Popular blockchain game Axie Infinity has announced major updates to its in-game token, Smooth Love Potion (SLP). Here's a simple breakdown of what's new and why it matters:

SLP Gets a Supply Cap

The total supply of SLP is now capped at 44 billion. In the game's lore, this decision follows the destruction of a key ingredient for brewing SLP, caused by a sudden winter frost. The current supply is around 41.4 billion. This cap is to control SLP's supply and prevent inflation.

Buyback & Stability Fund

For every 10 SLPs burned (used up in the game), 2 SLPs will be minted and added to a new fund. This fund starts with 60,000 USDC from Axie Infinity. It aims to keep the value steady by buying back the SLP if its value drops or selling it if it rises too much.

A 2% Deflation Target

Unlike typical currencies that aim for 2% inflation, SLP will target 2% deflation. The plan is for the SLP value to increase slightly over time. This approach is to create a consistent demand for the token and balance its availability.

SLP in Axie Infinity 

Note that SLP is the lifeblood of Axie Infinity. It's used for breeding Axies, the game's NFT characters. The supply and value of this token directly impact the game's economy. According to the lore, SLP speeds up the hatching of Axie eggs and is crucial for their population growth.

Implementing the New Policy 

Each month, Sky Mavis will check the inflation rate of SLP. If it's too high, they will use USDC to buy the token. If it's lower than expected, they will sell some SLPs. The team will adjust their actions based on the market and player feedback.

All in all, these changes aim to stabilize SLP's value and make the game's economy more sustainable. The team is committed to adjusting these policies based on data and community input.