Axie Infinity: The Economy

My thoughts on the current economy of Axie and what I think needs to be done to recover and sustain it.

It’s been almost a year since I started playing Axie Infinity. It was August 2021 when SLP was at its all-time high. It’s gone down since then and currently trading at around 0.0038 USD (PHP 0.21).

We’re currently in a Bear Market and yes, this decline is inevitable. And because of this, Sky Mavis has been bombarded with negativity from both the players and the media.

I myself was on the brink of selling all my Axies way back in November 2021 after the Ronin Dex (Katana) was released as there were no signs of an SLP bounce back. Though SLP recovered from 0.06USD to 0.095 USD, it continued to plunge into the abyss after that brief period.

Why didn’t I sell my assets?

I was afraid that if I sell all my assets, I might lose both my initial investment and the potential for it to grow. So I HODL, stop playing for a while and read things that could help me survive this cycle. It paid off. (I think)

I learned to believe in Sky Mavis’ ability to recover from this kind of adversity. Axie was born during the 2018-2020 bear cycle and still ships out products up until now. A team that thrives during this hard period deserves nothing but respect as only a few survive in a market like this. I still think that they could have done better with some things in the past, to be honest.

However, we are now at Phase 2 of Origin Phases and Advancement Plans, Land Staking is out, bugs are getting fixed, AXS rewards on the Origin leaderboards, First AxieCon (click to reserve tickets) in Barcelona and a whole lot more to come with no signs of slowing down. Some might say that some things I mentioned were meant to be shipped out months ago but hey, they are here now so can’t complain about that.

SLP rewards will be implemented in the next phase of development which has no fixed date yet. So, what can we do with SLP?

SLP Burning Mechanism

Here are some SLP burning mechanism ideas that I think SM can consider deploying once SLP is implemented into Origin.

1. Axie Skins / Emotes / Elimination Animations

In-app store purchases using SLP are the most basic thing that we can use as a burning mechanism.

For skins, I think having an overall Axie skin and individual body parts skin is more viable. It’s more diverse.

Skins are already in the plans but I’m not sure what types of skins are they planning to release so I’m putting this on record.

For emotes, probably add some more cool stuff in there. Jihoz face maybe? no?

For elimination animations, I just wanted to feel that I eliminated other players’ axies.

2. Monthly Pass/Battle Pass

Monthly pass or battle pass or whatever you like to call it. Used SLP to purchase this will be burned.

The idea is to engineer a monthly pass that consists of several levels with different rewards that a player can earn per level reach. How do you level up? By playing of course, and most importantly to get to our point, spend SLP.

Players can choose to spend an X amount of SLP to gain battle pass levels to acquire rewards faster instead of playing the game. Of course, the more levels you want to acquire, the more SLP you need to spend.

And of course, rewards per level should be SLP spending-worthy for this to work. That’s up to the devs.

3. Incentivize Breeders

This is more of an indirect way of burning SLP but one of the most important ones, I think.

Look at the charts above. On 24 Sep 2021, the community burned around 111M worth of SLP, compared to the latest record on the second chart which is 19M burned SLP. And just by looking at the chart, burned SLP is getting lower and lower. Why are breeders not breeding axie anymore?

• Demands for Axie aren’t that high.

• You are spending more than what you are earning.

• No incentives from breeding (thought of mine)

By incentivizing breeders, you are basically inviting them to breed more and by breeding more, they will be awarded medals or badges upon reaching a breeding milestone (reaching a certain amount of Axie bred). The format could be as followed:

Level 1 medal/badge - reach X amount of Axies bred. 3% less SLP will be used on your following breeding.

Level 2 medal/badge - reach X amount of Axies bred. 5% less SLP will be used on your following breeding.

Level 3 medal/badge - reach X amount of Axies bred. 8% less SLP will be used on your following breeding.

and so on…

or

A class badge/medal will be earned when you reached a certain amount of axie bred for a certain class. For example Level 1 Aqua breeder badge/medal x% less of SLP will be used.

or could be a combination of both.

The Lunacian code that has been implemented is fine since we are helping our content creators but we are talking economy today so it’s the breeders who get the love.

4. Genes Re-rolling

Having the ability to reroll your Axies Dominant, R1, and R2 genes by the use of SLP could also work.

It could slightly reduce the disparity of prices between chops Axies and pure ones since you now have the ability to somehow manually engineer its genes.

But of course, you’ll only be allowed to reroll a certain amount of genes (Max of 3 genes regardless if it’s from D, R1, or R2) because giving the player the ability to reroll every single gene is quite unnecessary and dangerous, I think?

5. In-game Mini Games

Probably spending a small amount of SLP to play a mini-game (let’s say a roulette game) where you can win a certain amount of moonshards for crafting, a small amount of SLP, Axie Skins, Crafting materials, and more. SLP spending on these spins should be cumulative and should have a maximum spin per day, otherwise, this could be exploited.

6. Rework the 5.25% Marketplace fee

Currently, Axie sellers are paying a 5.25% Marketplace fee for every item sold in the market. 1% of that goes to the content creator or NFT artist or whoever Lunacian code you are using (you can use mine: 6NHHKMX8). 4.25% goes to the treasury. Is it possible for SM to burn the 0.25%?

SLP isn’t the only token you can use to buy assets, you dummy. How can they burn that %?

I know.

We are now living in a world of smart contracts. I think SM devs could engineer a smart contract that converts the 0.25% of whichever token you used to purchase into SLP and then burn it instead of putting it into the treasury. I think 0.25% won’t hurt, no?

There could be more ideas out there but for me, these are the most reasonable ones that SM could implement.

I also think that all transactions that are related to the game, including crafting, should be charged with $RON which gives it more utility. It’s very cheap now so I don’t think it will hurt that much.

Axie Infinity Shards ($AXS) should also be removed from breeding fees since it’s a governance token and should be used as it is.

7. Scholarship by Renting

I’ll be publishing another article for this as this is a larger, broader topic. It’s just simply paying SLP to rent a team.

The problem I have about this is it will take a lot of work. Marketplace will be needing a re-work, in-game UI will need a re-work and more.

We do have 10 more years of funds to build, right?

Final Thoughts

This article and ideas may be too late already as there may already be plans on how to balance the economy/SLP of the game, but I’ll still put this out just in case they’re missing something.

SM should focus now on how to make the game more “fun” for these ideas to work.

As for us, the users, the only thing we can do is wait, hope, and pray that everything works.

It will ultimately come down to the users as no matter how many burning mechanisms SM releases, if we do not contribute, the current economy will stay as it is.

Some might argue that no one will spend that much on the game anymore as it won’t be profitable anymore.

Well, newsflash my friend. People spend thousands of dollars buying in-game cosmetics from a game where you literally earn NOTHING.

This site shows how much people spend on each Genshin Impact character’s banner. At the latest record, there are a total of over $500M USD spent in total.

This site stated that Riot games generated over $18M in revenue from Valorant Cosmic bundle last year.

You’re getting my point now?

So buckle up. We still have a long way to go, Lunacians.

Please let me know what you guys think! see you at the next one!