Unchained Podcast: How YGG Scholars Cash Out + Axie Infinity’s Declining SLP Price
In this podcast, Gabby Dizon speaks with Laura Shin about how Yield Guild Games (YGG) is trying to address the problem that players face when cashing out and the state of SLP.
This is a continuation of the previously published excerpt where Gabby and Laura discuss the YGG token, YGG’s NFTs, and their utility.
The Unchained Podcast with Laura Shin invites industry experts that are building the decentralized internet to unravel what has led to the creation of this technology, while also sparking conversation on topics such as regulation, security and privacy.
A former senior editor at Forbes, Laura Shin is one of the earliest mainstream journalists to cover crypto full-time. Alongside Unchained, Laura also hosts the Unconfirmed podcast, a 20-minute show that offers insight into how the influential figures in crypto are reacting to the week’s top headlines.
In this episode of Unchained, Laura talks to YGG co-founder Gabby Dizon about how to tackle problems that scholars face when withdrawing in-game earnings from Axie Infinity. They also discuss the declining price of SLP.
The following is an excerpt from the discussion. Listen to the full episode here.
How Yield Guild Games Is Revolutionizing the Future of Work and Investment – Unchained
Laura (12:20): People are earning, as you mentioned, things like Smooth Love Potion in Axie Infinity. How easy is it for them to cash out, especially if they are in these more developing countries?
Gabby (12:34): Cashing out is not super easy. I think the easiest way to do that is via the crypto exchanges that support tokens like SLP. So, for example, Binance listed game tokens like SLP, so it’s relatively easier to cash out. But now we’re actually working with partners to make it easy for you to use the tokens that you earned and use it to pay for real-world financial services. Like, we have a partner that comes in where you can use the SLP you earned and pay for your phone bill, for example, and that’s just incredibly amazing to see.
Laura (13:10): Is that XLD?
Gabby (13:13): Yes.
Laura (13:15): And can you talk a little bit more about, like, how are they making that work?
Gabby (13:20): So, the magic there is where crypto meets fintech. And in fintech, you can apply for different kinds of licenses, which vary from country to country, but if you have the proper licenses, it is just similar to making a bill payment for your bank.
They kind of abstract away the exchange from SLP to Philippine pesos or US dollars and then just use that to pay for the bill on your behalf. When it works, it’s just amazing, where you think of yourself as playing a game. You’re earning tokens, and then I’m using that token to pay for phone bills or get airtime load. That’s, I think, where crypto has a real use case that helps people in the real world.
Laura (14:06): And which countries are they in right now? Which countries do you have these services to make it easy for people to cash out?
Gabby (14:17): It's in beta right now. So, it’s in the Philippines, but we’re going to roll it out to over a hundred countries.
Laura (14:23): So, I’m sure you’re aware — and I know, here we are, just talking about this one game, Axie Infinity, but obviously, it’s kind of the main one, or has the most traction — but as I’m sure you’re aware, the value of SLP has been dropping. Earlier this year, it was US$0.35, and now it’s closer to US$0.05. Why do you think that has happened?
Gabby (14:49): SLP is different from other tokens in that it’s an infinite-supply reward token. It’s not a capped token. It’s meant for people to earn value in-game, and then when you breed Axies, you burn SLP. So, that’s how the tokenomics works. It’s important for a game like Axie to have some sort of reward token that has inflation, so that new people can come in and start earning value. Unfortunately, when Axie started really growing mid this year ,and when everything started exploding, I think speculation on the exchanges got ahead of where the price of SLP was or where the good range was.
It went to really high levels where, for example, at US$0.30, people were earning over maybe US$2,000 a month playing the game. And it was probably unsustainable, because it was driven by speculation, and what you want for a game reward token is to be driven more by internal game economy rather than by external forces. So, I guess that’s one thing that all game designers have to think about. How do you mitigate the volatile nature of cryptocurrency? Because people can and will speculate on your token, and that might end up hurting the game economy that you have in the long run.
Laura (16:21): And are there any thoughts on how to prevent that from happening? Because you’re right. If these tokens are basically trading on these markets that are open 24/7/365, then I could imagine it might be difficult.
Gabby (16:36): Yeah, it’s kind of a tough game design question. I think this is where the game economy designers come in, where you have to design economy mechanics where you limit the volatility of the token, whether tokens are redeemable and the developer fixes them at a certain capped price. Or maybe you’re giving out some form of a stablecoin, or something that has a low inflation rate. There are several ways to do this, but it also depends a lot on the context of the game.
One of the advantages that the game developer has is that they almost act like a central bank, where they can change the utility of the token itself. For example, this week, Sky Mavis, the developers of Axie, upped the breeding cost in SLP tokens and dropped it in AXS tokens. Which means that it now costs a lot more SLP to breed new Axies. And that means that there’ll be a higher price support as more SLP gets burned when new Axies are created.
Listen to the full episode on Spotify.
--
Follow the Unchained Podcast on Spotify to listen to all of their upcoming episodes.
Check out Gabby and Laura’s Twitter to know more about their projects.
Join the YGG Discord or follow us on Twitter for future updates.