The GameFi sector has witnessed a significant surge, with the market capitalization of GameFi tokens rising by more than 7 per cent in the last 24 hours. Axie Infinity (AXS) leads the rally, boasting a 28 per cent weekly gain, accompanied by a remarkable 62 per cent increase in its in-game currency, Smooth Love Potion (SLP). Other notable performers include GALA, with a 47.5 per cent weekly push, and STEPN, up by 18 per cent in the past 24 hours. Several top web3 games and gaming infrastructure projects, such as The Sandbox, Illuvium, Enjin, and ImmutableX, have also posted double-digit gains for the week.
Data from CryptoQuant indicates a surge in active AXS addresses, jumping from 173 on Oct. 15 to a three-month high of 445 on Oct. 24. DappRadar also reports a 22% increase in weekly Axie Infinity players from 13,000 on Oct. 18.
Axie Infinity’s $AXS token also experienced a sudden 16% surge in the last 24 hours and a 30% increase over the past week. Despite the absence of a clear catalyst, the trading volume has spiked from less than $15 million earlier in the month to over $170 million.
While the current move is significant, $AXS remains 97.5% below its all-time high. Traders are closely watching as the token approaches the $7 resistance level, a key support/resistance zone, with potential implications for its future trajectory.
While the renewed interest in Axie is certainly good news for GameFi, the question of how long it will last is also important.
Fundamentally, Axie remains largely the same game as it was before the crash, and we should also remember that Axie’s crash came before the Luna crash, rather than as a result of it.
Therefore, we should be wary of considering the revival as something that has its root in substantive changes within the GameFi sector.
Of course, the crypto winter has provided valuable time to thin the herd when it comes to Web3 games, and traditional gaming companies like Bandai Namco are also moving into blockchain.
But it is still far too early to say that these developments are guarantees of GameFi’s revival.
We still need to see what these traditional studios can do with blockchain, and if these new blockchain games have the staying power to compete with traditional games that are already established within the wider gaming community.
Instead, this recent pump is likely to be mainly speculative in nature, as the outlook for crypto in general has become more optimistic in the past few weeks.
The spike in interest, therefore, should not be considered a long term, structural change, but a temporary, speculative movement that cannot be sustained unless greater, more fundamental changes are put into place.