Popular crypto game Axie Infinity’s reward token SLP has seen its price shoot up by 58% overnight and over 300% in the last week to reach $0.03787.
SLP’s overnight gains come alongside a surge in the price of the the game’s governance token, AXS, which is up 36% over the last week.
Both coins have risen following the the official announcement of Axie’s ‘Season 20’ update, which makes sweeping changes to the play-to-earn title’s in-game economy.
So what is Axie Infinity, what role does SLP play, and how does the update affect things?
Axie Infinity is a Pokémon/Tamagotchi inspired game in which players collect and breed monster NFTs and battle them for rewards.
Once players have assembled a team of Axies, they can collect ‘Smooth Love Potion’ (SLP) tokens through battles. SLP tokens can be redeemed for new in-game features, including the ability to breed new Axies.
Axie Infinity’s Season 20 update
Axie’s new update is centered on reducing the daily supply of SLP tokens by 56%. Players can no longer earn them through daily questing or playing in adventure mode.
In its blog post, the Sky Mavis team wrote: “The daily quest, in principle, was great to encourage people to play every day, but it’s now become a mass emission mechanism for SLP. By removing the daily quest, we are able to reduce issuance by around 45 million SLP per day.”
The new measures to cap SLP are aimed at increasing token scarcity, a measure which developers feel was absolutely necessary to avert “total and permanent economic collapse.”
The possibility of a meltdown under the game’s previous economy was due to the extremely high inflation of the token, “with around 4x more SLP being created (supplied) per day than burned (demanded) through breeding.” Sky Mavis hopes that the new update will strategically rebalance the game’s economy, which had slumped in recent months, with the floor price for Axie NFTs dropping from several hundred dollars to under $50.
Another big part of Season 20 is onboarding new players. The team has created a $6 million prize fund and now offers rewards of up to 117,676 AXS tokens for the top 300,000 players in the new season.
“Put simply, we’ve prioritized growth and onboard millions. Without this approach, it’s likely that Axie would have remained a small, niche game with a few thousand players.”
Yesterday, there was another positive announcement for SLP: crypto exchange Binance added SLP/BNB as a trading pair, meaning that traders can now directly exchange BNB for SLP on the exchange.