps best known for its interest in the video game sector – both as a game developer for the Chinese market and the acquirer of several established gaming companies. Tencent is a vast company with a stake in more than 600 companies. Following is a look at some of the companies and subsidiaries it has a majority stake in.

Free-To-Play Business Model

A free-to-play is a model that became particularly popular in gaming. Free-to-play is also commonly referred to as free-to-start. For instance, companies like Epic Games have launched popular games like Fortnite’s Battle Royale, which had ingrained a free-to-play model. This is a model that has become extremely popular in the digital age of gaming.

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Related Blockchain Business Frameworks


Web3 describes a version of the internet where data will be interconnected in a decentralized way. Web3 is an umbrella that comprises various fields like semantic web, AR/VR, AI at scale, blockchain technologies, and decentralization. The core idea of Web3 moves along the lines of enabling decentralized ownership on the web.

Blockchain Protocol

A blockchain protocol is a set of underlying rules that define how a blockchain will work. Based on the underlying rules of the protocol it’s possible to build a business ecosystem. Usually, protocol’s rules comprise everything from how tokens can be issued, how value is created, and how interactions happen on top of the protocol.

Hard Fork

In software engineering, a fork consists of a “split” of a project, as developers take the source code to start independently developing on it. Software protocols (the set of rules underlying the software) usually fork as a group decision-making process. All developers have to agree on the new course and direction of the software protocol. A fork can be “soft” when an alteration to the software protocol keeps it backward compatible or “hard” where a divergence of the new chain is permanent. Forks are critical to the development and evolution of Blockchain protocols.

Merkle Tree

A Merkle tree is a data structure encoding blockchain data more efficiently and securely. The Merkle tree is one of the foundational components of a Blockchain protocol.


The nothing-at-stake problem argues that validators on a blockchain with a financial incentive to mine on each fork are disruptive to consensus. Potentially, this makes the system more vulnerable to attack. This is a key problem that makes possible underlying blockchain protocols, based on core mechanisms like a proof-of-stake consensus, a key consensus system, that together the proof-of-work make up key protocols like Bitcoin and Ethereum.

51% Attack

A 51% Attack is an attack on the blockchain network by an entity or organization. The primary goal of such an attack is the exclusion or modification of blockchain transactions. A 51% attack is carried out by a miner or group of miners endeavoring to control more than half of a network’s mining power, hash rate, or computing power. For this reason, it is sometimes called a majority attack. This can corrupt a blockchain protocol that malicious attackers would take over.

Proof of Work

A Proof of Work is a form of consensus algorithm used to achieve agreement across a distributed network. In a Proof of Work, miners compete to complete transactions on the network, by commuting hard mathematical problems (i.e. hashes functions) and as a result they get rewarded in coins.

Application Binary Interface

An Application Binary Interface (ABI) is the interface between two binary program modules that work together. An ABI is a contract between pieces of binary code defining the mechanisms by which functions are invoked and how parameters are passed between the caller and callee. ABIs have become critical in the development of applications leveraging smart contracts, on Blockchain protocols like Ethereum.

Proof of Stake

A Proof of Stake (PoS) is a form of consensus algorithm used to achieve agreement across a distributed network. As such it is, together with Proof of Work, among the key consensus algorithms for Blockchain protocols (like the Ethereum’s Casper protocol). Proof of Stake has the advantage of security, reduced risk of centralization, and energy efficiency.

Proof of Work vs. Proof of Stake


Proof of Activity

Proof-of-Activity (PoA) is a blockchain consensus algorithm that facilitates genuine transactions and consensus amongst miners. That is a consensus algorithm combining proof-of-work and proof-of-stake. This consensus algorithm is designed to prevent attacks on the underlying Blockchain.

Blockchain Economics

According to Joel Monegro, a former analyst at USV (a venture capital firm) the blockchain implies value creation in its protocols. Where the web has allowed the value to be captured at the applications layer (take Facebook, Twitter, Google, and many others). In a Blockchain Economy, this value might be captured by the protocols at the base of the blockchain (for instance Bitcoin and Ethereum).

Blockchain Business Model Framework

A Blockchain Business Model is made of four main components: Value Model (Core Philosophy, Core Value and Value Propositions for the key stakeholders), Blockchain Model (Protocol Rules, Network Shape and Applications Layer/Ecosystem), Distribution Model (the key channels amplifying the protocol and its communities), and the Economic Model (the dynamics through which protocol players make money). Those elements coming together can serve as the basis to build and analyze a solid Blockchain Business Model.


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A decentralized autonomous organization (DAO) operates autonomously on blockchain protocol under rules governed by smart contracts. DAO is among the most important innovations that Blockchain has brought to the business world, which can create “super entities” or large entities that do not have a central authority but are instead managed in a decentralized manner.

Smart Contracts

Smart contracts are protocols designed to facilitate, verify, or enforce digital contracts without the need for a credible third party. These contracts work on an “if/when-then” principle and have some similarities to modern escrow services but without a third party involved in guaranteeing the transaction. Instead, it uses blockchain technology to verify the information and increase trust between the transaction participants.

Non-Fungible Tokens

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Decentralized Finance

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History of Bitcoin

The history of Bitcoin starts before the 2008 White Paper by Satoshi Nakamoto. In 1989 first and 1991, David Chaum created DigiCash, and various cryptographers tried to solve the “double spending” problem. By 1998 Nick Szabo began working on a decentralized digital currency called “bit gold.” By 2008 the Bitcoin White Paper got published. And from there, by 2014, the Blockchain 2.0 (beyond the money use case) sprouted out.


An altcoin is a general term describing any cryptocurrency other than Bitcoin. Indeed, as Bitcoin started to evolve since its inception, back in 2009, many other cryptocurrencies sprouted due to philosophical differences with the Bitcoin protocol but also to cover wider use cases that the Bitcoin protocol could enable.


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Ethereum Flywheel

An imaginary flywheel of the development of a crypto ecosystem, and more, in particular, the Ethereum ecosystem. As developers join in and the community strengthens, more use cases are built, which attract more and more users. As users grow exponentially, businesses become interested in the underlying ecosystem, thus investing more in it. These resources are invested back in the protocol to make it more scalable, thus reducing gas fees for developers and users, facilitating the adoption of the whole business platform.


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Decentralized Exchange

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