Axie Infinity’s AXS token is soaring after its developer, Sky Mavis, announced major changes to how players earn rewards in the game.

The blockchain-based game, which lets players collect, breed, battle, and trade creatures called Axies, kicked off its new season on January 21 with a big difference: the valuable AXS tokens, which players can earn through the game, will no longer be tradable by default.

Instead, players will receive bAXS, a token backed one-to-one by AXS that can be used for Axie breeding, ascending, evolving, and staking, but cannot be transferred to other accounts — at least not initially.

The move aims to reward Axie Infinity’s real players while suppressing bot activity, the game’s developers said in a blog post detailing the change.

Since the changes were first announced by Axie Infinity co-founder Jeff Zirlin on January 14, the AXS token has rallied 123%, breaking a brutal months-long downtrend.

Boom and bust

Axie Infinity launched in 2018 and experienced explosive growth in mid 2021 after the game released the AXS token.

The ability to earn valuable tokens made the game very profitable to play. Many players in developing countries, such as the Philippines, made upwards of $600 a month playing five to eight hours a day.

But the situation was unsustainable.

As the number of new players flocking to the game dried up, the value of the tokens given out as rewards declined. This made it less viable for real players to earn a living through the game.

Since then, bots — automated programmes that play the game to earn the rewards — have taken over.

Axie’s developers are hopeful that the change to the AXS token rewards, coupled with a previous change to SLP, the game’s other valuable token, will breathe new life into the ailing game.

“These changes are designed to benefit real players,” the game’s developers said. “They remove incentives for the bot-heavy experience we see today and give us space to polish new products.”

Supply shock?

Investors are likely bullish on the change, as it will reduce the number of new AXS tokens entering the market. Axie Infinity distributed approximately 10 million AXS tokens worth $23.5 million at current prices as player rewards in 2025.

With AXS still being consumed when players breed, ascend, or evolve Axies, investors are hopeful the new situation will create a supply shock, driving prices higher.

To be sure, the new bAXS token can still be sold on the market. Players who receive it can choose to convert it into AXS for a fee.

High-reputation players pay lower fees, a move the game’s developers say will help prioritise long-term contributors while discouraging short-term “farm and dump” behaviour.

The value of the game’s tokens isn’t its only issue it’s grappling with, either.

One of the top priorities developers are tackling is the oversupply of the Axie creatures needed to play the game. They’ve hinted at potentially reducing the supply through aggressive burn mechanics.

“We believe restructuring emissions and addressing Axie oversupply are the only viable paths to meaningfully increasing the value and utility of every Axie,” the developers said.