Axie Part 2 - Gamer Economics

In part one of this report series, we analyzed the strong fundamentals of Axie Infinity, one of the fastest growing games in crypto. In this second half, we’ll dive deeper into the game mechanics, highlight recent results from the battle arena, analyze the utility of SLP and assess current trends in the marketplace. We’ll also explore how Axie Scholarships are changing lives by enabling play-to-earn models. 

Small Love Potion (SLP) is a token used in the Axie ecosystem, and has two main functions. SLP is earned (Minted) through gameplay and spent (Burned) through breeding of Axies. The recent increase in breeding activities has caused SLP to deflate momentarily as more SLP was burnt from breeding than minted from gaming.

SLP supply peaked at 584mil on 29th May and had a short period of deflation. On 28th June it stood at 484mil, a 100mil(-17%) supply decrease in 30 days. However, this does not seem to be permanent as supply change of SLP has become positive again recently.

Small Love Potion (SLP) has seen a significant growth in price of +712% YTD as of June 28th. This is a knock-on effect of user growth, since additional Axies are bred to meet that demand and SLP must be burned in the breeding process. Large uptick in breeding was also the result of moving over to Ronin, where fees are much cheaper. SLP demand and price really spiked around 4/30-5/1, likely as a result of the increased breeding post-Ronin launch.

The chart above speaks to the dynamics of the Axie breeding economy. You can see there’s a bit of a barbell distribution where Axies with less desi