AXS Surges As Axie Infinity Shakes Up PVP Rewards Structure, Reduces Smooth Love Potion Supply

The price of AXS, the NFT-based online video game Axie Infinity's token, surged almost 48% since Friday, and was trading at nearly $70 following an annoucement by its developer that shakes up the reward structure and reduces the supply of tokens that players earn by playing the game.

Vietnamese studio Sky Mavis revamped the reward structure of its play-to-earn's player-vs-player (PVP) competition round while reducing the supply of the Smooth Love Potion (SLP) tokens.

"For Season 20, we’ve expanded the number of leaderboard slots to 300,000 and increased the amount of AXS we’re giving out to 117,676," Sky Mavis said in an announcement Friday. "This will supercharge the competitive Axie scene and create more demand for quality Axie teams in the ecosystem."

In addition, "Axie Infinity" removed the adventure mode as well as the daily quest. This means gamers will now have to earn SLP tokens via area combat — a decision the team believes would reduce the daily supply of SLP tokens by 56%.

This is important as players burn SLPs to allow old Axies to breed new ones. Over the past months, the Axie Infinity team created more SLPs to reward players than the number of SLP burned through breeding.

This resulted in a higher SLP inflation, causing the per token rate to crash from its summer high of $0.40 to only $0.008 on Feb. 3. The developers said while the daily quest encouraged people to play every day, it also increased SLP supply by 45 million, which has weighed on the Axie Infinity economy.

"We know that this is painful medicine. The Axie economy requires drastic and decisive action now or we risk total and permanent economic collapse. That would be far more painful," the team said recently.

When the Season 20 launches, players should expect SLP to be scarcer, potentially making Axies a lot more valuable. In theory, it could allow Axie Infinity to gain traction not only among players, but also among crypto supporters and eventually raise the demand for its AXS token.

As of 1.50 a.m. ET Monday, AXS was trading at $69.61, data from Coinmarketcap showed. The coin rose to a high of $71.66 in late Sunday trading.

This could be the reason why the AXS price increased more than 40% following the team's announcement. The AXS price at the time of this writing is $69.68 with a 24-hour trading volume of $1,365,520,405, according to coinmarketcap.