Axie Scholarships
A blockchain business for entrepreneurs
As an overview, Axie Scholarships are programs run by Axie Owners that loan teams of Axies to New Users so they can earn SLP (Axie Infinity’s in-game reward token). New Users are attracted to this because the current Battle Systems that earn SLP (PVP and PVE) require New Users to own 3 Axies to form a team to play. The cost of a competitive 3-Axie Team at the time of writing is around ETH 0.2, equivalent to US$145 today.
When BlockchainSpace launched Axie Academy at the start of November 2020, there were around 10 active Axie Scholarships. As of writing there are over 45 active Axie Scholarships (not including micro scholarships with less than 50 Members). Including micro scholarships we could be well over 100.
If you’re interested to learn more about Axie Scholarships or you want to setup your own, reach out to: info@blockchainadvisory.asia
Why have Axie Scholarships exploded 450% in 2 months??!
In August 2020, this article from Coindesk columnist Leah Callon-Butler hit home for many who were stranded at home during lockdown with no work and ample time on their hands. At the time you could easily farm $300–400 in a month from playing Axie Infinity. Whilst this may not sound huge for some, it was very attractive for those in developing countries like the Philippines where farming SLP could earn you more than Minimum Basic Salary (read this from Mike Mislos of BitPinas).
Since Leah’s Coindesk article and a number of subsequent Axie launches such as the $AXS and $SLP token listings on Binance, along came an influx of New Users. These New Users were excited and motivated to play the game but with no prior knowledge of the game and only few with knowledge of crypto and blockchain.
Enter Axie Scholarships.
The Value of Axie Scholarships
Your typical Axie Scholarship provides:
1. Loans of 3-Axie Teams
2. Education on Axie Infinity and SLP Farming
3. Education on Crypto and its applications in Axie Infinity
4. Community Building & Support
At present these services are most relevant to New Users, and these reasons help explain why Axie Scholarships have played a key role in onboarding New Users:
- Axie Scholarships take away the risk and the cost barrier
Considering that a competitive team to farm SLP in Axie Infinity will set you back $145, getting into Axie Infinity is both a risk and an investment.
When most mobile games are FREE to download and most console games are only priced around the $50–60 mark, asking anyone to pay $145 to play a game is quite an ask for those who do not understand its value or simply want to try farming on a trial basis.
Axie Scholarships add value by taking on the investment of the team purchase and accepting the risk that these assets or the game itself might one day go to zero.
2. Axie Scholarships Educate New Users
Axie Scholarships act as a landing pad for learning how the flow of Axie works — from onboarding, SLP farming and cashing out, to battle mechanics and upcoming developments.
As a blockchain game, Axie uses a number of crypto native features and tools that non-crypto users will not be familiar with. Typical scholar questions relate to the 2 in-game tokens $AXS and $SLP, how to use Metamask for sending/receiving transactions. Even understanding good and bad times to participate in the Axie marketplace requires some background, especially as its priced in ETH.
If you’re new to Axie Infinity, the learning curve is fairly steep and if you’re new to crypto the learning curve is even steeper.
3. Axie Scholarships follow game mechanics like a hawk
As a game that is still in Alpha game updates happen fast and can results in changes in game mechanics. Understanding the consequences of game updates can be complex. Axie Scholarships, which are usually run by experienced community members help follow in-game developments and translate these to New Users. Updates like the recent “energy limitation” released in November 2020 have direct impacts on players and need to be evaluated and communicated.
4. Axie Scholarships Build Community
This might sound strange as all new users are ultimately part of the overarching Axie Community however building bonds and bridges within micro communities is also key within MMORPG games and Axie is no different. With the emergence of landplay in the future it won’t be long till we see micro communities turn into clans or guilds with a common purpose. Something as simple as language focus of a scholarship program could unify communities. Axie already has players speaking 19 languages including French, German, Spanish, Tagalog, Bahasa, Arabic, Turkish, Greek and Axie Scholarships are borderless, spanning the globe and covering different geographies.
Building supportive community is also important for motivation and direction. Farming in Axie can also be seen as part-time work, communities can make this work fun and entertaining.
What is in it for the Axie Scholarships?
Why do Axie Scholarships take on the risk and see value in offering these Scholarship Programs. It boils down to this.
The significance of #Play2Earn
We’re at a paradigm shift where earning from playing computer games has evolved and this next evolution is called #Play2Earn.
Play2Earn brings about new forms of game monetization and game ownership that stem from new purpose-built token economies that empower the player!
Today players of blockchain games can…
- Earn.
Players can earn in-game currencies in return for that can be spent both in and outside of the game - Invest.
