Co-founder and CEO of Axie Infinity Trung Nguyen recently took to Twitter to let the community know that “nature heals”.
The Fall of Axie Infinity
In its heyday, the Pokemon-inspired play-to-win game crushed the competition. A chart published by @WuBlockchainas of November 2021 showed Axie Infinity’s revenue to be almost 3x higher than the next closest dApp, dYdX, at $191 million from the previous month.
The ripple effect saw governance token AXS approach its ATH ($157.75) and the project looked unstoppable.
But all hell broke loose in March when it emerged that hackers had taken control of several validators on the Ethereum (Ronin) sidechain the game was running on. This resulted in the loss of $615 million draining ETH and USDC tokens.
“The Ronin Bridge was mined for 173,600 Ethereum and 25.5 million USDC. The Ronin Bridge and Katana Dex have been stopped.
It recently emerged that the cause of the hack was a complex LinkedIn phishing scheme involving a complex plan to bait a senior engineer at Sky Mavis, the developers of Axie Infinity.
The plot involved several fake interviews, ultimately culminating in a generous job offer officially communicated via a PDF file. However, the PDF file was riddled with spyware, which compromised the engineer’s computer when opening the file. This offered an entry point that allowed hackers to take control of four of the nine network validators.
Recently, the Ronin Bridge reopened, with developers keen to emphasize the safety of user funds, audit procedures that have since taken place, and a new “Land Staking” feature.
The Ronin Bridge is open!
• All user funds are fully guaranteed 1:1 by the new bridge.
• The bridge has undergone an internal audit and two external audits.
• We are still on track to release Land Staking this week.
— Axie Infinity🦇🔊 (@AxieInfinity) June 28, 2022
Back to manufacturing?
The March hack had devastating consequences for the project. The chart below shows that Axie Infinity’s daily sales volume peaked at $40.8 million on November 4, 2021, followed by a steep decline.
This indicates that even before the hack, users were losing interest in the game. This can be attributed to several things. First of all, it takes a team of three Axies to play, buying even the cheapest one meant shelling out around $1,000 at the time.
Then there was also the fall in the price of Creamy love potion (SLP) in-game currency. An update that drastically reduced daily SLP rewards didn’t help matters.
“For example, an average player at around 1.5 kmmr can earn 50 SLP at the current price of $0.0268. That’s a terrible return for 1 hour of play.”
Nonetheless, in a bid to rebuild trust and start fresh, Nguyen tweeted that “nature heals,” meaning metrics on sales volume, downloads, and land staking suggest things are turning around. .
22,000 Axies sold in the last 24 hours. Was at 7,000 a few weeks ago.
Origin is growing rapidly with the new Alpha Season. 4,600 downloads yesterday.
The bridge is in place. Land (90% staked) issues AXS.
Nature heals. pic.twitter.com/AdNzi8x4cb
— The Jiho.eth 🦇🔊 (@Jihoz_Axie) July 7, 2022
An important factor in making a return is the price of the SLP. At its peak, SLP was trading at nearly $0.40. However, with a current price of $0.00403565there is downward pressure on the incentives to play the game.
Whether land staking can significantly offset this pressure remains to be seen. With land staking, users stake the fastest growing AXS token for AXS rewards.