Nikolas Sargeant
The price of Axie Infinity (AXS) dropped to a low of $4.20, the lowest in two years. This decline was due to a decrease in investor interest in the GameFi sector in early September. However, on-chain indicators now show positive signs for a potential recovery in the AXS GameFi ecosystem.
Gamers in the Axie Infinity ecosystem have experienced significant profits during the recent crypto market rally. The emerging GameFi sector has unexpectedly become a winner, with other major Play-2-Earn (P2E) platforms like PlanetIX also seeing a surge in player numbers. Now, the question is whether these historic price gains will continue or if gamers will choose to cash out early.
Players Flock Back To The Axie Ecosystem
The price of Axie Infinity has risen by 43% in the last ten days. However, this increase cannot be solely attributed to the overall crypto market rally. On-chain indicators suggest that the GameFi space had attracted active gamers even before the price breakout occurred last week.
The number of daily active addresses on the Axie Infinity gaming network has increased since mid-October. The active addresses metric tracks the daily user activity by counting the number of unique wallets that complete valid network transactions. When a blockchain network experiences a sustained increase in active user addresses, it is typically seen as a positive signal.
Over the past two weeks, there has been a consistent increase in the number of users using transactions and utilizing the products and services on the Axie Infinity gaming network. This has led to a 180% growth in active users from October 15 to October 30, which has resulted in a 43% recovery in the price of AXS. It is worth noting that the last time AXS had 484 active addresses was on July 21, when prices were above $6. This indicates that the current network activity of AXS can overcome the $6 price resistance.
What’s Next For Axie And GameFi?
Axie Infinity, like other GameFi and Play-2-Earn projects, uses a separate token called Smooth Love Potion (SLP) for trading in-game assets. Recently, SLP token holders have seen higher profits compared to AXS' price gains of 43%. This indicates a resurgence in the GameFi industry.
The MVRV-30 ratio is a financial indicator for recent SLP holders. According to the chart, their unrealized profits have reached 53%, the highest since February 2022. This increase suggests that Axie Infinity gamers hold onto their assets instead of selling them for profit. They might be planning to use the tokens for valuable in-game transactions or to earn even higher profits in the future. This could have a positive impact on the price of Axie Infinity and its overall ecosystem. The rise in SLP price and gamers' profits indicate that the GameFi comeback is driven by genuine gaming activity and profitable trading of in-game assets rather than speculative trends in the crypto market.
The industry has promise, but there is still a lot of progress to be made. A universal digital identifier could be the solution. It would not only help GameFi gain traction but also bridge the gap between Web2 and Web3 gaming projects. By simplifying the process of claiming rewards and enabling cross-game interoperability, mass adoption could skyrocket. To achieve this, a universal identifier must be created for GameFi's increasing prominence and success.
GameFi and universal digital identifiers are driving changes in the gaming industry. These changes could lead to a new era of blockchain gaming, with the industry becoming a serious player in crypto adoption. The industry is moving away from hype and towards mass adoption.
