Axie Infinity Shards (AXS) is a type of an ERC-20 governance token where its holders would be able to claim rewards if they would stake their tokens, play the game, and participate in the key governance vote. As they play various games within the Axie Infinity Universe, they would be able to earn $AXS.

The mechanisms of the game can be described by its two main goals: (1) players would be rewarded for having an interaction with Axie Infinity while at the same time, incentivizing them to hold on to their tokens so they could claim additional rewards later on. Lastly, (2) to decentralize the ownership and governance of Axie Infinity.

The community treasury went live in early 2021, receiving revenues generated by Axie Infinity as well as a portion of staking rewards. Once the network has become sufficiently decentralized, the treasury would then be governed by AXS stakers.