Sky Mavis has just announced the launch of a new tool that will allow anyone to burn their SLP tokens. The primary purpose of the tool is to allow players to burn whatever SLP they may have on their Ronin wallets and help reduce the actual supply of SLP in the ecosystem. However, even though burning SLP has been a much-awaited feature, this is not quite the best way to do it
As many of you may know, Axie is a play-to-earn blockchain NFT game that allows players to earn SLP as a reward for successful wins in the game. It gained mainstream popularity last year as it became a viable alternative form of income. However, the influx of gamers also meant the influx of SLP being minted which has caused severe inflation in the in-game economy due to oversupply that also resulted in the devaluation of SLP. SLP prices peaked at Php 20 or $0.35 at the time but are now only at Php 0.66 or $0.0128 at the time of this writing.
Several measures have been made by the development team to address the inflation and oversupply of SLP which included halving the rewards of SLP received, to removing SLP rewards for Adventure mode and quests completely. This has yet to really address the issue, however, despite assurances from the development team.
For the longest time there has been a clamor from the community for some form of burning mechanic that incentivizes the burning of SLP while at the same time allowing for the economy to grow more stable and pump the prices back again. No such mechanic exists yet but many are still patiently waiting. So the release of the SLP burn tool comes as quite a surprise for many community members.
This newly released burning tool is not quite what the community has been asking for. While it allows players to just directly burn the SLP , it does so without any form of incentive. And once the SLP is burned, it’s gone for good.
According to the dev team, the SLP Burn tool was requested by tournament organizers. The idea is that organizers could host their own tournaments that require you to burn SLP to join. In turn, that SLP will be burned so that it can help balance the economy.
Analysis and Perspective
As an entity that that organizes blockchain tournaments, United Gamers Chief Marketing officer RJ Jacinto chimed in to state that while the new tool is novel its not quite the solution to the current woes of the Axie ecosystem. He adds that the system will prove to be difficult to implement in the local Filipino Axie scene, which is one of its biggest markets, since the circumstances are very different:
“This will be difficult for Filipino tournament organizers.” Jacinto states.
“Gone are the days when tournaments have an entry fee and those that do are almost guaranteed to have little to no players joining. With the majority of players in the Philippines being scholars, they probably do not hold on to their SLP in the first place. So expecting them to hand over SLP to join a tournament and then having to burn them after is ideal but unrealistic.”
Apart from this, individual players may also see no reason as to why you would want to use this tool. While the burn tool is a good idea and conceptually it should work, this may not necessarily make much of a difference in balancing the economy and increasing the prices of SLP.