This article relates to a blockchain game called Axie Infinity. It is not intended as financial advice and/or advice of any form, and is an analysis based on existing marketplaces and tokenomics disclosures around March 2022. It relates to future possibilities and any assumptions in it could be faulty, mistaken and/or simply wrong. The author holds nearly every class of Axie Infinity assets. The author is not responsible for any decisions you make.
AXIE LAND ANALYSIS
By baronar
March 20, 2022
A world away.
At the present time, land in Axie Infinity is full of speculation, uncertainty and change. Prior to changes in the roadmap from and after December 2021, the roadmap predicted that we would have a Community Alpha for land by the end of 2021 and a release of land play by approximately June of 2022. This delay was met with significant heartache by the land faithful, but the news was not all bad. For example, the primary reason for the delay was directly due to the team having to spend almost all of their energy to work on scaling solutions resulting from mass interest in the Axie Infinity Battles game. Despite dealing with nearly three million daily active users at the peak, Sky Mavis was still able to launch major releases including AXS staking, RON farming and significant patching of the existing platform.
Another change with generally positive but somewhat mixed reception was the announcement that land play was pivoting away from the 2D art that was showcased in the Project K demo during December 2020. Instead, the team has chosen to go with a 3D art format – demonstrated in the teaser trailer including this announcement. Regardless of various opinions, this move is certainly in line with the industry standards for a land game.
The concept for land plots has changed significantly over time as well, initially envisioned as terrariums with an 8x8 block size, then modified to a 16x16 format with a 1 block border, and now described as being 128x128 blocks per land plot. Land enthusiasts are all hopeful that we will get more information soon regarding early indications such as multiple plot buildings, connected plot management, updated item descriptions, and various other open questions. The primary question on most land-owners’ minds is: what type of resources and rewards will be available for land play.
Life in the question.
To the significant disappointment of players acquiring land during the mid to later half of 2021, land prices have slid significantly from and after the announcement that land would be delayed. This has been further compounded by economic troubles in the Battles game related to SLP and Axie prices themselves and some uncertainty earlier in the year as to when the new “version 3” of the battles game would be released, Axie: Origin. With various indications that Origin is slated to be released by the end of March 2022, the marketplace for Axies has been further chilled as a result of the unknown in terms of Origin gameplay and meta. SLP price did recover somewhat on the announcement of restricted earnings and eliminating bot-like behaviors in Battles. However, the declining economic measures for Axie Infinity overall (AXS price decrease, SLP price decrease, Axie price decrease) certainly has spread into the land marketplace as well.
Further, there is significant uncertainty around topics that previously seemed relatively clear. For example, it was indicated that land resources may remain off-chain. The scope of this statement has not been fully explained or clarified, but it does leave a question as to the fate of some significant art related efforts.
A closer view.
All of these questions, and frankly, many, many more, remain unanswered and are possibly completely unknown at the present time. The land game could be very far off and the official twitter even wrote, near the end of last year, “Land 2022?” The present state of things has certainly created negative price pressure on Axie Land. And rightfully so. This negative price pressure is likely to continue into the future in the absence of better, more detailed information and/or some form of staking and staking rewards. The reason, in my opinion, that land has not suffered even greater price declines are the promises of significant returns for owners of land – in particular the portion of the AXS tokenomics that is dedicated specifically to “Play and Earn” (recently updated for accuracy from “Play to Earn”). Over a 54 month period, the total of 54,000,000 tokens are slated to be unlocked and distributed on this basis. Based on previous statements and the statement in the whitepaper that the team “envision[s] the play and earn portion of the issues to reward key behaviors within our ecosystem [including] Interacting with and tending to your land plots.” Given the general expectation that there are two primary games planned for the Axie ecosystem, has led many to theorize that at least one-half of the Play and Earn allocation would be earmarked for land gameplay.
