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More affluent players are becoming bosses in blockchain-based video games like Axie Infinity. In the Philippines, people are earning twice what they could in a regular job just by playing this game.

Power fantasies are the focus of video games. The conventional wisdom says: Defeat enough dragons to reach level 99, sell enough wolf skins to buy a gaudy gold cape, and you will become rich or strong or accomplished in the world of the game-despite not being wealthy or successful in real life. During her 30s, Catdicax, a Finnish woman, found that the online fantasy role-playing game Runescape was a place where she could earn more and more in-game items by working hard. Ten years of playing had paid off: She had amassed a collection of high-end relics.

Eventually, however, Catdicax became restless. Working so hard for Runescape's digital axes or cloaks felt like a waste of time. Then in 2019, Catdicax discovered Axie Infinity, a blockchain-based video game where players collect and level collectible Pokémon-like virtual pets, known as Axies. A player's Axies compete to win cryptocurrency tokens, which are then used for breeding new creatures using NFTs. Smooth Love Potion (SLP) is a token earned by defeating your opponents in Axie-fights. You can trade it on crypto exchanges or exchange it for legal tender. Even though the game is not about the game, it is about the

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economy. As if holographic Charizards were on steroids, rarer Axies sell for eye-watering amounts: A portly, winged angel Axie was sold for $130,000 in cryptocurrency in 2020.

Catdicax uses her screen name because she is afraid of being "targeted" because of her Money and to avoid sexist trolling. Her digital pets now sold for as much as $500 per Axie as the value of her digital pets grew. Catdicax wasn't just a player anymore. She owned assets. In late 2020, after Axie Infinity became very popular, she realized that aspiring players who couldn't afford their own Axies would jump at the chance to use hers. Mostly based in the Philippines, she outsourced her video game grind to people she met online.

They would take a cut of her earnings as part of an Axie lending program-in Axie-speak, a scholarship. A new video game, power fantasy, was absorbing Catdicax: being a manager. "This is really amazing. People in the Philippines are earning twice as much as they could in a regular job," she says. I, too, wanted to help people. In fact, an analysis by the insights company Naavik suggests that, as of August 2021, only the most skilled players earned more than the average wage in the Philippines of $41.49 per day. And that's before considering compensation for scholarship managers. The cryptocurrency world is haunted by a new buzzword: play-to-earn. Essentially, the term refers to a category of games that use blockchain technology to reward players with digital items with real-world (or at least crypto-world) financial value. Uplands, Splinterlands, and Alien Worlds are among the other titles. Sky Mavis' Axie Infinity is the most illustrious of the band's offerings. According to crypto analytics platform DappRadar, gamers paid $2.32 billion for unique gaming objects on the blockchain as of the third quarter of 2021. Andreessen Horowitz led a $152 million investment round in Sky Mavis led by its grantees in October. Axie Infinity had 1.8 million daily users as of August 2021, so thousands of people play at any given time.

Aleksander Leonard Larsen is the cofounder and COO of Sky Mavis, an online gaming company that uses cryptocurrency technology to transform the online gaming economy. When Axie Infinity launched in 2018, its only crypto element linked Axies to NFTs-unique crypto assets that can be minted on the Ethereum blockchain. In late 2019, Sky Mavis introduced SLP tokens and decided to harvest the tokens in-game rather than sell them to users. "Other game studios always want to make as

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much money as they can from players," Larsen says, referencing games with business models that rely on selling extra objects or features. He believes Axie Infinity and other play-to-earn games reward competent players with valuable digital assets.

Sky Mavis launched Katana in November, an automated cryptocurrency exchange where Axie Infinity tokens can be exchanged for Ether - allowing a direct, cheap connection between the game and cryptocurrency-fueled decentralized finance. Ownership of an Axie entails owning an NFT; SLPs and Axie Infinity's other currency, AXS, are Ethereum tokens based on the ERC20 standard. Furthermore, these assets do not just exist as digits on an MMORPG server; they are stored in players' cryptocurrency wallets. Sky Mavis has been gradually implementing a monetary policy similar to a privatized central banker, ensuring that there is no oversupply of tokens. The company has been cracking down on people who use multiple accounts, capping the number of tokens that can be earned in non-fight modes and generally making it harder to earn tokens.

