Why does SLP Have Value || Axie Infinity

Introduction

The goal of this article is to give you an idea on why SLP has value($). We already know that the game is play-to-earn. But let us step back a little. Why can we earn in the game? Well, we can grind SLP right? But where does the value of SLP come from?

Disclaimer: This is not financial advice. The aim of this article is for the readers to have a gist of the economy of Axie Infinity without the fancy words that are hard to understand. So that when someone tells you that the game is a “scam”, you can give them an answer as simple as possible.

Scam or Not?

"Axie Infinity is a play-to-earn game". That is what most people would say to easily describe the game. To others it might sound too good to be true. Others might also consider it as a scam while others would join the hype without knowing a thing. This could lead to disappointment and frustrations causing one to feel cheated. So you ask yourself and others these questions:

• "How can you even make money with a game?"
• "Is the company giving away money for free?"
• "Stop the bull*****, that is a scam."
• "Where did the money earned come from?"
• "Is there even a future with this game?"
• "Will the company go bankrupt for giving away money?"
• “Look, the value of SLP is going down, I told you that is a scam.”

SLP = Real Money

SLP has value simply because, "People want to have Axies". As long as there is a demand, need or want of the virtual pets, SLP will also gain value. Factor in the lack of supply when compared to the ever increasing number of players who want to play.

Let's face it, Axies are not for free. Players need to own or borrow Axies in order to start farming SLP. For those without the capital to buy an Axie, they could apply for a scholarship wherein a manager loans an Axie temporarily.

By buying an Axie, the money and its value is invested or injected inside the game which in turn gives value to the game. Unlike traditional games, the money invested on an Axie does not go to the pockets of the developers directly. It stays in the game and is circulated in the form of SLP. Aside from SLP, AXS is also being used. During the breeding process of Axies, the breeder is required to use both SLP and AXS.

After obtaining an Axie, we farm SLP in adventure and Arena mode. SLP that has been farmed can now be used to breed more Axie. Newly hatched Axie can be sold to the marketplace for crypto currency. Once again the cycle continues.

SLP Minted vs Burned Chart

 
So, supply and demand right? People want to buy axie but there is a limited supply. So breeders of Axie want to create more Axies. This generates a demand for SLP and AXS which increases their values. Even though the amount of SLP being farmed or minted is increasing, the amount of it being burned/used during the breeding process is also steadily increasing due to the demands of the following.

• Gamers want to actually own their in game assets

  Explanation: According to Axie Infinity’s whitepaper, more than 50% of the players joined the game due to the gameplay and the community. Some players might have been disappointed with commercial games that only have profit as their goal. Aside from that, game items from commercial games are still owned by the developers so they cannot do anything if the item suddenly disappears.

• People want to earn money for their daily needs

  Explanation: In 3rd world countries, Axie Infinity has been their source of income after they have lost their jobs due to the pandemic. These batches of players apply as scholars which increases the demand for Axies.

• Investors see the opportunity to make more money

• In the future, there are external sources of capital aside from the increasing number of new players which will be invested in the game.

Aside from the supply and demand there is also another factor which helped increase the value of SLP, “Hype”. Due to the large amount of earnings created by players, many people have become more interested in Axie Infinity. As many people get to know more about it, some influencers would try to join the bandwagon and try to gain a new stream of content. These popular people would often hype the game to their followers thus increasing the amount of potential players joining the game. The sudden spike of players just recently was caused by the said factor. This has created a server overload which led to game lagging and freezing.

To the Moon!

Now we have reached the point where you start to doubt the game due to a certain aspect, breeding. You might think, “If you keep on breeding Axies, its value will drop, right? This leads to Axie Infinity being short lived, why should I spend money?”

Let me tell you this, calm down, drink water and listen. Based on the game’s white paper, Axie Infinity is in the alpha stages. Many changes and updates are coming. One important change right now is the requirements for breeding. SLP requirements have increased and AXS is now required. This will slow down inflation while increasing the value of the tokens,

Furthermore, Axie population control will be implemented for its long term growth. It will most likely arrive together with Axie Infinity Land Gameplay. To combat the increasing number of Axies, the developers have planned to allow Axies to be “freed” or “released”. By giving the Axie freedom, materials can be obtained. These resources can be used to craft as well as upgrade both land and other Axies.

In short, Axie Infinity will continue to grow. In the future, SLP’s value will grow together with the game in a more sustainable manner. New gameplay will also diversify and increase the game’s fun level both for casual as well as professional gamers.