Unfortunately there are far too many assumptions to attempt to provide any significantly useful evaluation of what to expect from the Play and Earn allocation. For example, some portions of the land rewards may come from expending significant efforts, others may be more passive reward to landowners in line with comments from team members that land is “delayed AXS” or like “banked AXS.” For a conceptual framework, despite the fact that the Play and Earn allocation is front loaded, let’s consider a starting point of equalizing the allocation over the entire 54 month period, and use one-fifth (20%) of the total allocation and apply it first to existing land, then to total land. These figures could only hold during the 54 month distribution period and are pure conjecture. Also, for purposes of this analysis, Genesis plots are simply ignored, which is part of the reason a lower percentage of the total allocation is used. This figure leaves another speculative thirty percent (30%) for various returns in land play and for Genesis plots.
Twelve months at 1,000,000 per month equals 12,000,000 AXS, multiplied by one-fifth (20%) is 2,400,000. 2.4 Million divided by 365 days results in approximately 6,575 AXS daily. For the purposes of this analysis, I will use the initial chest ratios to figure the base rewards for each type of land plot. The ratios, starting with Savannah, are: Sav x3.2 == Forest, Sav x9 == Arctic, Sav x20 == Mystic.
What this results in on a daily basis, with the present player-owned lands, is equal to a daily yield of AXS per plot of, approximately, Mystic 1.238, Arctic 0.557, Forest 0.198, and Savannah 0.0619. This assumes the above ratios, the total AXS daily pool of 6,575, and the currently owned land plots totaling 17,166 (excluding Genesis) and nothing else.
Once fully divested, the daily yields are reduced to, approximately, Mystic 0.323, Arctic 0.146, Forest 0.0517, and Savannah 0.0162. Again, this assumes the ratios, the same total daily AXS pool, but includes all lands other than map features (roads, nodes, rivers), Luna’s Landing, and Genesis plots, for a total of 68,868 player owned plots and nothing else.
A path forward.
Presumably, one of the significant rewards for holding/acquiring land of the first quadrant will be the opportunity to experience the higher earning ratios similar to those described above as well as further front loading of AXS Play and Earn distributions. Other possibilities exist as well, such as potentially sharing in the earnings from future land sales or future land item sales and so forth. Certainly expected will be the opportunity to mine resources, craft buildings, and other engagements in other desirable activities that will allow landowners of the first quadrant an opportunity to be rewarded for their early involvement and/or purchase of a speculative asset.
However, it is very obvious that even with the information that is discussed above, land prices are experiencing a decline. Whether or not that is 1) reasonable in line with the actual future game, 2) reasonable in line with what the developers prefer to see, and/or 3) reasonable in line with actual future returns (everything in this article is completely conjecture and pure speculation, informed by the reference materials), prices are likely to continue to decline without further action on the part of the team.
I believe that the team is already working on some updated information that will allow the owner base to have greater insight into what expectations are reasonable and what gameplay is likely to entail. In my view, it is vastly better at this point to have more concrete information so that speculation can be reduced and knowledge can allow land prices to sort themselves out rationally. If this means a price decline, that is likely better than to have future upset in the event that price speculation is vastly out of line with reality. I strongly believe that reasonably detailed information, particularly related to the economies of the game, is crucially important in the near term. Otherwise, prices will suffer further.
If some or most of the land prices are rational, my personal expectation is that Savannah may be somewhat high on the price spectrum and that Arctic lands might be a good value, then it might make sense for the team to enact some form of reasonable AXS returns in the form of emissions on a regular basis prior to land play. This honestly would be healthy for the land market, would enable a preview of any passive earnings that might be eventually included in land play and would stabilize the market. This should be a reasonable approximation to the actual rewards in gameplay for efforts that are related to “owned plot” resource generation. Given the successful implementation of these types of yields (CyberKongz, Crypto Unicorns, BAYC, etc.), it seems highly likely that this would drive additional interest to this space and prime the pump for engagement with Axie land at or near the same time that Axie: Origin releases.
Regardless, I remain an Axie land bull and continue to faithfully dream of interacting with Lunacia, building exceptional buildings, and doing my part to see the total land economy grow and blossom.
#AxieHard
References:
https://whitepaper.axieinfinity.com/
https://axie.substack.com/p/landteaser?s=r
https://axie.substack.com/p/feb2022?s=r
https://docs.google.com/spreadsheets/d/1g4d2lzBytC-Wo4_rKGHjR3vGeJHb8hd1jb55qRf_S2g/edit#gid=0
https://axieedge.com/may-land-development-update/
