Thank you very much for your continued attention. Since I discovered the XAI project and participated in the Odyssey plan with everyone, building nodes has been 5 months. During this time, we have witnessed XAI drop from $1.2 at its launch on Binance to $0.8 now. Although the price has fluctuated, investors in the Chinese community have still received considerable returns.
Recently, I have seen many discussions and information sharing about XAI on Twitter. Although these contents are well written, I found that they did not delve deeply into the core logic of the XAI project, and this understanding seems insufficient. Therefore, I would like to provide some analysis here, hoping to help everyone better understand the XAI project.
The content of this article may be relatively long, but I have tried to explain various aspects of XAI in the most direct and substantial way. The XAI team has made a lot of efforts to become a leader in the gaming field, which are essential for any project aspiring to the top of this field. If you are an investor and hold a sense of responsibility towards your investments, I believe you will find reading this article very worthwhile. It contains not only an in-depth analysis of the XAI project but also a detailed outlook on its future potential.
1. How much can the price of XAI reach?
A question that many people are concerned about is how much the price of XAI can rise. Based on my analysis, I personally predict:
Short-term price prediction (January-February 2024): $2 to $4.
Medium-term price prediction (March-December 2024): $4 to $10.
Long-term price: (2025 - 2030): This will depend on the development status of the XAI gaming ecosystem.
You may be curious why I make such predictions? This is precisely the focus of this article. I will elaborate on my viewpoints and analytical basis in the following content.
2. What is the XAI project doing?
We know that the XAI project is a gaming public chain, and many game developers will deploy games on XAI. Its development goal is to bring millions of traditional Web2 gamers into Web3 gaming.
Core logic: The funds from the XAI foundation will be used to sign contracts with games and hold shares in games, requiring games to airdrop to KEY holders, and the dividends from game profits will be used to buy back XAI and continue signing games, creating a cycle.
2.1 The current development situation of XAI
Technical support
It is well known that the technical support behind the XAI project comes from the ARB development team under Offchainlab. Recently, the Orbit L3 technology launched by the ARB project has shone brightly, creating a new situation. I won't go into details about Orbit L3 here. It is worth mentioning that XAI is the only L3 chain independently developed and maintained by the ARB team, which undoubtedly makes it a benchmark in the industry.
The ARB team constantly innovates, and all the latest technologies beneficial to game development will be rapidly integrated into XAI, ensuring that XAI remains at the forefront of the industry in terms of technology. This continuous technological innovation and excellent maintenance provide a solid guarantee for the stability and foresight of XAI, and bring lasting confidence to its users and investors.
Game ecosystem
Unlike other gaming chain projects, the XAI project established close partnerships with the gaming industry at the very beginning of its launch. This is a significant advantage: in many cases, other gaming chain projects need to start negotiating partnerships with game developers only after the chain is built, whereas XAI had already established many important partnerships before the project's launch.
These partners include but are not limited to Ex Populus, Thirdweb, Paima Studios, and one of the world's largest esports clubs—Team Secret. Such a partnership lineup not only showcases the strength of XAI but also indicates its vast potential market.
This year, XAI has clearly stated it will launch multiple AAA-level games. These include Final Form (whose 20,000 cards were sold out in 2021), LAMO (a chain-modified game with many players on Steam), and Crypto Unicorns (this game has switched from the Hoofie platform to the XAI platform without hesitation). The addition of these games not only proves the attractiveness of XAI but also brings substantial content and player bases to the platform.
This strategy of establishing partnerships in advance provides XAI with a solid starting point, allowing it to stand out in the fiercely competitive gaming chain market.
Huge funding from the Arbitrum Foundation and community
The Arbitrum Game Catalyst Program (GCP) is a revolutionary model aimed at rapidly enhancing Arbitrum's support for game developers, thereby accelerating innovation and growth in the gaming industry. This forward-looking plan not only strategically invests funds and resources into carefully selected experts but also aims to expedite the landing and market promotion of top game developers.
Through XAI's active participation, the GCP plan aims to stimulate the vigorous development of the gaming ecosystem. Surprisingly, the plan proposes to invest 100 million to 200 million ARB tokens, which, based on the current ARB token price of $2, amounts to a huge investment of $200 million to $400 million to incentivize the rise of the Arbitrum gaming ecosystem. XAI plays a crucial role in this flourishing gaming ecosystem, being akin to the darling of the gaming ecosystem.
