Authors
ABSTRACT
This study attempts to determine price formation and price symmetry of the Smooth Love Potion (SLP) cryptocurrency. SLP is earned through the Axie Infinity game, and is one of the first play-to-earn games. Using quantity theory of money (QTM) to establish the price formation model of the SLP, we use variables such as SLP velocity, stock and transaction volume, and SLP price. Results show that relationships of velocity and transaction volume to the SLP price negate hypothesized relationships based on QTM propositions and that the SLP stock does not affect its price. We use price symmetry model and showed that the SLP price exhibits positive asymmetric behavior. Price formation analysis was done under two price windows to check for consistency of results. Results indicated a mix of theoretically consistent and contrarian results, suggesting that cryptocurrency like the SLP may have a different theoretical fit based on QTM assumptions and hypotheses.
