Axie Infinity (AXS) Shows NFT Hype Not Over
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Axie Infinity (AXS) is an outlier in the crypto space, recently marking a series of price expansion and all-time records. The crypto market still contains enough interest in new projects to create hype and lift prices, even when the rest of the market is stagnant.
AXS broke out to $21.28 in an ongoing pump on Tuesday, just the last upward leg after a few phenomenal days on record-breaking volumes. AXS daily trading expanded from almost no activity to above $840M per day. Now, AXS has to prove its growth has a basis in its main product and collectible marketplace, and will not be a temporary pump.
What is Axie Infinity
Axie is a project based on crypto collectibles, also known as NFTs. The gamified collectibles also come with a breeding fee schedule, ensuring the project has an inflow of funds and robust tokenomics.
Axie Infinity claims a turnover of 90,000 ETH until now, with the most expensive NFT trading for 300 ETH. Axie incentivizes players to participate in the game and earn AXS rewards. At the same time, to win at the game, players must acquire Axies, the collectible game characters.
Axie also has a unique approach to acquiring new users. Players can join the app and gaming platform only after acquiring three NFT characters from the OpenSEA marketplace. AXS itself is an Ethereum-based token which is easily available, along with ETH, to buy NFTs on open marketplaces.
What Drives the Success of AXS
Axie managed to take the lead in NFT trading in July, displacing previous hot projects. The new arrivals line up among the most active marketplaces, showing there is still enough interest in gamified NFTs.
The project is enjoying outsized interest, as evidenced by a recent spike in gas usage. This speaks of highly active NFT minting and transfers.
At this point, it is too early to say if the Axie marketplace is sustainable and if the trading will remain just as active. The NFT market has switched to lower activity levels, but a higher number of tokens traded. There is also no way to verify if the NFT minting is enjoying organic interest, or if the activity gets a boost from organized buying. Axie claims organic interest in its product, as evidenced by users on its Discord server.
How the NFT Market is Doing
From June 2021, NFT sales started another round of growth, though a bit more subdued compared to the April-May boom. On average, sales reached 30,000 tokens daily.
Of that activity, about 50% is primary sales, with 50% reserved for secondary sales. CryptoPunks remains one of the most popular projects, enjoying significant resales.
Some NFT projects also mix in various forms of decentralized finance and liquidity mining, as in the case of Aavegotchi, which includes both collectibles and a form of passive income.
Is AXS a Good Investment
Axies is a hot new project with a dose of significant risk. On the positive side, AXS has significant liquidity through Binance trading pairs. Yet more than 34% of all trades depend on a single Binance trading pair, against USDT.
The pair has relatively low slippage, but also the potential to see diminished activity suddenly. AXS has seen significant trading only in the past month, and has spent only weeks with a double-digit price.
AXS still enjoys significant social media hype, and the price climb is viewed as a bullish sign.
The rise in AXS happens at a time when decentralized finance is at the forefront, with most DeFi tokens appreciating significantly. At the moment, NFTs and DeFi tokens are sources of the most significant gains in crypto space.
AXS itself is present on both Uniswap and SushiSwap, in a pairing with wrapped ETH tokens. But at this point, centralized trading on the Binance exchange and a handful of Asian markets is taking the lead in terms of volume and liquidity depth.
NFTs Arrive on the IOTA Platform
NFTs usually depend on the Ethereum platform, making use of the concentration of projects and significant liquidity for primary and secondary trading.
Recently, the IOTA project has announced it is almost ready with the technology allowing it to host NFT marketplaces.
For now, the NFT minting is available on the IOTA Devnet, a form of testnet launch. The IOTA team is still working on the actual launch of the new network.
An NFT launch on the IOTA network may start to change the rules, due to the potential for wider distribution and lower transfer fees. Rough estimates on Ethereum NFT minting show that to buy some digital goods, fees may run between $50 and $300, with no limit when there is significant network congestion.
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