This aggressive and visionary plan not only demonstrates Arbitrum's commitment and confidence in the gaming industry but also announces its leadership in promoting the integration of blockchain technology and gaming to the world. For game developers seeking breakthroughs and innovations, the GCP plan is not only an accelerator but also a new era's launch point filled with immense hopes and infinite possibilities.
You can refer to this article for specific details: Arbitrum and Web3 Games: The XAI Project is a choice that can change your life trajectory
Sales situation of sentinel nodes
In the XAI ecosystem, sentinel nodes play a crucial role. They are key elements in achieving decentralization within the ARB L3 solution. As of January 22, 2024, 33,360 sentinel nodes have been successfully sold, raising a total of 11,048.55 ETH. These nodes are operated by 6,070 wallet holders certified through KYC (real-name authentication), which greatly enhances the security of the XAI network.
Furthermore, it is worth mentioning that the sale of sentinel nodes is still ongoing. This not only indicates the market's high trust and interest in the XAI project but also further strengthens the decentralization and security of the network. With more nodes joining, the network structure of XAI will become more robust, providing its users and investors with a safer and more reliable blockchain environment.
The successful sale and continuous growth of sentinel nodes are undoubtedly strong evidence of the healthy development of the XAI project and a positive outlook for its future prospects.
Influence in the crypto world
In fact, this point hardly needs much elaboration. Since the XAI project was launched on Binance Launchpad, it has become a well-known project in the crypto sphere. As of this article, it is the first L3 chain directly supported by Binance for trading and withdrawal, which is unprecedented. Therefore, almost everyone paying attention to the digital currency field knows about XAI, which itself proves its significant influence and attention in the market.
It is particularly noteworthy that the XAI foundation pays great attention to the community. They always value the support of community members who back the XAI project and have repeatedly emphasized that without the support of the community, XAI will accomplish nothing. In the early stage of the Sentry Node sales, some community members unfortunately became victims of phishing attacks, losing a total of hundreds of ETH. Although these phishing incidents are not the responsibility of the XAI project itself, the XAI foundation decided to gift sentinel nodes to these affected community members. See: Xai Foundation: No one can harm any Xai community member
This initiative not only reflects the XAI foundation's deep concern for community members but also demonstrates their sense of responsibility towards community contributors. Through such actions, the XAI foundation proves that they not only value the contributions of community members but are also willing to provide support and assistance during difficult times. This sincere care and response to the community undoubtedly enhance the trust and loyalty of the community towards the XAI project.
Supporting evidence
The highly summarized supporting evidence for the above content can be found in the information I shared at Binance Square:
Gaming public chain Xai: Binance Square database
2.2 Is it likely that XAI can realize its vision?
We can talk about a lot, but ultimately, the key question is: how likely is it that the XAI project will succeed? Honestly, no one can predict accurately. However, if we look at it from another angle, in the crypto world, it is rare for a project to achieve technical guarantees at the startup stage, establish a complete gaming ecosystem, successfully complete node sales, and build strong influence in the crypto space. It can even be said that in the new round of gaming chain competition, the only project that has achieved such accomplishments is XAI.
As a leader in this sector, XAI's first-mover advantage is highly decisive. This not only demonstrates the strength of the XAI team and the potential of the project but also indicates that XAI has a clear lead in the fierce market competition.
3. What is the logic behind XAI having at least 10 times growth potential?
The content of the XAI project is indeed rich and complex. If you have been closely following this project, you may have already been able to draw a detailed mind map and analyze it to conclude that the price of XAI still has the potential to grow by up to 10 times. Below is a mind map generated by me using artificial intelligence technology, based on all available information. Of course, I will further delve into and layer the analysis to clearly explain the logic and reasons behind it.
3.1 Players need to purchase a large amount of XAI
Assuming we discuss the 'current development situation of XAI'. We can reasonably speculate that XAI is making significant progress towards its grand goal of 'transferring millions of traditional Web2 gamers to Web3 gaming'. If this trend continues, we will see more and more gamers starting to experience games based on the XAI platform. With the increase in the number of players, there will be a large number of buy orders for XAI tokens, using Final Form as an example.
