Investing in Axie Infinity: Axies

I hope everyone enjoyed the holidays and is excited for the new year! I want 2021 to be the best one yet for everyone. 

This article is going to be the start of an overview of all the different types of investing you can do in Axie Infinity. There are so many ways to be a part of Axie that not everyone is aware of and I want to go into detail for all of them! While there are never any guarantees in investing, these are avenues that you can explore… 

*** I want to make an important note, none of the below is financial advice, just my opinions on the Axie Infinity market***

As a general, high-level view, there are several main categories of investing in Axie:

  • Axies
  • Items/Land
  • Tokens

Each of these categories can be broken down further into many, more specific investments, but in the general sense those are the three. 

Let us start with the basic and most fundamental one, Axies…

Axies:

The term “Axies” covers anything related to the internet monsters themselves. Axies is a broad group that we can break down further into many subcategories, such as:

  • Collector
  • Breeder
  • Flipper

Collector:

The collector path is one where you buy and hold onto rare Axies with the assumption that the speculative growth of the asset will increase. There is no day-to-day work involved besides buying once and holding. There are several types of Axies that you can invest into if you want to go this route, these include:

  • Mystics
  • Origins
  • MEOs (1 and 2)
  • Christmas Part Axies

(Agamogenesis too, but 2/3 are sharded and will be talked about in the token article)

The main reason these are collector’s Axies is because these Axies have fixed quantities. There can only be the set amount that is in the smart contract. This is important to note because as a collector I believe there are 3 main things you look for, or at least I would look for: aesthetics, rarity, and utility. As of right now, Mystics take the cake when it comes to all 3. 

Aesthetics:

Mystics are the only tagged Axie class in the game, besides Agamogenesis, that have specially designed parts. There are 36 differently designed Mystic parts that Axies can have. A list of Mystic parts and their rarity can be found here. The upgraded parts have a couple benefits. First, and most obviously, they are more beautiful than their normal counter parts. Let’s take a look at a couple just so we can see the difference.

Hermit vs Crystal Hermit:

Eggshell vs Golden Eggshell

Mavis vs Sky Mavis:

Both normal and Mystic parts are obviously well designed. They are both in and of themselves beautiful art. But, just from looking at them we can see that Mystics stand out. Which is the second point, you can easily identify a Mystic Axie out of a crowd. While this may seem like a moot point, when investing in expensive collectibles you want something that people notice. Something that catches their eye. If you could not distinguish a mystic from a crowd of Axies, why would you invest in one?

Rarity:

We know that Mystics have beautiful looking parts, but the next important factor is that they have a fixed rarity. At the presale, the team set a hard cap of 4,088 Origins that were to be sold. The Origins that were not sold out during the presale were represented by AOC (Axie Origin Coins) and the limit was set in the AOC smart contract. In the contract, we can see the remaining amount of AOC that are still circulating, 1,375. Since you need 5 AOC to roll an Origin and give yourself a shot at a Mystic, we know the amount of possible Mystics still potentially out there. However, I think most of the AOC are still held by the team (Sky Mavis) who have no plan on rolling them anytime soon, so the rarities are pretty much set.

Utility:

Finally, we suspect that Mystics will have some sort of utility whether it be legendary parts or some other in-game benefit. The team has also hinted to this in the FAQ on the Axie Infinity website.

The possibilities are endless when it comes to Mystics. Can they grant you access to special dungeons? Can you create special potions or items specifically for Mystics? Can you generate higher resource yields or AXS yields on your land with a Mystic? The team has tons of fun and interesting ways to provide Mystics with extra value in Lunacia. That is why they are the most expensive and most respected out of the group. 

Current Mystic Stats (with floor price at time of writing):

Single Mystic: 1141 (5.48 ETH)

Double Mystic: 213 (26.69 ETH)

Triple Mystic: 19 (258.04 ETH)

Quad Mystic: 3 (5300 ETH?)

Origins:

Origins are the next best fixed quantity asset, more specifically low ID origins are a very niche market to get into. All Mystics are Origins, but not all Origins are Mystics. Each Origin part had the chance of becoming a Mystic part. 

