AXS Surges 123% as Axie Infinity Overhauls Reward System to Curb Bot Activity

Axie Infinity’s AXS token has surged over 123% following a structural overhaul of its reward system, announced by co-founder Jeff Zirlin on January 14. The new system introduces bAXS, a non-transferable token backed one-to-one by AXS, used for in-game actions like breeding and evolving Axies, aimed at curbing bot activity and rewarding real players. By reducing the number of new AXS tokens entering the market, the update is expected to create a supply shock, potentially increasing AXS’s value and reducing bot-driven sell pressure.

Axie Infinity, a blockchain-based game that lets players collect, breed, battle, and trade creatures called Axies, has introduced major changes to its reward structure to stabilize its in-game economy. The AXS token, previously distributed as tradable rewards, will now be issued in the form of bAXS. These tokens are account-bound and can be used for in-game actions like breeding, ascending, evolving, and staking, but are not transferable at first.

The new reward system aims to reduce bot activity, which has dominated gameplay in recent months, and prioritize real players who have long contributed to the game. By making bAXS non-tradable by default, the developers hope to limit speculative trading and ensure that rewards are used within the game.

This shift in tokenomics has already had a significant impact on AXS’s price. Since the announcement on January 14, the token has surged over 123%, breaking a months-long downtrend. Investors view the structural changes as a positive step, believing that reduced token supply and increased in-game utility will support long-term value.

The developers have also hinted at future measures to address oversupply issues, including aggressive burn mechanics for both AXS and Axie creatures, further aiming to enhance the token’s utility and value.

What are the implications of this structural change for Axie Infinity players and investors?

The shift from AXS to bAXS is a structural change designed to benefit real players while deterring bots. By limiting the tradability of newly issued AXS, the game reduces the incentives for bot activity and short-term speculative behavior. This, in turn, is expected to create a more sustainable and fair environment for long-term contributors.

For investors, the changes signal a potential supply shock as fewer AXS tokens enter the market. With the existing tokens being consumed through in-game actions like breeding and evolving, the reduced supply may drive prices higher. The new system also introduces a fee structure for converting bAXS to AXS, with lower fees for high-reputation players, which further aligns rewards with long-term engagement.

How might this affect the broader GameFi market and digital assets sector?

The success of Axie Infinity’s new tokenomics could have broader implications for the GameFi sector, which has struggled with issues like inflation and bot activity. If the changes lead to increased player retention and sustainable token value, other GameFi projects may look to adopt similar strategies.

However, the effectiveness of the new system will depend on user adoption and long-term engagement. If real players continue to find the game profitable and bots are successfully curtailed, the model could serve as a blueprint for other blockchain-based games.

At the same time, the structural changes highlight the importance of tokenomics in digital assets ecosystems. By restructuring emissions and tying rewards to in-game actions, Axie Infinity is demonstrating how developers can align incentives and create more resilient economic models. This could influence broader market sentiment toward GameFi and digital assets, particularly as projects seek to address issues like inflation and speculative behavior.

The broader institutional adoption of digital assets, including initiatives like State Street’s tokenized products and Old Glory Bank’s digital integration, further supports the long-term viability of such strategies. These developments suggest that structural changes to tokenomics are likely to play a key role in the future of blockchain-based economies.