Axie Infinity’s New DEX May Have Crashed SLP
GameFi

Axie Infinity’s New DEX May Have Crashed SLP

6 months ago

The new DEX is built on Axie’s custom Ethereum sidechain known as Ronin, which features low fees and snappy transactions while offering interoperability with Ethereum.

Axie Infinity’s New DEX May Have Crashed SLP
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Axie Infinity is the latest name to throw its hat into the DEX ring with the launch of Katana — a decentralized exchange built for the Axie ecosystem.

The new DEX is built on Axie’s custom Ethereum sidechain known as Ronin, which features low fees and snappy transactions while offering interoperability with Ethereum.

The DEX allows users to trustlessly trade the two tokens used in the Axie Infinity ecosystem, Smooth Love Potion (SLP) and Axie Infinity Shards (AXS) against both USD Coin (USDC) and Ronin Wrapped ETH (WETH).

Token holders can contribute their assets to one of Katana’s liquidity pools, allowing them to share a proportion of any transaction fees it generates.

Axie Infinity also announced the native token for the Ronin side chain. The token, which will trade under the ticker RON, will be used to “ensure that Ronin will always be a blockchain owned by our [Axie’s] community.”

The full details on the utility of the RON token are yet to be unveiled. But there’s a good chance it’ll be used for platform governance and Katana trading fees.

In true DEX fashion, Katana also offers a variety of liquidity pools, allowing liquidity providers to earn RON tokens by staking their LP tokens. A total of 10% of the RON token supply will be allocated to liquidity providers participating in the AXS/ETH and SLP/ETH pools (50% of this to each pool).

For a limited time, all Ronin users will also benefit from 100 free transactions per day.

Although many blockchain-powered games feature a decentralized marketplace or trading system, Axie Infinity is the first to build and deploy its own full-fledged decentralized exchange.

Since it launched less than a day ago, Katana has already notched up $644+ million in liquidity and $189 million in 24-hour trading volume (two-thirds of which stems from the SLP-WETH pool).

Despite making the following statement: “We anticipate that these rewards will create a whirlpool effect, sucking in AXS, SLP, ETH, and USDC to Katana,” the market has seemingly reacted unfavorably to the news, SLP has shed close to 20% of its value in the last day (one of its largest-ever single-day drops), whereas AXS is down more than 3%.

Given that Axie Infinity arguably started the play-to-earn (P2E) trend, it wouldn’t come as a surprise if more blockchain games deploy their own similar solutions in the near future.

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