Breeding Fee Adjustment
In 24 hours, we will update the breeding fee!
The SLP cost per breed will triple.
The AXS cost per breed will be halved to 0.5 AXS.
Our Journey Together
This year has been an incredible journey. We’ve gone from 38,000 daily players in April to over 2.5 M daily players today. This has presented many amazing opportunities but also challenges for our growing digital nation. Some of you have voiced confusion, worry, and even frustration with the current volatility of the economy. We recognize that this volatility makes it hard for our community members to value their efforts consistently. Hopefully by the end of this update, you’ll better understand that our occasional economic adjustments are our attempt to consistently reward skill and effort while balancing community/player growth.
Let’s start with a couple of core Axie economic concepts:
The only way SLP can be created is through gameplay. Each SLP is the result of effort and skill.
The only way Axie can be created is by burning SLP. Each Axie is proof that a human played Axie Infinity for a certain amount of time.
When there are new players to Axie, the only way they can play is if there are more Axies available than there are players. This means that we need to think about the future demand shocks to the Axie market and SLP when balancing the economy.
Ensuring long-term sustainability for the economy will rely on a combination of player growth, new sources of demand for Axies, and external organizations subsidizing play-to-earn by sponsoring leaderboard seasons/tournaments & more.
If you’re interested in diving deeper into our economic model, take a look at these two articles for further context:
Axie Population & Long-term Sustainability
Breeding Fee Adjustment
The Axie economy needs to be balanced by rewarding everyone’s immediate efforts while supporting a long-term plan for community growth. There are some considerations that can be hard for some of our community members to grasp, especially if they’ve only recently started their Axie journey. Many players that are new to Axie have expectations of the in-game economy that are unrealistic and would not be conducive to long-term growth. Thanks in advance for your understanding as we learn together how to balance the economy in both the short and long-term.
We’d like to provide some more insights into how we think about changing the fee:
Goals
Manage inflation of in-game resources to increase stability.
Ensure there is opportunity in breeding makes sense which drives Axie supply expansion. This enabled both current and future players to obtain Axies at reasonable prices.
Continue to provide some utility through AXS through its role in the breeding process.
Considerations
Floor Axie prices should theoretically reflect future expectations of earnings and how fun the game is.
For breeding to make sense there needs to be a spread between breeding fee and virgin floor Axies.
If the SLP fee portion is too high, we get Axie population inflation which increases SLP output too quickly and floods the Axie marketplace with supply.
If AXS fee portion is too high it limits people's ability to breed and burn SLP.
If we make either the SLP or AXS breeding costs too high, Axie breeding will decrease, Axie prices will go up, and accessibility of the game may decline.
If we make either the SLP or AXS breeding costs too low, we get SLP and Axie quantity inflation.
The AXS portion of the breeding fee has risen above 80%.
Most of the recent imbalances have stemmed from the AXS portion of the breeding fee being too high. We believe that the adjustment will better balance SLP burning, Axie supply growth, and incentives for breeders and players.
While we are currently making these changes manually, long-term we’d like to outsource management of the economy either to intelligent machines or informed members of the Axie community. We hope to ultimately implement an auto-balancing system that will adjust the AXS and SLP portions of the breeding fee to be both stable in dollar/fiat terms and in relation to each other. This is a bit harder technically, but something that we hope to roll out in the future. At least for now, as we experiment with creating a new digital economy, more active management from Sky Mavis may be required.
Questions?
* Some of the language here has been repeated from this article for consistency and repetition:
