- Axie Infinity is one of the biggest players in the blockchain gaming industry.
- The network will unlock millions of crypto tokens on Friday.
- Token unlocks lead to more dilution of existing investors.
Axie infinity will be in the spotlight in the coming days as investors focus on the upcoming big token unlock. The AXS token, once a popular choice among investors, has crashed hard in the past few days. It was trading at $4 on Thursday morning, lower than the year-to-date high of $13.25.
One of the top crypto news of the coming days will be Axie Infinity’s token unlock that will release millions of tokens to the market. According to Token Unlocks, the platform will release over 11 million tokens worth over $61 million. These tokens will represent over 11% of the market cap.
The tokens will go to the team, staking rewards, advisors, play to earn, and ecosystem fund. As with many token unlocks, most of the tokens will go to the company’s insiders. Data shows that over 67% of all AXS tokens have already been unlocked.
Token unlocks are usually bearish since they lead to more dilution to the existing holders since they bring more tokens to the market. In most cases, many cryptocurrency companies compensate the tokens unlock with burning, a mechanism that removes tokens from the market.
Axie Infinity’s token unlock comes at a time when its gaming platform is not doing well. Data compiled by DappRadar shows that the Unique Active Wallets (UAW) in the ecosystem dropped by more than 22% in the past 30 days to 56.22k. These numbers are much better than those of Sandbox and Decentraland, which have less than 10k per month.
Additional data shows that 80% of the active wallets in the past 30 days were the power users. These ones were followed by everyday users, forgotten accounts, and low-value users. The only positive Axie Infinity metric, as shown below, is the rising number of transactions in the ecosystem.
At its peak, Axie Infinity was serving millions of players who were excited about the AXS and Smooth Love Potion (SLP) rewards. People who won these rewards back then have seen the value of their holdings plummet since the two tokens are down by over 80% from their peak.
Axie Infinity has also dropped as demand for Non-Fungible Tokens (NFT) retreat. Recent data shows that the volume in the broader NFT market has dipped by double digits from its peak level.
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