The Current Axie Infinity Breeding Debate

If you are in the Axie Infinity Discord (which you should be in), you have seen the recent discussion on the current status of the breeding market. There are multiple philosophies that are being discussed which I want to summarize and then give my perspective on it. There is a lot to unpack here, so I am going to try my best to give as much detail as possible.

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To give some historical perspective, the previous breeding system required a certain amount of experience (exp) for Axies in order to be bred. For example, the first breed of an Axie required 300 exp for each Axie, and goes up for subsequent breeds. The only way that a user could earn this experience was by playing battles every day and earning it over a certain duration of time (it was about 18 exp for a win). This obviously required a significant amount of time and energy invested in the game perfecting a gene pool. The people that put in the time and energy into these pools were rewarded appropriately for it.

(Granted you could sell high experience Axies, but why would you sell premium high exp Axies when you could breed them and then sell?).

In the current system, a certain amount of SLP is required to breed an Axie. For example, the first breed of an Axie costs 100 SLP for each Axie, and goes up for subsequent breeds. The SLP for these breeds is rewarded when a user wins a PvE or PvP match. The major difference with this system is that SLP is a tradable ERC20. On Uniswap, users can swap their SLP earned from playing the game for ETH in the SLP/ETH pool. On the flip side, users can now swap ETH for SLP and do not have to put the time in to earn the SLP to breed, they can buy it from the pool.This creates an economy around SLP.

This brings us to what is currently going on. Breeders are able to join Axie, buy SLP and virgin (0/7) premium Axies off the market, and mass reproduce sought after part combinations without having to put in any specified amount of time to acquire the SLP or the premium part combos. This led to several conversations deeply debating the current breeding system.

Now that the background is set, we can analyze the different breeding philosophies.

The first: mass reproducing of Axies is good because it breeds cheaper Axies for more people and mass adoption. The way that the current system is set up, there is nothing inherently wrong with people buying SLP to mass breed premium Axies. As Baronar stated, the breeders are buying time. This makes sense, breeders purchase the SLP generated from the “farmers” that spent the time to generate the SLP. If the market around breeding remains profitable, there will always be a demand for SLP and thus farmers will be encouraged to play.

Also, as Axie Infinity gains in popularity, you will need more Axies for more players. So being able to mass produce Axies is good as long as there is demand to match it.

In addition, this market interaction is good for AXS holders as the buyers/sellers generate fees that go to the treasury. However, if breeding eventually slows down and no longer benefits the AXS holders, they can vote to make changes in the game. This is down the road, but something to think about with regard to how future decisions of the game will be made.

The second: mass reproducing Axies takes away the emotional attachment to Axies, removes the time-invested, and eliminates the market for premium Axies. As stated above, the history of the game required a lot of time investment in order to generate premium gene pools. Now that you can buy this time, you can mass breed an Axie to 7/7 in a day. There is no time and emotion invested into the game with that Axie. While it may seem odd that there is an emotional connection, it is true. Many people give names to these creatures and truly see them as digital pets (see Jiho tweet here). People spend time to see their Axie’s succeed in game. This mass reproduction eliminates any emotional attachment to the Axies.

Also, by mass reproducing Axies, there is no such thing as “premium” Axies. Why take the time perfecting a gene pool when someone can get a lucky roll and then mass produce? This decreases the desire to take the time to plan breeds. It is the mechanic of rapid mass production that some see as the problem.

If you want to read more about both viewpoints, there are screenshots of some community member views at the bottom.

Before I give my perspective, let’s take a look at what Jihoz had to say on it:

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Screenshot from Axie Infinity Discord of Jihoz Message

To summarize this message, Trung, Aleks, and Jihoz all understand the need to generate a healthy Axie population growth rate in order for the game to succeed. The team has been weary of this ever since the conception of the game and have properly taken the necessary steps over the last 3 years in order to ensure proper growth. Axie Infinity is the top NFT game for a reason and the attention to detail is one of them.

Further, the next point Jihoz lays out is that short term bandaid fixes such as SLP reductions and breeding cool downs can help optimize the inflation rate for the short term. This game is still in alpha, so while these changes may help now, they are not the final form, so to speak.

I love what Jihoz says next, as it shows a very deep understanding of not only the game, but also the fundamental problem. To summarize, long term “population management relies on”:

  • Additional Axie utility through experiences
  • Vertical progressions
  • Soulbound Axies

Lets analyze:

As of right now, I believe there are two different ways of valuing Axies: collectable rare Axies (mystics, Christmas, Origins, etc.) and high PvP ability Axies. Even though we can argue semantics, you are either collecting or playing. If you are collecting, you can argue that those Axies don’t necessarily have any utility in game. Which means the current utility of an Axie is driven by its use in the arena. By providing additional sources of utility to Axies outside of the Arena, part combos that might not be seen as useful in PvP can become more sought after.