Larsen believes that offering DeFi services is a logical next step. "You get DeFi when you use a wallet that stores both digital and fungible assets." According to DappRadar, Katana quickly became one of the most popular DeFi apps. Many players will not cite the game mechanics as the reason they keep coming back to Axie Infinity. In May, Sky Mavis founder Jeff Zirlin asked his Twitter followers what they loved most about the game. The economy was mentioned by 48 percent of respondents. Like any economy, Axie Infinity's includes an active labor market. Axie Infinity's owners like Catdicax set up a scholarship system, which made Yat Siu, cofounder of Animoca Brands, one of the early backers. Both labor and capital were invested, says Siu. It was similar to how Chinese workers (and sometimes even incarcerated people) would "farm" fancy armor and gold they "grinded" for in World of Warcraft and sell it on graymarket websites. NFT games encourage players to sell their assets to other players, and trading those assets for real money is totally legal and above-board.

Similarly, Splinterlands' digital cards straddle both an altruistic and capitalist experience in increasing their financial status and standing. In Axie Infinity, some players rent their axies to other players for a 30 to 40 percent cut of the earnings. Players from developing countries like Ecuador and the Philippines are more likely to rent their axies. Sky Mavis reports that more than half of Axie Infinity's players are from the Philippines. In Axie Infinity's Discord, dozens of workers "apply" for positions every 10 minutes, sharing why they should be hired, what their gaming experience is, and

We come in, buy Axies in bulk, and then lend them out to players� Each party receives their profit cut using a self-executing piece of blockchain software or smart contract developed by YGG

Gabby Dizon

CEO, Axie Infinity Philippines

how good their internet connection is. Discord facilitates worker-manager relationships by allowing players to share their usernames and passwords.

Siu invested early in the market. Gabby Dizon, CEO of Axie Infinity in the Philippines, noticed players sharing their usernames and passwords last year, so he decided to formalize the relationship with Yield Guild Games, an online gaming guild with over 15 different titles. In an interview with WIRED, Dizon outlined the guild's business model: "We come in, buy Axies in bulk, and then lend them out to players." Each party receives their profit cut using a selfexecuting piece of blockchain software or smart contract developed by YGG. "Community managers" who recruit and manage players on behalf of YGG get 20 percent of their earnings. YGG receives 10 percent of those tokens and may reinvest them to breed more Axies.

Currently, there are about 5,400 scholars. Next year, we aim for hundreds

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of thousands, Dizon says. His wager has so far paid off: YGG was funded with $4.6 million by Andreessen Horowitz in August. The company waxed lyrical about how jobs are evolving thanks to blockchain technology and gaming in its announcement of the deal. Axie and similar video games aren't even comparable to other video games, in Dizon's opinion. "It's a little like Uber, Grab, or Gojek, where you deliver food and get paid for it," he says. "Why not work from home and play this game and get paid in tokens instead?"

As the lines between investing and gaming have blurred, Axie Infinity has grown. Robinhood has helped turn investing into entertainment while also lowering the barriers to entry by offering commission-free trades. Cryptocurrency exchanges have also grown in popularity, providing investors with better access to the volatile markets. Covid-19 and the financial volatility many people experienced over the last two years could be partly to blame, says Jill Carlson, founder of Open Money Initiative's economic research nonprofit. "That woke people up to the system." People are now asking themselves, 'Why shouldn't I take more control over my assets?'"

There has been a flurry of activity among

Other game studios always want to make as much money as they can from players

Aleksander Leonard Larsen

Cofounder and COO of Sky Mavis

amateur investors in the past year, often inspired by online communities, such as Wall Street Bets' GameStop surge and Shiba Inu's Dogecoin. "Play to earn" takes the concept of investotainment very seriously, according to Gary Gensler, chair of the Securities and Exchange Commission. NFT players simulate capitalism in a less chaotic setting by gaining capital through labor, investing that capital, and earning money through other people's labor.

Traditional role-playing games have a linear relationship between work and reward. Studies have long discussed 'the fantasy of labor,' or how games satisfy itchiness created by modern-day capitalism but not satisfied by capitalism itself, like earning a concrete rate for simple tasks or achieving renown through hard work in a linear manner. According to Naomi Clark, chair of New York University's Game Center, the idea that everyone can reach level 50 if they work the same amount is associated with the bootstrap mythology of early capitalism.

Clark has been writing about "the fantasy of labor" for 15 years. He says NFT games represent a more modern philosophy brought about by people's disillusionment with today's financial systems and gamified investments. According to Clark, modern games fulfill the dream of the modern economy: "You don't have to work. You don't have to grind. It's just a matter of watching the money roll in." Video games can provide an alternative to the current flawed economic system.

Gabby Dizon, YGG's star NFT player, is too busy to participate in the games. There is no World of Warcraft guild that can compare to the guild he runs. "I'm still playing a video game, but I'm not in the game," he says. "My role is to organize people to play these games and earn Money. It's more fun because the stakes are higher. I'm playing the meta-game." 