Final Form Game Introduction
Final Form is the first game developed by Ex Populus to be deployed on the Xai blockchain and released by the Xai foundation. In Final Form, players frequently create different battle decks based on the cards they own to automatically battle other players, combining Rogue-Lite game mechanics. Players will use free limited-edition cards, Reaver cards, mutates, and relics to build increasingly powerful battle decks. The best players will gain an advantage in automated battles and receive rewards, which will accelerate the transformation of their limited edition cards from normal rarity to legendary rarity, and as players 'burn' cards for evolution, the total supply of cards will gradually decrease. As the supply of cards decreases and rarity increases, card collectors and traders will find that their cards become more important and popular. These cards are all made in collaboration with renowned artists, celebrities, and athletes, including Oscar-nominated Calabash and former heavyweight champion Tyson (with more partners to come in the future). Collectors who own legendary cards will join the Vanguard League and qualify for special rewards.
Reasons for a large number of buy orders for XAI
Final Form is a game that players love very much; it not only has strong gameplay but also does an excellent job in marketing and endorsements. So far, over 20,000 cards have been sold out, and many players are eagerly awaiting the official launch of the game. Through detailed introduction, we can see that Final Form adopts a unique FI model—players can earn game tokens through battles, while upgrading cards requires consuming these tokens.
This model not only increases the participation and interactivity of the game but also provides players with an interesting game economic system. Therefore, as shown in the figure below:
From the above figure, we can clearly see that when a game runs an FI (Financial Incentive) mechanism, XAI, as the payment token in the ecosystem, will face a large amount of demand. This situation can be compared to the consumption of ETH when minting NFTs on Ethereum (ETH). Just as minting NFTs in the ETH ecosystem requires the use of ETH, participating in games with an FI mechanism in the XAI gaming ecosystem will also lead to a significant demand for XAI tokens. This increase in demand will essentially drive the value and liquidity of XAI tokens, further proving its importance and potential in the gaming ecosystem.
In addition, there is a very noteworthy highlight: besides decentralized exchanges (DEX) infrastructure like Sword, Layer0 technology has also been deployed on the XAI mainnet. The purpose of this strategy is to facilitate the migration of other games to the XAI platform. It is worth noting that the first game to complete the migration is 'Crypto Unicorns'. This initiative not only demonstrates the technical strength and flexibility of the XAI platform but also further attracts the attention of game developers, laying a solid foundation for the expansion and diversification of the XAI ecosystem. This Andrew guy is actually a big brother of Axie Infinity.
A large number of games are being deployed on XAI
As mentioned earlier, before building the XAI chain, the XAI project had already conducted in-depth cooperative negotiations with multiple game developers. Therefore, here I will simply showcase some game cases that have partnered with the XAI project without elaborating further. The diversity and quality of these cooperation cases further prove the attractiveness and potential of the XAI chain, while also showcasing its wide influence and recognition within the gaming industry.
Let's take the first-launch Tarochi game, the data upon its release is as follows:
34,000 players.
Ranked at the top of Arbitrum and Opensea.
TX directly pulled 300,000 lines in one day, the recently trending Pixels were suppressed, it's crazy.
It can be seen that the power of this gaming track is immense.
3.2 Can the selling pressure from sentinel node token generation be absorbed?
Many may worry that the large number of tokens mined by sentinel nodes may cause significant sell-off pressure on the XAI project. In response, I will provide some explanations. First, it needs to be clarified that the tokens mined by sentinel nodes are esXAI, which is a reward for the contribution to decentralization by the nodes. Node users can choose to convert esXAI into XAI, but this process involves a lock-up mechanism.
The design of the lock-up mechanism is as follows: users can choose their lock-up time. If choosing to lock for 15 days, users can receive 25% of XAI; if choosing to lock for 90 days, they can receive 50% of XAI; and if locking for 180 days, they can receive 100% of XAI. This flexible lock-up mechanism not only provides users with the freedom of choice but also helps stabilize the market and reduce the possibility of a large number of tokens being sold off in the short term, thereby mitigating potential negative impacts on the XAI project.
Staking mechanism
In addition to reducing market sell-off pressure through the lock-up mechanism, it is clear from XAI's official Twitter dynamics that the operators of the Sentry nodes and the stakers of esXAI play a crucial role in the XAI ecosystem. This means that if the sentinel node operators stake esXAI in the system, it will increase the computing power of their nodes, thereby increasing the number of tokens mined. Conversely, if node operators choose not to stake esXAI but instead hold a 'mining and selling' strategy, their node output will gradually decrease.
