What is Smooth Love Potion and why is it soaring?
Smooth Love Potion soared over 300% since the beginning of February due to an Axie Infinity update.
Smooth Love Potion (SLP) — the in-game currency token of the popular NFT game Axie Infinity — has been soaring since the start of the month, adding as much as 300% to its value.
SLP reached a high of 40 cents per token in July 2021. After that, it saw a consistent drop to less than 1 cent per token. This changed when Axie's game developers deployed an update last week in an attempt to stop the token from depreciating further, and prevent the whole Axie Infinity economy from collapsing.
Gamers and investors have taken this move as a positive sign. The token has since traded as high as US$0.04044 this month, and was trading slightly below 3 cents today.
Keep in mind, we're talking pennies here. And because of the nature of SLP tokens, there's another Axie-linked crypto that might be the better bet for investors.
What is the SLP token?
Smooth Love Potion (SLP) is an ERC-20 token used as a currency in Axie Infinity. Earn the token by completing tasks within the game or breeding new Axies — Pokemon-like creatures you use to fight other players. This shouldn't be confused with Axie Infinity token (AXS), which is the game's governance token.
The inherent issue of the SLP token was its unlimited supply. The more players the game has, the more tokens are minted every day. This inevitably caused massive inflation that threatened to collapse the game's economy.
Season 20 update starts to fix the issue
The game developers launched a game-changing update last week along with Season 20 of the game. What they did was remove SLP rewards from certain game modes and reduced the overall daily token issuance by 56%.
"As a first measure to stabilize the economy, we have removed all SLP rewards from adventure mode (this includes the SLP rewards for first-time completion)," said the team in its Season 20 release notes.
"Next, we have removed the 25 SLP reward from the daily quest." This feature alone kept 45 million SLP tokens from being issued every day.
Will this halt the SLP drop? In theory, lowering the supply should positively affect the token's price. But being an in-game currency, it's unlikely that it will "moon," or skyrocket beyond current values, anytime soon.
If you're looking to get in the game as an "investor", the AXS token is a better bet: it has a limited supply and it's the game's governance token, which gives you the right to vote and help decide how the game goes.
Read more in our guide to Axie Infinity.
Kliment Dukovski owns AXS as of the publishing date.