Origins are just what their name says, the Originals/OGs. Origins were the Axies sold at the initial sale and are the foundational blocks of the Axie movement. They are well respected for their rarity, but have no current aesthetic benefits and in-game utility. When it comes to price movements, Origins also tend to follow the Mystic market closely.

Credit Axie World for the chart

There are several layers to Origin investing. The first is low ID Origins. Since not every Origin was a Mystic, there are some very low ID Axies that have expensive price tags on them. If you want something that is not as expensive as a mystic, but one of the foundation blocks of Axie, then low ID Origins are a good place to look. Take this recent sale of #22 for 22 ETH.

The next layer is rare class Origins. These include: Birds, Bugs, Reptiles. From the stats below you can see the break down of Origins by class. The rare class Origins have significantly lower totals than the other class Origins. This provides a special niche for Rare Class Origin Axies

Current Origin Stats (with floor price at time of writing):

Total: 3802

Beast: 1202 (1.1824 ETH)

Aquatic: 1161 (1.2702 ETH)

Plant: 1091 (1.05 ETH)

Reptile: 118 (4.305 ETH)

Bird: 116 (2.55 ETH)

Bug: 114 (2.5 ETH)

Chart taken from Nonfungible

The chart above is filtered specifically for Non-Mystic, Origin Bird sales. We can see that during the ETH bear market, and when Axie was still building and growing (pre- hockey stick), the average USD remained relatively stagnant. If we compare this chart to the number of Axie holders, we can start to see a correlation. 

Credit Axie World

As the number of users start to pick up, the average USD price also starts to increase. 

The same can be said for the bug and reptile charts.

Bug (Credit Nonfungible)
Reptile (Credit Nonfungible)

Origin Analysis:

If you are looking for exposure to Axies that are fundamental cornerstones of the Axie Infinity, I think Origins are the second best to Mystics. They are the first tagged Axies that were released ever and there will never be more Origins. I do think that it is possible the team will add some benefit for Origins down the line as a way to reward the people that stuck around and believed in the project.

MEO:

The next collectable, fixed quantity asset are MEO Axies. There are 2 MEO ‘seasons’ so to speak, MEO 1 (commonly referred to as MEO) and MEO 2. MEO stands for Monster Engineering Operation Corporation, and is actually, which I came to find out recently, Trung’s nickname.

 MEOs are tagged Axies that were sold after the Origin sale ended. These new tagged Axies were used to introduce new parts into the game. They have a fixed quantity, but again, no current aesthetic or in-game utility. A little known fact about MEOs is that MEO 1’s are more rare, in terms of quantity, than Origins. There are less MEO 1s than there are Origins, 802 vs 3802. The breakdown for MEOs (with floor price at time of writing) is:

Beast: 245 (0.7874 ETH)

Plant: 233 (0.4 ETH)

Aquatic: 265 (0.3548 ETH)

Bird: 21 (1.5 ETH)

Bug: 21 (5 ETH)

Reptile: 17 (16 ETH)

You can see the same trend for Rare class MEOs as we saw with Rare Class Origins — the quantities are significantly different. This opens up a niche opportunity for collecting rare class MEO Axies, as you would have one of a very limited Axie. 

MEO 2s are currently the last of the tagged Axie market. They were the last season that was released from the Axie Lab. They have higher total quantities than MEOs and are not as sought after for collectibles, but are still tagged Axies none-the-less. The breakdown for MEO 2s is:

Total: 1786 

Beast: 525 (0.1 ETH)

Aquatic: 565 (0.1 ETH)

Plant: 550 (0.085 ETH)

Bug: 57 (0.65 ETH)

Bird: 47 (0.6 ETH)

Reptile: 42 (0.948 ETH)

MEO Analysis:

In my opinion, MEOs (specifically MEO 1 over MEO 2) are still an undiscovered asset class in Axie Infinity. Not many people know a lot about their history, rarities, or their potential use cases in Lunacia. Plus, as an added bonus they (along with Origins) can be bred for free, with no SLP required; however, if you are going for collectibles I do not recommend breeding them out. Also, with the total Axie population approaching 250,000 Axies, there are still less than 1000 MEO 1s. 

