Axie Infinity
Axie Infinity is a non-fungible token-based online video game developed by Vietnamese studio Sky Mavis, known for its in-game economy which uses Ethereum-based cryptocurrencies. Players of Axie Infinity collect and mint NFTs which represent axolotl-inspired digital pets known as Axies. These creatures can be bred and battled with each other within the game. Sky Mavis charges a 4.25% fee to players when they trade Axies on its marketplace. As of September 2021, most "Axie Infinity" players are from the Philippines. "Axie Infinity" is built on the Ronin Network, an Ethereum-linked sidechain developed  by Sky Mavis. In March 2022, hackers compromised the Ronin Network, stealing approximately US$620 million worth of cryptocurrency from the project. Gameplay. According to the company's website, "Axie Infinity" is a competitive game with an "idle battle" system derived from games like "Final Fantasy Tactics" and "Idle Heroes". The game's setting is filled with creatures called Axies that players can collect as pets. Players aim to battle, breed, collect, raise, and build kingdoms for their Axies. The game has an in-game economy where players can buy, sell, and trade resources they earn in the game. The  main path to progression in the game is by expanding the size of one's collection. The game uses a "pay-to-earn" model (also called "pay-to-play-to-earn" model) where after participants pay the starting costs, they can earn an Ethereum-based in-game cryptocurrency by playing. "Axie Infinity" allows users to cash-out their tokens every fourteen days. This model has been described as a form of gambling, and one with an unstable market that is overly reliant on the inflow of new players. In February 2020, Sky Mavis estimated that the average player had to  spend around US$400 to meet this starting requirement. By August 2020, the cheapest Axie cost approximately US$307, although reports as of March 2022 suggest the floor price of an Axie has dipped to around US$20. In the Philippines, the prohibitive cost of entry led to the formation of gaming guilds which rented out assets to allow new players meet the minimum requirements. As of June 2021, some people in the Philippines had begun to treat the game as their main source of income, although earning rates from playing "Axie Infinity" fell below the national minimum wage by  September 2021. The Philippine Department of Finance also clarified that income from playing "Axie Infinity" is taxable, and suggested that the SEC and BSP may classify its cryptocurrency as a currency or a security. Players of "Axie Infinity" can also purchase virtual land and other in-game assets as NFTs. The record sale of a plot of virtual land was priced at US$2.3 million, as of 25 November 2021. Gameplay related to purchased virtual land was intended to be introduced by 2020, but this has been pushed back twice as of April 2022. The delays have prompted complaints from  users coinciding with a sharp decline in the profitability of the in-game economy. Development and history. Development of "Axie Infinity" commenced in 2017, led by its co-founder and CEO, Nguyen Thanh Trung, alongside Tu Doan, Aleksander Larsen, Jeffrey Zirlin, and Andy Ho. Nguyen had previously spent money on the game "CryptoKitties" before he began work on his own blockchain-based game, combining elements of "CryptoKitties" with gameplay from the "Pokémon" series or "Neopets". In October 2018, the development team released "Axie Infinity's" first battle system. Development of the real-time card battle system and application commenced in  March 2019, and an alpha was released in December 2019. On 23 March 2022, hackers compromised the Ronin Network, stealing approximately US$620 million in Ether and USDC. The hack currently sits as the largest-ever breach in the cryptocurrency sector by dollar value. A month prior to the incident, the game had become the first NFT series to exceed US$4 billion in sales. On 8 April 2022, Sky Mavis said it expected it would be able to recover some of the funds, but it would take several years. On 14 April 2022, the FBI issued a statement that  the Lazarus Group and APT38, which are North Korean state-sponsored hacker groups, were responsible for the theft. Accordingly, the US Treasury has sanctioned the cryptocurrency address. Some of the cryptocurrency has been laundered through a cryptocurrency tumbler known as "Tornado Cash".