Burning Axies and SLP: Will it Help Axie Infinity Balance Tokenomics

Axie Infinity game still struggles with oversupply of characters and Smooth Love Potion (SLP) tokens.

The call to create an Axie burn mechanism circles social media, as Axie Infinity gaming rewards diminish. The game, which has provided a significant crypto income boost to some regions, is now struggling to preserve its profitability and gaming incentives. 

https://twitter.com/AxieMannygc88/status/1488744342562897920

Burning Axie characters may also lift the floor price, which has fallen toward $30. The oversupply of characters is already surpassing demand for scholarships.

The Axie Infinity team opened the sale of digital land plots in return for “sending away” Axie characters. The Axies and their images are not destroyed, but according to game lore, they are released into the metaverse. Released Axies cannot be used in battle again, but they will bring in-game rewards and land plots to players. 

The Axie burn model is yet to have an effect on rebalancing the Axie Infinity economy, as it depends on the behavior of players. 

What Can Burn Excess Smooth Love Potion (SLP)

Smooth Love Potion (SLP) trades at $0.009, severely diminishing the returns of players. There are calls to burn more SLP, but not all owners want to burn the tokens instead of realizing some profit. 

There are calls to make SLP the gas token on the Ronin network. For now, the only mechanism to burn SLP is to breed Axie characters, which creates another type of oversupply. The Axie game has a pathway to breed Axie characters and release them for rewards, but there is no way to predict how many players would be ready to risk their hard-won tokens for surprise items.

The SLP mint/burn ratio has been unfavorable for months and there are no signs yet of a shifting direction. One of the rumors is that to stop SLP oversupply, the game may eliminate PvE rewards, thus curbing bot activity and focusing on real players.

The problem for Axie Infinity can also affect similar games where reward tokens are used as a source of income and players are more eager to cash out than to circle the asset back into the game.

The Axie Infinity team will keep working on SLP burn mechanisms, with updates expected in Q1.

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