Further, I think it is definitely possible to see some added utility, whether it be something built from the community or the team itself when full Lunacia gameplay comes out. It would be cool to see MEO only tournaments or events in Lunacia, or even special skins that these Axies can wear that shows people how they are different. Whether this impacts the price or not, only time will tell.

Christmas:

The last group of collectible rare Axies are the Christmas Part Axies. If you don’t know about Christmas part Axies, I wrote 2 articles on them (Part 1 and Part 2). I won’t go too into detail talking about them again, but the general idea is that they are rare, Christmas inspired Axie parts that have fixed quantities. I like them for their aesthetics and their rarity.

Breeding:

Breeding is a major part of Axie Infinity the game. Many people have created successful farms that have generated impressive returns. Off the top of my head bird farms had a great run for a couple months (until they were bred out too much) generating expensive price tags that were probably averaging close to 0.3+ ETH.

A farm is a pool of Axies that you use to breed the specific combination of parts that you want. Players buy up 0/7, or low breed, Axies with their desired part combinations and use them in the pools. The resultant successful breeds can either be bred again, or sold off on the marketplace. This sounds easy, but can get rather complex. 

As a breeder these are 2 potential routes that you can go down. The first is breeding for pure Axies. In this method, you buy out Axies whose genes, both dominant and recessive, are all practically the same. The genes below belong to a pure bird I found on the marketplace. You can see how all of the genes, both dominant and recessive, are bird genes. This means if you breed this pure bird with another pure bird, the offspring has a 100% chance of being a pure bird.

Pure Bird genes

The second is being a Meta breeder. Meta breeders often require diverse gene pools, that can add up, in order to get started. They also run the risk of an ever changing meta, where the Axies that they bred can become less valuable, or more valuable, depending on PvP changes. The gist of a Meta breeder is that you identify unique part combinations that succeed in the arena. As an example, hypothetically, though probably not actually viable, could be a triple healer tank with carrot as the tail. You would breed this combination of parts and sell the resultant Axies on the marketplace with the demand coming from people wanting to succeed at PvP (arena).

As I said, these methods may sound easy, but can be very hard perfecting. There are many factors that you have to take into consideration when breeding, such as: the meta, gas prices (when Ronin), floor prices, and other competition. 

With gas fees being high, and Battles V2 around the corner, I have been holding off on breeding new Axies until we know more.

Flipping:

Flipping Axies is now an art more than a skill, plus it is much harder now than it used to be. I got started playing Axie by flipping Axies. The goal being to target a specific group of parts that was being used, identify its floor (the average price that something similar is going for) and analyze if it was undervalued or not. The specific parts could be any combination of parts, in my time it was often based on purity because there were not as many pure Axies back then. So if the floor for 2/6 Bugs was 0.2 ETH (which it was at one point), and there was a 2/6 Bug for sale at 0.075 ETH, the point would be to buy the Axie at 0.075 and re-list for sub-floor, say 0.15, and hope it got bought over the next cheapest. Since there were not as many players when I started playing, there was much less competition and flipping Axies could be profitable. However, now with the given amount of Axie players, these opportunities are much harder to come by.

Axies Consensus:

(Not financial advice, do your own research)

When thinking about how you want to start investing in Axies specifically, you have to take several things into consideration: how much you want to spend, how active you want to be, and how long you are willing to wait. If you want to invest in the most well-respected Axie asset class that has everything that you want, aesthetics, rarity, and future utility, then Mystics are the way to go. If you do not want to spend as much, but still want exposure to a fundamental part of Axie that has history and rarity, then Origins may be where you want to start. Also, I am a believer that MEOs can play a significant role in the future.

If you want to take the more active role and try out breeding and flipping, then just be aware of the time and effort that it will take to become successful at, and the fact that it is not guaranteed money. It helps that breeding and playing is fun!

This is just the beginning of getting started in Axie, there is a lot more to get into. Make sure to keep an eye out on items/lands and tokens coming out soon!

Please make sure to follow and spread the word on Twitter. I have an AXS giveaway pinned there.

Thank you!

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