Axie Infinity Coins Go Crazy After Tokenomics Change
Developers behind the wildly popular blockchain-based Axie Infinity game tweaked the tokenomics of their play-to-earn (P2E) ecosystem, sending related tokens on wild rallies.
Smooth Love Potion (SLP), one of Axie Infinity’s in-game tokens, was down almost 94% from its all-time high in the summer as it continued to suffer from out of control inflation.
SLP tokens, act as the main reward token for the game, and serve as a replacement for experience points. They can be used to “breed” new digital creatures called Axies which players of the game can create and battle.
The cost of breeding starts at 100 SLP but increases as you go — rising to 200 SLP for the second breed, 300 for the third, 500 for the fourth, 800 for the fifth and 1,300 for the sixth.
According to Axie Infinity developers, SLP was being created four times higher than it was being burned through breeding, putting constant downward pressure on it.
“As we discussed [previously], inflation of SLP has been very high, with around 4x more SLP being created (supplied) per day than burned (demanded) through breeding. As we are building more burn mechanisms... we are also looking at where we can strategically reduce issuance in order to balance the economy.”
The developers essentially eliminated multiple reward systems, drastically reducing the supply of SLP and putting intense upward pressure on its price.
Trading at $0.009 the day before the tokenomics revamp, SLP rallied all the way to $0.039 for a 337% gain in less than a week.
Ronin (RON), also involved in the Axie Infinity economy as it will eventually be used for gas fees and network security, enjoyed a 74% bump after the developers made their move. AXS, the native token behind Axie Infinity, currently is up over 34% in the last seven days with a market cap of $4,532,933,912.
AXS remains one of the flagship cryptocurrencies of the metaverse sector, putting in one of the most memorable performances of 2021. It’s up 51348.1% since its all-time low in November of 2020, while the video game continues to grow its already massive user base.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.