In the NFT game “Axie Infinity” there is a strange system: rich players from the West hire players from the Philippines, Venezuela or Thailand as “scholars”. A German YouTuber explains how much money he made with it in August 2021: 15% return is a large passive income. But now the market is collapsing.
What kind of game is this?
- Axie Infinity is a “Pokémon” -like game about “SLP”, “Smooth Love Potion”: a currency that can be exchanged for money
- In the game there are Pokémon-like creatures called “Axie” that players can fight and breed
- In 2021, there was a hype about Axie Infinity. The game appeared to be the flagship game for “Play2Earn” games, that is, games that allow you to make money. But now a harsh awakening is imminent.
Investors borrowing Axie, will have 30-70% of the profits from their scholars
How do rich westerners make money on it? To play Axie Infinity you need to buy 3 Axies in the beginning. These 3 axes cost around $ 1,000 on top of the game, but prices have since dropped. But it’s still too expensive for many games. Because Axie Infinity is popular in regions where people do not earn much (via playercounter):
- 40% of Axie Infinity players are from the Philippines
- 6.3% from Venezuela
- 5.7% from the United States
- 4.7% from Thailand
Real money big investors buy Axies and lend their Axies to players from “poor regions” to let them earn “Smooth Love Potions”. They then collect their share of the income from their farmers on a monthly basis.
According to an Axie co-founder, the usual percentage is between 30% and 70% (via vice).
Investors call themselves “managers” – their people called them “scholars”.
The German YouTuber Sw1pe Axie showed in a video from August 2021 (via youtube) that 16 “researchers” played for him. The best earned 5,886 SLP (approx. 586 euros), the worst earned 739 SLP (approx. 74 €). Sw1pe explained that he leaves his scholars 50% of their profits.
Investor dreams of “passive income” – profit of € 3,000 per. month with an investment of € 20,000
Why is he doing this? According to the YouTuber, he gets a great return of 15% per month this way:
‘Firstly, 3,000 euros is a lot of money. But if you see that I only spent about 20,000 euros for all the teams together – I think it was even less, I only spent 18,000 euros, then it’s about 15% return or profit that I earned on it per month .
How did it go for him? Sw1pe released 2 more videos with his earnings. They showed that he continued to expand his program and doubled the number of scholars, while his income remained relatively constant because the price of Smooth Love Potion was halved against the euro at the same time.
- in september 2021 23 scholars worked for him – he earned € 2895, by then the price of an SLP had already dropped from 10 cents to 6 cents
- in October 2021, 31 scholars worked for him – he earned 3463 €
- From November, however, Sw1pe stopped posting videos about its earnings from “Scholarship” – during November and December 2021, the value of an SLP dropped from 6 cents to 2 cents
Man in Venezuela supports his family by playing a very old MMORPG
“Skolars” instead of China farmers
What is the difference between “Chinese farmers”? “China farmer “is an expression from MMORPGs like World of Warcraft. It suggests that Chinese sweatshops are forced to produce an MMORPG for money, in order to sell the content to wealthy players in the West.
The difference with Axie is that there is no “company” behind it, but private individuals from the West who want to generate “passive income” as crypto investors. In addition, their scholars are apparently not from China, but from Thailand, Venezuela, and the Philippines.
This is what it looks like when you actually play Axie Infinity:
“Digital colonialism” or “conditions that benefit everyone”?
Isn’t it all a little weird? Yes of course. This is about rich people letting people from poor areas play a video game for very little money a month.
A journalist looking at the strange relationship from the outside talks about “digital colonialism.”
But investors see themselves as benefactors. The Vice website cites a leader who employs up to 200 academics. He says that the agreement is, after all, mutually beneficial:
“I make money on them by using my NFTs, and they make money by playing them. Charity is something I’ve never experienced myself. But the news I get from my scholars is how they spend their profits. to pay their bills, buy a washing machine, or buy Grandma new teeth. “
The market collapses and the “scholars” stop
What’s the problem? The video with Sw1pe Axie’s bill dates from August 2021 – at the time, a “Smooth Love Potion” was still worth 10 cents. But since then, the value of a Smooth Love Potion has dropped sharply:
- At its peak on July 24, 2021, an SLP was still worth 29 cents
- On August 8, there was at least 15 cents for it – almost half
- On September 21, the price had dropped to 5 øre – about one sixth
- Today, April 22, 2022, there is still 1.4 cents for an SLP – only one twentieth of the maximum price
As a result, “investors” like Axie Swipe LP are losing their cheap workers in droves because no one wants to farm for the money anymore.
On Twitter, some investors are complaining that their “scholars” are quitting and that they are now sitting on their axes. One says that it is now too time consuming to look for new scholars because they stop faster than he can find new ones.
The leaders are now discussing whether they can now sell all the Axes out and live with the loss, or whether they hope that the price will rise again. However, prices seem to be so low that “giving up” is simply not an option for many.
The German “Sw1pe Axie” also seems to continue to bet on the game. Within the last month alone, 7 new videos have emerged on the subject. But with the price drop, dreams of a YouTube career also seem to be shattered:
- While the video about his earnings with the “Scholar program” still has 3,300 views in August 2021
- The last videos only got between 70 and 430 views
We have already reported on Axie when the game was hacked for a lot of money:
Hackers steal € 550 million from NFT games – Unfortunately Pokemon-like games were too successful