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Announcement
Axie Infinity, a blockchain-based gaming phenomenon, is set to unlock ~15 million AXS tokens, valued at ~$70 million, on October 20th. This event accounts for roughly 11.5% of the current circulating supply of AXS, a digital asset integral to the Axie Infinity ecosystem.
AXS Token
Axie Infinity’s economic model is derived from its dual token model of AXS and SLP. These two tokens power in-game marketplaces for trading NFT assets, a vital part of Axie Infinity’s P2E approach.
NFTs, such as Axies and Land, within Axie Infinity, retain their own speculative values in addition to the value of the system’s base currency AXS. The economy aims to create value growth through the appreciation of these speculative assets through player retention and growth.
AXS token is the governance token of the Axie Infinity ecosystem. Launched in November 2020 as an ERC-20 token, AXS can be purchased, traded, or earned by playing Axie Infinity. The token allows holders to participate in key governance votes and influence how funds in the Axie Community Treasury are used.
AXS rewards are given to the top-ranking players after each season. The token can also be used to monetize digital property ownership within the game, enabling players to buy, sell, and trade resources they earn. So, the AXS token is the primary token powering incentives for the Axie Infinity economy.
Initial Launch, Supply Schedule, and Issuance
The Axie infinity project initiated the funding of the AXS token with a $1.5 million seed round in November 2019 at an average token value of $0.005. This was followed up by another private sale worth an additional $864k in May 2020 for $0.08 per AXS.
The AXS initial coin offering (ICO) took place in November 2020, where AXS tokens were sold at a price of $0.10 per unit, raising $2.9 million through token sales. This was the first public offering of AXS.
Axie Infinity underwent two additional fundraising rounds to raise capital, including its $7.5 million Series A round in May 2021 and its $150 million Series B funding round in October 2021 at a valuation of $3 billion. This final round was led by major venture giant Andreessen Horowitz.
AXS Distribution Breakdown
The unlocked AXS tokens will be allocated across various segments as follows:
- Team: 40.19%
- Staking Rewards: 22.67%
- Play to Earn: 22.34%
- Ecosystem Fund: 11.17%
- Advisors: 3.63%
The largest share belongs to the Team allocation, representing approximately ~17% of the total AXS supply. Up to this point, the Team allocation has already undergone several unlock events, accounting for ~60% of its total allocation, which equates to around 33.75 million AXS tokens. These unlocks occur every six months, with each release representing 10.12% of the Team allocation.
With only 115 million of the total 270 million AXS tokens in circulation, there is still a significant amount of dilution left to occur. Per the Axie Infinity whitepaper, dilution of AXS will continue until all coins have been dispersed 65 months removed from the ICO. Dilution of new tokens will be issued to a number of different channels, including:
- Ecosystem Fund
- Sky Mavis
- Advisors
- Play to Earn
- Staking Rewards
Conclusion
Axie Infinity's upcoming token unlock event is poised to release a substantial number of AXS tokens into circulation, impacting various segments within the ecosystem. While the theoretical calculation hints at a potential price drop of 10.32%, historical data and a reduction in unlocked tokens compared to previous events suggest a more tempered impact.
Investors and enthusiasts should closely monitor the situation, considering the nuances of past unlocks and the behavior of participants in response to these events. Ultimately, the long-term fundamentals and adoption of Axie Infinity should continue to shape the trajectory of AXS's value in the broader blockchain landscape.
