Sky Mavis to launch Decentralized Exchange for Axie Infinity

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In Brief
  • Jeff Zirlin, co-founder of Axie Infinity has confirmed plans to launch a decentralized exchange on Ronin sidechain to be used with the game.

  • It will be the first time a game has its own decentralized exchange.

  • It is designed to reduce friction caused by cross-chain token trading.

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Jeff Zirlin, the co-founder of the Axie Infinity game, has announced plans to launch a DEX to permit buying and selling of AXS and SLP tokens on-chain.

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Axie Infinity, the game that allows people to battle chubby, fantastical beasts, and earn Axie Infinity Shards (AXS), which are ERC20 governance tokens, and clean love potion tokens (SLP) while playing, will soon have its own decentralized exchange. The exchange will allow buying and selling of tokens among the Axie Infinity consumers. AXS can be earned by a placement on the leaderboard and by winning tournaments. AXS can also be purchased from crypto exchanges around the world, and they can also be earned through gameplay. 

The DEX will be built on the Ethereum-linked sidechain Ronin, which was built specifically for Axie, which will make Axie Infinity one of the first games in the world to have its own DEX. Sky Mavis, the company behind Axie Infinity, will be creating the exchange. One of the reasons for creating the Axie Infinity DEX is because people require tokens during gameplay and have to use cross-chain bridges to purchase or swap tokens, which creates friction in the user experience, which Zirlin wants to avoid, as reducing friction. Whenever Axie has reduced friction in their ecosystem, the trajectory of growth in users has been markedly different compared to when gameplay was handicapped by friction.

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DEX Liquidity pools and Axie NFTs

Axie Infinity allows consumers to battle, collect, raise and build land-based kingdoms for “Axies”, which are similar to Pokemon or Tamagotchis. Liquidity pools do exist on other DEXes, as well as centralized exchanges. Zirlin remains mum on whether the new DEX will have liquidity pools, but sees potential in combining recreation with blockchain and NFTs, and feels that this will present the blockchain to users in a way that is nostalgic, as it reminds them of the recreation of yesteryear.

Growing user base made possible by Ronin

Axie Infinity was started in 2018, and was built from the ground up, but high gas fees killed the economic viability. But then the team built Ronin, which allowed scalability and a community to develop. Axie Infinity’s user base has grown to 1.7 million daily active users, while it has captured over $2B in NFT gross sales. A single Axie Infinity NFT costs in the region of hundreds of dollars. Over 40% of the Axie player base comes from the Philippines. Zirlin believes that the new DEX will benefit from its significant user base and retention rate. Three out of five developers on the Axie team worked were part of the team that created the famous CryptoKitties.

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