The native token of the popular blockchain game Axie Infinity (AXS) has surged 123% over the past week, breaking a prolonged downtrend. The rally was ignited by developer Sky Mavis announcing a major overhaul of its in-game reward system, aimed at reviving the game's economy and curbing bot activity.
The key change, which took effect with the new season on January 21, replaces direct AXS token rewards with bAXS, a non-transferable token backed 1:1 by AXS. Players can use bAXS for in-game actions like breeding, ascending, evolving, and staking Axies, but cannot transfer it to other accounts initially. This mechanism is designed to reward genuine players while disincentivizing automated bot farming, which has plagued the ecosystem.
Analysts see the move as creating a potential supply shock. In 2025, Axie Infinity distributed approximately 10 million AXS tokens (worth $23.5 million at current prices) as player rewards. With the new system slowing new AXS emissions and AXS still being consumed for in-game actions, the net supply could decrease, supporting the token's price. Players can convert bAXS to tradable AXS for a fee, with lower fees for high-reputation players to encourage long-term engagement.
The rally in AXS has lifted sentiment across the broader GameFi sector. According to CoinGecko data, The Sandbox (SAND) posted weekly gains of 15.3%, while other gaming tokens like Decentraland (MANA) and Smooth Love Potion (SLP) also saw positive movement. This occurred as Bitcoin traded lower amid broader macroeconomic concerns, including a bond market crisis in Japan.
Experts are divided on whether this signals a sustained sector revival. Illia Otychenko, lead analyst at CEX.IO, attributed the moves to "local, project-specific catalysts" rather than a broad capital rotation. Bertie Wrench, founder of Bad Bikers, described the activity as "purely capital rotation and high-risk speculation." Both agree that a true GameFi recovery requires a fundamental increase in token utility and user demand, noting the sector saw a 75% decline in 2025 with significantly reduced funding.
