Axie Infinity Origin is just around the corner and soon will be released after getting a delay due to an impact from the recent Ronin Bridge hack. Players are excited for the release as the new mode will give additional use-cases for the game's currency and speculates that $SLP will have more scarcity and that will be shown through its price.
Now to the main concern, people or the players of Axie Infinity are once again having hopium that $SLP token will reach again over $0.20 like it did during its 2021 bull run where the price almost reaches $0.50. At that time, Axie Infinity game had a lot of demands as the trend for NFTs were starting to build up and minted $SLP tokens are still less compared to its demand (e.g. breeding).
Axie Infinity gained a lot of attentions and onboarded investors and million of players through scholarship program around the globe. And this is how the problem for the reward token $SLP started as its supply keeps on increasing from infinite minting in the game that overtakes its in-game demands causing to slowly drop on its price and losing its value as players need to take profit from the game.
Why $SLP Will Not Easily Reach It's 2021 High.
Or worse... It will never reach that price level again ($0.46).
Source: Binance
The native token of Axie Infinity $AXS has a fixed supply - no more tokens can be added in circulation. While the reward token $SLP has an infinite supply and can be infinitely obtain from playing the game.
$AXS token can be more scarced and can have more demands because of its tokenomics while $SLP can only steadily lose its value because its use-cases are not enough to cover the supply being minted everyday.
According to Coinmarketcap and Binance Exchange, the price of $SLP right now (04/12/2022) is just over $0.017 with a market cap of $93 million. Currently, the circulating supply of $SLP is almost 5.4 billion tokens and this will keep on increasing if no other solutions can be found to fight the inflation.
Axie Infinity has a burning mechanism for $SLPs but the plan was not enough to save it from inflation. It is barely holding on from players breeding in the game to sustain and fight inflation.
Can $SLP reach $0.50?
The best answer for that is very unlikely. Why? Here is a calculation;
Let's say that the supply of $SLP will not change- no added supply and no burning of tokens.
Formula: Price x Circulating supply = Market cap.
Price = $0.50
Circulating supply = 5.4 billion tokens
Market cap = ?
$0.50 x 5.4 billion tokens = 2,700,000,000 or $2.7 billion dollars in market cap.
$SLP will need to have a market valuation of $2.7 billion dollars to reach $0.50 - take note, if there is no added and burnt tokens.
If this happens, $SLP will take over top projects in the market cap such as exchange tokens like $KCS, $HT and $WAVES. It will be almost even in market cap with $AXS token that is just over $2.9 billion. Reaching $0.50 price for $SLP would mean overtaking real projects with real-world use cases and market makers doesn't see any reasons for $SLP to reach that valuation.
As a reward token that can be obtain with no limitations, $SLP will just continue to suffer and experience hyperinflation in the future if the game behind it can't find a sustainable solution. The infinite minting of $SLP tokens in the game is currently the biggest problem in the economy of Axie Infinity as it lacks use-cases and not enough burning mechanisms.
Final Words.
This is my personal view and speculations about Axie Infinity and $SLP token. I deliver this article base on my observation, knowledge and understanding about the game and of course, for the better, I want to be wrong about this. However, metrics will speak for itself. With the release of Axie Infinity Origin, hopefully it will fix the current problem/s of the games in their economy. There will always be chance for $SLP to regain its past highs and it will be up only to the developers of the game on how they should act on it.
Hanep may computation pang naganap haha. Basta ako walang slp. Pero nagbabalak akong mag buy nyan noon ee hmmm