Welcome back to the third part of Investing in Axie Infinity. In the first part I talked about investing in Axies themselves, the second part I discussed the Axie tokens, and in this part I will discuss Axie Infinity land.
***Again, before getting into it I want to make an important note, none of the below is financial advice, just my opinions on the Axie Infinity market****
The first Axie Infinity Land sale was about two years ago on January 19th, 2019. In the sale, the team sold off the first quadrant of 4 total quadrants. Each quadrant consists of 17,217 total plots that can be broken down further into the specific types of plots:
- Luna’s Landing (?)
- Genesis (75 for first quadrant, 220 total)
- Mystic (2338)
- Arctic (4171)
- Forest (5359)
- Savannah (5349)
To analyze land, we first have to start with the high level overview. It has been stated many times by the team, there will be a mode of gameplay where it is not required that you own land. This is good because there are 68,890 player-owned plots and if each user had just one piece of land, we could only have a max of 68,890 users. Even though you can play the game without land, it doesn’t mean you can get access to all the possibilities of land gameplay and play to earn. This is why I believe if you want the full Axie Infinity land gameplay experience, you need to own at least one parcel of land.
At the fundamental level, we know based off the pricing structure and quantity there is varied quality when it comes to land. The land sale from cheapest to most expensive was: Savannah, Forest, Arctic, Mystic. Based on rarity alone, Genesis is the rarest land in the game at a total of 220 Genesis plots. The initial distribution of Genesis land was a random drop based on a small percentage depending on the land purchased.
The assumption is that the amount of AXS, Axie’s Governance Token, distributed to land varies depending on the type of land that you own. Since Mystic land was the most expensive, we presume that there will be a higher drop rate of AXS on mystic land than compared to Savannah land. So, the value based on land sale prices, rarity, and predicted earning potential goes: Genesis, Mystic, Arctic, Forest, and last, Savannah. However, we will see later that there are other factors that impact land price…
But, the passive AXS drops that land holders may receive is potentially why land prices are correlated to AXS price. The higher the price of AXS, the more expensive land can get.
Presumably, land will allow you to earn AXS -> the more valuable AXS is, the better the return you can get on your land from Axie’s Play to Earn budget -> increased demand for land to generate yield -> higher land prices.
Play to earn aside, another factor to add in is the demand from new users. Axie has seen record highs in DAUs, MAUs, and Axie owners (not every Axie owner is a DAU):
The rise in AXS price, along with the recent surge of new users, will cause an increase in demand for the limited land for sale. Looking at the market, there are only 423 total plots of land for sale (at the time of writing) out of 15,000+ plots. This combination of low supply and high demand has contributed to the recent land fomo.
What are some other factors that contribute to the value of a land plot?
There are several factors to consider when analyzing the value of a land plot, factors such as (in no particular order):
- Distance to center
It is speculated that there will be many cool features that river plot owners will benefit from. Possible features such as fishing, boating, ice skating, etc. Some player driven, some possibly added in by the team down the road? In addition, there is the aesthetic aspect of owning a plot on water. A river plot gives you access to water views only a select few in Lunacia get. We see this play out in physical real estate — houses on lakes, rivers, and the ocean are often more expensive than those not. All the reason for potential upside in owning river plots.
Across the board all plots directly touching nodes are going for higher prices than non-node plots of the same land type. To best understand this it is important to understand what a node is and why they are an essential part of the game. Nodes are resource generating plots in Lunacia. As we saw with the land demo, players travel to these locations with their Axies to mine resources such as wood or stone and then use these resources on their plots to make cool statues or furniture. In addition to essential resources, it is known that special events like AXS drops or Chimera boss battles will occur on nodes. Players that own plots close to nodes will have faster/more direct access to these events because of how close they are. Further, in their original post, the team stated, “This means that players owning Land closest to resource nodes will have a higher expedition turnover rate.” While this may have changed, it is good to acknowledge it as a potential node benefit. Further, node plots may potentially get passive resource drops from Axies passing by them as they access the node.
Road plots are interesting because of the mass amounts of Axies that may pass by them. The theory is that the Axies that pass by your road plot will potentially drop resources on those plots. This means that if you have a perfectly placed road plot that a lot of Axies loaded with resources pass, then you can potentially have a passive source of resource gathering without doing a lot of manual work. Not only would resources drop, but also potentially AXS as well. Passive resource generation sounds pretty good.
Estates are typically 4 or more connected, touching plots in one section. Most estates were bought when the original land sale launched and added to over time. It would be very hard to build an estate now because you would have to find and track down all of your neighbors and get them to sell the land connected to you. The main benefit of owning an estate is the potential to build larger buildings and structures. In the early land press releases it was hinted that larger structures will require certain dimensions of land, mainly achievable by owning connected lands together. These larger structures will presumably have more value because of the larger prerequisites, making them potential points of interest on the map. What if you owned a large potion market that Axies from all over Lunacia travelled to and for each Axie visiting you got some type of resource or reward?
Distance to Center:
In my opinion the ‘distance to center’ aspect of land is lower on the list of important factors. Based on the market, it is seen that land inside of the river is more valuable than land outside of the river. This is possibly due to the fact that you have quicker access to potential events in Luna’s Landing (the red center of the map), where a lot of major in-game events will be happening. Also, there a lot more nodes inside of the river, which means more access to Chimera battles and resources. However, if you own any type of land inside of Lunacia, you are already in a good position no matter what location you are in.
The recent growth in both user base and AXS price, along with external interest in developing metaverses and digital land, has resulted in increased land prices. Further, there are many factors that contribute to the price of a land plot, so when analyzing the market consider the factors listed above. Also, the team made it clear that there will not be another land quadrant released until after initial land gameplay is released. This means the initial gameplay, for who knows how long, will be only available for the first quadrant owners.