The release of $215 million worth of AXS token by Axie Infinity could cause significant selling pressure. The game had a meteoric rise to fame last year as one of the first crypto-focused computer games.
Releasing Axie Infinity Token
Axie players earn cryptocurrency and non-fungible tokens through gameplay, which they can trade or use to level up their characters.
TokenUnlocks reports that 21.5 million tokens, or almost 8% of the total supply, will be released once the vesting period expires Oct. 24.
He predicted the unlock would take place on Oct 26 based on transaction block numbers, according to Sky Mavis’ chief operating officer Aleksander Larsen.
Early investors and insiders are usually required to hold their investments for a certain period of time, in part to prevent them from cashing out as new investors come in.
Upon expiration of the vesting period, investors can begin selling their holdings. During such times, tokens can sometimes be subject to steep selling pressure in digital asset markets.
The Distribution of Soon-to-be-unlocked AXS Token
TokenUnlocks reports that almost half of the AXS tokens that will soon be unlocked will go to developers ($57 million), advisers ($25 million) and early investors ($20 million). These holders, in theory, may choose to sell tokens and realize profits.
A total of 11 million tokens are earmarked for future staking rewards, play-to-earn rewards, and ecosystem funding, TokenUnlock shows. These tokens will not immediately enter circulation, Larsen says.
The blockchain gaming studio Sky Mavis, which developed Axie, has staked 11 million AXS and will stake the unlock of our token as well, Larsen informed CoinDesk.
“With the upcoming $AXS token unlock there is a lot of misinformation that should be clarified. First, tokens unlocked are not the same as tokens in circulation. According to the unlock schedule, there could be 151M in the market, but there are only 102M in circulation,” said Larsen.