Leading popular metaverse-blockchain game, Axie Infinity (AXS) announced that it would be revamping its player-vs-player (PVP) reward structure for players, while reducing the supply of SLP tokens.
In just three days, the price of AXS token has skyrocketed by 40%, giving the popular NFT game additional legs to stand on after it announced it would be creating a new rewards structure that would apply to its PVP competition round.
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Additionally, Axie Infinity shared that it would also reduce the creation of its native Smooth Love Potion (SLP) tokens by 56 percent.
The NFT-based videogame, developed by Vietnamese studio Sky Mavis, uses the governance token “AXS” for its Axie Infinity protocol, allowing players to purchase in-game NFTs known as “Axies” from its native store.
Why Axie Infinity reduced SLP tokens
Initially, Axie Infinity offered three ways to earn SLP tokens – completing daily goals in-game, clearing levels in a special ‘adventure mode’, and area combats.
However, the tokenomics behind earning SLP tokens was flawed in that the SLP token became inflationary, as too many tokens were being earned – outstripping the demand. While the number of tokens could be reduced by burning, the burn rate was failing to keep up with the earn rate – creating 4x SLP than what was burned.
In the game, burning occurs through breeding Axies, which players can use their existing AXS tokens to breed more.
From what we know, approximately 40% of SLP was created from adventure mode, 44$ from PVP, and 14% from claiming daily quests – leading to the conclusion that this was not a viable economic model. Consequently, the first two generation methods were culled from the upcoming Season 20, removing over 130 million SLP tokens from the daily supply.
Specifically, “adventure mode” was a way that incorporated the community to help educate players on how to use the Axie creaures, whereas the “daily quest” was previously used to encourage players to engage with the game daily. By removing the 45 million generated SLP per day, the game can now markedly improve the balance between SLP supply and demand.
With the new changes in place, Axie Infinity will have a leaderboard with 300,000 slots and distribute 117,676 AXS tokens for an equivalent $6 million prize pool. Previously, there were only 3,000 AXS distributed to the top 1,000 players on the leaderboard.
Additional token burn mechanisms will be added, including unique cosmetics and skins, upgraded Axie body parts, new emojis, breeding events, buy-in tournaments, and Axie naming.
Bitter pill to swallow for Axie fans
At the time of writing, the price of AXS tokens was $65.85 and has been on a downward trend from its all-time high of $164.90. SLP has been on a downward trend since July-August 2021, after hitting a peak of $0.299727 on July 13, 2021.
This is in line with the inflationary pressure caused by lower demand and higher supply. Axie Infinity has said that changes to bring up the SLP value may be a bitter pill to swallow for some.
However, it is the only way to prevent a total collapse of the game’s economic system.
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