The SLP price fell dramatically to $0.0211 in May due to an influx of new players. While the price of SLP isn’t a wrong digital currency, it’s worth questioning its value as a digital asset, significantly since its market cap has plummeted from its peak. While SLP may continue to rise, it is unlikely to be a solid investment going forward. This article will discuss a few of the factors that may contribute to the falling price of SLP.
SLP cryptocurrency was the first digital currency to be issued in the Philippines and has seen an enormous surge in popularity since its launch in July 2021. The corresponding token prices rose as new players joined the game and the demand for Axies soared. Gaming guilds began renting out their Axies to players who could not afford them. The SLP token was also sold at an exponential rate as more players bought it and resold it for cash.
While Sky Mavis and other players have touted the income potential of Axie Infinity, the economy in the game is looking increasingly unstable. Despite the inflated earnings potential of the game, SLP prices have fallen sharply since mid-July and are currently down 85% from $0.40 to $0.06 today. The decline in SLP prices is primarily due to a fundamental problem with the P2E mode.
As a result, the Smooth Love Potion coin price may recover a significant portion of its value following a recent hack. In the long term, Smooth Love Potion is forecast to grow from $0.007 at the beginning of 2022 to $0.022 by 2025 and $0.15 in 2030. However, this is far from a sure thing. While Smooth Love Potion remains a promising coin, cryptocurrency markets remain volatile and analysts may make errors. The only way to predict the market movement is to look for technical indicators.
Uncapped Token Supply
Two leading causes of the SLP price drop are the overpopulation of Axies and the capped token supply. As of September, there are roughly 3 Axies for every holder. However, that number has since spiked back up to 3.5, indicating an oversupply of Axies about demand. This isn’t a healthy situation, but the solution is simple: sink Axies!
To solve the SLP price deficiency and directive steps to reduce the oversupply. The game is now facing a shortage of SLP to solve the SLP price drop, which will make players grind more to earn equivalent amounts as they did before the capped token supply was introduced. This will negatively affect in-game income and retention of players.
Axie Infinity has implemented an in-game reward system to counter this shortage to cap the SLP supply at 56 percent. This will make the SLP tokens even rarer, making it attractive to invest them the opportunity for both new and experienced rs. While this will cause the price to fall in the short term, it should be noted that the supply was only capped in 2021.
As of July 1, several developers have already realized that the SLP price has fallen due to the capped token supply. They plan to balance the ecosystem with a new system that will make SLP even more valuable for players. It may have been a mistake to use the Energy system to limit the SLP earnouts in the PvE Adventure mode or to tweak the PvP matchmaking to combat botting. These changes may have caused SLP to drop dramatically, but it is unlikely that the developers will change their minds about this shortly.
Cryptocurrency Market Crash
A combination of factors is likely to have led to will likely lead. Although cryptocurrency is meant to be digital cash, it has become a speculative investment. Inherently wasteful, it is volatile and resource-intensive. A recent collapse in the price of Bitcoin triggered a widespread sell-off. Some are calling for regulation. A major industry player, TerraUSD, is facing severe problems because of the crash.
The biggest winners and losers of the crypto market crash have been the stablecoins. Tether and USD Coin, for example, have risen to become the third and fourth largest cryptocurrencies, respectively. This is because their value is backed by stable assets, short-term, high-rated commercial bonds, and cash, while Tether is backed by U.S. government debt. Moreover, these two assets have liquid cash readily available to cover withdrawals.
While bitcoin dominated the market in 2018, other cryptocurrencies followed. Some market watchers believed that bitcoin was in a bubble. But the recent crypto market crash was simply part of the bubble popping. After all, the last year’s hype cycle was so overwhelming that the market was already saturated. Consequently, Pawel Kuskowski, CEO of Coinfirm, a company that provides cryptocurrency compliance services, has argued that this has reached a climax.
While governments try to keep the crypto market reregulated, the crypto market is punished. Efforts must be globally coordinated and far-reaching to stem the growing climate contagion. The Bitcoin market crash proves that cryptocurrency is not a reliable means of exchange or store of value. It has caused more pain for the average user than profit. Furthermore, governments have pledged to clamp down on “toxic” financial instruments such as Bitcoin and cryptocurrency. Ultimately, this will help all of us.
Read More: Will the Crypto Market Continue to Crash in 2022?
SkyMavis Fixes To Increase Demand For SLP
AXIE Infinity users are concerned that the SLP price may have dropped too low, as it was nearing $40 cents in July. However, it is currently trading at one cent, indicating a 75% drop in value since July. This sudden drop has made players press Sky Mavis to reduce the price. After all, most players earn less than $60 a month from playing the game, so the company is trying to find a way to keep the prices under control.
In order to address the situation, Sky Mavis has changed the breeding costs for SLP in Axie Infinity. As a result, players now have to pay 3 times more SLP tokens to breed just one NFT character. However, the increase in the breeding fee does not affect the actual demand for SLP. This change has the opposite effect. While the SLP prices have been lowered, the number of Axie buyers has increased.
Despite the increasing demand for SLP, the issue of SLP prices has not been resolved yet. Sky Mavis has admitted that the low demand for SLP has been a concern for the players, and plans to address the issue. In addition, they are working on introducing more features to the game economy. In the mean time, we can expect a new update in the next few days. It is important to note that the game economy has a long way to go.
While SLP is a valuable currency in the game, its price may skyrocket over time, ruining the game. The developers have addressed this problem by making fixes to lower the supply of SLP and increase the demand for it. However, most of the fixes have targeted the supply side of the equation.