The Axie Infinity utility token SLP (Smooth Love Potion) is declining in value and is now worth less than 1 cent. In fact, it is now at $0.00522 at token, which is in stark contrast to the highs of $.36 around this time last year.
Why has Axie Infinity SLP token fallen so much?
There are many factors to consider as to why the currency has fallen so much. However, one of the main reasons is the sustainability of the game ecosystem. In particular, they are finding it hard to ensure profitability for players in Southeast Asia, where the game is most popular, such as Vietnam and The Philippines.
Another huge problem is too much SLP in the Axie Infinity ecosystem. Players earn tokens, which flood the market, forcing the price down. The Smooth Love Potion acts as a currency to breed the Axies, the cute in-game creatures.
Many claim it is too easy to gain the currency tokens. Sky Mavis, the developer of Axie, has previously stated this as an issue for SLP. They said there is four times more supply of SLP tokens than demand for breeding. Significantly, this is something that newer generations of P2E games will have to address.
Axie Infinity has also attempted to address the SLP downfall and introduced several measures. They removed SLP farming from the single-player mode. What’s more, they now offer a feature that allows players to burn SLP when entering Axie tournaments to reach a higher prize pool.