SLP saw a hike in burning rate, but will that really be enough

SLPUSDT 2022 07 17 07 30 15

On 14 July, the leading play-to-earn platform, Axie Infinity, announced the launch of its campaign, “Lunacian Summer.” According to the announcement, the campaign, which will span 50 days, will allow gamers to breed limited-edition summer skins for their game characters.

Following the campaign launch, for the first time since August 2021, the burn rate for Axie’s Smooth Love Potion (SLP) tokens spiked. A total of 41,541,750 SLP tokens have been burned since the campaign’s launch.

Similar campaigns have led to an upward rally in the prices of Axie Infinity’s native tokens, AXS and SLP, in the past. With the ongoing campaign coupled with deflationary activity, how has the SLP token reacted over the last few days?

Smooth sailing to the moon

According to data from CoinMarketCap, when the campaign commenced, the price per SLP stood at $0.0037. An uptick in gamer activity prompted by the campaign led to an upward price rally, forcing the alt to hit a high of $0.0040 by 16 July.

Exchanging hands at $0.003994 at the time of press, the price appreciated by 7% in three days. Within that period, the crypto’s market capitalization saw a slight uptick from $159 million to $171 million.  

On the 24-hour chart, SLP posted a 5% hike in price. Trading volume was, however, down by 0.22%. A steady accumulation of SLP tokens has been underway over the last 24 hours. On an upward curve at 49.40, the Relative Strength Index (RSI) was spotted attempting to cross the 50 neutral mark.

Inching closer to the overbought region, the Money Flow Index (MFI) marked its territory at 61.64. 

Source: TradingView

Investors remain bullish, although…

According to data from Santiment, a network-wide accumulation of SLP tokens transpired over the last three days. With the Mean Coin Age on a rising slope, investors have taken to filling their bags with SLPs since the commencement of the campaign. At press time, this metric stood at 127.

Smooth Love Potion SLP 07.47.49 17 Jul 2022

Source: Santiment

However, despite this accumulation trend, on a day-to-day basis, the on-chain performance of SLP has declined since 14 July. For example, at 88 at the time of writing, the number of unique addresses that transacted SLP tokens within the period under review logged a 24% decline.

Similarly, the aggregate amount of SLP tokens across all completed transactions since 14 July dropped by 80%.

Smooth Love Potion SLP 07.46.54 17 Jul 2022

Source: Santiment

Interestingly, despite the campaign, SLP embarked on a decline post 14 July. At 0.042% at the time of press, the Social Dominance metric declined by 61% in three days.

The Social Volume of the altcoin logged a 77% decline within the same time period.

Smooth Love Potion SLP 07.52.19 17 Jul 2022

Source: Santiment

Down 99% from its all-time high, SLP might require more than just skin breeding campaigns and deflationary tactics.