Players and investors can own in-game digital assets (characters, battle items, land) that are tradable both in and outside the game - Govern.
Players and investors can participate in the game’s internal economy and contribute to its governance
Citing Yat Siu, Co-Founder of Animoca Brands:
“Games are inflationary by design with no scarcity and no regard to the economy. Play2Earn has a strong value element that goes to the player, traditional games accrue value only to the game company”
Blockchain has revolutionized the gaming industry by bringing completely novel economic design concepts that empower the players!
Blockchain-based token economies can now be ‘deflationary’ and value can be transferred to the player so they can earn from playing, invest in assets in the game and can participate in the governance of the game’s economy.
The future of games has changed forever!
To go deeper into #Play2Earn I highly recommend reading this article from Cointelegraph.
The Value Proposal for Axie Scholarships
The Earning Thesis
Axie Scholar Average Earnings (avg): SLP 5,000/month (US$100/month)
Hours per month (avg): 84hrs / month
Competitive Team Cost: ETH0.2 (US$145)
Note:These figures can vary depending on team size and team selection
Play2Earn game mechanics, have allowed Axie Scholarships to provide competitive teams at US$145 and have this paid back in under 1.5 months. Amazing!!
The returns for farming SLP can be significant and with such fast an ROI you can see why its attractive to want to own multiple Axie accounts.
Axie Scholarships provide the opportunity to match multiple Axie accounts with multiple users (in line with the game’s rule of 1 user = 1 account).
Today, Axie Scholarships typically run a revenue sharing model whereby a Scholar’s earnings are shared 70% (Scholar) / 30% (Axie Scholarship) in return for the Axie Scholarships services and initial investment. This provides New Users a risk-free way to try the game to earn. Relate these figures back to the $100/month on average that a Scholar earns and an Axie Scholarship is looking at an ROI of 4.8 Months with this revenue sharing model.
However as you can imagine the entrepreneurial talent in this space has been innovating fast to find ways to scale faster, take less risk, give more back to the Scholar and some emerging models include:
- Axie Loan Platforms
- Automated Team Issuance and Payout Platforms
Additionally, Axie Scholarships are looking into ways to empower their Scholars, especially those who cannot afford to buy their own teams and are setting up team purchase agreements and even helping Scholars run their own micro Axie Scholarships!
The Investment Thesis
As mentioned above, spending on Axie Teams is an investment that comes with risks. Risks that the underlying assets devalue over time, risk that the game itself does not exist in a few years from now, risk that loaned Axies might be abused by scholars renting them and thus getting them banned.
So why do Axie Scholarships still take on this risk?
- Axies are denominated and traded in ETH, the native currency of Ethereum. As you accumulate axies, you are in effect investing in ETH. The price of ETH back in January 2020 was approx. US$130, today the price of ETH in January 2021 is approx. US$735. If you purchased or bred Axies in Jan 2020 and held till Jan 2021, the USD valuation would have returned 5.6x (assuming the ETH valuation of your axies did not drop).
- In the long-term the floor price (the cheapest axie you can buy off the marketplace) might appreciate. Floor price of axies in January 2020 was around 0.02ETH. In January 2021 the floor price of axies is 0.045ETH, a return of over 2x from a year ago.
- New monetization models such as Battle V2 and Landplay promise more ways to use your game assets to generate yield. You can speculate that new battle modes and new ways to interact with the Axie ecosystem such as through Landplay mean more ways to monetize any Axie assets you own.
The Governance Thesis
If you haven’t already, you need to read the Axie Whitepaper.
The future of Axie Infinity will be decentralized.
As Axie say it themselves:
We want Axie to become the first game truly owned and operated by the community that plays it. This opens up limitless possibilities but must be approached carefully. In the past, projects have been abandoned and become stagnant using the term “decentralization” as a ruse. The shift to a true Decentralized organization will occur gradually over time.
The key to owning part of this future is through owning Axie’s governance token $AXS which can be earned through gameplay, participating in key governance votes and staking tokens and Axie Scholarships will be well positioned to participate in this.
While $SLP is the main token being earned in the 2 battle modes: PVP and PVE today, $AXS will be the token earned in the future.
You can see just how committed Axie is to their belief in #Play2Earn from the $AXS allocation schedule in their whitepaper, where 20% of all $AXS supply will be dedicated to Play to Earn rewards.
Axie Scholarships believe in the future of Axie Infinity. We want to help build, own and craft a part of it. There is more brewing in the Axie Scholarships space in relation to eSports.
If you’re interested to learn more about Axie Scholarships or you want to setup your own, reach out to: info@blockchainadvisory.asia
