Popular play-to-earn blockchain Axie Infinity’s token unlock event could lead to significant sell-pressure on the platform’s native token AXS.

Photo by Christopher Burns on Unsplash

On Oct. 25, around 8% of AXS’s token supply will be scheduled to be released in a token unlock. At the time of writing, these 21,543,000 tokens were worth more than $200 million. 

Of the tokens to be distributed across the ecosystem, advisors will be paid out 2.5 million AXS tokens, worth $27 million and 1.9 million tokens, worth $21.6 million, will be distributed to those who participated in its private sale.

This is particularly significant because the last four times advisors and private sale participants saw their tokens unlocked, the price of AXS has dropped almost immediately after.

According to data from Lookonchain, a Twitter account that tracks high-value on-chain transactions, Axie Infinity’s advisors and private sale participants will bring $45.8 million worth of sell pressure to the market. 

Lookonchain noted that Axie Infinity raised $864,000 during its private sale in 2020, when the price of AXS was just $0.08. 

“Even if investors in the private sale dump AXS at $10, they’re still making 125x. So selling after unlocking is very likely to happen,” he said.

Some of those who participated in Axie’s private sale include crypto investment firms Delphi Digital, Arca and now-insolvent crypto hedge fund Three Arrows Capital. 

Earlier this week, Aleksander Leonard Larsen, COO of Axie Infinity and its parent entity Sky Mavis, confirmed that this will be the final token unlock for private investors.

“I’m also happy to say that Sky Mavis will not be selling a single token of our upcoming unlock,” said Larsen.

At the time of writing, the unlocked AXS had not yet been transferred to the private sale investors and advisors. However, the token fell by 22% over the last week driven by traders anticipating the token unlock. AXS is down 94% from its all-time high ahead of $164 and is currently trading at $9.28.