Axie Infinity, (AXS), is the most popular play-to earn ecosystem in crypto. It has maintained this position since it was released. AXS, the native cryptocurrency of Axie Infinity, saw its value drop alongside all other digital assets since the beginning of the bear markets. The decline in AXS’s price is not over, however, as additional tokens will be put into circulation starting Monday, 24 Oct.
21.5 Million Tokens Are Coming
Axie Infinity, like many projects within the cryptocurrency space uses a vesting scheme where tokens cannot be locked at certain times. It is done in order to limit the supply and ensure that the cryptocurrency asset stays valuable.
On Monday, Axie Infinity’s most recent unlock will take place. More than 21 million tokens will be put in circulation. AXS’s current circulating supply is at 103 million and the token unlock will account for approximately 8% of the entire supply of AXS. Current prices indicate that the total unlocked token value is $185.3million.
The established allocation, which ranges between team and staking rewards, will be followed by all tokens that are unlocked Monday. 26,6% or 5.7million of the total value will be sent out to the team. The total amount is approximately $57million. Advisors, investors and others involved in the private sales round will each receive $45 millions.
AXS supplies to be locked at 88%| Source: Token Unlocks
About half the remaining token unlock will go towards the Axie Infinity ecosystem. These tokens will come in the form of play to win rewards and staking rewards.
Time To Get Out Of Axie Infinity?
Axie Infinity operates in the same way as any other asset. The ongoing cryptocurrency market has already caused the price to drop. A greater supply of tokens in the market will also not be beneficial to its value. Investors in the token are understandably concerned about this.
Source: AXSUSD on TradingView.com| Source: AXSUSD on TradingView.com
This is why Aleksander Leonard Larsen, founder and chief operating officer of Axie Infinity was so excited. TwitterLarsen clarified that unlocking does not necessarily mean that all tokens will be released into circulation. Larsen explained that unlocked tokens such as those from P2E and advisors are not going to be available immediately. But rather, “they follow a separate issuance schedule which is more flexible and can be tailored to user numbers.”
However, this does reduce the supply of tokens that could otherwise flood the market. There are tokens still available for private investors (worth $20 million), and they can dump them on the market at any time.
This expected supply has led to increased selling pressure for AXS. According to Coinmarketcap data, AXS has traded at $8.65 for the past seven days. This is a drop of more than 21% in just 7 days.
Featured image by CoinGeek. Chart from TradingView.com
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