Sky Mavis’ play-to-earn game Axie Infinity experienced a downturn in daily active users even before the recent Ronin bridge hack that resulted in losses of approximately $600M.
The game’s daily active users peaked in November, but fell 45% to 1.48M by March 28, 2022, according to recent data from Sky Mavis, approximately a day before the 600M hack. The fall in users has been particularly notable since December when the game was updated, and on March 23, when hackers stole $600M in ETH and USD Coin from Ronin, a sidechain enabling faster in-game transactions.
December saw a rapid selloff in the in-game Smooth Love utility token, dropping the price. “Daily earnings dropped, and so did interest in the game. Those that bought in at the highs started to feel fearful and naturally doubt creeped in,” opined Martin Lee, a data journalist at Nansen. Lee adds that players are awaiting the game’s “Origin” patch that looks to revitalize, improve and increase the depth of gameplay.
Sky Mavis, developer of Axie Infinity, and Ronin have stated that they will reimburse players as quickly as possible but have not provided details about how they plan to do this, raising concerns that players move to other games, further reducing the numbers of Axie’s user base. On April 4, the hacker moved 1,400 ETH to Ethereum tumbler TornadoCash, a service that obscures the link between the source and destination of crypto transactions.
How P2E differs from traditional games
Play-to-earn games have carved a lucrative niche in the decentralized financed space, allowing players on smartphones and computers to generate an income by leveraging blockchain technology. In a traditional game, players can acquire assets, be they new skins, power upgrades, or cards, which are under the control of the game developer. The assets have little value outside the environment of the game.
That’s where play-to-earn gaming comes in. As players progress, they are awarded tokens or NFTs (digital assets) that can be exchanged for fiat in the real world, and assets are distributed amongst all players in a decentralized manner. Hence, these applications are called decentralized apps and are a feature of what is commonly known as Web3.
STEPN enters M2E space to incentivize fitness
Web2 is a place where key industry players often hold corporate power. Decentralized applications remove the power from large conglomerates and give it back to the people. STEPN has launched a fitness app on Solana that rewards users for being healthy, encouraging users to exercise, and rewarding them with crypto when they reach specific fitness goals.
These applications are called “move-to-earn (M2E).” This application users are already proudly showing off their earned NFTs for STEPN sneakers, which have become a status symbol. NFT sales and royalties have earned over $26 million in profits that will be used to support the in-app tokenomics by buying back tokens from the secondary market and burning them on-chain.
BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.