Axie Infinity token AXS gains 40% after taking steps to avoid 'permanent economic collapse'

2 years ago

The terms of the Axie Infinity (AXS) token has surged by astir 40% successful 3 days. AXS rallied to implicit $65, its champion level successful much than 2 weeks, arsenic Axie Infinity revealed a revamped reward structure for its player-vs-player (PVP) contention round.

In detail, the play-to-earn startup expanded its fig of leaderboard slots to 300,000 and boosted the magnitude of AXS rewards to 117,676 from the earlier 3,000 for the adjacent season.

"This volition supercharge the competitory Axie country and make much request for prime Axie teams successful the ecosystem," Axie Infinity explained, adding that their determination would make a $6 cardinal worth of prize excavation for Season 20.

Economic revamp boosts AXS demand

AXS serves arsenic a governance token for the Axie Infinity protocol. Additionally, it acts arsenic a legal tender to acquisition in-game nonfungible tokens (NFTs) — much oregon little unsocial integer pets called "Axies" — from the Axie marketplace. Finally, players besides usage AXS to breed caller Axies utilizing the existing ones.

But Axie Infinity uses a dual-token structure. The different crypto, Smooth Love Potions (SLP), was awarded to players for completing regular quests and clearing levels successful the escapade mode. Additionally, players received SLP rewards done country combating successful the Axie Infinity game.

Axie Infinity besides eliminated the regular quest and the escapade mode, meaning gamers would present gain SLP tokens lone done country combat. The determination expects to trim the SLP token regular proviso by 56%.

That is captious arsenic players pain SLPs to alteration aged Axies to breed caller ones. Of late, the Axie Infinity squad created much SLP to reward players than burned done breeding. Unfortunately, that led to a higher SLP inflation, prompting its per token complaint to clang from its summertime 2021 highs of $0.40 to $0.008 connected Feb. 3.

As a result, Axie Infinity removed avenues that were generating much SLPs. The squad noted that the regular quest, successful principle, encouraged radical to play each time but besides added a 45 cardinal SLP proviso load onto the Axie Infinity economy. It acknowledged:

"The Axie system requires drastic and decisive enactment present oregon we hazard full and imperishable economical collapse."

Simply put, the Season 20 update would marque SLP scarcer, frankincense perchance making Axies much valuable. Therefore, successful a "perfect" scenario, it could person Axie Infinity summation traction among gamers and crypto supporters alike, theoretically raising request for its AXS token.

That somewhat explains wherefore the AXS terms rallied by implicit 40% aft Axie Infinity's Feb. 3 announcement.

AXS terms technicals

The latest play of buying successful the AXS marketplace has prompted its terms to reclaim a captious short-term absorption level arsenic support.

Notably, AXS terms crossed supra its 200-4H exponential moving mean (200-4H EMA; the bluish question successful the illustration below) connected Sunday. The caller retests of the aforesaid level coincided with an summation successful selling sentiment. Therefore, reclaiming it arsenic enactment raised AXS's imaginable to widen its rally.

The $68 level would beryllium the adjacent upside target, according to the Fibonacci retracement graph drawn from AXS's plaything precocious adjacent $140 to its plaything debased astir $45. Meanwhile, a decisive determination supra the said level could person AXS purpose for $80 next.

Conversely, a pullback from $68 whitethorn permission the AXS terms astatine hazard of investigating its 20-4H EMA (the greenish wave) adjacent $56 arsenic its adjacent downside target.

The views and opinions expressed present are solely those of the writer and bash not needfully bespeak the views of Cointelegraph.com. Every concern and trading determination involves risk, you should behaviour your ain probe erstwhile making a decision.

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