In this post I break down Axie infinity breeding - why breed Axies, genetics, how you breed, and what breeding costs. This is the third post in my Axie series. If you missed the first two posts, you can find them here:
Why breed Axies?
Axie breeding is one of the pillars of the Axie infinity ecosystem. Currently most folks breed to flip Axies for profit. The amount of profit one may make from a breed depends a lot on one's understanding of Axie breeding genetics. There were 4088 'origin' Axies and, as of today, there are 11155 Axies listed for sale on the Axie infinity marketplace. This is because of breeding. If Axie infinity gameplay continues to grow in popularity then breeding will be necessary for more people to get involved. By increasing Axie supply, breeding also helps to keep prices at reasonable levels, thus making it accessible for most.
Breeding genetics
Whilst genetics is not my strongpoint at all, my most basic beginner advice would be to select two parents of the same class (remember, Axie classes are: bird, bug, reptile, aquatic, plant and beast). At least then the class of the offspring is guaranteed (I think?). For beginners, I would not worry too much about the details of breeding as you will probably end up feeling overwhelmed. You can pick up a lot of this knowledge over time (I am). If this is something you are interested in trying, I would just dive in.
Beyond that, I would look at the body parts (Axies have six body parts - eyes, ears, mouth, horn, back and tail) associated with the two parents you intend to breed. Body parts affect the cards that get minted for the Axie and these cards are used in gameplay.
The genetic makeup of the bred Axie is determined by math (probability). Each Axie body part has three genes - dominant (37.5%), recessive (9.375%) and minor recessive (3.125%). Thus, if both parents have the same dominant gene, there is a 75% chance that their offspring will inherit that dominant gene, so the odds are in your favour if you can find two Axies with the dominant genes you’re interested in.
There are some fantastic articles and tools to help with breeding genetics (will provide links to these in my last post of this series).
How to breed Axies
If you dare to take on the task of understanding breeding genetics, the actual steps to breed should seem very easy. I have a theory that most folks that have bred Axies and written guides about breeding must have thought it was so easy that they didn’t even need to document it because I found it difficult to find information on how to breed Axies.
This is what you will need to do:
- Sign in to the Web3 wallet that holds your Axies (remember Axies are NFTs on the ethereum blockchain).
- Navigate to http://marketplace.axieinfinity.com and select ‘Login with Metamask’.
- Then go to account > inventory.
- Click on one of your Axies you would like to breed, then click on ‘Breed’ (which is the second of three buttons under the image of the Axie).
- You will then asked to select the other Axie you would like to breed.
- Once both parents have been selected, the SLP cost will be calculated, then click ‘Start breeding’.
That’s about it! This is what the process looks like:
Impact of ethereum gas costs on the Axie ecosystem
Up until last week, the whole Axie ecosystem was in a state of flux, thanks to the recent spike in transaction costs on the ethereum blockchain. With low gas costs, Axie breeding and flipping is profitable. Exchanging SLP for other assets like ETH or DAI is also worthwhile with low gas costs. However, high gas costs means that all the moving parts of the ecosystem have come to a standstill. Whilst folks may be still ‘playing the game’, all is happening is that they are hoarding loads of SLP offchain and not using it for anything onchain.
Last week the Sky Mavis team (the company that develops the Axie infinity game) announced that they are working on their own Layer 2 scaling solution to solve this problem (Ronin). This came as a surprise as most people (I believe) were expecting them to announce a partnership with Matic as a scaling solution. Previously they had a relationship with Loom (another scaling solution) but they announced the end of that partnership a few months ago.
There has been no indication for how long it will take to develop Ronin but perhaps the launch of ethereum v2 will go some way to solving the gas cost problem.
What does breeding cost?
I made my first breed just before gas fees on ethereum shot up. Thus I have only made one breed, so here I am going to break down what it cost me. It was basically an experiment to try out the UX and see how much (or little) one can make through breeding and flipping. I had very little understanding of Axie genetics at the time. I sold my bred Axie for 0.0315 ETH.
Breeding fees
For this breed, both parent Axies were 'virgins' (that is, Axies with 0 breed count). The SLP cost for virgin Axies is 100 SLP per parent. The SLP costs rise with the breed count (hence why folks pay a premium for virgin Axies). Remember, SLP is the in-game currency, so it's effectively 'mined' through Axie infinity gameplay. It can also be bought/sold via Uniswap So, the SLP cost for this breed was 200 SLP.
How much is that?
- The current SLP-ETH exchange rate on uniswap = 71505.2 SLP per ETH
- The ETH-USD price = 226.70
- At this rate, 1 SLP in USD = 1/71505.2*226.7 = 0.00317
- Thus, 200 SLP = USD 0.63 or 0.0028 ETH
Axie fees
One also pays a small fee to breed an Axie on top of the SLP cost (which goes to Sky Mavis). This fee is (presumably) like a treasury that keeps development of the game and the ecosystem ticking along (there is a long pipeline of features to be rolled out in future). Sky Mavis takes a 0.002 ETH cut for each breed.
Ethereum gas costs
Looking through etherscan, I pulled out a few transactions associated with the breeding process. Each step of the breeding process is a transaction on the ethereum blockchain so they all incur a gas cost. The initial breed is the first transaction. After a few days, the Axie 'morphs' to 'petite', and then a day or two later is ready to morph into an ‘adult’. These are the second and third transactions. Here's what I paid in gas:
- 0.001225357 ETH
- 0.001166557 ETH
- 0.0017441623 ETH
- Total = 0.0041360763 ETH
Total returns
- Sale cost = 0.0315 ETH
- The breed costs were (assuming today's SLP-ETH exchange rate) = 0.0089360763 ETH
- Profit = 0.0225639237 ETH
Not a lot. Still, I learned a lot. I think this proves that having a thorough understanding of Axie breeding genetics would likely make breeding more profitable. No doubt successful breeders know exactly what to look for when purchasing parent Axies for breeding. I would love to dive down this rabbit hole and get back in to breeding some day.
Also ...
The re-sale value of the parent Axies used in this breed will be affected as they are (obviously) no longer virgins. It will also cost more SLP for them to breed in future (not a problem at the moment as I have been accumulating a lot of these because I have not been breeding since gas costs shot through the roof!!!).
Thanks for reading. If you have any questions, please let me know.