What ends up happening is the smooth love potion becomes used as transactional currency in Philippines besides being a game currency to purchase Axies. This is not going to be what the government wants and who knows what can happen next, but as you see this automatically gives people a way to transact digitally by using the underlying infrastructure without a fintech company

however price of smooth love potion has been on a downtrend according to the chart https://www.coingecko.com/en/coins/smooth-love-potion

the hype is over, and players are mainly selling every tokens they earned whether from the game or through transaction

I have not played Axie Infinity, but to the best of my knowledge that is the only use of Smooth Love Potions.