Axie Infinity Boosts SLP Burn Rate in Latest Update—Will It Stabilize the Token?

In a bold move to address long-standing concerns over inflation and sustainability, Sky Mavis, the developer behind Axie Infinity, has introduced a major update aimed at increasing the burn rate of Smooth Love Potion (SLP). The update comes after years of volatility and tokenomic imbalance that led to a sharp decline in SLP’s value since its all-time high in 2021.

As Axie Infinity attempts to reclaim its influence in the play-to-earn (P2E) ecosystem, investors, players, and analysts are now asking: Will the boosted SLP burn rate finally stabilize the token?

This article explores the technical, economic, and market implications of this update, and whether it has the potential to secure SLP’s long-term value.

What Is SLP and Why Does It Matter?

Smooth Love Potion (SLP) is an ERC-20 token used in Axie Infinity to breed Axies—digital creatures players use in battles and missions. SLP is earned through gameplay and burned (removed from circulation) when players use it for breeding or other in-game activities.

Originally praised as the foundation of the P2E model, SLP once allowed players to earn real-world income. But its utility-driven nature also meant uncontrolled minting during user spikes, leading to a massive oversupply and price collapse from $0.36 in 2021 to below $0.01 by 2023.

What’s Changing: The New SLP Burn Mechanisms

In the April 2025 update, Sky Mavis introduced a multi-layered burn strategy to bring back equilibrium between supply and demand.

Key Burn Enhancements Include:

1. Breeding Fee Increase
   The cost of breeding Axies using SLP has increased by 25%, raising the total tokens burned per breeding cycle.

2. In-Game Utility Expansion
   SLP is now required to:

   • Unlock premium cosmetics

   • Craft rare items in Axie Homeland

   • Upgrade Axies in Axie Origins

3. Time-Locked Sinks
   Players can lock SLP for future rewards or governance access, temporarily removing it from circulation.

4. Seasonal Events
   Limited-time breeding and crafting events require large amounts of SLP, encouraging mass burning during peak engagement periods.

Sky Mavis Statement: “We’re moving toward a deflationary model for SLP that reflects real utility and long-term economic health.”

Burn Rate vs. Mint Rate: The Core Equation

The health of the SLP economy has always depended on the balance between minting (token creation) and burning (token destruction). Prior to 2022, the mint-to-burn ratio was severely skewed—sometimes as high as 4:1, meaning far more SLP was being created than consumed.

Current Burn Trends (as of May 2025):

• Daily SLP minted: ~15 million

• Daily SLP burned: ~13.5 million

• Mint/Burn Ratio: ~1.11

This marks a significant improvement from previous cycles, where burn rates were often under 50% of minting volume. If sustained, this shift could ease inflation and improve market confidence.

Data Source: Ronin blockchain explorer and DappRadar tracking.

Market Reaction: Is SLP Price Recovering?

Since the update was rolled out:

• SLP’s price increased from $0.009 to $0.017—an 88% rise in 3 weeks.

• Trading volume rose by over 200%, signaling renewed investor interest.

• The number of active daily wallets in the Axie ecosystem surged to over 320,000.

While this momentum is promising, volatility remains high. Much of the rally is sentiment-driven, and sustainability will depend on whether the demand for SLP (via gameplay and utility) can consistently outpace its supply.

Will It Really Stabilize the Token?

✅ Positive Indicators:

1. Better Tokenomics Control: The higher burn rate limits uncontrolled inflation.

2. Real Utility Growth: More ways to use SLP means stronger organic demand.

3. Player Re-engagement: Higher user activity often translates into more token use and burning.

4. Institutional Confidence: Analysts see this as a step toward maturing the Axie economy.

❌ Remaining Concerns:

1. Dependency on Game Popularity: If user growth slows, so will SLP burn.

2. Speculation vs. Utility: Short-term traders might drive price volatility disconnected from in-game use.

3. Regulatory Uncertainty: Countries may classify tokens like SLP as income or securities.

Industry Insight: “Burn mechanics are necessary, but not sufficient. The token’s value will depend on sustained player activity and constant innovation in utility,” says Juan Alvarez, GameFi Analyst at CryptoIntel.

The Bigger Picture: A New Chapter for P2E?

SLP’s stabilization effort is not just about one token—it’s about rescuing the reputation of the play-to-earn model. Many P2E games that launched during the 2021 boom have since faded due to unsustainable economies.

If Axie Infinity can demonstrate that burn-based tokenomics and fun gameplay can coexist, it could set a new standard for Web3 gaming.

“SLP was the canary in the coal mine for P2E,” notes Delphi Digital. “Its recovery could inspire a second wave of more resilient, economy-aware blockchain games.”

Final Thoughts

The increase in SLP’s burn rate is a significant and necessary step in repairing the token’s broken economy. It won’t solve every challenge overnight, but it does lay the groundwork for a more stable and sustainable future for SLP and the Axie Infinity ecosystem.

Whether this effort will be enough to restore SLP as a viable utility token depends on:

• Continued player engagement

• Innovative game mechanics

• Transparent governance and economics

But for now, one thing is clear: SLP is not dead. It’s evolving.