Axie Infinity Blockchain Nft Play To Earn Game Economics Hack

Updated on August 23rd 2021

These days anybody has already heard about cryptocurrencies and a growing number of people have even purchased assets like bitcoin and ether. But cryptocurrencies are just the tip of the iceberg of what blockchain technologies can do. Terminal year the biggest news in the space was DeFi and although it’southward an interesting space it didn’t bulldoze a significant level of adoption to the blockchain. This year all the same seems to exist the year of the NFTs and in detail, the year of the blockchain games.

Blockchain games that are based on NFTs are nothing new, they have been effectually since at least 2022 with moderate success. To create a successful blockchain game requires a very delicate residual of playability, tokenomics and technology that seemed elusive until finally ane game got information technology right: Axie Infinity.

Axie Infinity has exploded in popularity in recent months pioneering the concept of “play to earn” where players are able to earn real money past playing a pokemon-like game. My plan is for this to become the starting time commodity of many where I analyze different areas of the game to amend sympathise what the secret recipe of this “killer app” is.

Today I’ll be focusing on the technology side and clarify how Axie Infinity leverages blockchain technologies to create a whole new chapter in the gaming industry.

Why a blockchain and not just a database?

Before talking about the specifics of Axie Infinity and the utilize of blockchain, it’south important to empathize why they decided to employ a blockchain at all. Afterwards all every game until at present has relied on a centralized database to store game related information just fine.

In a regular game your characters, items and in-game currency are stored in a centralized database. In this situation, the game development company has the power to modify the content of that database at volition and has also the ability to decide who can access the information and who can’t. That leaves you equally a gamer in a vulnerable position equally you don’t accept existent control of your assets, you take simply the illusion of control.

Some other problem with a regular database is that they represent a unmarried signal of failure of the organisation. If the database stops working no ane can play the game. Being a single point of failure as well means that it’s vulnerable to beingness hacked and the information can exist corrupted or wiped out by a hacker.

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A permissionless blockchain is a blazon of distributed database where the game developer doesn’t have the power to modify the data stored in information technology as it’s past design immutable. These systems can be considered to be “neutral platforms”. Whatever you own in these types of blockchains (NFT, tokens, etc.) is yours and can’t be taken away, not even past the visitor that adult the game.

As a blockchain relies on the collaboration of multiple nodes and the data is duplicated on each node, there’s not a single point of failure in the system. A blockchain is much more resilient to failures and hacks than a regular database. They are built from the ground upwardly to handle rogue nodes using clever economic incentives and strong cryptography.

All this comes with a downside, blockchains are slower than regular databases. How much slower depends on the characteristics of the blockchain. With the current performance of the premier smart contract blockchain, Ethereum, and the high price of fees to execute transactions, developing a game directly on Ethereum will make information technology unusable and impossible to calibration. Luckily alternative approaches do exist: permissioned blockchains.

Permissioned vs permissionless blockchains

A permissionless blockchain like Ethereum and Bitcoin requires multiple nodes to piece of work together to attain consensus and anyone can get-go a new node to mine and validate transactions. In these types of networks consensus can exist reached by using Prisoner of war (Proof of Work) or PoS (Proof of Stake) algorithms. Permissionless blockchains sacrifice performance in favour of security.

In dissimilarity, a permissioned blockchain has a small fix of predefined validators. What this means is that you lot can’t offset a new node on the network even if you lot want to. Ordinarily in this type of blockchains mining is not required and simply a simple consensus machinery is needed as the set of nodes is minor and assumed to exist honest (trusted). Instead of the complex consensus algorithms of Pow and PoS, a permissioned blockchain can apply a simpler PoA (Proof of Authorization) that but attempts to verify that the validator is in fact one of vetted nodes. This can greatly increment performance but sacrifices decentralization and security. It’southward a eye ground betwixt a true blockchain and a database.

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What blockchain is used to run Axie Infinity?

Sky Mavis has created an Ethereum sidechain named Ronin that’southward dedicated to just that one game. This sidechain is a permissioned blockchain that has a two style bridge to Ethereum then ERC20 tokens like SLP and AXS (tokens used in the game) and ETH itself can be transferred from i concatenation to the other. The NFTs are not transferable and they alive only on Ronin as shown in figure i.

Effigy 1.
Ethereum and Ronin sidechain (source)

Equally discussed before, the reason to use a permissioned blockchain is performance equally they allow for a greater book of transactions compared to Ethereum with the added benefit of not needing to pay gas fees. Sky Mavis chose a set of validators that include Ubisoft and Binance among others that are directly compensated by Sky Mavis for their work securing the network instead of relying on mining rewards and gas fees like on Ethereum. Of course this implies that the gamers will take to trust that the validators will remain honest but at least it’s meliorate than just Sky Mavis having complete control over a centralized database.

How does the Ethereum – Ronin bridge work?

I don’t know the specifics of how the Ronin bridge was implemented and then I volition explain how a bridge unremarkably works every bit information technology’s probable a similar architecture.

A bridge works past deploying two smart contracts, one on Ethereum and 1 on the sidechain (Ronin in this case), that are able to communicate through an oracle. When a resources is sent from Ethereum to the sidechain, the smart contract on the Ethereum side locks the resources while the smart contract on the sidechain mints an equivalent corporeality of the same resource and sends it to the user’due south wallet on the sidechain. Go along in mind that the sidechain wallet is different from the Ethereum wallet of the same user. Sky Mavis developed a wallet for Ronin that’s available every bit a Chrome extension.

Figure two.
Ronin wallet screenshots.

On the other hand, when transferring a resource from a sidechain to Ethereum, the bridge smart contract on the sidechain side burns the resources while the smart contract on the Ethereum side unlocks the same amount of the resource and sends it to the user’s Ethereum wallet.

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Why is a span to Ethereum needed?

Exchanges. Without a bridge to Ethereum, Heaven Mavis would have needed to implement an exchange that somehow connects to the banking organization of multiple nations and has enough liquidity for multiple trading pairs (USD-ETH, ETH-AXS, etc.). By creating an Ethereum sidechain, Axie Infinity tin can do good from the Ethereum infrastructure while allowing for the game’s scalability.


Update:
Turns out that Sky Mavis has a FIAT on ramp where for now you can only buy ETH (technically wrapped ETH or WETH) straight on the Ronin sidechain.

Continue in mind that the security guarantees of the sidechain are weaker than Ethereum. With the bridge yous take the selection to move at least some of your assets into a more secure network if you plan to HODL any of their tokens for a long term. The Sky Mavis team has in their roadmap the possibility to also withdraw the game NFTs to the mainnet but the date is unclear.

Determination

The blockchain technology stack of Axie Infinity is pretty solid considering the alternatives. A sidechain has clear trade-offs but it’s currently the simply type of blockchain that tin can support a game of that scale while allowing room to abound. Other solutions that tin can be explored in the future are layer two networks with rollups and zero noesis proof which at least in theory provide high scalability while preserving security guarantees from the Ethereum mainnet. Such technologies are still experimental and they will need to mature before being considered a existent alternative for Axie Infinity.

Information technology’s impressive how fast the team has been able to iterate and to motion away from the Loom network to implement their ain sidechain forth with their own wallet and bridge. Their roadmap seems to tackle some of the well-nigh important topics for improving community participation and security. Information technology’s non easy to be a pioneer just they seem to go in the right direction at least when it comes to their blockchain applied science stack.

Axie Infinity Blockchain Nft Play To Earn Game Economics Hack

Source: https://david-barreto.com/axie-infinity-and-the-power-of-blockchain-games/