23/08/2021
Axie News 5-mins read:
SLP & Play-To-Earn
SLP has been live for 614 days now. This means Play to earn is almost 2 years old!
It's been an amazing journey and there's been a lot to learn.
SLP is a utility token/potion in the Axie ecosystem. It's used to breed Axies.
Ideally, the daily amount of SLP created through play and burned through breeding would be close to balanced.
Harmony between the supply and demand side of the economy.
With variable short-term growth rates and cyclical adoption, things can get out of whack.
We've gone through times of low burn/low minting as well as times of high burn/high minting and everything in between!
With the huge increase in growth with Ronin, we experienced a period where the amount of SLP burned through breeding exceeded the amount minted.
This happens when a massive rush of entrants join the ecosystem and hadn't ramped up production by playing yet.
Once these players were onboarded and started earning, the amount minted started to increase relative to the burn rate. The burn rate has still been high in absolute terms but has been lagging as a percentage of the minting rate recently.
Part of the reason for this has also been the Skyrocketing AXS price. AXS, our governance token, became part of the breeding fee with the shift to Ronin.
We increased the AXS portion of the breeding fee. As AXS demand increased, so did price and its relative proportion.
I do think that AXS as a percentage of the breeding fee has gotten too high and that the amount of SLP burned relative to minting is a bit high.
The average amount of SLP burned as a percentage of the daily issuance is 58% and we've been a bit lower than this recently.
This can be addressed by:
- decreasing AXS portion of the breeding fee (again)
- Increasing SLP portion of the breeding fee (again)
- Decreasing SLP issuance (again)
- Adding new sources of demand for Axies (inducing more SLP burn)
Do I think there's an emergency supply overflow of SLP right now? No.
But I do think it's something to watch and I find it helpful to share our thinking around this topic.
Long term, introducing new features that increase our growth trajectory is the easiest way of ensuring the supply and demand sides of the in-game economy are balanced.
Some might think this is a danger to the system. We are reliant on growth!
Actually, this is a positive aspect of the system: everyone wants Axie to grow and helps to make it happen.
This is how our community absorbs, internalizes, and projects a growth mindset to the outside world.
This is not unique to Axie, it also applies to Crypto in general.
We also have ~4 B USD of AXS in the play-to-earn allocation which will reduce the ecosystem's reliance on SLP as their source of earning long-term.
We will ramp up the distribution of AXS as our gameplay gets more advanced. We are still in Alpha with a very basic product!
-Jihoz | Axie Infinity
Co-founder and Growth Lead
Source: https://twitter.com/Jihoz_Axie
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