How Axie Infinity Has Become The Second Largest Fee Revenue Generator

Axie Infinity has been on an absolute tear lately. The play-to-earn platform has become the face of a new integration of crypto and gaming that holds unbelievable potential.

Axie Infinity has surpassed 1M daily active users, and is generating more revenue than any protocol or platform with the lone exception of Ethereum. Yes, Axie Infinity is yielding more fee revenue than major platforms such as OpenSea, Uniswap, Bitcoin, or the Binance Smart Chain.

If you weren’t already paying attention to Axies, you probably should be. Need to get up to speed on the basics? Check out our report from a couple months ago on the emergence of Axies.

A series of tweets from Coinbase Ventures’ Connor Dempsey lays out the short and sweet of the story quite well. As Dempsey aptly notes, every Axie transaction collects a priced-in fee – either in $SLP or $AXS.

At the time of writing, in the past 24 hours, Axies have generated over $17MM in sales volume, leading the pack when it comes to NFTs. The next closest NFT project on the sales volume chart is Bored Ape Yacht Club, which is just under $9MM.

You’re reading that right, Axies have nearly doubled the next closest comparable NFT project today. Axies, of course, also lead the 30-day and all-time charts for NFT sales volume, as the platform has eclipsed $1.7B in transactions and approached 1.5M owners.

If you look at blockchain fee revenue over the long-term, Axies become even more impressive. According to Token Terminal, any long-term time horizon from the 90-day chart and longer reflects a fee generation from Axies that surpasses Ethereum. As Dempsey highlights in his tweet thread, the treasury pool from Axie fees has ballooned to nearly $600MM.

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Dempsey’s tweet thread leads to a new Coinbase blog post this week centered around Axie Infinity, associated gaming guild Yield Guild Games, and more broadly, the play-to-earn model.

The demand flowing into Axie Infinity has led to Axies costing an average of around $300 this month, with a minimum of 3 Axies required in order to play the game. Revenues in August nearly doubled from July. How did this happen?

It started with an emergence last year in the Philippines. It’s grown so much in the country that government finance officials have reiterated that profits from play-to-earn titles should be reported as income tax. Other developing and emerging countries, particularly ones hit hard from the COVID-19 pandemic (and where local currencies may have weakened), have found a living wage modeled through Axie Infinity as well.

The largest criticism around Axie comes to sustainability; will consistently rising costs to enter the market lead to unsurmountable barriers to entry? In enters Yield Guild Games, who lend out Axies for a small return. Yield Guild Games even partnered with exchange FTX to sponsor over 100 players in developing countries. The surrounding economy to support Axie Infinity is coming to life before our eyes.

Axie Infinity is paving the way for the play-to-earn model, and impacting individuals lives in a very major way, at a very significant scale.

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