The design of this mechanism is very clever. It encourages long-term investment and support for the XAI project, while also providing a gradual exit path for those who do not plan to hold long-term. This strategy not only incentivizes XAI's staunch supporters but also creates conditions for the project's long-term stability and growth by reducing short-term sell-offs.
The design inspiration for XAI's staking mechanism comes from TIA (Celestia). If you are interested in XAI's staking mechanism, it is recommended that you read this article: Understanding the XAI Staking Mechanism and Ecological Development
4. What will the price of XAI really be?
Congratulations on reading this far. Now we can start from the same starting line to discuss the price trend of the XAI token together. Now, let's dive into the market game analysis here. Several key points to consider are as follows:
The opening time for the replacement of esXAI: It is expected that esXAI will start to be open for replacement in early February, assuming starting from February 1. Even if all sentinel nodes choose to redeem XAI by destroying 75% within 15 days, the selling pressure in the market will arrive by February 15. As of February 15, the total circulating amount of XAI in the market will only be 277 million.
Price fluctuations of XAI: Since XAI was launched on Binance, its price has fluctuated between $0.45 and $1.23, with stable market support in each price range. So, we need to consider how much of this 277 million circulating XAI is in the hands of ordinary users, how much is in the hands of market makers, and how much is in the hands of staunch supporters.
Impact of the gaming ecosystem: With the increase in game cooperation, the launch of new games, and the development of the gaming ecosystem, when will the demand for XAI appear?
Behavior of sentinel node users: Users with more than 6,000 sentinel nodes have invested thousands of dollars to purchase nodes. Will these users additionally purchase XAI and convert it into esXAI to increase their node's computing power? If so, what would be the proportion of such actions? How much XAI would they purchase?
My opinion
At this point, I would like to share my personal opinion:
Assuming the price of XAI is $2 (2U), then before February 15, its circulating market value will be $2 multiplied by 277 million, which is $554 million. Considering that XAI's total supply is 2.5 billion, its fully diluted market value (FDV) will be $5 billion.
If the price of XAI reaches $4 (4U), then the circulating market value before February 15 will be $4 multiplied by 277 million, which is $1.108 billion. Similarly, with a total supply of 2.5 billion, its FDV will be $10 billion.
What does this data mean? Taking the IMX gaming chain as an example, during the previous bull market peak, its FDV was approximately $18 billion. This means that when XAI is at $2, its FDV would be 27.8% of IMX; and at $4, its FDV would reach 55.6% of IMX. This comparison not only shows the enormous potential of XAI in terms of potential market value but also provides an interesting market positioning reference. Through such analysis, we can see more clearly the potential position and value of XAI in the entire gaming chain field.
Ideal state
As a staunch supporter of the XAI project, I look forward to seeing the following ideal scenarios realized:
Before February 15, I hope the price of XAI can reach $2 to $4. Within this price range, the following situations are very likely to occur:
Continuous hot sales of sentinel nodes: The sales volume of sentinel nodes may increase from the current 33,000 to around 40,000, while the price of each node may rise to about 2.2 ETH.
Strengthening community consensus: With the widespread dissemination of community information and the formation of consensus, more people will understand and support the XAI project, significantly boosting the community's consensus and enthusiasm.
Market activity brought by game launches: As more games are launched on the XAI platform, there will be a large number of buy orders for XAI, greatly reducing the selling pressure generated by sentinel nodes. There may even be node operators who, after staking the esXAI they mined, actively purchase XAI and convert it into esXAI to increase their node output.
Spiral rise of the ecosystem: With the interplay and positive feedback of the above factors, the entire XAI ecosystem may enter a virtuous cycle of spiral rise, further promoting the healthy development of the project and the increase in market value.
Such development will not only be a tremendous victory for the XAI project itself but also the best proof of the faith of its supporters.
5. Is there a bubble in XAI?
Many may ask, based on my analysis, the price of XAI seems destined to exceed $10. Does this mean it is a Ponzi scheme? Or will it ultimately fail? In fact, the answer to this question is not complicated. When millions of gamers purchase in-game items and skins, the money they spend is part of the answer.
Additionally, we must recognize that Web3 games are the trend for future development. In the Web3 world, owning limited edition skins or items means they can be easily monetized in the market. This not only provides real value to players but also brings new economic models and growth potential to the entire gaming ecosystem. Therefore, the potential growth of XAI is not based on nothing, but on a solid foundation of tangible market demand and emerging gaming trends.