Axie Infinity Revamps SLP Token: Supply Cap, Stability Fund, and Deflation Mechanism

Sky Mavis, the team behind the popular play-to-earn monster battling game Axie Infinity, recently announced a major rework of its reward token, Smooth Love Potion (SLP), in an effort to stabilize its earning model. Here are the key points to note:

Supply Cap for SLP

• Sky Mavis has established a supply cap for SLP, limiting the total number of tokens to 44 billion.
• This cap is not enforced by a new smart contract but rather described as a "social contract" that will be partly enforced through metering in-game rewards to stay within the cap.
• Currently, there are approximately 41.4 billion SLP tokens in circulation.

Token Ecosystem

• SLP serves as Axie's primary in-game currency, while AXS is its governance token and RON is the gas (transaction fee) token of Axie's Ronin blockchain, an Ethereum sidechain designed for gaming.

Deflation Mechanism and Stability Fund

• The Axie Infinity team aims to bring SLP to a deflation rate of 2%.
• They have introduced a stability fund where 2 SLP will be added for every 10 SLP burned, with an initial injection of 60,000 USDC.
• The stability fund will programmatically buy SLP during high inflation periods and sell SLP during low inflation times to help balance supply and demand.

Price Movement

• Following the announcement, SLP's price rose by approximately 8% in a day but remains down nearly 2% over the past week.
• Despite this recent increase, SLP is still over 99% lower than its 2021 peak when Axie Infinity experienced a surge in popularity.

New Game Mode

• In addition to earning SLP through gameplay, Axie Infinity has introduced a new game mode called Premium Cursed Coliseum.
• Players must pay a one-time fee of 150 SLP to enter this mode but can earn 50 SLP for three wins and 150 SLP for six wins.

The adjustments made to SLP and the introduction of the stability fund demonstrate Axie Infinity's commitment to creating a more sustainable earning model for its players. As the game continues to evolve, it will be interesting to see how these changes impact the overall ecosystem and player engagement.