As Jihoz stated, the main way to “progress” in the current system is via horizontal progression. Horizontal progression is simply expanding the quantity of your Axie collection. Vertical progression is upgrading the parts, or quality, of an Axie or your land (not leveling up like the current PvE system). This provides the time investment aspect of the game. Further, in order to get the required crafting ingredients for upgrading parts, Axies may be “released” (I think the nice way of saying burned). This is also a natural Axie sink to limit the population growth. The important thing to note, though, is: upgraded Axies/land will be the source of connection between the Axie and its owner.

In the final point about soulbound Axies, Jihoz is saying how the team will provide people with the ability to compete for free and this will allow the game to be open to more players. However, the rewards generated by soulbound Axies will be minimal or close to nothing. He finishes with how the game should not be Pay to Win.

I want to touch on the implications of when he says that the game should not be Pay to Win. I think this essentially means that there should be no long term “premium” PvP Axies. All part combinations should be available to anyone that wants to compete. Which makes sense if you want the competitive scene to be, competitive. You want people to win based on merit and skill, not based on them being able to afford Axies that someone else can’t.

My View:

Now that I have touched on the various stances, I want to go into my perspective on the current system. At first, I was against the idea of breeders buying SLP to mass reproduce Axies. I preferred the system where players have to truly invest time into the game perfecting a gene pool. However, after talking with Baronar and others extensively in the Axie Discord I have come to understand that breeders pay for time, which is common in normal markets. If you want something conveniently, pay extra for someone else’s time. Breeders reward farmers for their time. This inherently creates value in SLP, as long as breeders want to breed, there is demand for farmers to generate SLP. But, this is contingent upon there being a demand from a consistent player base growth. Like we see in a free market, if at any time the demand subsides, the supply of Axies will continue to increase (if people keep breeding) and the price per Axie will reflect the drop in demand. These are normal ebbs and flows of supply and demand. Yet, it is of utmost importance that the team is on top of this in the short term and makes the necessary tweaks (e.g. energy limits) to the market to account for it.

Also, I agree completely with the view that this game should NOT be Pay To Win. You want eSports to be based on skill, not how big your wallet is to pay for good Axies. This means that Axies should be priced appropriately for anyone to be able to compete. The game will still require proper team building, part combinations, chemistry, and skill, it just will give everyone the opportunity to do this.

Further, I am encouraged about the idea of vertical progressions. The time invested can now be a requirement for increasing the quality of your Axies or land. This time investment will create the emotional bond and attachment to the Axies that you chose to upgrade. You put the time into that Axie, you watched it evolve over time. Think Pokemon when a trainer watches their Pokemon evolve. There is an emotional attachment to the process of evolving. It took time, it took effort, it took grit, and it should be rewarded.

However, I have two hesitations, the first is that a lot of people, myself included, see breeding as an adventure. It is the process of taking the time perfecting a gene pool that is exciting. The months and months of iterations that lead to the perfect combination of parts is rewarding. When you are able to mass reproduce Axies, you reduce the time between iterations and accelerate the process. Instead of months, they could take days or weeks. To compensate for this, I would like to see special parts, which could require hidden combinations, that are introduced for a limited amount of time (like Christmas parts) that make breeding an event.

Wouldn’t it be awesome if there were in-game obstacles that gave hints to riddles that users would have to solve in order to get the specific combination of parts required?

However, there would have to be some sort of time restriction on breeding, so you would force breeders to carefully select the combination. These timed events make breeding for certain parts fun, and create a market around rare event-inspired parts.

The second is that the solutions don’t necessarily correct the mechanic of being able to mass produce any combination of parts. Essentially, any new combination can be mass bred rapidly. I know it will take a while, but what happens when every good combination is bred out? What happens next? If that is desired, then there is no issue. Although I like the idea that you can breed to something interesting, not just spam.

While these are just my personal concerns, I trust Trung, Aleks, and Jihoz’s knowledge and experience with handling this problem. The team has access to the data and information about the future content and plans ahead for Axie Infinity. They have the long term vision and are going to execute on that, all we can do is engage in thoughtful discussion and help the team execute on their plan.

If you liked what you read, or even if you didn’t, please give me some feedback! I am open to different ideas and engaging in thoughtful debate so follow me on Twitter for more.

on Twitter: https://twitter.com/the_YCB

Or in Axie Infinity’s Discord as YCB: https://discord.gg/axie

Thank you!

Some community members’ views:

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