The SLP token has been on the rise today and it was trading at $0.01926 at the time of writing; a 24.17% rise over the last 24 hours.
Its trading volume stood at $1,262,461,511 after a 136% rise in the last 24 hours.
Why is SLP token price rising today?
The main reason why the price of the SLP token is on the rise is the looming reduction of SLP token supply by Axie Infinity.
Some may ask how the two (Smooth Love Potion and Axie Infinity) are connected. But here is how.
Smooth Love Potion (SLP) are earned by winning competitions on Axie Infinity, which is metaverse blockchain that allows gamers to play games and also earn as they play.
Axie Infinity players collect, breed, raise, battle, and trade non-fungible tokens (NFTs) based creatures called ‘Axies’. Players earn Smooth Love Potion (SLP) tokens as rewards and the SLP tokens can be redeemed later to breed new ‘Axies’ creatures.
SLP tokens are different from AXS, which is the cryptocurrency used for transactions within the Axie Infinity ecosystem.
Axie Infinity developers to reduce the SLP token supply
Axie Infinity developers want to make SLP tokens scarcer by implementing changes that will rebalance the ecosystem.
The team had this to say about the issuance of Smooth Love Potion (SLP) tokens:
“The daily quest, in principle, was great to encourage people to play every day, but it’s now become a mass emission mechanism for SLP. By removing the daily quest, we can reduce issuance by around 45 million SLP per day.”
The developers described this as a “painful medicine,” that will be necessary for the future progress of the game. If implemented, the supply of SLP tokens is expected to drop by up to 56%, as the developers stressed that:
“The Axie economy requires drastic and decisive action now, or we risk total and permanent economic collapse. That would be far more painful.”
The team wants to create a $6 million prize fund and make changes in its reward structure.
In season 19, Axie Infinity gave 3,000 AXS to the best player on the leaderboard. The reward has increased to 117,676 for the top 300,000 players in the next season.
The team concluded by saying:
“Put simply, we’ve prioritized growth and onboard millions. Without this approach, Axie would likely have remained a small, niche game with a few thousand players.”
During the past several days, the price of Axie infinity token (AXS) has also as the general crypto market recovers. Its current price level is 30% higher than what it was at the end of January.
After the news of SLP reduction, the SLP price surged by more than 40% before retracting to its current price.