Top play-to-earn tokens like Axie Infinity witness 98% drop in trading volume from peak

Quick Take

  • Trading volumes for top play-to-earn tokens are down 98% compared to their November 2021 peak, according to Kaiko Research data.
  • Token values for Axie Infinity, The Sandbox and Gala Games have fallen month on month since early February.

Trading volumes for the top Play to Earn (P2E) tokens have fallen by 98% in June and July, compared to the height of the bull market in November 2021.

The P2E concept soared in popularity in late 2021, during the last bull-market's peak. Yet as the games struggled to maintain momentum, interest in trading them has decreased. Kaiko Research data reveals decreased activity in key tokens, including Axie Infinity (AXS), Enjin (ENJ), Gala Games (GALA), and The Sandbox (SAND).

"After soaring in popularity in late 2021, the monthly trade volume for the top P2E tokens has fallen nearly 98% to just $2 billion in June, and July experienced volumes that were the same at around $1.9 billion," Senior Analyst at Kaiko Research Dessislava Aubert told The Block.

Kaiko exchange P2E top token trade volume

"P2E volumes in July remained lackluster at $1.9 billion which is a 94% drop relative to January 2022. Data shows that Binance and Korean markets are the main markets for these tokens, which were particularly popular in Asia Pacific and Latin American countries during their peak in 2021 and 2022," the senior analyst added.

Aubert said monetary incentives were the main driver for users, but these platforms have been struggling to retain their user base amid falling in-game rewards. "AXS, the governance token of the Axie Infinity ecosystem is down more than 90% since early 2022 and SAND, MANA and GALA tokens have seen a a similar drop in value," she added.  

Carl Dawkins, former head of growth at Tamadoge, said the dearth in P2E activity is also due to gamers becoming disillusioned with a flood of gaming tokens providing little to no reward, "that are essentially Disneyland gambling money."

"An interesting growth area is P2E tokens with unique use cases, such as 'vote to earn' tokens like Love Hate Inu, that rewards survey and voting in polls. Layer 2's like polygon are ignoring the bear market cycle and onboarding a lot of P2E games and positioning them for the next bull run," he told The Block.

Blockchain gaming activity in late 2022

Last year saw healthier prospects for web3 gaming. According to a DappRadar overview of 2022, the P2E sector was responsible for almost half of all the blockchain activity. "Gaming remains a driving force for the dapp industry, accounting for almost 50% of on-chain activity tracked by DappRadar and on average, 1.13 million Unique Active Wallets connected to game dapps daily an increase of 60% from 2021 numbers," the report stated at the time.

The DappRadar report added that in January 2023 the market caps of top gaming tokens increase by 122% on average. However, tokens associated with web3 gaming have fallen month on month since early February of this year. The incremental fall in the value of the tokens have meant the incentive to play games is slowly evaporating.

This downtrend has continued. As of the time of writing, The Sandbox's SAND token was trading at approximately $0.40, marking a fall of 5.5% in the past week. The native token of the Enjin ecosystem experienced a fall of over 4% in the same period, with its price hovering around $o.29. The native token of Axie Infinity has slumped in the past week, down 3.9% to $5.86, and GALA is down 3.4% in the past day to $0.02, according to data from CoinGecko.

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