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Reviewing the economics of the Axie Infinity platform a little, I was able to learn about certain aspects that I found worrying in terms of the future of the gaming economy, which is affecting holders and could worsen in the near future.
There are two tokens on this platform: Axie Infinity Shards (AXS) and Smooth Love Potions (SLP).
The AXS is used to acquire the NFTs (Axies) characters while the SLP token is generated when the users complete the crossing missions and arena combat.
The SLP generation is causing an inflationary conflict that led its developers to cut the number of reward tokens in half.
The utility of this token (SLP) is to cover the Axies Breeding fees. The breeding of Axies costs 4 AXS and some SLP.
I don't want to go into the details of the breeding or crossing of axies, I just want to highlight the fact that each NFT can be breeded 7 times maximum. The first brood is the one that needs the least capital investment (AXS + SLP) until reaching the seventh brood which is the most expensive.
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To optimize this process, the player must take into account the characteristics of each axie who will act as "parents" in order to obtain a calf with specific characteristics or abilities.
The economic conflict is occurring due to the fact that axies holders are only breeding up to the 4th level, since making an investment for the 6th and 7th breeding is not profitable according to the current prices of the SLP token. .
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I must make the point that when SLPs are used for the breeding of axies, the "burning" of these tokens occurs, thus maintaining inflation levels, but since the tokens are not being burned because users are not performing the hatchlings of the upper levels, then a supernumerary amount of SLP tokens is being generated and for this reason their price is decreasing.
Axies players and holders are selling the SLPs generated by the game in the exchanges, this only represents a "change of hands", but what the game developers really expect is that the token is used (burned) and thus maintain the economy.
Conclusion
With the recent actions taken by the developers of Axie Infinity, reducing the rewards of SLP by half, they are looking to decrease the rate of accumulation of tokens, but this measure only represents a "cloth of warm water", it is not a measure of background, since SLP tokens are still being generated and according to the whitepaper this generation is unlimited.
If the SLP token burn rate does not increase, there will be hyperinflation imminently.
@juanmolina
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Excellent analysis friends had not thought of it that way. I have been researching the game because the truth seems very interesting to me, only that the cost to start playing it is very high.
There are many things to think about.
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