Crypto winter has also hit the popular blockchain-based online video game sector in recent months. On one hand, the user numbers of the most popular platform, Axie Infinity (AXS), have dropped massively.
On the other hand, the AXS price has not been able to escape the broader market sentiment and has fallen from around $100 at the start of the year to $10.53 at the time of writing.
In the short term, the AXS price could suffer even more pain. This is because on October 25, a total of 21,543,000 AXS tokens worth around $233 million will be unlocked. This is a whopping 7.979% of all AXS tokens.
Advisors will unlock 2,501,750 AXS worth around $27M and early investors will unlock 1,997,500 AXS worth around $21.6M.
On top of that, there are 5,737,500 AXS which were awarded to the Axie team, as well as additional AXS distributed in the form of staking rewards, play-to-earn, and as part of the ecosystem fund.
Notably, advisors and private sale AXS tokens have been unlocked four times in the past, on November 4, 2020, May 3, 2021, October 30, 2021, and April 28, 2022. In each of these unlockings, the AXS price dropped, as shown in the chart below.
Upon unlocking, advisor and private sale participants will put selling pressure of 4,484,668 AXS valued at $48.5 million to the market. With current trading volume of around $56 million over the last 24 hours, an impact on price seems more than likely.
Add to that the fact that Axie Infinity raised $864,000 in its private sale of 10,800,000 AXS in mid-2020. This equates to a private sale price of just $0.08.
Even if investors in the private sale unload for $10, they still make a whopping 125x. Thus, a price dump after the unlocking is very likely.
Axie Infinity Remains Most Popular Metaverse Game Despite User Downturn
Beyond the potential dump by early investors, AXS investors may also want to ponder another issue. While Axie Infinity remains the most popular blockchain-based online video game, user numbers have dropped massively.
The chart below shows that the game offers a massive ROI of over 103x from their ecosystem, followed by The Sandbox (85.3x) and Decentraland (25x).
Top 10 #Metaverse Projects by Current ROI
— CryptoRank Platform (@CryptoRank_io) October 13, 2022
Meanwhile, Axie Infinity has seen a significant loss of players in recent months.
With around 701,000 average monthly unique players in the last 30 days, the game’s popularity dropped by 21.3% compared to January 2021, when the platform boasted around 850,000 average monthly players.
The massive drop is even more evident when looking at user numbers from the end of January this year. At that time, Axie Infinity had an average player base of 2.78 million, close to four times the current number.
The recent trend could be related to the ongoing slowdown of the crypto market. At the time of writing, AXS was trading below its 200-day moving average, while the RSI at 31 is slowly approaching oversold territory.