Axie infinity finds ready players in hyperinflation-racked Venezuela

Juan Tirado, 32, is unemployed and lives with his family at his in-laws’ small home in Maturín, the capital of Monagas state in Venezuela. He earns his living by playing the cryptocurrency-powered video game Axie Infinity every day from his mobile phone.

“Being able to play Axie has helped me pay off years of debts and cover not only my own food expenses, but for my daughter, too,” Tirado said in an interview in Spanish via Discord.

That also explains why Axie, a metaverse “play-to-earn,” animated-pet-training video game inspired by Pokemon but fueled by cryptocurrency rewards, has surged in popularity over the past year in the South American country.

The game’s capacity to generate earnings for individual users has drawn headlines for its widespread adoption in the Philippines, where some of the world’s poorest people have found a supplemental or primary source of income from their daily playing. Authorities there have even discussed taxing players, thanks to the game’s popularity.

So the surging adoption of this game by Venezuelans might show how readily these crypto-powered games could find fresh audiences among populations racked by soaring inflation, shrinking economies and the daily struggle to make ends meet.

According to traffic-monitoring data from SimilarWeb, the second-highest number of Axie players in the world are in Venezuela, after the Philippines but ahead of the United States, Argentina and Brazil. Axie has about 2.5 million daily players around the world, according to officials at Sky Mavis, the owner of Axe Infinity.

Axie Infinity is popular in Venezuela because its similarity to Pokemon is familiar to millennials, said Angelica Valle, ecosystem lead in México for Celo, a platform that makes decentralized financial applications accessible on mobile phones. Valle hasn’t worked with Axie in Venezuela but she’s familiar with it because she works on initiatives to help Latin Americans adopt cryptocurrencies without government intervention.

“Venezuelans don’t think about it in terms of crypto,” Valle told CoinDesk in an interview. “They think this is a game and see it as a means to earn money.”

Given the complicated economic situation in Venezuela, Axie Infinity’s method of letting people earn money by playing offers an attractive alternative to citizens to signing on to low-wage jobs to overcome the nation’s hyperinflation.

Venezuela has the highest annual inflation rate of any country, according to the World Bank. The inflation rate decreased to 1,575% in October from 1,946% in September, according to data from TradingEconomics. It makes the latest 6.2% inflation reading in the U.S. – with the fastest growth in three decades – look tame.

“Axie empowers Venezuelans to make money in crypto rather than their broken currency,” said Carlos Betancourt, founder of BKCoin Capital, in an interview with CoinDesk.

In Venezuela, where the minimum monthly wage is so low, the initial price to play Axie is high.

To get started, Axie Infinity requires users to buy (or borrow) three Axies. Currently, the average price per Axie is around $355, according to DappRadar. At that price, starting the game costs around $1,065 to form a team of three players.

For this reason, the Axie community has created “scholarships” – not in the traditional sense of educational grants, but a way of staking players who don’t immediately have the cash for the startup costs. Through these scholarships, Axie owners lend their Axies for a cut of the tokens earned.

To apply for a scholarship, people join Axie scholarship-related Discord or Telegram groups, where users publicize when they have openings. Others go directly to websites such as Axie University 101.

“Soon, doctors, economists, engineers will be playing the game,” said Valle.

It’s a bold prediction, but plenty of actors are working to make it happen.

Block Esports, a startup based in Venezuela that claims to be the first Spanish-speaking Axie Infinity team in LatAm, lends its Axie teams out through a scholarship process. Depending on the player’s ability, Block Esports offers a 60%-70% cut to the players. Put another way, Block Esports takes a cut from players’ earnings in exchange for loaning their teams to players based on their performance in the game.

Axie Infinity has two utility tokens, smooth love potions (SLP) and Axie Infinity shards (AXS), which can be converted into cash. Most players earn by farming SLP, which are required to breed new Axies.

“Some of our players use their Axie earnings to put food on the table,” said BlockEsports founder Luis Lozada in an interview with CoinDesk. “Others use it to pay for tuition fees.”

Players must have access to the internet in order to enroll in the scholarship program with Block Esports. This is a significant hurdle for some in Venezuela. Where Tirado lives in Monagas, only 14% of people have access to the internet.

He uses the money he makes from playing Axie to meet medical expenses for himself, his wife and his daughter, he said. In the past, he has struggled to cover those costs.

“I earn the same wage and sometimes more from playing Axie as others I know do by being a lawyer, doctor or engineer,” said Tirado. He acknowledges that he finds it very stressful playing Axie. Just like a lot of jobs.

“Personally I have many sources of stress. It is not just this game. I must learn to cope,” said Tirado. “I must learn in order to be able to play well, but also to stop it from affecting my daily life.”

Binance, the world’s largest crypto exchange, tweeted on Sept. 6 on its Binance Spanish account that it would offer scholarships for Axie players. Binance’s model allows users to be the total owner of Axies and profits, whereas most scholarship providers only loan users a team to play.