Season 18 is live on Axie Infinity and with it come some interesting changes including an overhaul of how players gain Smooth Love Potions (SLP).
For those of you that are unfamiliar Axie Infinity operates with two fundamental currencies, the most abundant of which is SLP. These are gathered in both adventure mode (PvE) and arena mode (PvP). The latest update has made a number of "economic adjustments" according to the announcement article on the Lunacian. Most notably, the way SLP can be harvested has been dramatically shaken up. The SLP cap for adventure mode has been halved from 100 to 50 daily and the daily quest reward has been similarly halved from 50 to 25.
What This Means For Players and Gameplay
PvP should become more challenging at the top and more fair for beginners. According to the Lunacian one of the reasons for this adjustment is to stop "smurfing" a term for the skilled players that purposely keep their ranking low in order to battle weaker opponents. This allows them to win more often at the expense of players with weaker teams or less experience.
In a rare move they also commented on the effect this will have on scholarships stating, "we believe that these adjustments will put upward pressure on scholar wages for skilled battlers and reward managers that have put time into educating and training their scholars for the arena."
For adventure mode, little will change besides becoming less lucrative. The impact here should be felt in the exchanges and marketplace as less SLP is minted.
How Will This Change The Economy Of Axie Infinity
If the goals stated in the article are accomplished this will likely reduce the amount of SLP on the market by lowering the amount minted. In turn this should balance the ratio of SLP minted to SLP burned. To use the bathtub analogy, where the tub is the total supply of SLP, the system prior to this morning was filling the tub to quickly. In order to bring the amount of water (SLP) back into equilibrium the flow of SLP had to be reduced. By reducing the amount minted by daily quests and through the adventure mode they are turning off the SLP tap slightly. Meanwhile, the amount being drained (SLP burned to breed Axies) should stay constant thereby balancing the market.
What Has Happened In The Markets
Markets are always a hard to predict thing but the changes seem to have had an immediate impact in a predictable way. Shortly after Season 18 went live there was a spike in the price of SLP. Adding possible upward pressure is the This is likely a response to the news that SLP will become more scarce in the near future.
Meanwhile, the price of AXS which is also a key component in breeding has not been similarly effected by the Season 18 announcement. It was noted that as part of future changes to Axie Infinity the AXS portion of the breeding fee is something the developers are "considering adjusting". If the amount of AXS that is needed is indeed reduced, the price of AXS may also adjust according to supply and demand.
Notably prices of Axies seem to be in flux as well. Axies are trading at lows of 0.08 ETH this evening as opposed to recent lows of 0.15. The price adjustment in USD has not been as wild however, it is interesting to note the changes in relation to the timing of Season 18. Only time will tell how it will ultimately shake up the marketplace.
Future Looks Favorable for Axie Infinity
Along with the "Axienomics" adjustments the July Development Update shows incredible metrics related to the growth and strength of the Axie Inifinity playerbase. Along with being the "#1 NFT project by volume" and reaching "new heights across all major metrics" according to the update they also were looking forward to "a flurry of launches" thanks to rapid progress on the roadmap. All of this, including an apparent eagerness by the developers to ensure economic stability in Season 18, bodes well for Axie Infinity in the near future. Which is important since Axies are more than just fun, for many players they are a significant financial investment.
