Some of the leading gaming-themed tokens will see significant unlocks in September. The tokens, a remnant of the play-to-earn era, will increase their circulating supply by as much as 7%.
Token unlocks are an inevitable feature of gaming projects that received VC funding. The unlocks, along with the slowdown of play-to-earn gaming, put pressure on most of the tokens. September is already seen as potentially bearish, and the upcoming unlocks may serve as downward pressure for top gaming tokens.
Gaming tokens as a whole lost a significant part of their market capitalization. The sector is down to a valuation of $16B, down from a peak close to $50B. IMX is among the leaders, and the collection of tokens is a mix of older gaming projects and newer assets from the current bull cycle.
PIXEL leads gaming token unlocks
The upcoming unlocks will affect PIXEL the most, expanding its circulating supply by 7%. Pixels (PIXEL) is currently in the most active of its expansion stages, awaiting a 118% supply growth in the next year. The next six months will come with almost constant unlocks for the token, which is expected to grow the available supply by 47% in six months.
Even at this point, PIXEL has the pattern of a low-float token slowly expanding its supply. Since the March peak at $0.93, PIXEL had a non-stop slide to current lows around $0.13. Only around 20% of the supply is in circulation, expecting to expand to a total 5B PIXEL.
Pixels is a game with simple graphics, offering immediate free access, with the option of tokenized play. The game has achieved mass appeal, with more than 604K active users based on DappRadar data. Pixels was released in 2022, inheriting the team of the Mesh project, which discontinued the product.
The game has drawn in $7.3M in funding from a total of 25 investors. The game also released a series of NFT collections and expanded with quests and special events to retain users. Private investors own 15% of the PIXEL supply, though some of the allocations will be to the treasury and for ecosystem development.
XAI prepares for second-biggest unlock
Xai Games (XAI) will unlock 6.24% of its supply in the coming month. The project started with Binance Launchpad, and is backed by some of the biggest VCs in gaming space. Backers include Animoca Brands, Maven Capital and others.
All categories of XAI owners are receiving inflows of their tokens, with accelerated unlocks coming at the end of the year. XAI has 21% investor allocations and 20% team reward. Around 20% of the token supply is unlocked, but 1B tokens are also categorized as untracked.
Blue chip gaming tokens see smaller unlocks
Other tokens awaiting unlocks include Immutable (IMX), Yield Guild Game (YGG), and Ape Coin (APE). The tokens were considered blue chips in Web3 space, with active communities or a promising game.
IMX already achieved a 75% supply unlock, and will accelerate from now on. The market has absorbed most of the unlocks, and even managed a rally to $3.60 in March. Currently, IMX trades at $1.20. The token supply of 1.6B IMX will be inflated by another 2.06%, estimated at $37M.
YGG will expand its supply by 3.7%, though the market will have to absorb just $5.48M. APE will add another 2.31% to its supply, creating potential selling pressure for $12.7M in new tokens.
For all three tokens, the supply will continue to grow in the next 6-12 months, rapidly diluting the supply. IMX will have the lowest pressure with 20.28% dilution in the next year. APE will add 27.75% to its supply in 12 months, while YGG will unlock another 42.55% of the supply in the coming year.
All tokens face additional price pressure from losing their loyal backers and lowered interest in NFT and gaming. APE has the biggest short ratio of all three, above 44% on most exchanges.
During the 2024 round, unlocks are seen as a bearish event, trying to tap the market’s liquidity. Unlike the early stage of unlocks in 2021, the market is not hungry for newly released tokens. Older projects are also still suffering the shift of liquidity and interest into memes.
