Early this week, Axie Infinity co-founder Jihoz shared a weekly growth data report of the game on Twitter. And things are not looking good. As of May 9th, the number of daily active users (DAU) in Axie Infinity has dropped to less than a million, which marked a 14.37% reduction in DAU compared to last week. At its peak, the game had more than 2.7 million DAU in November last year.
Axie Infinity’s daily active users are dropping to less than a million: Why?
As a start, many players are pointing to the poor tokenomics in the game that led to excessive inflation in the $SLP token supply. To those who don’t know, $SLP is the main in-game reward token in Axie Infinity. So whenever you win a battle in the game, you will receive some amount of $SLP tokens as a reward.
But as of writing, $SLP has a limited use case in the game. You can only use $SLP to pay for Axies’ breeding fee. Since not every player will breed Axies all the time, players will naturally sell away the $SLP tokens for profits.
What’s more, $SLP does not have a maximum supply. Thus, the number of $SLP minted is always more than the number of $SLP burned in Axie Infinity. Coupled with a market sell-off in December 2021, the $SLP price dropped all the way down to less than a penny in February this year. As of now, $SLP is trading at $0.005350 per token, which clearly doesn’t offer any significant returns to P2E players.
Not to mention that Sky Mavis, the team behind Axie Infinity had reduced $SLP rewards several times throughout the year. To make things worse, the Ethereum sidechain of the game, Ronin Network, suffered a $600 million exploit back in March this year.
With reducing ROI and players’ loss of confidence in the game, it is no surprise to see Axie losing more users every week. Only time will tell whether Axie can regain its former glory as the most popular NFT game of all time.