AXS Surges 123% After Axie Infinity Implements bAXS to Curb Bot Activity

Axie Infinity’s AXS token has surged 123% since the introduction of bAXS, a non-tradable token tied to AXS but restricted to in-game actions.

The new reward system aims to curb bot activity and prioritize real players, with bAXS only usable for breeding, evolving, and staking Axies.

The overhaul is expected to reduce the supply of new AXS tokens in the market, creating potential upward pressure on the token’s value.

Axie Infinity’s AXS token has seen a dramatic increase in value following a major overhaul of its reward system. The developer, Sky Mavis, introduced bAXS, a non-tradable token backed one-to-one by AXS, to be used for in-game actions. This change marks a significant shift from prior practices, where AXS tokens were easily tradable and often exploited by automated bot accounts. The new model seeks to reward genuine players while deterring speculative trading and bot activity.

The introduction of bAXS is expected to stabilize the in-game economy by reducing the number of new AXS tokens entering the market. This could help reverse the token’s prolonged downtrend and potentially drive long-term value. Additionally, bAXS tokens can be converted to AXS for a fee, with lower fees for high-reputation players, which encourages long-term engagement.

Investors are optimistic about the new system, as it addresses key issues such as inflation and oversupply. The change, combined with previous adjustments to another in-game token, SLP, is seen as a step toward revitalizing the game’s ecosystem. While bAXS remains non-tradable initially, its eventual conversion to AXS could create a supply shock, further increasing the token’s value.

What Is the Impact on Token Supply and Market Dynamics?

The new reward model significantly reduces the flow of AXS tokens into the market, potentially altering supply and demand dynamics. By tying token rewards to in-game actions rather than direct trading, the system discourages speculative behavior and bot-driven transactions.

This structural change could lead to a more stable token economy, where the value of AXS is more closely aligned with real player activity rather than speculative trading. The reduced supply of new tokens, combined with existing consumption through breeding and evolution, creates a potential supply shock.

For investors, the implications are mixed. On one hand, the reduced supply and increased demand from real players could drive up the token’s price. On the other hand, the non-tradable nature of bAXS may initially limit liquidity and market depth.

What Are the Risks and Uncertainties?

Despite the positive momentum, there are risks associated with the new model. One concern is the effectiveness of the bAXS conversion mechanism in maintaining long-term engagement. If high-reputation players dominate the lower-fee conversion options, it could create barriers for new players.

Additionally, the success of the new system depends on widespread adoption and user behavior. If players continue to sell AXS tokens at a high rate after conversion, the intended supply shock may not materialize.

Another key uncertainty is whether the system can address the broader challenges facing Axie Infinity, such as low user growth and declining holder counts. On-chain data suggests that while the price has surged, the number of active users remains low.

Overall, the new model represents a significant step toward a more sustainable and engaging in-game economy. However, its long-term success will depend on how well it balances the needs of real players, investors, and the broader GameFi ecosystem.