Axie Infinity: How SLP Economics Work

SLP or Smooth Love Potion serves as one of the currencies of Axie Infinity. It is no exaggeration to say that the value of SLP is one of the main reasons for the massive success of Axie Infinity.

Knowing how Axie Infinity’s source of income functions can save players money. This guide discusses SLP, its properties, and how it has developed over time.

Smooth Love Potion

Smooth Love Potion (SLP) is a utility token produced by players of Axie Infinity. This crypto token can be traded on exchanges for other cryptocurrencies such as Ethereum.

Smooth Love Potion (SLP)
Smooth Love Potion

SLP works as one of the metaverse’s sources of income since it can be bought and sold for fiat money. This is the game’s resource that is farmed/mined the most.

How is SLP created?

SLP is created the same way that fiat money is created. It is minted, i.e., created out of thin air. The exact mechanism though is through gameplay; Smooth Love Potion is created through Axie Infinity’s game modes. Players generate SLP through their gameplay in adventure and arena modes.

Arena and Adventure mode Buttons in Axie Infinity Game
The adventure and arena modes in-game

The more players Axie Infinity has and the more the game is played, the more SLP is created. 

How Is SLP Burned (destroyed)?

Smooth Love Potions can be burned through breeding. This mechanism allows SLP to be refreshed, giving birth to new Axies. Breeding is necessary, because it’s the only way that new Axies can be created, allowing new players to play the game.

Breeding UI

SLP costs for breeding can fluctuate, depending on how SkyMavis handles the economy.

You can check out more on breeding in this guide:

How To Breed Axies

Notable Price Peaks

Here are the SLP price peaks dating back to January 2020. 

All of these charts came from https://www.coingecko.com/en/coins/smooth-love-potion

July 08, 2020 | SLP = $0.193823

May 02, 2021 | SLP = $0.364533

July 14 – 24, 2021 | SLP = $0.342710 to $0.345505

SLP Price chart from January 11, 2020, to August 22, 2021

SLP prices have in general risen with Axie Infinity’s popularity. In the early months of 2020, SLP was low as $0.004 comparing it to August 2021 where its currently $0.15-$0.19.

Recent Changes

The Covid-19 pandemic left people stuck in their homes with their mobile devices. As soon as word got out about Axie Infinity, more players came in, boosting prices of both Axies and SLP.

Around late July and early August, the game’s popularity was huge and still rapidly accelerating (as it still is). The huge influx of players has caused a lot of SLP to be

SLP’s value from July to August 2021

SkyMavis has been trying to manage the game’s economy, adjusting SLP prices of breeding. Doing so gives room for more SLP to be burned, hopefully balancing the amount that is being created and burned.

SkyMavis also adjusted the amount of SLP a player can earn daily. From a max of 150 SLP for accomplishing adventure mode levels (PvE) and the daily quest down to 75 SLP.

SkyMavis’ season 18 economic adjustments

This update encourages more players to take part in arena mode, rather than relying on grinding in PvE. At this rate, low MMR (MatchMake Rating) players earn less than higher ones, potentially balancing the economy. 

Conclusion

There is a lot of complexity in this cryptocurrency’s economy. Supply and demand, prices of Axies, and in-game components all play a role in altering the economy. 

What we know so far is:

If there is too much SLP created vs. what is burned through breeding, the value decreases.

If there is a new mechanic that allows more SLP to be burned, its value can potentially increase.

If SLP is created and burned at a proportional rate, the value is roughly stable. This depends on the careful management of the economy by SkyMavis.

What do YOU think about SLP economics? Did I miss any major detail? Comment it down below!


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