The story of Axie Infinity, one of the most well-known play-to-earn (P2E) blockchain games, illustrates both the promises and pitfalls of Web3 technologies. Once hailed as a revolutionary platform that could onboard millions into the decentralized internet, the game’s spectacular crash during the 2022 crypto downturn provides valuable lessons about sustainability, user expectations, and the future of digital economies.
At its peak during the COVID-19 pandemic, Axie Infinity attracted hundreds of thousands of players globally, with particularly strong adoption in the Philippines where many used the game as a primary source of income. The model was simple but enticing: players bought NFT-based creatures called Axies, battled them in-game, and earned cryptocurrency rewards linked to Ethereum. With rising token values, early adopters quickly recouped their investments, fueling a surge in interest and community-driven growth.
However, the system had inherent flaws. Many scholars and analysts compared the P2E model to a Ponzi scheme, as the game’s sustainability depended on new player inflows to maintain token value. To expand the player base, “scholarship programs” emerged, where wealthier players lent NFTs to newcomers in exchange for a share of profits. This dynamic created a class divide within the community, highlighting how economic pressures and speculative incentives shaped the game’s culture.
The breaking point came in mid-2022 when North Korean hackers stole $620 million from Axie Infinity’s Ronin blockchain, marking one of the largest crypto heists in history. Combined with the broader crypto market crash, token values plummeted, players’ earnings evaporated, and the game’s active user base shrank by nearly 90%. Many users openly admitted they never truly found the game entertaining—they were there for the money.
Yet, not everyone abandoned ship. A portion of players chose to stay, continuing to grind for minimal rewards in hopes of a future rebound. Researchers at Cornell University, who studied Axie Infinity’s trajectory, argue that these players should not be seen as victims but as active participants who understood the risks and sought to manage them. This perspective challenges the narrative that Web3 users are simply exploited by unsustainable projects.
Today, Axie Infinity still counts about 400,000 active users, though far from its pandemic-era heights. Importantly, its white paper and early innovations continue to influence new Web3 gaming models, with developers across the space borrowing heavily from its design and vision. Despite its shortcomings, Axie Infinity demonstrated the massive potential of blockchain-based economies to attract users, build communities, and experiment with decentralized ownership of digital assets.
Conclusion: The rise and fall of Axie Infinity is more than a cautionary tale—it is a case study in the evolution of Web3. While the financial risks and unsustainable mechanics of early P2E games are evident, the persistence of players and developers alike suggests that decentralization, digital ownership, and blockchain-driven ecosystems still hold strong appeal. The crash may have tempered hype, but it has also laid the groundwork for the next generation of Web3 innovations.
