Fear has gripped the Axie infinity community, as it recently emerged that a whale holds over half of all SLP tokens. The Smooth Love Potion (SLP) tokens are the in-game currency of the Axie Infinity platform. According to recent reports, the whale holds over 22 billion SLP tokens.
Details of the SLP Horde
According to a report by Techno Blender, the whale sent billions of SLP tokens from a Ronin Binance wallet into an anonymous wallet. One player interviewed by CoinTelegraph stated that the short amount of time in which the whale had garnered the tokens was worrying.
Benko, an Axie Infinity player, said that one person holding so much SLP gave them huge control over the game’s economy. He said it was especially concerning since minting tokens was especially difficult in Axie Infinity.
On Axie Infinity, the average player can produce 10 to 70 SLP daily, depending on how good they are at the game. So, according to Benko, a wallet holding 22 billion SLP could drive prices down when they should be going up.
Who Owns the Funds?
The Techno Blender report confirmed that Sky Mavis, the company behind Axie Infinity, did not control the wallet. It was also noted that the wallet was not part of the wallet used to distribute SLP tokens to players.
The COO, and co-founder of Sky Mavis, Aleksander Larson, confirmed this fact. In a conversation with CoinTelegraph, he stated that they did not control any of the tokens in the wallet. Instead, Larson noted that players had created all tokens in circulation.
Gabby Dizon, a co-founder of Yield Guild Games, a major DAO for Axie Infinity players, said that TGG was not behind the wallet. According to Dizon, Binance might be using the wallet to store liquidity. However, Benko does not think Binance owns the wallet. In his opinion, Binance had an official wallet, and this was not that wallet.
What would be the impact of the Tokens?
Thus far, no one knows what the wallet owner intends to do with 22 billion SLP. These tokens are used in-game to breed Axies. Therefore, the only way to mint SLP is in the Axie infinity Metaverse. However, the tokens have value outside the Axie Infinity Metaverse and are not traded on popular crypto exchanges.
A mass selloff of the SLP tokens would deeply affect the value of the entire Axie Infinity ecosystem. However, it is unlikely to collapse. This is because there is no fixed supply of SLP tokens. Besides that, Sky Mavis still maintains control over the cost of breeding Axies. As such, they could change the rates.
It is extremely improbable that the SLP tokens could be utilized in such a fashion. To begin, the value of the tokens would rapidly decrease if the holder tried to sell off all of them, which would result in a reduction in his net worth. As a result, it is highly likely that the owner will keep holding onto the tokens even as the ecosystem continues to develop.